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MDEQ Rule Declared Invalid, Shortening Time And Limiting Development of The Administrative Record Relating To Judicial Review Of Permit-To-Install Decisions

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Kirsten M. McNelly
Foster Swift Energy & Sustainability Update
October 1, 2009

On September 15, 2009, the Michigan Court of Appeals struck down a Michigan Department of Environmental Quality (MDEQ) rule which had broadened challenges to MDEQ decisions approving or denying permit requests to install new major sources of air emissions.  In Wolverine Power Supply v Department of Environmental Quality (Court of Appeals Case No. 287553), the Court of Appeals decided that the MDEQ had no authority to promulgate MAC R 336.2830, which had added an administrative contested case procedure for permit to install decision reviews.  Now, appeals of permit to install decisions must be made per the procedures outlined in the Revised Judicature Act, MCL 600.631, et seq.

The MDEQ, which is legislatively charged with administering federal and state air quality standards, promulgated a series of rules aimed to prevent significant deterioration of air quality.  As part of the rules, entities seeking to install new major sources of air emissions were (and still are) required to obtain MDEQ permits.  However, MAC R 336.2830 added a contested case procedure through which those aggrieved by a MDEQ permitting decision could seek review through an administrative contested case procedure.  A contested case is "a proceeding…in which a determination of the legal rights, duties, or privileges of a named party is required by law to be made by an agency after an opportunity for an evidentiary hearing." MCL 24.203(3).

The Court of Appeals decided that the rule allowing for the contested case procedure directly conflicts with the review procedure established by Michigan's air statute.  MCL 324.5505(8) allows aggrieved persons to seek review of such permit to install decisions directly with the circuit court pursuant to the Revised Judicature Act, MCL 600.631 et seq.; it does not provide for an administrative contested case procedure.

The practical effect of this ruling is several fold.  First, as noted by the Court of Appeals, review time for permit to install decisions may be shortened, as a contested case hearing step will not occur prior to circuit court review.  Second, the scope of the circuit court's review is likely limited to the information provided during the permitting process itself; it will not be expanded or clarified through an administrative contested case proceeding prior to appeal to a circuit court.  Third, permit to install decisions generally will be reviewed for whether the decision was supported by competent, material and substantial evidence in the record.