Petition — Shell Oil Co. v. West Michigan Environmental Action Council, Inc.
Supreme Court brief1979
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“BILED.
ILED
AUG 29 1979
-33
49 a 5 MIGHARL RODAK, JR, Ch
IN THE
Supreme Court of the United States
OcToBER TERM, 1972
SHELL Om Company, Amoco PropuctTion CoMPANY,
and NORTHERN MICHIGAN EXPLORATION COMPANY,
Petitioners,
v,
West MICHIGAN ENVIRONMENTAL ACTION COUNCIL,
Inc., et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO
THE SUPREME COURT OF MICHIGAN
E. Epwarp Bruce
D1anE P. Woop
Covington & Burling
888 Sixteenth Street, N.W.
Washington, D.C. 20006
RicHarp B. Foster
Wess A. SMITH
TERENCE V. LYNAM
Foster, Swift, Collins & Coey
313 South Washington Square
Lansing, Michigan 48933
Attorneys for Petttioners
<.-. _
ot cee Loe
TABLE OF CONTENTS
Page
Dee caw eww seesseccuse 1
JURISDICTION See eee ee eee 2
Nee ee CER Rh scot ebessceeseces 2
CONSTITUTIONAL PROVISION INVOLVED ...........0246. 2
I OP ng acces cc ceccccsecccecs 3
REASONS FOR GRANTING THE WRIT ............-.ee00. 11
Cee en cece ese cecerecoevecee 16
TABLE OF CASES
CasEs:
Anti-Facist Committee v. McGrath, 341 U.S. 123 (1951) 15
Boddie v. Connecticut, 401 U.S. 371 (1971) .......... 12
Brinkerhoff-Faris Co. v. Hill, 281 U.S. 673 (1930) .... 11
Eaton v. City of Tulsa, 415 U.S. 697 (1974) ......... 15
Goldberg v. Kelly, 397 U.S. 254 (1970) ............. 12
Gulbenkian v. Gulbenkian, 147 F.2d 173 (2d Cir.
ec y dh seecceeeesccceses 15-16
Hamling v. United States, 418 U.S. 87 (1974) ....... 14.
Kleppe v. Sierra Club, 427 U.S. 390 (1976) .......... 12
Matthews v. Eldridge, 424 U.S. 319 (1976) .......... 12
Memphis Light, Gas &€ Water Div. v. Craft, 436 U.S. 1
Leases encccsccccccsce gs 12, 13
Minnesota Public Interest Research Group v. Butz, 541
F.2d 1292 (8th Cir. 1976), cert. dented, 430 U.S.
eRe cbse sepecerescecccceses 12
In re Ruffalo, 390 U.S. 544 (1968) ................. 15
ii Table of Cases Continued
Page
Saunders v. Shaw, 244 U.S. 317 (1917) .......... 11, 14, 15
Taylor v. Hayes, 418 U.S. 488 (1974) ............... 15
United States v. Gypsum Co., 333 U.S. 364 (1948) .... 15
White v. Rimrock Tidelands, Inc., 414 F.2d 1336 (5th
SE Eh eRRNE deve eas L bee kesdevbaacenne 15
SraTuTEs AND OTHER AUTHORITIES:
Constitution of the United States:
Fourteenth Amendment $1 .................05. 2-3
National Environmental Policy Act:
Ey ES Vik 654 ccd ahh s 0000 40ks ene bs 12-13
eI ANSE Cha 54045 S ee 00K Ko 4 OWE bee de RS 2
Michigan Oil & Gas Act:
Ne eS er ern 5
Michigan Environmental Policy Act:
Mich. Stat. Ann. $ 14.528(201) ................ 5, 6, 7
SE Nak pak od nn hn 8 ONG k cheba 4 8eende be 16
Michigan Court Bale S0G2 ......ccccsccvcccscccecss 16
Leventhal, Environmental Decisionmaking and the Role
of the Courts, 122 U. Pa. L. Rev. 509 (1974) ..... 13
IN THE
Supreme Court of the United States
OcTOBER TERM, 1979
No.
SHELL Om Company, AMoco PRODUCTION COMPANY,
and NorRTHERN MICHIGAN EXPLORATION COMPANY,
Petttioners,
a,
West MIcHIGAN ENVIRONMENTAL ACTION COUNCIL,
Inc., et al.,
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO
THE SUPREME COURT OF MICHIGAN
Shell Oil Company, Amoco Production Company,
and Northern Michigan Exploration Company, who
appeared as appellees and as intervening-defendants
below, petition this Court for a writ of certiorari to
review a decision entered by the Supreme Court of
Michigan on February 20, 1979.
OPINIONS BELOW
The opinion of the Supreme Court of Michigan is
reported at 405 Mich. 741, 275 N.W.2d 538, and ap-
2
pears in the Appendix to this petition. (A. la-22a).
Petitioners’ motion for rehearing appears in the Ap-
pendix (A. 23a-41a), as does the order of the Supreme
Court of Michigan denying that motion. (A. 48a).
Neither the opinion of the Ingham Circuit Court, an-
nounced at the close of the case, nor its final judgment
is officially reported. They are reproduced in the Ap-
pendix at A. 45a-55a and A. 56a, respectively.
JURISDICTION
The decision of the Supreme Court of Michigan was
entered on February 20, 1979. Petitioners’ timely mo-
tion for rehearing was denied by that court on May 7,
1979. On July 18, 1979, Mr. Justice White granted pe-
titioners an extension of time until September 4, 1979,
to file their petition for certiorari in this Court. The
jurisdiction of this Court is invoked under 28 U.S.C.
§ 1257(3).
QUESTION PRESENTED
Whether, consistent with the Due Process Clause of
the Fourteenth Amendment, an appellate court may
enter final judgment for plaintiffs on a portion of
their complaint that had been dismissed by the trial
court at the close of the plaintiffs’ case, without re-
manding proceedings to afford defendants the oppor-
tunity to introduce evidence responsive to the pre-
viously dismissed allegations of the complaint?
CONSTITUTIONAL PROVISION INVOLVED
Section 1 of the Fourteenth Amendment to the Con-
stitution of the United States of America provides as
follows:
3
All persons born or naturalized in the United
States, and subject to the jurisdiction thereof, are
citizens of the United States and of the State
wherein they reside. No State shall make or en-
force any law which shall abridge the privileges
or immunities of citizens of the United States;
nor shall any State deprive any person of life,
liberty, or property, without due process of law;
nor deny to any person within its jurisdiction the
equal protection of the laws.
STATEMENT OF THE CASE
In 1968, the Michigan Department of Natural Re-
sources (DNR) sold to petitioners and others oil and
gas leases of state-owned lands, some of which were
located in the Pigeon River Country State Forest
(‘‘Forest’’). (A. 2a-3a). In 1975, DNR prepared an
environmental impact statement (EIS) concerning a
management plan for oil and gas development in the
Forest. The EIS discussed the possibility of allowing
such development in or immediately adjacent to a six
by eight mile area of the Forest, known as ‘‘ Unit I,”’
where some oil wells were already located, so as to pre-
serve the other three units in their relatively unde-
veloped state for wildlife and for hunting and other
recreational uses. (A. 3a).’
The management plan imposed numerous other lim-
itations upon future oil and gas operations in this part
of the Forest. For example, it provided that, upon the
completion of initial exploratory drilling, wells would
* There are presently five oil wells in Unit I. (EIS p. 53). It is
traversed by roads. (/d. p. 61). All proposed ‘‘wilderness or natu-
ral areas’’ in the Forest are located outside Unit I. (Jd. at 59).
4
be shut-in and no efforts would be undertaken to de-
velop or produce oil and gas until DNR published an
additional EIS which would assess the impacts of de-
velopment and production in the Forest—e.g., the in-
stallation of more permanent facilities for extracting
oil and gas, the construction of roads to service the
production facilities, the laying of pipelines, ete.’
On June 11, 1976, after negotiations with DNR and
the Michigan Natural Resources Commission (NRC),
petitioners entered into a ‘‘Stipulation Consent Order”
accepting the restrictions contained in the manage-
ment plan, as well as agreeing to other limitations
upon their operations. (A. 3a).
This litigation commenced on September 17, 1976,
when the West Michigan Environmental Action Coun-
cil and assorted other organizations filed a complaint
in the Cireuit Court for Ingham County Michigan
against the NRC and the Director of DNR alleging
various violations of Michigan environmental and oil
and gas laws which they claimed invalidated the con-
sent order. (A. 4a). Petitioners soon moved to inter-
vene as defendants, and on October 22, 1976, their
motion was granted.
At no point prior to trial, did plaintiffs make any
attempt to amend their complaint to attack the subse-
quent action of the Michigan Supervisor of Wells, who,
on August 24, 1977, granted petitioners permits to drill
EIS pp. 44-46. Additionally, the plan required, among other
things, ‘‘unitized’’ operations to reduce by 75% the number of
drilling rigs (Jd. pp. 44, 56), measures to sereen necessary facili-
ties from roads and trails (Jd. p. 44), installation of more quiet
electric motors (/d.), and close State supervision of roadway and
similar construction (Jd. pp. 44-45).
H)
ten exploratory wells. Although plaintiffs’ counsel
represented that he would file a supplemental com-
plaint attacking the drilling permits themselves, which
he characterized as ‘‘a new matter,’’ so as to squarely
‘‘allege that oil development in the [Forest] will in
and of itself violate’ the applicable law (Tr. Oct. 10,
1977, p. 70), plaintiffs chose instead to go to trial
solely on the basis of their original complaint.
That complaint contained six counts. (R. 2-27).’
However, Counts II through VI were dismissed at or
before the close of the presentation of plaintiffs’ evi-
dence at trial and were net in any respect referred to
by the Supreme Court of Michigan in the opinion here
under review. In so striking these five counts, the trial
court relied principally upon the argument that the
challenged consent order, in and of itself, would not
lead to any oil or gas exploration or developmental
activities which could impact the environment. (See
e.g., R. 1005-06, 1046, 1061).*
The trial court similarly dismissed all but one of
the operative paragraphs of Count I of the plaintiffs’
complaint. These dismissed paragraphs stated a ‘‘sub-
stantive’’ cause of action under the Michigan Environ-
* As used herein, ‘‘R.’’ refers to the appendix filed by plaintiffs
in the Michigan Supreme Court.
* As the trial court held in striking Count III of the complaint
charging violations of the Michigan Oil and Gas Act, Mich. Stat.
Ann. § 13.139:
‘‘The court has stated that it [the consent order] is not a
guarantee to oil and gas drilling, any more than the leases are
guarantees [that] oil and gas operations may go forward. It
stands in approximately the same position as the leases which
the state granted ....’’ (R. 1061).
6
mental Protection Act (MEPA), Mich. Stat. Ann.
§ 14.528(201). They charged that the consent order
would lead to ‘‘pollution, impairment, or destruction’”’
of natural resources in violation of the NRC’s pur-
ported duties to prevent such impacts upon the envi-
ronment. Of particular significance here in the light of
the subsequent decision of the Michigan Supreme
Court, the trial court struck in its entirety paragraph
15 of the complaint which alleged, in pertinent part,
that
‘‘the order is likely to lead to impairment of wild-
life in the PRCSF including elk, bobcat, and bear.
Development in Unit I will require pipelines
through the Black River Swamp which will or is
likely to impair the ecosystem of the swamp and
the Black River.’’ (R. 10-11).
The only operative provision of Count I, beyond
those setting forth allegations of background facts and
the prayer for relief associated with that count, left
standing at the close of the plaintiffs’ case was para-
graph 16, which alleged a ‘‘procedural’’ MEPA case:
‘‘Prior to the entry of the order, the Commission
had a duty to make findings regarding the likeli-
hood of impairment to natural resources. MEPA
mandates that these facts ‘shall be determined.’
The order was entered without findings, and was
therefore entered unlawfully.’’ (R. 11) (citations
omitted ).°
* The trial court indicated that its refusal to strike the prayer
for relief associated with Count [ was based upon the fact that it
had refused to strike paragraph 16, so that plaintiffs were entitled
to appropriate relief upon a showing that the consent order ‘‘was
improperly entered into by virtue of the findings surrounding it.’’
(R. 1079).
7
Apparently recognizing that the trial court’s dis-
missal of paragraph 15 and all the other allegations
of the complaint concerning the purported impact of
drilling upon wildlife and other aspects of the environ-
mnt read the substantive environmental issues out of
the case, plaintiffs, finally, attempted to amend their
complaint so as to attack the drilling permits them-
selves. (R. 1081). At this point, however, the trial court
ruled that it was too late for plaintiffs to so change
their theory of the case, since defendants had ‘‘cross-
examined witnesses [and] prepared their case on the
basis”’ of the original complaint, which challenged only
the consent order. (R. 1082). Accordingly, the court
denied plaintiffs’ motion to amend the complaint, since
they had ‘‘not met the standards set forth in the rule,
ha[d] not convinced the Court that prejudice would
not result.’’ (R. 1083).
Given these trial court rulings at the close of plain-
tiffs’ case, the state defendants and the petitioners
limited their evidence to testimony responsive to the
procedural claim that the State had proceeded without
the ‘‘findings’’ required by Michigan law. Neither made
any effort to develop the affirmative defenses available
under Michigan law in response to a substantive
case—e.g., that there are no feasible and prudent al-
ternatives to the proposed action and that the action is
consistent with the public health, safety and welfare.
(Mich. Stat. Ann. § 14.528(203) (1) ). Indeed, the trial
court’s ruling at the close of plaintiffs’ case vindicated
the view, consistently taken by the defense, that it was
unnecessary to develop any affirmative defenses in this
case because plaintiffs, having not placed the drilling
permits in issue, had not properly pled and therefore
8
could not prove a substantive cause of action under
MEPA. (R. 810-12).°
At the conclusion of the case, the trial court held
that ‘‘essentially, this suit boils down to the Court’s
consideration of paragraph 16 of the complaint.”’ (A.
