The Wisconsin Supreme Court ruled on a number of issues regarding the DNR’s authority when reviewing lake level petitions. The Court concluded that the DNR properly considered the impact of the Petition's proposed water levels on public and private wetlands in and adjacent to Lake Koshkonong. However, the Court concluded that the DNR inappropriately relied on the public trust doctrine for its authority to protect non-navigable land and non-navigable water above the ordinary high water mark. Although the DNR cannot rely upon the public trust doctrine for protection of the non-navigable land and non-navigable water above the ordinary high water mark, the Court concluded that the DNR has broad statutory authority grounded in the state's police power to protect nonnavigable wetlands and other non-navigable water resources. Thus, the DNR may consider the water level impact on all adjacent property under Wis. Stat. § 31.02(1).
The Court also concluded that the DNR may consider § NR 103 water quality standards when making a water level determination under Wis. Stat. § 31.02(1) that affects wetlands and may apply these standards when appropriate after weighing the factors in the statute. However, Wis. Stat.§ 281.92 suggests that the DNR is not required to apply ch. 281 standards in making a determination under Wis. Stat. § 31.02 because ch. 31 is excepted from the provisions of ch. 281.
Lastly, the Court concluded that the DNR erroneously excluded most testimony on the economic impact of lower water levels in Lake Koshkonong on the residents, businesses, and tax bases adjacent to and near Lake Koshkonong. This evidence was relevant to the DNR's decisionmaking under Wis. Stat. § 31.02(1). The Court stated “[a]lthough the DNR is granted substantial discretion in its decision-making under the statute, it must consider all probative evidence when its decision is likely to favor some interests but adversely affect others. In this case, the DNR's exclusion of most economic evidence was inconsistent with its acceptance of competing economic evidence that helped sustain its water level decision.”
The Court remanded the case to the District Court for further proceeding with consistent with the decision.