State Court Decides on Municipalities Ability to Revoke Conditional Use Permit

On Thursday, January 8, 2015 the Wisconsin Supreme Court heard oral arguments on the case Oneida Seventh Generation Corp. v. City of Green Bay (2013AP591). The supreme court will decide whether the court of appeals properly applied the substantial evidence test, which can effect when a conditional use permit can be revoked by a municipality.

Background

The Green Bay City Council granted Oneida Seventh Generation Corp. a conditional use permit to allow it to operate a solid waste-to-energy facility. The facility also received the proper permits from the Wisconsin Department of Natural Resources and the U.S. Department of Energy. However after public opposition to the project grew the city council requested that the city plan commission determine whether they were misled about the potential for harmful emissions from the facility during Oneida Seventh Generation Corp’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 it 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 council’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 City of Green Bay argues 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.

The Oneida Seventh Generation Corp. 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.

The Wisconsin Realtors Association filed an amicus brief with the state supreme court and argued that if Green Bay prevails that it will lead to uncertainty in property values and real estate development because property owners would not be able to rely and act upon a locality’s granting of a conditional use permit if the locality can revoke it at their discretion.

A decision in this case is expected by the end of July 2015.
 

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