45a). Holding that the State’s obligations under the
Michigan environmental laws to make ‘‘findings,’’ as
alleged in paragraph 16, were satisfied by the publica-
tion of the EIS (A. 46a), the court rejected plaintiffs’
contentions under paragraph 16.
The trial court next observed that defendants had
consistently argued that plaintiffs had failed properly
to present for the court’s consideration ‘‘any adverse
impact’’ that would result from drilling operations be-
cause of their refusal to amend the complaint to attack
the drilling permits themselves. (A. 47a). Neverthe-
less, the trial court in its oral opinion delivered at the
close of the case went on to speak to the impact of oil
and gas development on natural resources, including
elk (A. 52a-53a), pursuant to the following rationale:
‘“‘In any event, to prevent return of the matter for
findings of fact in the event of an appeal, in the
alternative view of the Plaintiffs, although the
Court finds not well pled and with no attempt to
amend, but in consideration of the Court’s per-
haps too liberal policy in giving the Plaintiffs lee-
way, the Court will speak to the allegations of
*The State put on only two witnesses, both of whom had pre-
pared reports on the management plan underlying the consent
order (R. 1091-93), as well as the EIS for that plan (R. 1095, 1123,
1134), which the State claimed constituted the ‘‘findings’’ required
by applicable law. Petitioners put on only one witness, whose con-
sulting firm had prepared a report on the effects that an oil spill
would have upon ground water, which had been submitted to the
NRC as, in effect, a supplement to the EIS, (R. 1112-15).
=
9
pollution, impairment and destruction surround-
ing the air and water.’’ (A. 48a, emphasis added).
Concluding that plaintiffs’ evidence failed with re-
spect to these substantive issues, the trial court entered
final judgment against them. (A. 55a).
Plaintiffs lodged an immediate appeal with the
Michigan Court of Appeals, but then asked the Michi-
gan Supreme Court to bypass the intermediate appel-
late court and grant direct review of the trial court’s
judgment. The Michigan Supreme Court granted
plaintiffs’ request for a direct appeal and also entered
an order enjoining petitioners’ operations pending
that appeal. (A. 4a).
On February 20, 1979, the Michigan Supreme Court
rendered the decision which is the subject of this peti-
tion. The Court conceded that ‘‘the record below is un-
clear as to what conduct of defendants is alleged as
being ‘likely to pollute, impair or destroy the air, wa-
ter or other natural resources ...’”’ (A. 4a). It attrib-
uted this ‘‘confusion’’ to ‘‘ plaintiffs’ failure to amend
their September, 1976 complaint to specifically attack
the validity of the permits issued in August, 1977,
despite their offer to do so at an October, 1977 pretrial
conference.”’ (A. 5a). The Michigan Supreme Court
thus admitted that:
‘‘as a result, there was uncertainty in the proceed-
ings below as to whether the validity of the per-
mits was ever properly put in issue before the
court.’’ (A. 5a).’
"This statement by the Michigan Supreme Court must be con-
trasted with the specific rulings of the trial court that plaintiffs
had not placed the permits in issue and that to have granted their
motion to do so, after the close of all their evidence, would have
resulted in prejudice to the defendants. (See p. 7, supra).
10
However, asserting that ‘‘all parties presented evi-
dence on the likely effect of the drilling of the ten
wells’’ and that ‘‘the effects of these permits were com-
prehensively treated at the trial level” (A. 5a),
which assertions could have rested only upon the state
defendants’ and petitioners’ evidence responsive to
plaintiffs’ procedural case, the court concluded that
‘plaintiffs’ allegation that the consent order is likely
to lead to pollution, impairment or destruction of the
natural resources’’ of the Fvrest was fully litigated
below. (A. 5a). In so referring to ‘‘plaintiffs’ alle-
gation’’ as to the effects of the consent order, the
Michigan Supreme Court did not acknowledge that all
such substantive allegations, including the specific
charge that elk would be adversely affected, had been
removed from the case before defendants put on their
evidence, nor did it indicate that the petitioners had
for this reason not developed the affirmative defenses
available to rebut such substantive allegations.
On this basis, the court below reversed the trial
court’s decision and directed entry of a ‘‘permanent
injunction prohibiting the drilling of the ten explora-
tory wells pursuant to permits issued on August 24,
1977.’’ (A. 14a). In so ruling, the Michigan Court did
not even refer to plaintiffs’ procedural claim. Instead,
it rested decision solely on the facts that ‘‘plain-
tiffs have demonstrated a likelihood of impairment or
destruction of natural resources, specifically of elk, as
a result of the proposed drilling of ten exploratory
wells,’’ and that defendants had not developed affirma-
tive defenses to rebut this charge. (A. 9a).
11
Three of the seven Justices of the Michigan Su-
preme Court dissented. Recognizing that the trial
judge ruled that the ‘“‘effects [of drilling] were not
in issue’? (A. 21a, emphasis in original), they would
have
‘‘remand[ed] to the circuit court for further pro-
ceedings because the defendants may have been
denied an opportunity to present evidence on the
issue of likely impairment or destruction from
the drilling of ten test wells by a belief, shared
by the judge, that the effect of test drilling was
not in issue.”’ (A. 22a).
Petitioners applied to the Michigan Supreme Court
for rehearing, arguing that the Court’s refusal to re-
mand the case for hearing deprived them of the oppor-
tunity to respond to plaintiffs’ evidence with respect
to elk and wildlife, in violation of the Due Process
Clauses of both the Federal and Michigan Constitu-
tions. (A. 24a, 26a-27a). The Michigan Supreme Court
denied the petition for rehearing without an opinion.
(A. 43a).
REASONS FOR GRANTING THE WRIT
The Michigan Supreme Court has rendered a de-
cision contradicting numerous opinions of this Court
under the Due Process Clause which guarantee de-
fendants adequate notice of and subsequent oppor-
tunity to defend against the claims of plaintiffs.’ Be-
* Since the federal question in this case did not arise until the
Michigan Supreme Court’s opinion, petitioners raised the question
presented here at their earliest upportunity. See Brinkerhoff-Faris
Co. v. Hill, 281 U.S. 673, 677-78 (1980) ; Saunders v. Shaw, 244
U.S. 317, 320 (1917).
12
cause this case involves core Due Process rights,’
whose disregard by the Michigan Supreme Court has
brought to a standstill a significant energy project, the
issue raised in this petition make it a most apt ve-
hicle for the exercise of this Court’s certiorari juris-
diction.
This Court has repeatedly required, even in cases
involving informal administrative action, that notice
be adequate ‘‘to apprise the affected individual of, and
permit adequate preparation for, an impending ‘hear-
ing.’’? Memphis Light, Gas & Water Div. v. Craft,
436 U.S. 1, 14 (1978) (condemning as inadequate the
notice provided by a regulated utility to one of its cus-
tomers on the ground that it may not have apprised
him of available procedures for challenging a disputed
bill). See also Matthews v. Eldridge, 424 U.S. 319, 325
n.4 (1976); Goldberg v. Kelly, 397 U.S. 254 (1970).
Petitioners had no such notice here. At the time they
were required to put on their defense, the sole issue in
the case was a procedural question under the Mich-
igan environmental laws concerning the adequacy of
the ‘‘findings’’ made by the state agencies in connec-
tion with their approval of the 1976 consent order.
Petitioners’ evidence was tailored to meet this claim; it
was not addressed to the affirmative defenses which
are pertinent only to a ‘‘substantive’’ claim.” On ap-
* Boddie v. Connecticut, 401 U.S. 371, 375, 378 (1971) (the Fifth
and Fourteenth Amendments reflect ‘‘the centrality of the concept
of due process in the operation of [the judicial] system,’’ guaran-
teeing ‘‘notice and opportunity for hearing appropriate to the
nature of the case.’’)
*° See Kleppe v. Sierra Club, 427 U.S. 390, 410 n.21 (1976);
Minnesota Public Interest Research Group v. Butz, 541 F.2d 1292,
1300-01 (8th Cir. 1976), cert. denied, 430 U.S. 922 (1977), clari-
fying the distinction between procedural and substantive issues
ni i iii artist ot sen nckuartiot
13
peal, however, the Michigan Supreme Court ignored
the procedural issue, rendered decision upon substan-
tive environmental grounds, and ruled against petition-
ers because they had not developed their affirmative
defenses.
Thus, the deprivation of due process which occurred
here is more serious than in Craft and other similar
eases. Petitioners were not merely put in the posture
of guessing whether substantive environmental issues
were still in the case when they put on their defense;
they had a direct ruling by the trial judge striking
the elk-impact and all other substantive issues. With
this decision of the trial judge, which adopted the
view of the case asserted by the state defendants and
petitioners consistently throughout the litigation, pe-
titioners obviously had no reason to introduce evidence
as to elk, nor did they have any occasion to plead or
develop the affirmative defenses to dispute a substan-
tive case.”
In entering judgment for the plaintiffs under these
circumstances, the Michigan Supreme Court directly
under the National Environmental Policy Act (NEPA), 42 U.S.C.
§ 4321. See generally, Leventhal, Environmental Decisionmaking
and the Role of Courts, 122 U.Pa. L. Rev. 509 (1974).
™ The defenses thus not developed were substantial. It is esti-
mated that the oil and gas located in Unit I of the Forest could
heat nearly one million homes for one year (EIS p. 41), that
1400 jobs in other parts of Michigan would be created by allowing
development there (/d.), and that, at 1975 prices (which are less
than half of current levels (Jd. p. 71)), the State would receive
between $57 and $113 million in royalties (Jd. p. 41). Moreover,
even at 1975 prices, production of Unit I oil and gas would be
worth nearly $1 billion (Jd. p. 72) and would thus represent a
substantial contribution toward lessening the Nation’s dependence
on foreign imports.
14
contradicted the rule of this Court in Saunders v.
Shaw, 244 U.S. 317 (1917). In that case, Mr. Justice
Holmes, writing for a unanimous Court, dealt with a
situation quite like the present one. Plaintiff filed suit
in a state court of Louisiana to enjoin the collection of
a drainage tax, offering evidence to show that his land
would receive no benefit from the drainage project. De-
fendant objected to this evidence, and it was excluded
as inadmissible. 244 U.S. at 318. Ultimately, however,
the Louisiana Supreme Court upheld plaintiff’s claim
that his land could not be benefited by the project and
granted an injunction against the tax assessment.”
This Court reversed, holding that ‘‘when the trial
court ruled that it was not open to the plaintiff to show
that his land was not benefited, the defendant was not
bound to go on and offer evidence that he contended
was inadmissible, in order to rebut the testimony al-
ready ruled to be inadmissible ... .’’ 244 U.S. at 319.
The Court took this action because it could not other-
wise ‘‘be sure that the defendant’s rights are protected
without giving him a chance to put his evidence in.”’
(Id.).
The vitality of the rule of Saunders v. Shaw has
been recognized in subsequent decisions of this Court.”
Moreover, in other relevant contexts, this Court has
time and again struck down notice in state judicial
proceedings which was too vague to inform a defend-
ant of the precise nature of the charges or actions that
12 Two Justices of the Louisiana Supreme Court, like the minor-
ity below here, dissented from its action, arguing that the case
should be remanded to the trial court. 244 U.S. at 319.
8 See e.g., Hamling v. United States, 418 U.S. 87, 110, 149-50
(1974), in which all nine members of the Court referred to the
rule of Saunders v. Shaw without questioning its validity.
iti iii tec ccunihiiiirg <i mb bbealt ences
15
might be taken against him. J'aylor v. Hayes, 418 U.S.
488 (1974); Eaton v. City of Tulsa, 415 U.S. 697
(1974) ; In re Ruffalo, 390 U.S. 544, 550-51 (1968).
The reason for this Court’s consistent adherence to
the rule of Saunders v. Shaw and its insistence in other
analogous contexts upon adequate notice is perhaps
best summed up in Mr. Justice Frankfurter’s concur
ring opinion in Antt-Facist Committee v. McGrath,
341 U.S. 123, 171-72 (1951) :
‘‘No better instrument has been devised for arriv-
ing at truth than to give a person in jeopardy of
serious loss notice of the case against him and
opportunity to meet it.’’
Here, petitioners were denied that opportunity. Hav-
ing successfully moved to strike those substantive as-
pects of the plaintiffs’ complaint that pertained to elk
and other wildlife and having limited plaintiffs’ claims
to a procedural attack upon the alleged failure of the
Michigan agencies to make the findings required by
Michigan law, petitioners were fully justified in be-
lieving that, should the trial court’s rulings on their
motions ultimately be reversed on appeal, they would
be entitled to a remand where they would have the
opportunity to present their evidence. See United
States v. Gypsum Co., 333 U.S. 364, 401-02 & n.20
(1948); White v. Rimrock Tidelands, Inc., 414 F.2d
1336, 1340 (5th Cir. 1969) ; Gulbenkian v. Gulbenkian,
147 F.2d 173, 177 (2d Cir. 1945), all of which
reflect the unanimous view that, when an appellate
court reverses the grant of a defendant’s motion at
the close of the plaintiff’s case to strike the complaint,
‘‘the action must be remanded for further proceedings
16
to allow the defendant to present his case.’’ 414 F.2d
at 1340."
CONCLUSION
The constitutional principles violated by the Michi-
gan Supreme Court are so well established that peti-
tioners request the Court to grant the petition, reverse
the decision below, and remand the case for a full hear-
ing in the trial court. In the alternative, petitioners
request that this Court grant the petition and set the
ease for plenary consideration.
Respectfully submitted,
EK. Epwarp Bruce
D1anE P. Woop
Covington & Burling
888 Sixteenth Street, N.W.
Washington, D.C. 20006
RicHarp B. Foster
Wess A. SMITH
TERENCE V. LYNAM
Foster, Swift, Collins & Coey
313 South Washington Square
Lansing, Michigan 48933
Attorneys for Petitioners
** Michigan General Court Rule 504.2, the procedural basis for
defendants’ motion to dismiss plaintiffs’ complaint at the close of
its case, is similar in all relevant respects to FRCP 41(b) under
which the cases cited above were decided.
