The State Supreme Court struck a large blow in favor of permit holders when it ruled in a 6-1 decision that the City of Green Bay did not have discretion to revoke a conditional use permit because there was no substantial evidence in the record to support the Green Bay Common Council’s claim of misrepresentation.

The Green Bay Common City Council granted Oneida Seventh Generation Corporation a conditional use permit to allow it to operate a solid waste-to-energy facility. The facility also received the proper permits from the Department of Natural Resources and the U.S. Department of Energy. However, after public opposition to the project grew the common council requested that the city plan commission determine whether they were misled about the potential for harmful emissions from the facility during Oneida’s application for the permit. The plan commission unanimously stated they were not misled and recommended that the permit not be revoked. The city did not follow the commission’s recommendation and revoked the permit on the grounds that the corporation made untruthful statements to the city about the potential for harmful pollutants to be emitted from the plant.

The trial court upheld the city’s decision to revoke the permit. The Court of Appeals, Dist. III, reversed the trial court stating that the city’s revocation of the permit was arbitrary because did not adequately explain its justification for revocation. The court applied the substantial evidence test in this analysis. The substantial evidence test requires the court to determine whether the city’s judgment (in this case the revocation of the permit) was supported by substantial evidence in the record before them. The court cannot substitute its own judgment for the city’s judgment. The substantial evidence test is a deferential standard that favors the regulating entity, in this case the city.

The city argued that when the court of appeals analyzed whether the city rightfully revoked the permit under the substantial evidence test the court substituted its own judgment of the facts for the city council’s judgment of the facts.

Oneida argued that they outlined their development in extensive detail and that the city knew what type of facility was being proposed. They further argue that the city has not presented sufficient evidence that the Oneida attempted to mislead city officials. Therefore, the revocation of the permit was unwarranted. If a municipality is able to revoke permits over a year after they were granted then it will have a chilling effect on real estate investment.

While this case is clearly a fact-intensive decision there are lessons to be drawn from the state supreme court’s decision. First, the court emphasizes the need for the development of the record. They state that when determining whether the substantial evidence test has been met the court must take into account all the evidence in the record.[1] This decision does not change the standard, however it shows that the court is willing to give a “hard look” at the entire record of the proceedings to see if there really was substantial evidence to support the city’s decision. Second, the evidence has to be taken in context.[2] In this case, the city took supportive portions of the record out of context in order to bolster their case, but the court rejected this interpretation of the evidence.[3]Oneida’s victory would not have been possible without the extensive record they developed. While this case does not lessen the deferential tilt of this substantial evidence test it does provide a path forward for permit holders who diligently flesh out the record of the proceedings.