Commonwealth Power Co. v. Department of Natural Resources

Nos. 204399, 210844 (Mich. Ct. App. March 21, 2000)

ELR Digest

The court holds that the Michigan Department of Natural Resources exceeded its authority when it denied a power company's request for a Clean Water Act (CWA) § 401 water quality certificate because the company failed to conduct a fish entrainment and mortality study. The court first holds that the appeal is not moot because there is no authority for the proposition that a CWA § 401 certificate, once issued, cannot be rescinded. Also, case law from other jurisdictions suggests that certification under CWA § 401 is not final until the appeals process is complete. The court then holds that the department is not required to adopt rules specifically indicating what will be evaluated in an application for a CWA § 401 certificate. Water quality standards promulgated by the department and any other state laws relating to water quality suffice to give CWA § 401 applicants notice regarding what will be required before a certificate will be issued. The court further holds that the department exceeded the bounds of its authority in ordering the power company to conduct the fish studies because it was not imposing a requirement that it knew would be necessary to protect fish in the river. The department contends that because the Michigan water quality standards indicate that rivers shall be protected for the use of fish and fish migration, it had the authority to order the study. However, the court distinguishes a U.S. Supreme Court case which held that an agency could condition the issuance of a CWA § 401 certificate on the maintenance of a particular stream flow level because it related to a designated use of the river in question—use as a fish habitat—as delineated in the state's water quality standards. Finally, the court holds that the circuit court erred by imposing sanctions on the defendant for its allegedly frivolous actions. The rules relied on by the circuit court were improper bases on which to impose sanctions for vexatious proceedings. However, the court remands the case to the circuit court to determine whether sanctions under a broader rule are appropriate.

The full text of this opinion is available from ELR (11 pp., ELR Order No. L-209).

[Counsel not available at this printing.]

[30 ELR 20469]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]