=a vr. = eCOell le
Rg PS eg pee Oe SO A i rot,
.
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APPENDIX A
West Micuican EnviroNMENTAL Action CounciL, INc.,
Pigeon River Country Association, Northland Sports-
man’s Club, Detroit Audubon Society, Inc., Michigan
Council of Trout Unlimited, Inc., Michigan Student
Environmental Foundation, Inc., Michigan Nature As-
sociation, Inc., East Michigan Environmental Action
Council, Inc., Michigan Lakes and Streams Associa-
tion, Inc., Sierra Club, Ine., Plaintiffs-Appellants,
V.
Natura, Resources Commission of the State of Michigan,
and Howard Tanner, as Director of the Department of
Natural Resources of Michigan, Defendants-Appellees,
and
Shell Oil Company, a Delaware Corporation, Amoco Pro-
duction Company, a Delaware Corporation, and North-
ern Michigan Exploration Company, a Michigan Cor-
poration, Intervening Defendants-Appellees.
Docket No. 60800,
Calendar No. 6.
Supreme Court of Michigan.
Argued May 3, 1978.
Decided Feb. 20, 1979.
Roger L. Conner, Grand Rapids, for plaintiffs-appel-
lants.
Frank J. Kelly, Atty. Gen., Robert A. Derengoski, Sol.
Gen., Stewart H. Freeman, Thomas F. Schimpf, Asst.
2a
Attys. Gen., Lansing, for defendants-appellees Natural
Resources Commission of the State of Michigan and How-
ard Tanner, Director.
Foster, Swift, Collins & Coey, P.C., Lansing, by Rich-
ard B. Foster, Webb A. Smith, Terence V. Lynam, Lan-
sing, for intervening defendants-appellees.
Moopy, Justice.
The issue is whether plaintiffs have made a prima facie
showing under the Michigan environmental protection
act, M.C.L. § 691.1201 et seq.; M.S.A. § 14.528(201) e¢ seq.,
that the drilling of ten exploratory wells in the Pigeon
River Country State Forest will constitute a likely im-
pairment or destruction of natural resources. We hold:
I) that the question of the likely effects of the ten ex-
ploratory wells was properly before the trial court;
II) that the trial judge erred in deferring to the De-
partment of Natural Resources conclusions as to the like-
lihood of impairment of natural resources rather than
exercising his own totally independent judgment;
IIT) that the evidence adduced at trial conclusively dem-
onstrates that the drilling of the ten exploratory wells for
which permits have been granted will likely result in an
impairment or destruction of elk. Plaintiffs have thereby
made out a prima facie case under M.C.L. § 691.1203(1) ;
M.S.A. § 14.528(203) (1).
We reverse and remand to the trial court for entry of a
permanent injunction prohibiting the drilling of the ten
exploratory wells pursuant to permits issued on August 24,
1977.
Facts
In 1968 the Department of Natural Resources (DNR)
sold oil and gas leases covering 546,196.89 acres of state-
owned land, including 57,669 acres -in what is now known
At A nar ann br tate alae
2 PAE RR BRIS BASES FFG PS
3a
as the Pigeon River Country [sic] State Forest (Pigeon
River Forest or Forest). Since that time, 19 oil and gas
wells have been drilled in the Forest, five of which have
been and are now producing wells.
Over a period of years, various plans to provide for
controlled oil and gas development in the Forest were
considered by the DNR. A management plan (the “limited
development plan”), allowing oil and gas development in
the southern one-third of the Forest while prohibiting de-
velopment in the northern two-thirds, was submitted by
the Director of the DNR, Howard Tanner, to the Natural
Resources Commission (NRC). The DNR was asked to
prepare an Environmental Impact Statement with respect
to this management plan. In December, 1975, the Environ-
mental Impact Statement (EIS) was completed.
The DNR then commenced negotiations with oil compa-
nies holding leases in the Forest in an attempt to have
them agree to the development scheme set forth in the
proposed management plan. On June 11, 1976 the NRC
entered into an agreement entitled “Stipulation Consent
Order” with Shell Oil Company, Amoco Production Com-
pany, and Northern Michigan Exploration Company. The
consent order adopted the limited development plan al-
lowing oil and gas development in the southern one-third
of the Forest, subject to certain enumerated conditions
and restrictions.’
The West Michigan Environmental Action Council
(WMEAC) and the Pigeon River Country Association
(PRCA) filed a motion to intervene in In the Matter of
Hydrocarbon Development in the Pigeon River Country
* Similar consent orders were later negotiated with Sun Oil Com-
pany, Michigan Consolidated Gas Company, Getty Oil Company,
and Chevron Oil Company, such that the only oil and gas lease in
the Forest not covered by a consent order was that for Corwith
1-22, the subject of litigation in Michigan Oil Co. v. Natural Re-
sources Commission, 406 Mich. 1, 276 N.W.2d 141 (1979).
are ener
_
4a
State Forest and moved for a hearing to be held on the
June 11, 1976 consent order. On August 13, 1976 the NRC
rejected this motion on the basis that it was premature and
should properly be granted only when permits were ap-
plied for.
On June 12, 1977 Shell Oil Company applied for permits
to drill ten exploratory wells in the limited development
region. On August 24, 1977 the Supervisor of Wells
granted these permits.
On September 17, 1976 plaintiffs filed the complaint in
this action under the Michigan environmental protection
act claiming that the consent order was entered into un-
lawfully and was likely to lead to the impairment of wild-
life in the Forest. Plaintiffs sought an order restraining
the state from issuing any permits to drill for oil and/or
gas in the Forest or from implementing the June 11, 1976
consent order.
. On December 5, 1977 the court rendered its final deci-
sion against plaintiffs and denied a motion for a stay and/
or injunctive order pending appeal.
On December 7, 1977 an appeal was filed in the Court of
Appeals. The Court of Appeals denied plaintiffs’ motion
for an injunctive order pending appeal on December 15,
1977. The following day plaintiffs filed an application for
leave to appeal with this Court and requested an injunc-
tion pending that appeal. On December 22, 1977 this Court
granted the injunctive request. 402 Mich. 836 (1977). Later,
on January 5, 1978 we granted the motion for an appeal
prior to decision by the Court of Appeals. 402 Mich. 845
(1978).
I
The record below is unclear as to what conduct of de-
fendants is alleged as being “likely to pollute, impair or
destroy the air, water or other natural resources or the
public trust therein.” M.C.L. § 691.1203(1); M.S.A. § 14.528
ie deer Ae ore
da
(203) (1). Specifically, it is uncertain whether the action of
the Supervisor of Wells in granting ten permits on August
24, 1977 to drill exploratory wells for oil and gas was a
part of such conduct.
Part of the confusion resulted from plaintiffs’ failure
to amend their September, 1976 complaint to specifically
attack the validity of the permits issued in August, 1977,
despite their offer to do so at an October, 1977 pretrial
conference. As a result, there was uncertainty in the pro-
ceedings below as to whether the validity of the permits
was ever properly put in issue before the court.
Nonetheless, all parties presented evidence on the likely
effect of the drilling of the ten wells. Furthermore, the
trial court chose to address the issue of the likelihood of
pollution, impairment or destruction from the drilling ac-
tivities contemplated by the ten permits.
We conclude that the issuance of the permits to drill ten
exploratory wells was properly before the circuit court as
conduct alleged to be likely to pollute, impair and destroy
the air, water or other natural resources or the public
trust therein. The effects of these permits were compre-
hensively treated at the trial level, both by the parties and
by the circuit judge. Further, the consent order, which the
trial court recognized was designed to be a “legally en-
forceable” document, stated that “[a]s many as ten test
wells may be drilled for verification of seismic informa-
tion. Specific drilling locations for these wells shall be de-
termined by the oil companies and the director in consulta-
tion with the Public Service Commission.”
Therefore, plaintiffs’ allegation that the consent order is
likely to lead to pollution, impairment or destruction of the
natural resources of the Pigeon River Country State For-
est can fairly be said to include within it an allegation
that the issuance of permits for drilling test wells will
have such result, the issuance of these permits being an
inevitable consequence of the adoption of the consent order.
6a
II
Plaintiffs allege that the trial court deferred to the
DNR’s conclusion that no pollution, impairment or de-
struction of the air, water or other natural resources or
the public trust therein was likely to result from the con-
templated drilling. Plaintiffs claim that such deference
constituted error by the trial court and that the court had
a responsibility to independently determine whether such
pollution, impairment or destruction would occur. We
agree that the trial court so erred.
While we understand the trial judge’s reluctance to sub-
stitute his judgment for that of an agency with expe-
rience and expertise, the Michigan environmental protec-
tion act requires independent, de novo determinations by
the courts.
The act declares that “[p]rinciples of burden of proof
and weight of the evidence generally applicable in civil ac-
tions in the circuit courts shall apply to actions brought
under this act”. M.C.L. § 691.1203(1) ; M.S.A. § 14.528(203)
(1). Furthermore, the Legislature specifically addressed
the relationship between suits brought under the environ-
mental protection act and administrative proceedings:
“(2) If administrative, licensing or other proceed-
ings are required or available to determine the legal-
ity of the defendant’s conduct, the court may remit the
parties to such proceedings which proceedings shall
be conducted in accordance with and subject to the
provisions of Act No. 306 of the Public Acts of 1969,
being sections 24.201 to 24.313 of the Compiled Laws
of 1948. In so remitting the court may grant temporary
equitable relief where necessary for the protection of
the air, water and other natural resources or the pub-
lic trust therein from pollution, impairment or de-
struction. In so remitting the court shall retain juris-
diction of the action pending completion thereof for
~ an
ee eee
2 aa
7a
the purpose of determining whether adequate protec-
tion from pollution, impairment or destruction has
been afforded.
“(3) Upon completion of such proceedings, the
court shall adjudicate the impact of the defendant’s
conduct on the air, water or other natural resources
and on the public trust therein in accordance with this
act. In such adjudication the ccurt may order that ad-
ditional evidence be taken to the extent necessary to
protect the rights recognized in this act.
“(4) Where, as to any administrative, licensing or
other proceeding, judicial review thereof is available,
notwithstanding the provisions to the contrary of Act
No. 306 of the Public Acts of 1969, pertaining to ju-
dicial review, the court originally taking jurisdiction
shall maintain jurisdiction for purposes of judicial re-
view.” (Emphasis supplied.) M.C.L. § 691.1204; M.S.A.
§ 14.528 (204).
Additionally, §5 of the act states in relevant part:
“(2) In any such administrative, licensing or other
proceedings, and in any judicial review thereof, any
alleged pollution, impairment or destruction of the
air, water or other natural resources or the public
trust therein, shall be determined, and no conduct
shall be authorized or approved which does, or is
likely to have such effect so long as there is a feasible
and prudent alternative consistent with the reason-
able requirements of the public health, safety and
welfare.” (Emphasis supplied.) M.C.L. § 691.1205;
M.S:A. § 14.528(205).
The above sections provide that the court in which suit
is filed retains original jurisdiction of the matter, even if
it chooses to remit parties to administrative proceedings.
Moreover, the court has a responsibility to “adjudicate”
8a
and “determine” whether “adequate protection from pollu-
tion, impairment or destruction has been afforded”. Courts
can discharge their responsibility to make such determina-
tions only if they make independent, de novo judgments.
In fact, M.C.L. § 691.1204(4); M.S.A. § 14.528(204) (4),
specifically indicates that the usual standards for review
of administrative actions under the Administrative Pro-
cedures Act, M.C.L. § 24.201 et seq.; M.S.A. §3.560(101)
et seq., are inapplicable once an environmental protection
act case has been filed in a circuit court. The environmental
protection act would not accomplish its purpose if the
courts were to exempt administrative agencies from the
strict scrutiny which the protection of the environment de-
mands.
Shortly after the environmental protection act was
passed, its chief legislative sponsor stated that “[u]nder
the new statute, courts may inquire directly into the merits
of environmental controversies, rather than concern them-
selves merely with reforming procedures or with invali-
dating arbitrary or capricious conduct.” ?
This Court has previously acknowledged:
“In the final analysis the very efficacy of the EPA
will turn on how well circuit court judges meet their
responsibility for giving vitality and meaning to the
act through detailed findings of fact.” Ray v. Mason
County Drain Commissioner, 393 Mich. 294, 307-308,
24 N.W.2d 883, 889 (1975).
Therefore, we conclude that the trial judge erred in fail-
ing to exercise his own totally independent judgment. We
find, however, no need to order remand because we con-
clude that a judgment in favor of plaintiffs is required on
the record presented.
* Press release, Michigan Passes Landmark Environmental Law,
July 2, 1970, State Representative Thomas Anderson.
PS eR Se a ae te ee eed Cn An
ee i ee
9a
Il
Defendants in this case have not sought to raise any
affirmative defenses under M.C.L. § 691.1203(1); M.S.A.
§ 14.528(203)(1), but, rather, have rested their case on a
denial that plaintiffs have made a prima facie showing that
the conduct of defendants has, or is likely to pollute, im-
pair or destroy the air, water or other natural resources
or the public trust therein. We find that plaintiffs have
demonstrated a likelihood of impairment or destruction
of natural resources, specifically of elk, as a result of the
proposed drilling of ten exploratory wells.
There is little, if any, dispute that the drilling of the
exploratory wells will have some adverse impact upon
some wildlife, particularly elk, bobeat and bear. The trial
court found that “[t]here appears to be no question that
adverse impacts will be visited upon particularly the elk,
and to some lesser extent, bear and bobcat. * * * It is clear
that an adverse impairment of the herd is likely for some
unknown period to some unknown degree.” *
* The record supports this finding.
Gary Boushelle, the DNR wildlife biologist who approved the
ten sites, agreed that there would be a ‘‘severe adverse environ-
mental effect for some wildlife species’. E. Ford Kellum, a wild-
life biologist and a former employee of the DNR, stated that Unit
1 of the Forest, in which the exploratory drilling is to occur, has
‘‘unique, almost endangered species, elk, bear and bobcat, osprey
and a bald eagle, of which this was the center of where it looked
like if they were going to survive the human race it’s gonna’ be
here.’’ Mr. Kellum testified that his experience at Charlton 1-4 and
other wells led him to the observation that once drilling occurred
in an elk habitat the elk no longer returned there.
Mr. Ned Caveney, the area forester in charge of the Forest,
stated that it has been necessary to restrict snowmobiles in the
Forest, even though each snowmobile represented only a temporary
intrusion, in order ‘‘to improve and increase favorable elk habitat,
and * * * to provide seclusion for wildlife’’.
Mr. Robert Strong, the district wildlife biologist in Gaylord, in
charge of overseeing development of management plans for elk,
10a
Perhaps the single most revealing piece of evidence is
the Environmental Impact Statement for Potential Hydro-
bear and bobcat, noted that elk need large blocks of land since
they normally range over 10 to 25 miles. He noted that the area
in which the proposed drilling is to take place presently provides
excellent habitat for elk, is within their range, and that they are
commonly seen there. He stated that each well site would adversely
affect elk up to two to three miles away.
Mr Strong also stated his opinion that the effect on wildlife did
not differ ‘‘whether there was 10 or 40’’ wells drilled, and con-
cluded that a logical environment defense line for elk would rule
out any further well drilling in that Forest.
Mr. Strong further testified that there has been a steady decline
in bobeat population due to loss of habitat and increased develop-
ment, and that the drilling of wells would have an adverse effect
on bear and bobcat although he could not qualify within what
radius each site would affect those animals.
Nelson Johnson, Jr., the DNR regional wildlife biologist for the
northern half of the Lower Peninsula, agreed with Mr. Strong’s
statement that elk would be adversely affected within a two-to
three-mile radius around each drilling site. Mr. Johnson stated
that the sites proposed for drilling offered good habitat for elk,
and had previously noted the effects of a reduction in available
habitat in his testimony in Michigan Oil Co. v. Natural Resources
Commission, supra. In that case he had stated:
‘“If they drill a well, there are not going to be a lot of elk,
and bobcats and bear drop dead. But because of their aversion
to this type of thing—especially the elk—and the history of
how this animal has become almost extinct over almost 80 to
95 percent of its former range, indicates it is a sensitive animal.
Their pattern of use of the area is going to be disrupted, and
we believe and think that our research which we have carried
on in our state in the past—this elk herd is going to be less
able to make use of the range and therefore, since there is a
limited place where they can go, sooner or later it is going to
result in decrease of their population.’’
Dr. Donald Inman, of the Office of Environmental Review of
the DNR, stated in a letter that the results of drilling in the Forest
would be ‘‘that those species of wildlife for which people value the
Forest and those which are susceptible to man-made disturbances
will, in all probability, be reduced in number’’.
iw Eevee Sac tee .
Sih MAS ces itt a hs Lill AE at i tS a le
— ee he tt
lla
carbon Development in the Pigeon River Country State
Forest, prepared by the DNR. Some of this statement
concerns the impact of production of oil and is not rele-
vant for present purposes. However, many of the EIS’s
conclusions directly apply to the effects of exploratory
drilling.
Testimony before the trial court indicated that six of
the ten proposed sites were not adjacent to any road, re-
quiring that roads be built to such sites. The EIS cites
studies in Montana, by the Intermountain Forestry and
Range Experiment Station, 1973, which concluded that
“fejlk avoid roads even when there is no traffic”. The EIS
also observed that “[w]hether the elk will return to their
former range following completion of the last seismic sur-
vey work is unknown”.
Seismic survey work precedes exploratory drilling and
it is designed to determine whether oil might be in an
area; exploratory wells are then drilled to determine if
production efforts are warranted. Seismic survey work oc-
curs over a less prolonged period than exploratory drill-
ing and yet, apparently, may result in an extended ab-
sence of the elk to the extent that it is uncertain whether
or not they will return.
Exploratory drilling obviously exacerbates this problem
and, in fact, the EIS notes, “with the possibility of drill-
ing and production development following the survey, an
early return by the elk is doubtful.”
The EIS observes that ‘‘[t]he most pressing need of
Michigan elk is to protect their range against further hu-
man intrusion for purposes other than timber or wildlife
management,” and that the last remaining sanctuaries
against the disturbance of oil and gas development have
now disappeared. It concludes:
“Additional disturbances from hydrocarbon devel-
opment, new roads, initial drilling activities, and the
presence of facility sites will significantly reduce elk
,
Se z
12a
numbers in the proposed area. It is likely that much of
the existing herd will not remain in revised Unit 1,
but will spread out to the northern areas of the
PRCSF and to private lands. However, private lands
also may be impacted by hydrocarbon development. An
unknown number will not survive since habitat is finite.
A viable population may survive, however, if intensive
management efforts are established in priority areas
in the northern PRCSF and if poaching can be sub-
stantially decreased throughout the elk range.” (Em-
phasis supplied.)
The EIS also found that bobcats are “expected to retreat
in the face of hydrocarbon development. The history of
this species indicates a high degree of incompatibility with
the works of man”. With respect to bears, the EIS states
“[bJears have been pressed into wild areas of diminishing
size by the increasing pressures of land development and
other human disturbances throughout much of the north-
ern Lower Peninsula. * * * It is expected that the one to
two percent of the land which will be intensively developed
as sites will have less impact on bears than will the devel-
opment of service roads with resultant multiplied human
activities and increased human contact.”
Some quantification of the adverse impact of exploratory
drilling on the elk can be gained from comparing the EIS’s
Matrix for Proposed Hydrocarbon Development in the
Southern Portion of the Forest, with Dr. Inman’s testi-
mony. Dr. Inman, who participated in the development of
the EIS, testified that a slow recovery time is considered
to be 40 to 50 years or more, a short recovery time less
than 20 years, and a great recovery time is about 100 years
or more.
The Environmental Impact Matrix predicts that elk will
be adversely affected by the development of roads and
pads. These are associated with even exploratory drilling.
13a
The Environmental Impact Matrix defines a significant ad-
verse impact as “a change in the element that is impacted
from its present status to a status that may take a long
time for recovery, at least during the duration of the proj-
ect.” Applying Dr. Inman’s definitions of what constitutes
a slow recovery time to the matrix predictions, it would
appear that elk would avoid the impacted areas for 40 to
50 years.
As noted above, the trial court conceded that the explora-
tory drilling would have an adverse effect upon wildlife.
However, the trial court determined that this adverse im-
pact did not constitute impairment or destruction of a nat-
ural resource because such adverse impacts are “commonly
the result of management decisions. Improving
deer habitat by cutting trees to allow the sun to shine
on the forest floor for the purpose of new growth, it
certainly has an adverse impact upon the animals,
birds, so forth, using the trees. Eradicating the entire
fish population in a lake or stream to destroy un-
wanted ‘trash species in order to plant more acceptable
fish certainly has an adverse impact on the fish killed
but is an acceptable management technique. * * * These
animals, along with the trees that will be cut, har-
vested, or otherwise removed, are the innocent victims
of the discovery of oil in their forest domain”.
This determination reveals a fundamental misconception.
If nature is allowed to pursue its own course, the growth
and expansion of some species will inevitably result in the
diminution and possible extinction of others. Faced with
a situation where an adverse impact will occur naturally
unless some action is taken, it is a management decision
to determine whether such natural processes should pro-
ceed or whether, through human intervention, the adverse
impact should artificially be shifted to other species. The
choice is not whether an adverse impact will occur, but,
rather, upon what.
l4a
If oil or gas development does not take place, the oil and
gas will not be adversely impacted. On the other hand, if
such development does take place, wildlife is adversely
affected. Thus, the choice is whether or not any adverse
impact on natural resources will be allowed.
We recognize that virtually all human activities can be
found to adversely impact natural resources in some way
or other. The real question before us is when does such
impact rise to the level of impairment or destruction?
The DNR’s environmental impact statement recognizes
that ‘‘[eJjlk are unique to this area of Michigan’’ and that
the herd is ‘‘the only sizable wild herd east of the Missis-
sippi River. Several attempts to introduce elk elsewhere
in Michigan have been unsuccessful.’’
It is estimated that the herd’s population, which num-
bered in excess of 1500 in 1963, now probably lies between
170 and 180. Expert testimony has established that the
Pigeon River Country State Forest, particularly unit 1 in
which the exploratory drilling is to take place, provides
excellent habitat for elk and that the elk frequent this area.
Furthermore, it is clear from the record that available
habitat is shrinking. The result of a further shrinkage of
this habitat by the intrusion of exploratory drilling and
its concomitant developments is that ‘‘an unknown num-
ber [of elk] will not survive’’.
In light of the limited number of the elk, the unique
nature and location of this herd, and the apparently serious
and lasting, though unquantifiable, damage that will result
to the herd from the drilling of the ten exploratory wells,
we conclude that defendants’ conduct constitutes an impair-
ment or destruction of a natural resource.
Accordingly, we reverse and remand to the trial court
for entry of a permanent injunction prohibiting the drilling
of the ten exploratory wells pursuant to permits issued on
August 24, 1977.
Firzcrratp, Ryan and Wi.uias, J.J., concur.
Ra iT 6 Ak I Cte
l5a
Levin, Justice.
The issue is whether plaintiffs made a prima facie show-
ing under the environmental protection act’ that the drill-
ing of ten exploratory wells in Unit 1 of the Pigeon River
Country State Forest will constitute a likely impairment
or destruction of natural resources.
We would vacate the judgment of the trial court and
remand to it for further proceedings, retaining jurisdiction.
I
In 1968 the Department of Natural Resources (DNR)
sold oil and gas leases covering 546,196.89 acres of state-
owned land including 57,669 acres in what is now known
as the Pigeon River Country State Forest (PRCSF). Since
that time, 19 oil and gas wells have been drilled in the
PRCSF, 5 of which are producing wells.
Over a period of years, various plans to control oil and
gas development in the PRCSF were considered by the
DNR.? A management plan, allowing oil and gas develop-
ment in the southern one-third of the PRCSF while pro-
hibiting development in the northern two-thirds, was sub-
mitted by the Director of the DNR to the Natural Re-
sources Commission (NRC). The DNR was asked to pre-
pare an Environmental Impact Statement (EIS) with re-
spect to the management plan, which was completed in
December, 1975.
The DNR then negotiated with oil companies holding
leases in the PRCSF in an effort to have them agree to
the management plan. On June 11, 1976 the NRC entered
2M.C.L. § 691.1201 et seg.; M.S.A. § 14.528(201) et seq.
?In 1973, the DNR published a ‘‘Concept of Management’’ for
the PRCSF. In January, 1975, a specific proposal for unitized
development of the oil and gas in the PRCSF was presented to
the DNR. A revised proposal was presented in October, 1975 which
was published for public comment and review.
nearer e ne eee
l6a
into a ‘‘Stipulation Consent Order,’’ intended to be legally
binding, with Shell Oil Company, Amoco Production Com-
pany, and Northern Michigan Exploration Company. The
consent order adopted the management plan allowing oil
and gas development in the southern one-third of the
PRCSF, subject to certain conditions and restrictions.’
Plaintiffs West Michigan EnvironmentalAction Council
and the Pigeon River Country Association moved to inter-
vene in administrative proceedings concerning the consent
order and sought a hearing. On August 13, 1976 the NRC
rejected this motion on the basis that it was premature and
could properly be granted only when permits were applied
for.
On June 12, 1977 Shell Oil Company applied for permits
to drill ten exploratory wells in the limited development
region and on August 24, 1977 the Supervisor of Wells
granted these permits.
Before the permits were applied for, on September 17,
1976, plaintiffs commenced this action under the environ-
mental protection act claiming that the consent order was
not lawfully entered into and was likely to lead to impair-
ment of wildlife in the PRCSF. They sought an order re-
straining the state from issuing any permits to drill for oil
or gas in the PRCSF or in any other way implementing
the consent order.
On December 5, 1977 the court found against plaintiffs
and denied a motion for a stay pending appeal.
We granted leave to appeal prior to decision by the
Court of Appeals and injunctive relief pending appeal.
* Similar consent orders were later negotiated with Sun Oil Com-
pany, Michigan Consolidated Gas Company, Getty Oil Company,
and Chevron Oil Company. However, Corwith 1-22, the subject of
Michigan Oil Co. v. Natural Resources Commission, 406 Mich. 1,
276 N.W.2d 141 (1979), was not covered by a consent order.
TE ESS
17a
II
Plaintiffs contend that the judge deferred to the DNR’s
conclusion that no pollution, impairment or destruction of
the air, water or other natural resources or the public trust
therein was likely to result from the contemplated drilling.
The judge’s comments in this regard are unclear, but are
subject to that construction.
We agree with the plaintiffs that such deference would
constitute error. A judge has a responsibility to determine
independently whether pollution, impairment or destruc-
tion is likely to occur. While we can understand a judge’s
reluctance to substitute his judgment for an agency’s in-
formed decision, a stance generally appropriate when re-
viewing decisions of an administrative agency, the envi-
ronmental protection act provides for a separate, inde-
pendent determination by a court.
Not only does the act declare that ‘‘[p]rinciples of bur-
den of proof and weight of the evidence generally applic-
able in civil actions in the circuit courts shall apply to
actions brought under this act’’,t the Legislature specifi-
cally addressed the relationship between actions brought
under the environmental protection act and administrative
proceedings.’ The usual standards for review of adminis-
trative actions under the Administrative Procedures Act °
are not applicable.
As recently stated in Superior Public Rights, Inc. v.
Department of Natural Resources, 6 Env.L.Rptr. 20439,
20437 (Ingham Circuit Court [1976], where this issue was
raised:
‘‘'T Jo rule that the reviewing court is bound by the
administrative fact finding would be but to destroy one
*M.C.L. § 691.1203(1) ; M.S.A. § 14.528(203) (1).
5M.C.L. §§ 691.1204, 691.1205; M.S.A. §§ 14.528(204), 14.528
(205).
°M.C.L. § 24.201 et seg.; M.S.A. § 3.560(101) et seq.
18a
of the central thrusts and purposes of [MEPA]—to
watchdog the controlling governing agencies them-
selves in order to guarantee that they do not by inad-
vertence become the captives of the very entities they
are seeking to control and/or fail to recognize, due to
ingrained myopia, inertia and bureaucratic compla-
cence, the very environmental dangers they were es-
tablished to prevent.’’ (Digest.)
III
Defendants have not sought to raise affirmative defenses
under the environmental protection act,’ but have rested
on a denial that plaintiffs made a prima facie showing
that the conduct of defendants is likely to pollute, impair
or destroy the air, water or other natural resources or the
public trust therein.
There is little dispute that drilling the exploratory wells
will have adverse impact upon some wildlife, particularly
elk, bobcat and bear. The judge found that ‘‘[t]here ap-
pears to be no question that adverse impacts will be visited
upon particularly the elk, and to some lesser extent, bear
and bobcat. * * * It is clear that an adverse impairment of
the herd is likely for some unknown period to some un-
known degree.’’ He determined, however, that this adverse
impact did not constitute impairment or destruction of a
natural resource because such adverse impacts are
‘‘commonly the result of management decision. Im-
proving deer habitat by cutting trees to allow the sun
to shine on the forest floor for the purpose of new
growth, it certainly has an adverse impact upon the
animals, birds, so forth, using the trees. Eradicating
the entire fish population in a lake or stream to de-
stroy unwanted trash species in order to plant more
acceptable fish certainly has an adverse impact on the
*M.C.L, § 691.1203(1) ; M.S.A. § 14.528 (203) (1).
19a
fish killed but is an acceptable management technique.
* * * These animals, along with the trees that will be
cut, harvested, or otherwise removed, are the innocent
victims of the discovery of oil in their forest domain.’’
He particularly relied on the testimony of Dr. Inman, who
had expressed the opinion that, although the drilling would
have an adverse impact on certain species of animals, it
would not have an adverse impact on the overall environ-
ment of the forest.
The examples of management technique offered by the
judge are inapposite. If nature is allowed to take its own
course, the growth and expansion of some species may re-
sult in the diminution and possible extinction of others.
Faced with a situation where an adverse impact may occur
naturally unless some action is taken, it is a management
decision to determine whether such natural processes
should proceed or whether, through human intervention,
the adverse impact should be shifted to other species. That
choice, however, is not whether an adverse impact on a
natural resource will occur at all but what species will bear
the burden of it.
The Environmental Impact Statement states that ‘‘[e]lk
are unique to this area of Michigan’’ and that the herd is
“the only sizable wild herd east of the Mississippi River.
Several attempts to introduce elk elsewhere in Michigan
have been unsuccessful.’’ (Emphasis supplied.)
It is estimated that the herd’s population, which num-
bered in excess of 1500 in 1963, is now probably between
170 and 180. Testimony established that the PRCSF, par-
ticularly Unit I in which the exploratory drilling is to take
place, provides a favorable habitat for elk and that elk
have frequented the area. Further, the available habitat
is shrinking. It appears that the result of a further shrink-
age by the intrusion of exploratory drilling is that some
elk will not survive.
20a
In light of the limited number of elk and the unique na-
ture and location of this herd, there is evidence that de-
fendants’ conduct may impair or destroy a natural re-
source.
We refrain, however, from deciding whether plaintiffs
made a prima facie case that defendants’ conduct is likely
to impair or destroy # natural resource within the mean-
ing of the environmental protection act for reasons stated
in part Lv, infra.
IV
The complaint alleged: ‘‘The [consent] order will or is
likely to lead to pollution, impairment and/or destruction
in the natural resources of the [Pigeon River Country
State Forest].”
At the trial, it was unclear whether the conduct so al-
leged as ‘‘likely to pollute, impair or destroy the air, water
or other natural resources or the public trust therein” *
was or should be treated as limited to the effects of the
consent order or whether it included the effects of issuing
ten permits to drill exploratory wells for oil and gas.
Eleven months after the complaint was filed, in August,
1977, the Supervisor of Wells, pursuant to the consent
order, granted ten permits to drill exploratory wells. Plain-
tiffs then sought an injunction restraining the oil com-
panies from exercising their rights under the permits. The
circuit court denied a preliminary injunction. In Septem-
ber, 1977 plaintiffs appealed to the Court of Appeals which
denied relief because no drilling activity could occur under
the permits between then and November 30 and plaintiffs
therefore would suffer no irreparable harm by denial of
injunctive relief. Noting that there had not yet been a trial
on the merits, the Court of Appeals ordered: ‘‘This cause
*M.C.L. § 691.1203(1) ; M.S.A. § 14.528(203) (1).
ee
2la
be, and the same hereby is remanded for immediate trial
which shall commence on or before October 10, 1977 and
proceed to conclusion on an expedited schedule.’’ The
Court of Appeals, thus, apparently expected that the va-
lidity of the ten drilling permits would be contested at the
trial on plaintiffs’ original complaint.
Plaintiffs did not amend their complaint to specifically
attack the validity of the permits. The judge indicated that
he would allow such an amendment, but none was filed. As
a result, there was uncertainty at the trial whether the
propriety of issuing the permits themselves was properly
in issue.
Plaintiffs presented evidence on and argued the likely
effect of drilling ten wells. The judge, in his findings of
fact, ultimately ruled that such effects were not in issue.
He said, however, that although the effects of drilling the
ten wells were ‘‘not well pled and with no attempt to
amend, * * * in consideration of the court’s perhaps too
liberal policy in giving the plaintiffs leeway,’’ he had ad-
dressed the issue of the likelihood of pollution, impairment
or destruction from the drilling activities contemplated by
the ten permits.
The consent order stated that ‘‘[a]s many as ten test
wells may be drilled for verification of seismic information.
Specific drilling locations for these wells shall be deter-
mined by the oil companies and the director in consulta-
tion with the Public Service Commission.’’
While the question of production was left unresolved
by the consent order,® some test wells were to be drilled.
®*The consent agreement states with respect to production of oil
and gas: ‘‘It is further agreed by the parties that before produc-
tion of oil and gas takes place in the limited development region,
the oil companies shall submit to the Director for his approval a
development plan and an environmental assessment.’’ (Emphasis
supplied. )
22a
It was only their location that was to be determined by the
Director of the DNR.
Plaintiffs’ allegation that the consent order is likely to
lead to pollution, impairment or destruction of the natural
resources of the PRCSF can fairly be said to include
within it the effect of issuing permits for drilling test
wells, the issuance of the permits being an inevitable con-
sequence of the adoption and implementation of the con-
sent order.
We would, however, remand to the circuit court for fur-
ther proceedings because the defendants may have been
denied an opportunity to present evidence on the issue of
likely impairment or destruction from the drilling of ten
test wells by a belief, shared by the judge, that the effect
of test drilling was not in issue.
We would vacate the judgment of the trial court and
remand to it for further proceedings, and retain juris-
diction.
KavanacH, C.J., and CoLeman, J., concur.
23a
APPENDIX B
STATE OF MICHIGAN
IN THE
SUPREME COURT
West MicuiGAN EnvirONMENTAL AcTION Coun.
cit, Inc., Pigeon River Country ASsociATION,
NortHLAND SportsMaAn’s Crus, Detroit Av-
puBON Society, INnc., MicHiGAN CounciL OF
Trout Unumitep, INc., MicuiGAN STUDENT
ENVIRONMENTAL FOUNDATION INc., East
MicuiGAN ENviRONMENTAL ACTION COUNCIL, Ingham County
INc., MicuiGAN Lakes AND STREAMS ASSOCIA. = ga
ase oO.
TION, INC., Sierra Cis, INc., 76.19335-CE
Plaintiffs-Appellants,
VS Court of Appeals
No. 77-4777
Narturat Resources COMMISSION OF THE STATE OF
Micuican, and Howarp Tanner aS Director Supreme Court
of the Department of Natural Resources of ©25¢ No. 60800
Michigan,
Defendants-Appellees, and
Suect Ou Company, a Delaware corporation,
Amoco Propuction Company, a Delaware
corporation, and NortHern Micnican Ex.
PLORATION Company, a Michigan corporation,
Intervening
Defendants/Appellees.
MOTION FOR REHEARING
Foster, Swiet, Cortins & Coey, P.C.
Attorneys for Intervening Defendants/Appellees
By: Richard B. Foster (P 13594)
Webb A. Smith (P 20718)
Terence V. Lynam (P 26490)
Suite One. Plaza |
401 South Washington Square
Lansing, MI 48933
Dated: March 12, 1979 Telephone: (517) 372-8050
24a ---
APPLICATION FOR REHEARING
The Intervening Defendants/Appellees Shell Oil Com-
pany, Amoco Production Company, and Northern Michigan
Exploration Company urge rehearing of this matter and
reconsideration of this Court's opinion for the following
reasons:
It is repugnant to the fundamental concepts of fairness
and the Federal and State Constitutional requirements of due
process of law for this Court to reverse aad render based
upon the record before it, where the Trial Court dismissed
from the case at the close of Plaintiffs’ proofs the very issues
upon which this Court not only reverses but renders a final
decision of the case, thereby precluding applicants from
presenting proofs—denying them even an opportunity to be
heard.
Even assuming. arguvendo, that the Trial Court erred in
its finding that Plaintiffs had failed to establish a prima facie
case with regard to impairment to natural resources,
Defendants/Appellees are entitled to an opportunity to pre-
sent evidence. This Court's holding deprives Defendants/
Appellees of that fundamental right.
The Court erred by its holding that the validity of the
permits issued on August 24, 1977, was properly before the
Trial Court.
IV
Even if the Trial Court erred in holding that the validity
of the permits was not properly before that Court,
Defendants/Appellees are entitled to an opportunity to de-
fend in light of this Court's holding thereon. This Court's
failure to remand deprives Defendants/Appellees of this fun-
damental right.
25a
Vv
The Court's interpretation of MEPA requiring the appli-
cation of a de novo standard of review where Plaintiffs seek
review of an administrative action is contrary to the express
provisions of the Constitution of the State of Michigan.
Applicants realize that essentially what is being re-
quested of the Court here is a reconsideration of its own
actions as a denial of due process of law. In that sense, we
view this as a very unusual case: for it is what this Court
will do by its Order remanding for permanent injunction
rather than any error committed by the Trial Court that will
result in denial of due process to applicants. We cannot
believe that this Court would knowingly give such short
shrift to Intervening Defendants/Appellees’ procedural and
property rights, and we are confident that, with an increased
awareness of the manner in which the Trial Court defined the
issues, the Court will reconsider its Order to reverse and
render.
26a
ARGUMENT
In its opinion of February 20, 1979, the Court held
unanimously that the Michigan Environmental Protection
Act requires a de novo review on the part of the Trial Court.
Having found that the Trial Court in this matter applied the
wrong standard of review, the majority determined to make
findings of its own without remand entirely on the record
before it.
Clearly, in undertaking to review the matter, the majority
was required by the Court's own holding to apply a de novo
standard of review. It is inconceivable to us that the Court
could undertake such a review without a full reading and
consideration of the entire record in this matter.
Nonetheless. we cannot believe that the majority did so: for
if they had, they would have considered the facts that: (1)
The Trial Court, at the close of Plaintiffs’ proofs, dismissed
that part of the Complaint which alleged impairment to the
elk, bobcat, bear, and other natural resources (A1013: Tr
3022)—the very issues upon which the majority grounded its
findings. (2) At the close of Plaintiffs’ proofs, the Trial Court
specifically and expressly ruled that the validity of the
drilling permits of August 24, 1977, was not before the Court
and not at issue (A1058-1059; Tr 3141-3142).
Justices Levin, Coleman, and Kavanagh stated that, ‘‘the
Defendants may have been denied an opportunity to present
evidence on the issue of likely impairment or destruction
from the drilling of the ten test wells by a belief. shared by
the judge, that the effect of test drilling was not an issue."
(pp 7-8) Intervening Defendants/Appellees did not rely on a
belief that such was the case, we relied upon a specific ruling
by the Court to that effect prior to the presentation of our
defense.
Even if the Court were to hold that the Trial Court erred
in dismissing those portions of the Complaint relative to
impairment to elk, etc., fundamental principles of due
process of law would require at the very least that the Court
remand the case to the Trial Court to give Defendants an
27a
opportunity to present their defenses in light of that ruling.
The Court's indication of an intent to enter an order
remanding to the Circuit Court for entry of a permanent
injunction clearly deprives Intervening Defendants/Appellees
of their rights to due process of law guaranteed by the
Constitutions of the United States of America and the State
of Michigan.
Few would argue that a procedural nightmare has been
created in this case. What is most frightening about it,
however, is the way the highest Court in the State of
Michigan has chosen to deal with the problem. While
admitting that at least ‘‘[pJart of the confusion resulted from
Plaintiffs’ failure to amend their September, 1976,
Complaint .. . despite their offer to do so at an October,
1977, Pretrial Conference’’ and ‘‘[a]s a result, there was
uncertainty in the proceedings below as to whether the
validity of the permits was ever properly put in issue before
the Court’’ (p 5), the majority of this Court would visit the
sins of the Plaintiffs upon the Defendants by effectively
amending the Complaint retroactively.
Finally, based upon the pleadings, Plaintiffs sought
review of an administrative action. No cause of action was
ever stated against Intervening Defendants. We contend
that, in an appeal from an administrative action, seeking
review thereof, requirement of a de novo standard of review
is contrary to the provisions of Article VI § 28 of the
Constitution of the State of Michigan.
I. THE COURT ERRED AS A MATTER OF LAW
WHEN IT REVERSED AND RENDERED BASED
UPON THE RECORD WITHOUT ALLOWING DE-
FENDANTS AN OPPORTUNITY TO PRESENT EVI-
DENCE RELEVANT TO THE VERY ISSUES UPON
WHICH THE COURT’S OPINION IS BASED DE-
SPITE THE FACTS THAT:
A. At The Close of Planitiffs’ Proofs, The Trial Court
Specifically Ruled That The Validity Of The Drilling
28a
Permits Issued By The Supervisor Of Wells On
August 24, 1977, Was Not At Issue Or Properly
Before The Court.
The Court's holding that the validity of the permits
issued on August 24, 1977, was properly before the Trial
Court is contradicted by the record. As this Court is well
aware, the only Complaint filed in this matter, and never
amended, was filed in September, 1976. At that time, no
applications for permits were even in existence. At the time
of trial, Defendants/Appellees called to the Trial Court's
attention that the validity of such permits had not been
placed at issue by the Plaintiff. Further, it was indicated that
Defendants asserted a right to have any issues sought to be
brought before the Court framed by way of pleadings so that
Defendants could properly respond and defend in the case.
(Tr 32; 62)
As the record clearly shows, Plaintiffs never made good
their offer (Tr 71) to amend the Complaint and properly place
before the Court the validity of the ten, permits issued in
August, 1977. Consistently, throughout the trial proceedings,
Intervening Defendants/Appellees objected to any evidence
relevant to the validity of the issuance of the permits. The
Trial Court, recognizing that this was a nonjury trial, allowed
certain testimony and evidence to be adduced despite
questionable relevance, indicating that the Court could
exercise its discretion with regard to any matters that were
subsequently determined to be irrelevant to any issue
properly before the Court.
Following the closing of Plaintiffs’ proofs, but before the
presentation of proofs by Defendants, the Court, ruling on
Motions (A1052-1054; Tr 3135-3138) brought by Defendants,
held:
[njow it’s clear that we are not here on an appeal of
any action taken by the Supervisor of Wells in his
capacity as Supervisor of Wells. | don't understand
that we have before us a judicial determination of the
29a
procedure engaged in by the state and the oil wells
(sic) in procuring the leases. The Court allowed the
leases to come into evidence to assist and aid certain
witnesses in the presentation of their evidence.
Leases were necessary for Mr. Westlund, for
example, to describe and for the cross-examiner to
cross-examine him on his description of the
procedures that were described in the leases.
MR. SMITH: Excuse me, your Honor, | think you
mean the permits.
THE COURT: I mean the permits. Correct. I
misspoke myself. (Tr 3141 and 3142)
The Court went on to state at Tr 3143, “So I don't
understand that we are here on any contest of the activities
surrounding the granting of permits pursuant to the Oil and
Gas Act.”"!
It is, therefore, clear that at the time Defendants were
called upon to present proofs the Trial Court had ruled that
the validity of the permits was not an issue before it. Even if
the Trial Court were wrong in so ruling, it is incredible that
this Court can so easily state that Defendants had an
opportunity and did in fact present evidence on that issue.*
Intervening Defendants offered the testimony of one
witness and one witness only. That witness was Dean Gregg
of Dames & Moore, who testified as to a hydrological study
that had been conducted in the area of the forest known as
Unit I. His references to the drill sites for purposes of
identifying geographical locations were not relevant at all to
the validity of the permits themselves. In fact, other than
Mr. Gregg’s involvement with the hydrological study that
was considered by the Department of Natural Resources,
' This ruling became the law of the case and was never appealed by
Appellants. Appellants are now bound by that ruling and this Court is
precluded from considering it swa sponte.
2 Without a single citation in support thereot.
30a
Mr. Gregg had nothing whatever to do with the applications
for the permits.
In any event, even if Intervening Defendants/Appellees
did present evidence which could be construed as relevant to
the validity of the permits, such cannot constitute anything
but improperly admitted irrelevant evidence based on the
express ruling of the Trial Court.
Had the Trial Court ruled otherwise, our entire defense
would have been handled differently. Let there be no doubt
in the Court's mind that we are ready and able to offer
evidence that goes to the very heart of the factual questions
on which the Court has rendered a decision. Evidence exists
and would have been presented which would entitle
Intervening Defendants/Appellees to a favorable ruling.
B. At The Close Of Plaintiffs’ Proofs, The Trial Court
Specifically Ruied That Those Portions Of The
Complaint Alleging Pollution, Impairment, Or
Destruction To Elk, Bobcat, Bear, And Other
Resources Were Dismissed And No Longer At Issue.
At the conclusion of Plaintiffs’ proofs, Defen-
dants/Appellees moved the Trial Court for dismissal of
the Complaint based upon GCR 1963, 504.2. As indicated in
Intervening Defendants/Appellees’ Counterstatement of
Facts (pp 9-10), the Trial Court dismissed, in their entirety,
Counts II through V? of the Complaint before Defendants
were called upon to proceed with presentation of proofs. In
addition, the Trial Court dismissed all but a few Paragraphs
of Count I of the Complaint, the Count containing the only
allegations purported to constitute a cause of action under
the Michigan Environmental Protection Act. In fact, as
pointed out in footnote 9, page 10 of Intervening
Defendants/Appellees’ Brief, the only substantive Paragraph
left in Count | was Paragraph 16, which asserted that the
*Count VI had already been dismissed pursuant to a similar motion
brought earlier in the trial (see our Brief p 24).
3la
Natural Resources Commission had failed to make findings
prior to the entry of the Consent Order.
It is incredible that the Court completely ignores that fact
that the Trial Court, at the close of Plaintiffs’ proofs,
dismissed Paragraph 15 of the Complaint (A1013, Tr. 3022)%.
Paragraph 15 is the only Paragraph in Count I, the only
remaining Count from the original Complaint, of the
Complaint that alleges that, *‘[t]he Order is likely to lead to
impairment of wildlife in the Pigeon River Country State
Forest including elk, bobcat, and bear.”
Therefore, even if this Court holds that the Trial Court
erred by dismissing those allegations on the basis that
Plaintiffs had failed to establish a prima facie case thereon, it
cannot render but must remand to the Trial Court to afford
Defendants an opportunity to proceed to rebut Plaintiffs’
prima facie case on those issues.
Defendants/Appellees had a right and a duty to rely upon
the ruling of the Trial Court with regard to the issues before
it at the time of trial. It is a well recognized general rule that
where a Court has considered and determined a point in a
case, its conclusion thereon becomes the law of that case,
unless or until reversed or modified by an appellate Court?.
Such a decision, as the law of the case, is binding on the
Courts, as well as on the parties, and even though the
decision was erroneous, it cannot be availed of by the litigant
prejudicially affected. When the Trial Court ruled that the
issues regarding impairment to elk or other natural resources
were no longer before the Court by dismissing the
Paragraphs containing allegations relative thereto,
Defendants had a right to rely upon that ruling as the law of
+*Paragraph 15, the Court having held earlier that the Order is not
likely to lead to anything such as that stated in this allegation but merely
provides a mechanism, the same as the original leases, for the permit
procedure to go forward and to bring into play the Oil and Gas Act, and
therefore this Paragraph may be dismissed.”
5 See CJS. Courts § 195.
32a
the case until such ruling is overturned by an appellate
Court.®
Again, had the Trial Court not ruled as it did with regard
to elk etc., we would have presented evidence to refute
those allegations.
C. At The Close Of Plaintiffs’ Proofs, The Trital Court
Specifically Ruled That The Consent Order, The
Validity Of Which Was At Issue, Could Not, As A
Matter Of Law, Be Likely To Cause Pollution,
Impairment, Or Destruction Of The Air, Water, Or
Other Natural Resources Proscribed By The
Michigan Environmental Protection Act.
Assuming that the validity of the permits was not at
issue, the Complaint seeks review only of the Consent Order
as likely to cause pollution, impairment, or destruction of
resources. If drilling is the activity which is alleged to cause
such damage, then the Consent Order can be said to cause
damage only if it gives permission to drill.
Following the close of Plaintiffs’ proofs and pursuant to a
Motion made by the State Defendants for dismissal of Count
IV of the Complaint’, the Court addressed itself to the
Consent Order as a guarantee of drilling.
[T]he Consent Order itself does not, quote,
guarantee, unquote, any oil development, and in that
context it is important to note that although the Order
Says, as is demonstrated by the Complaint, quote, all
potential hydrocarbon reservoirs, as indicated by
seismic surveys, shall be drilled, developed and
produced, it goes on to say, however, quote, under
and subject to the terms of the Unit Agreement and
the provisions of this Order, unquote, along with
* The Supreme Court of this State has recognized that the “law of the
case’ as a general rule has at least limited application, Chesnow v Nadell,
330 Mich, 487 at 490.
? The Court's ruling dismissing Count IV was not appealed.
33a
other language. It constitutes a severe strain on the
ordinary understanding of the English language and
the proper interpretation thereof to say that that is a,
quote, guarantee, unquote, that oil drilling and so
forth will definitely take effect. The Court would
interpret that language to say in the event drilling,
development and production is approved, it shall
proceed according to the Unit Agreement and the
Consent Order; nothing more, nothing less.
(A 1005-1006; Tr 3014-3015)
Again, the Court specifically ruled, prior to the time
Defendants were called upon to present proofs, that the
Consent Order, the validity of which was before the Court,
could not in and of itself be likely to lead to o1 cause
pollution, impairment or destruction proscribed by the
Michigan Environmental Protection Act.®
It is not clear from the majority opinion, that the Court
intended to overrule the Trial Court's specific finding in this
regard. The majority recognized that the Consent Order
provided that ‘‘as many as ten test wells may be drilled...’
(Emphasis added) (p 5). As previously pointed out to the
Court (Brief p 16), the plain words of the Consent Order
indicate that these wells may be drilled, but subject entirely
to the provisions of the rules and regulations and the laws of
the State of Michigan. There is no basis for the majority's
apparent finding that ‘the issuance of these permits’’ was
‘‘an inevitable consequence of the adoption of the Consent
Order.’’ (Majority Opinion p 6) If, in fact, the majority
intended such a holding, we suggest that it is erroneous as a
matter of law, representing an improper interpretation of the
plain language of the Order itself.
But the crucial point is that the Trial Court specifically
ruled that as a matter of law the Consent Order was not a
* This ruling became the law of the case and was never appealed by
Appellants. Appellants are now bound by that ruling and this Court is
precluded from considering it sua sponte.
34a
guarantee of drilling. This Court, then, reviewing that
holding, must apply a ‘‘clearly erroneous'’ standard required
by the Court Rules and case law. (See Brief p 18) We submit
that the Trial Court's ruling cannot be held to be clearly
erroneous and must be allowed to stand.
Finally, if the Consent Order cannot, as Judge Brown
held, cause pollution. impairment, or destruction, and its
effects are the only questions before the Court (as Judge
Brown also held), then any error of the Trial Court with
regard to factual findings on the impact of drilling pursuant
to the permits is harmless error.
So finding, this Court should affirm.
II. PRINCIPLES OF FUNDAMENTAL FAIRNESS AND
DUE PROCESS OF LAW REQUIRE THAT THE
COURT REMAND THE CASE TO THE TRIAL
COURT FOR FURTHER PROCEEDINGS IN VIEW
OF THE COURT’S HOLDINGS WITH REGARD TO
THE ISSUES PROPERLY BEFORE THE TRIAL
COURT.
There is no similarity between the suit tried before Judge
Brown and the case decided by this Court.
The agreement represented by the Consent Order was
entered into in June, 1976. Suit was brought in September,
1976, alleging, inter alia, that the Consent Order made the
granting of permits inevitable. In October, 1976, the Trial
Court specifically ruled that it did not.
Following tender of permit applications in January, 1977,
the Supervisor of Wells considered the applications for a
period of eight months. Public hearings relative to said
applications were held during that time, and Plain-
tiffs/Appellants participated in them.
Prior to trial, Defendants, in good faith, called to the
Court's attention that the validity of the permits issued in
35a
August, 1977, had not been properly placed before the Court
and requested that Plaintiffs apprise them of the bases for
their attack on the validity of the permits if such was to be an
issue in the case. Plaintiffs refused, and the Trial Court
ruled, at the close of their proofs, that the validity of the
permits was not at issue. No relief as to the permits was ever
sought until reaching the Supreme Court.
On December 6, 1977, the Trial Court, following eight
weeks of trial (contained in over 4,000 pages of transcript), a
personal visit to the forest, and consideration of all the
evidence, rendered its decision. At that same time, the Trial
Court refused to enjoin Defendants from exercising their
rights pursuant to the permits, the validity of which was not
even before it. The Court of Appeals refused to overrule the
Trial Court's decision.
This Court, however, with not even a shred of testimony
or any part of the record before it, enjoined the
Defendants—even before making a decision as to whether or
not it would hear the case at all!!
After the granting of Plaintiff's Application for Leave to
Appeal, Plaintiffs submitted a brief which contained a
Statement of Facts blatantly in violation of the rules
promulgated by this Court. Plaintiffs also therein attempted
to raise issues not contained in their Application for Leave to
Appeal, clearly in violation of this Court's own rules.
Intervening/Defendants Appellees brought a Motion to Strike
and sought immediate consideration thereof. No ruling on
the Motion has even yet been forthcoming.
Finally, all seven members of this Court acknowledge
that there was at least confusion as to the issues presented
by Plaintiffs for adjudication. The majority specifically
acknowledges that such confusion was at least partly caused
by the Plaintiffs themselves. But that same majority holds
that it must be Defendants who are penalized for the
confusion, not the Plaintiffs. We have set forth our reasons
for this conclusion at length above.
36a
Intervening Defendants/Appellees have been and will
continue to be deprived of property without benefit of their
constitutionally? guaranteed rights to due process of law.
Fundamental principles of justice require that, at the very
least, the matter be remanded to the Trial Court for
proceedings in light of the holdings of the Court.
Ill. THE COURT ERRED AS A MATTER OF LAW BY
HOLDING THAT THE STANDARD OF REVIEW TO
BE APPLIED IN THIS CASE REQUIRED BY THE
MICHIGAN ENVIRONMENTAL PROTECTION ACT
BE DE NOVO, NOTWITHSTANDING CONTRARY
PROVISIONS OF THE CONSTITUTION OF THE
STATE OF MICHIGAN.
In reversing the Trial Court's refusal to restrain the state
from issuing permits to drill for oil and/or gas or from
implementing the Consent Order, the Court construed
provisions of the Environmental Protection Act (‘‘EPA"’),
MCLA 691.1201 et seg, MSA 14.528(201) et seq, to require
in actions brought thereusider that the Courts undertake de
novo review of administrative agency decisions relevant
thereto. As so construed, those provisions of the EPA are in
violation of the Michigan Constitution.
Article 3, § 2 of the Michigan Constitution provides that
‘‘No person exercising powers of one branch shall exercise
powers properly belonging to another branch except as
expressly provided in this Constitution.’’ (Emphasis added)
The Constitution provides for and delineates the scope of
review by the judiciary of administrative agency
determinations:
All final decisions, findings, rulings and orders of any
administrative officer or agency existing under the
constitution or by law, which are judicial or
quasi-judicial and affect private rights or licenses,
*U. S. Const.—Amendment V,. Amendment XIV § |
Mich. Const.—Article 1. § 17
37a
shall be subject to direct review by the courts as
provided by law. This review shall include, as a
minimum, the determination whether such final
decisions, findings, rulings and orders are authorized
by law; and, in cases in which a hearing is required,
whether the same are supported by competent,
material and substantial evidence on the whole
record.
x* * *
Const 1963, art 6, §28. In Viculin v Dep't of Civil Service,
386 Mich 375 (1971), this Court, by Justice Williams with the
concurrence of the entire Court, after thoroughly reviewing
the Constitutional Convention Record, expressly held that
Article 6, §28 precludes de novo review of Civil Service
Commission proceedings.'® Viculin, supra, at 384-392.
Consistent with the directive in Article 6, §28 that all
administrative agencies ‘‘existing under the constitution or
by law’ are subject to the standard of review therein
prescribed, the Viculin holding, permitting limited review
only, has been applied to determinations of administrative
agencies other than the Civil Service Commission. See, e.g.,
13-Southfield Associates v Dep't of Public Health, 82 Mich
App 678 (1978): Farmers State Bank of Concord v Dep't of
Commerce, 77 Mich App 313 (1977), lv den, 402 Mich 864
(1978); Keating Int'l Corp v Orion Township, 51 Mich App
122 (1974); Union Bank & Trust Co v First Michigan Bank &
Trust Co, 44 Mich App 83 (1972). Similarly, the fact that the
Department of Natural Resources is an administrative
agency “existing... by law’, that being MCLA 16.350 er
seq, MSA 3.29(250) et seq, the construction accorded Article
6, §28 of the Michigan Constitution in Viculin, supra, and the
afore-cited progeny thereof preclude, on constitutional
grounds, review de novo of its determinations by the courts.
'© An example of constitutionally provided de novo review is con-
tained in Art. 5, §29. Clearly the framers contemplated that such a
standard should not be applied unless expressly provided by the Constitu-
tion.
38a
Accordingly, the Court's construction of provisions of
the EPA to require de novo review of determinations of the
Department of Natural Resources, or any other
administrative agency ‘‘existing under the constitution or by
law’, renders those provisions in violation of Article 6, §28
of the Michigan Constitution. That being the case, the
familiar rule requiring construction of ambiguous statutory
provisions so as to save them, if possible, from
unconstitutionality, see, e.g., Lesniak v Fair Employment
Practices Comm'n, 364 Mich 495, 503 (1961), requires the
Court to seek an alternative, constitutional construction of
the provisions.
The Lesniak opinion is particularly relevant to this
matter. The Court therein, to save from constitutional attack
an express statutory directive that an administrative
determination be reviewed de novo in circuit court,
construed the directive to mean limited review on the
administrative record only. Lesniak, supra, at 505-506.
Just as in Lesniak, supra, there exists in this matter a
construction of §4(4) of the EPA that is constitutional.
Section 4(4) of the EPA, MCLA 691.1204(4), MSA
14.528(204)(4), the provision construed by the Court to
except actions under the EPA from the constitutional limited
judicial review standard imposed by the Administrative
Procedures Act (“APA‘'), MCLA 24.201 et seq, MSA
3.560(101) et seg, on its face does not require the
unconstitutional construction accorded it by the Court.
Section 4(4) of the EPA nowhere includes an express
reference to APA provisions pertaining to the standard of
review. Instead, reference is made to APA provisions
“pertaining to judicial review’’. The APA, however, includes
provisions pertaining to judicial review other than that
prescribing the standard of review thereunder. Section 101 of
the APA, MCLA 24.301, MSA 3.560(201), for example,
conditions judicial jurisdiction to review final administrative
determinations on exhaustion of administrative remedies and
conditions judicial jurisdiction to review interlocutory
39a
administrative determinations on even narrower grounds.
Furthermore, §104 of the APA, MCLA 24.304, MSA
3.560(204), prescribes a timeliness condition to judicial
jurisdiction to review administrative determinations.
Given the inclusion in the APA of judicial review
provisions pertaining both to judicial jurisdiction to review
administrative determinations and to the standard of review
once jurisdictional conditions are satisfied, it is necessary to
determine which of those provisions are inapplicable to civil
actions under the EPA pursuant to §4(4) thereof. In that
regard, if §4(4) of the EPA is construed to prescribe
independence only from those APA judicial review
provisions pertaining to jurisdiction to review administrative
determinations, the statute would survive constitutional
attack: since, left subject to the APA limited review
standard, the constitutional defect inherent in de novo
review would be avoided. Moreover, the language employed
in §4(4) of the EPA more clearly supports the constitutional
construction thereof. While the provision expressly provides
for concurrent jurisdiction ‘‘notwithstanding the provisions
of [of the APA) to the contrary’’, it nowhere similarly
expressly excepts contrary APA judicial review provisions
pertaining to standard of review. Certainly, the express
reference in the provision only to jurisdiction is the best
evidence that, of the APA provisions ‘pertaining to judicial
review’, only those pertaining to jurisdiction are thereunder
inapplicable to EPA proceedings.
Additionally, a constitutionally sound construction of the
EPA is more consistent with §6 thereof, MCLA 691.1206,
MSA 14.528(206), providing that actions thereunder are to be
“supplementary to existing administrative . . . procedures’’.
A conclusion that §4(4) of the EPA prescribes concurrent
jurisdiction notwithstanding contrary APA provisions
provides that supplementary procedure. A conclusion that
§4(4) prescribes independence from APA provisions
pertaining to standard of review, however, supplants rather
than supplements existing administrative procedures.
/ 40a
In State Hwy Comm'n v Vanderkloot, 392 Mich 159
(1974), Justices Williams, Kavanagh, and Swainson agreed
that “‘the EPA [does] not supplant the highway
condemnation act judicial review section’’. In that there
appears to be no basis for factually distinguishing
Vanderkloot (and the impact of the EPA on highway
condemnation determinations) from this controversy (and
the impact of the EPA on natural resource determinations),
there exists also no basis for construing the EPA so as to
substitute de novo review for the constitutional standard of
review of the APA.
Significantly, a constitutional construction of the
EPA—that being one that rejects de novo review of
administrative determinations in EPA proceedings in favor of
the limited review on the record mandated by Article 6, §28
of the Michigan Constitution—provides no_ less
environmental protection than does the unconstitutional
construction adopted in the Court's opinion. In State
Hwy Comm'a v Vanderkloot, supra, at 185-186, this Court
made clear that the EPA prescribes substantive environ-
mental guidelines applicable to administrative agency
determinations. Certainly, even on review limited to the
record as required by Article 6, §28 of the Michigan
Constitution, the judiciary can strictly scrutinize compliance
with the substantive duties prescribed by the EPA and in
that manner assure the protection the environment demands.
See Vanderkloot, supra.
As it stands, the Court's interpretation allows a citizen to
go through time-consuming and costly administrative
proceedings (preparation of an EIS, hearings, etc.) in order
to receive permission from the government of this state to
engage in certain activities, and then have a court impose a
completely different standard for determining the legality of
his conduct.
The Court's construction of the provisions of the EPA is
constitutionally unsound and results in fundamental
unfairness.
4la
RELIEF
Applicants respectfully pray entry by this Court of an
Order:
(1) Vacating its opinion and affirming the findings of the
Trial Court: or
(2) Vacating its opinion on appeal. directing
supplementary briefs be filed on the issues raised in this
Motion, and setting the date for the rehearing and oral
argument of this appeal on those issues: or
(3) Vacating its order of remand for entry of a permanent
injunction prohibiting Intervening Defendants/Appellees’
exercise of their rights pursuant ot the permits issued on
August 24, 1977, and remanding the matter to the Trial Court
for further proceedings consistent with the findings of this
Court.
Respectfully submitted,
Foster. Swer. Cortins & Cory. P.C.
Attorneys for Intervening Defendants Appellees
By
Richard B. Foster (P 13594)
Webb A. Smith (P 20718)
Terence V. Lynam (P 26490)
Suite One, Plaza |
401 South Washington Square
Lansing. Michigan 48933
Telephone: (517) 372-8050
Dated: March 12, 1979
43a
APPENDIX C
At A SESSION OF THE SUPREME CouRT OF THE STATE OF
Micuican, Held at the Supreme Court Room, in the City
of Lansing, on the 7th day of May in the year of our Lord
one thousand nine hundred and seventy-nine.
Present the Honorable Mary S. Coteman, Chief Justice.
THomas Gites KavanaucH, G. MENNEN WILLIAMS,
CuHarues L. Levin, Jonn W. Firzcerautp, James L. Ryan,
Buair Moopy, Jr., Associate Justices.
Rehearing No. 487
West MicuicgAN ENvIRONMENTAL Action CounciL, Inc.,
Piceon River Country Association, NorTHLAND Sports-
MAN’s CiuB, Detrorr Aupuson Society, Inc., Micuican
Councit oF Trout UnurmiTep, Inc., Micnigan Stupent En-
VIRONMENTAL Founpation, Inc., MichicAN Nature Associa-
TION, Inc., East MicHiGAN ENviRONMENTAL AcTION CoUNCIL,
Inc., MicuigAan Lakes anp Streams Association, Inc.,
Srerra Cuvs, Inc., Plaintiff s-Appellants,
Vv.
60800
CoA: # 77-4777
LC: # 76-19335-CE
NaturaL Resources CoMMISSION OF THE STATE OF MICHIGAN,
and Howarp Tanner as Director of the Department of
Natural Resources of Michigan, Defendants-Appellees,
and
SHett Ow Company, a Delaware corporation, Amoco Pro-
puctTion Company, a Delaware corporation, and NorTHERN
Micuican ExpLoration Company, a Michigan corporation,
Intervening Defendants-Appellees.
44a
In this cause a motion for rehearing is considered and,
on order of the Court, it is hereby Denizen.
Strate or MicHiIGAN—Sss.
I, Harold Hoag, Clerk of the Supreme Court of the State
of Michigan, do hereby certify that the foregoing is a true
and correct copy of an order entered in said court in said
cause; that I have compared the same with the original,
and that it is a true transcript therefrom, and the whole of
said original order.
In Testimony Wuenreor, I have hereunto set my hand
and affixed the seal of said Supreme Court at Lansing, this
7th day of May in the year of our Lord one thousand nine
hundred and seventy-nine.
/s/ Ariss R. Davis, Deputy Clerk.
45a
APPENDIX D
STATE OF MICHIGAN
IN THE CIRCUIT COURT OF THE COUNTY OF INGHAM
Oral Opinion of the Court Dismissing Complaint and
Directing Entry of Final Order in Favor of Defendants
and Intervening Defendants.
This is the time set by the Court to render its opinion
in regard to this matter. Before doing that, however, the
Court would like to express to counsel its thanks for a suit
well tried. To use some phraseology from the case, not a
stone was left unturned, if you get my drift.
Now, I would just like to characterize briefly counsel for
the Plaintiffs. I think he could best be described as dog-
gedly determined. I think relentlessly he pursued his De-
fendants, frequently putting them to the wall in the pre-
sentation of his proofs and the examination of theirs.
Counsel for the Defendant Commission, I judge to have pre-
sented a very perspicacious defense, using little and gain-
ing greatly through his questions of witnesses. Counsel for
the Defendant Shell Oil Company, in my opinion, pre-
sented a much more pragmatic approach, relying to a great
extent on the exact written word and application of those
written principles to the principles of the case.
All in all, I feel this was an enjoyable experience, in-
cluding our sojourn in the forest, and I confess to having
learned a great deal about drilling for oil but perhaps not
too much law.
Now, I know that the praise heaped upon counsel will not
change anything very much, and it is my judgment that
whoever is perceived as having lost here today will, in all
likelihood, appeal this decision. I did, however, wish to
thank counsel for their indulgence of the Court.
Now, essentially, this suit boils down to the Court’s
consideration of paragraph 16 of the Complaint, which
says, to paraphrase it, that the Defendant Commission had
Lee
46a
a duty to determine the likelihood of impairment to nat-
ural resources before executing the Consent Order of June
11, 1976, pursuant to the mandates of the Michigan En-
vironmental Proection Act, Section 5, subparagraph 2. The
Michigan Environmetal Protection Act, Section 5(2) does
provide any alleged pollution, impairment or destruction of
the air, water or other natural resources or the public
trust therein shall be determined. The Act is silent as to
whether this determination shall be in writing or what, but
consistent with common sense and the ability to reproduce
the determination, it seems logical that the actions of the
proceedings would either be in writing, taped or otherwise
preserved.
In any event, the Court finds that the Commission did
conduct a determination as required by the Michigan Envi-
ronmental Protection Act, and that determination is in
writing, as embodied in the Environments: Impact State-
ment and incorporated specifically in the Consent Order.
The Environmental Impact Statement, which is Defendants’
Exhibit 1-A, specifically refers to significant impacts in
the event of oil and gas operations in the Pigeon River
Country State Forest. To name a few, the elk, bear, bob-
cat, trees, water, so forth.
The Defendant Commission also determined or was
brought to their attention that the water, ground water and
surface water could be significantly impacted. It, therefore,
ordered the Defendant Shell Oil, et al, to study this fea-
ture. As the result, the Dames and Moore report was pre-
sented to the Commission for their consideration. A sig-
nificant portion of this lawsuit has involved the circum-
stances surrounding this particular report.
The Plaintiffs argue alternatively that pollution, impair-
ment and destruction is implicit in the Environmental Im-
pact Statement, that no evidence has been presented to the
contrary to refute this impact, and that, therefore, the
State not having by way of affirmative defense cited any
47a
feasible or prudent alternatives, the Court should issue a
declaratory judgment, declaring the Commission must make
a determination supported by findings as required by the
Michigan Environmental Protection Act prior to the entry
of Order, or that if the Court determines the Environmen-
tal Impact Statement sufficient to constitute a determina-
tion by the Michigan Environmental Protection Act, that
the Court enjoin permanently the issuance of drilling per-
mits because of the implications in the Environmental Im-
pact Statement of adverse impact.
The Defendant Commission argues that the Commission
made its determination pursuant to the Environmental Pro-
tection Act, and that finding is incorporated in the Envi-
ronmental Impact Statement and further was made a part
of the Consent Order of June 11, therefore, clearly estab-
lishing a compliance with the statute. Defendant Commis-
sion argues further that the Plaintiffs have failed to prop-
erly present for the Court’s consideration any adverse im-
pact for the further application of the Michigan Environ-
mental Protection Act in its Complaint.
One of the most important impediments to proper con-
sideration of this case by the Court has been the inability
of the litigants to properly conduct pretrial discovery and
the Court to be likewise properly apprised of the situation
by way of Motion, Pretrial Hearings, and otherwise, be-
cause of the expedited nature of the proceedings, all to the
disadvantage of everyone concerned. It is to be noted, how-
ever, that the Plaintiffs were given liberal opportunity
early in the proceedings to amend their Complaint, to bring
to the Court’s attention the possible granting of drilling
permits. This, the Plaintiffs did not choose to do. Further-
more, the Court did give to the Plaintiff broad opportunity
to present its views regarding pollution, impairment or
destruction of the air and water. This, perhaps, was too
short-sighted a ruling by the Court, but I believe was more
clearly occasioned by the nature of the proceedings, the
history surrounding the proceedings, and the somewhat
truncated Complaint. |
—
48a
Accordingly, the Court feels constrained to rule upon the
matter as pled in the Complaint. At this point, we have
clearly a divergence, difference of opinion between the par-
ties as to the lawsuit, and it reminds me of a story that’s in
Dr. Wayne Dyer’s book, “Erroneous Zones.” It tells an
anecdote upon a meeting of Alcoholics Anonymous and the
instructor presents a point, has a glass of water and a glass
of whisky. He puts a worm in a glass of water, and the
worm continues to wiggle around. He puts a worm in the
glass of whisky, and it immediately dies. He asks some old
sot in the front row, “What does that prove?” And he
says, “Well, if you’ve got worms, drink whisky.”
My point is, it’s obviously a difference of opinion be-
tween counsel here, all depending on one’s perception. And
of course, the Court must take one of the paths. In any
event, to prevent return of the matter for findings of fact
in the event of an appeal, in the alternative view of the
Plaintiffs, although the Court finds not well pled and with
no attempt to amend, but in consideration of the Court’s
perhaps too liberal policy in giving the Plaintiffs leeway,
the Court will speak to the allegations of pollution, impair-
ment and destruction surrounding the air and water. The
Court will not consider to any great detail the other impair-
ments advanced, that being the impact upon wildlife, since
these allegations mainly concern the application or non-
application of the Environmental Impact Statement having
a predicate to the determination of the Commission.
Now, in regard to air or its proposed pollution, it is not
clear, first of all, whether noise or noise pollution is pro-
hibited by the Michigan Environmental Protection Act as
it relates to air as a natural resource. Mr.—I forget the
gentleman’s name——
Mr. Conner: Bragdon.
THe Court: Yes. The Plaintiffs’ witness indicated in his
opinion that noise pollution is defined as, one, destruction
49a
of the hearing and interference with activity or something
that constitutes an annoyance. There was no contention
here, I don’t believe, that the noise associated with oil and
gas operations in the Pigeon River Country State Forest
was destructive of hearing, but he did establish that the
operation clearly interfered with activity and constituted
an annoyance. The facts otherwise indicated that the Plain-
tiffs had a test conducted in one portion of the forest for
the purpose of establishing an ambient noise level to be
applied generally in the entire forest. I am not able to give
the test great weight and credit, but in the absence of
proofs to the contrary, it is held that the proposal of 45
decibels at 1500 feet contemplates a greater noise level at
positions closer to the proposed operation and could con-
ceivably interfere with activity and constitute an annoy-
ance.
On the other hand, the proofs do indicate that this noise
will be of short duration, a month or less, to give Plaintiffs
every possible benefit, and will have no long range impact,
and does not, in the opinion of the Court, constitute pollu-
tion, impairment or destruction of the air. The noise level
indicated and its temporary impact does not, in the opin-
ion of the Court, rise above the present impact of airplanes
occasionally flying over the forest and the various firearm
seasons, even though it will be continuous in nature as to
each one of the sites for the period of the drilling operation.
It will not be permanent and is, therefore, of no long-last-
ing effect.
It should be noted, I believe, that while on our visit in
the forest, the Court was directed to deer tracks very close
to an operation just south of the forest, certainly circum-
stantial evidence that deer had visited that site without
great concern for the noise emanating from the operation
there.
Now, regarding the evidence offered on alleged water
pollution, the Court has greater concern. The Plaintiffs
produced three witnesses on this point, Mr. Robertson, Mr.
50a
Westlund and Mr. Sheaffer. It is not disputed—to dispose
of Mr. Sheaffer’s testimony first—that oil in the form of
crude, upon reaching the surface water, will have an ad-
verse impact on the aquatic wildlife. What is disputed is
the amount and the question of whether, in fact, crude and/
or brine will flow from the ground water to the surface
water in any quantity. Mr. Westlund believed that an acci-
dent involving in the main human error was inevitable and
that crude and/or brine was certain to be spilled upon the
ground or in some other manner in the drilling operation.
Mr. Robertson testified that if crude and/or brine was in
some manner spilled, that it was certain to enter the aqui-
fer, flow with the ground water into the surface water, and
then, following the implications of Mr. Sheaffer, cause ad-
verse impact. The fatal flaw, it seems to the Court, is that
Mr. Westlund failed to establish what quantity of crude
and/or brine could reasonably be expected to be produced
by an accident, and in the same vein, Mr. Robertson failed
to establish the amount of oil and/or brine, lacking Mr.
Westlund’s foundation, it would take to flow from the ac-
cident to the ground water. Certainly a drop, as suggested
by counsel for the Defendant Commission, would be insuffi-
cient. Applying Mr. Westlund’s assertion of common sense,
probably a cup or even a gallon or perhaps a barrel would
likewise be insignificant. The point is, however, that the
Court is left to speculate and hypothecate on the matter
without adequate standard or even the benefit of a logical
inference.
Accordingly, the Court declines to speculate and believes
the testimony to be refuted by other competent and sub-
stantial evidence. Defendant Shell Oil produced Mr. Gregg,
an expert in the field of hydrology and the principal archi-
tect of the Dames and Moore report, which is Plaintiffs’
Exhibit 32. It is the observation of the Court, having had
the opportunity to judge the credibility of the various wit-
nesses, that this witness is certainly knowledgeable about
5la
the facts and able to comment on them. It is also the ob-
servation of the Court that the entity known as Dames
and Moore is a careful, prudent and conservative group.
The Court is impressed with the background and experi-
ence in the field of hydrology. The Court was likewise im-
pressed with the reasoned comments of the witness Gregg
on various factors of importance in determining matters
surrounding oil operations and the impact of accidents.
This witness was able to precisely and concisely define the
various correlative factors, such as unconsolidated ma-
terials, aquifers, permeability, water tables, gradient, po-
rosity, viscosity and density, ground water level, and so
forth, that caused the Court to be convinced, as the tryer
of the facts, the witness had an involved understanding of
the situation. Furthermore, his experience and knowledge
of the Pigeon River Country State Forest, which assisted
him and enabled him to apply the various factors, was, to
me, of immense assistance.
The Court had some lingering concerns about some cer-
tain sites, that being Corwith 1-14 and 1-24, 1-26 and 1-28,
which caused the Court to pause before fully acting last
Wednesday and Thursday, but those concerns have been
resolved by the Court, availing itself of the opportunity to
review again the testimony of Mr. Gregg, Mr. Robertson
and Mr. Westlund. The Court believes that the greater
weight of the evidence lies with the Defendants, in that it
is extremely unlikely an accident will occur, and if it does,
it appears that the contingency plan, which is Exhibit 33,
and the witness’ testimony, that contaminants could be
removed to the extent of any level specified by the State.
There is no reason to believe that the advice of the witness
and the protection stipulated to and extracted by the State
will be ignored. The Court, simply put, places greater re-
liance on Mr. Gregg’s testimony, the report prepared by
him, and the underlying data collected to substantiate his
opinions.
Se ee
52a
It is to be noted that Mr. Robertson, although of con-
siderable knowledge and experience, did not conduct any
test of his own but did rely on the Dames and Moore re-
port, rejecting some portions of it, verifying some. The
testimony, expertise aside, cannot be given greater weight
and credit than that of Mr. Gregg. The Court, therefore,
concludes the following: If a brine spill occurs and the
emergency measures are resorted to by the Defendant oil
company as specified in the Exhibits, then the contaminant
will be either entirely removed or removed to an extent
specified by the State so as to prevent pollution, impair-
ment or destruction of the surface water. In like manner,
a crude oil spill will be confined and appropriately resolved.
Turning then to the adverse impact upon the wildlife;
specilically, elk, bear and bobcat, as outlined in the En-
vironmental Impact Statement and as also so graphically
described by attorney for the Plaintiffs and Plaintiffs’
witness, there appears to be no question that adverse im-
pacts will be visited upon particularly elk, and to some
lesser extent, bear and bobcat. It is inevitable. The vital
question, however, is it legal impairment or destruction?
It is the Court’s belief, as suggested by the attorney for
the Defendant Commission, that the destruction of the
species in the Pigeon River Country State Forest is in no
way contemplated. Therefore, that contention is summarily
rejected, no proofs having been offered from any quarter
of a convincing nature that the State is bent on a program
of total elk eradication. It is clear that an adverse impair-
ment of the herd is likely for some unkonwn period to
some unknown degree, Plaintiffs’ Exhibit 1-A. The De-
fendant Commission indicates to the Court, and the witness
for it indicates, that this is commonly the result of man-
agement decisions. Improving deer habitat by cutting trees
to allow the sun to shine on the forest floor for the pur-
pose of new growth, it certainly has an adverse impact
upon the animals, birds, so forth, using the trees. Eradi-
cating the entire fish population in a lake or stream to de-
53a
stroy unwanted trash species in order to plant more ac-
ceptable fish certainly has an adverse impact on the fish
killed but is an acceptable management technique.
It is further observed that the forest is immense and
contains many areas, both inside and outside the forest,
where the elk, bear and bobcat may continue to roam with-
out any apparent adverse effects. Furthermore, the Con-
sent Order guarantees that the other areas of the forest
will continue to offer the solitude and quiet demanded by
these particular creatures. These animals, along with the
trees that will be cut, harvested or otherwise removed, are
the innocent victims of the discovery of oil in their forest
domain.
Dr. Inman in his testimony aptly describes the situation
in terms most compelling. He described the situation in-
volving the trees and animals as part of time dynamics,
or a measurement of one period of time and the applica-
tion of forces to determine its destiny, while, as I under-
stand it, applying the characteristics of the ecosystem.
The witness very convincingly presented evidence of the
resilience of the forest and its ability to recover. Cutting
of trees, for example, was nothing new or unique in the
forest, it having experienced many such incidents in the
past. The so-called adverse impact matrix, which is page
62 of Exhibit 1-A and pages 42 and 43 of Exhibit 1-A,
vividly describes the effect of hydrocarbon development
on recreation and other uses within Unit 1 of the Pigeon
River Country State Forest.
It would, I believe, be apropos to comment at this point
on counsel for the Defendant Commission that the Court
should approve of an honest decision honestly arrived at
by honest men. This is a little aside, but I had my son
down here with me yesterday. To keep him occupied, I had
him clean the blackboard there. He did a pretty good job,
but he aso put some gook on that table. I tried to help
him clean it off, but if we did a bad job and it has polluted,
54a
destroyed or impaired your shirt sleeves, at least the
effort was an honest one. Rather, the Court believes the
Michigan Environmental Protection Act, applying Ray vs.
Mason County Drain and Irish vs. Green—it seems like a
contradiction in terms, Irish vs. Green—those cases re-
quire a more careful and thoughtful process by the Court.
This is not, however, a thicket without guideposts and
paths, the cardinal principles being pollution, impairment
or destruction.
If the judicial review pinpoints the principle, then, cor-
rectly, this conduct cannot be condoned. Merely saying,
however, that pollution, impairment or destruction is not
imminent is not sufficient. A clear finding of fact is re-
quired, and that finding involves a management program
which is embodied in a document referred to as the Con-
cept of Management, which is Plaintiffs’ Exhibit 2, which
the Court had the pleasure of reading in its entirety this
past weekend.
Trying to put the finger on the overall picture there
presented is exceedingly difficult and perhaps, in the ulti-
mate, a priori reading will involve an honest judgment
only. It does, however, seem to the Court that the Defend-
ant Commission wrestled with a difficult problem, and
made a difficult, thoughtful judgment. The judgment in-
volved the temporary convenience for some, a long-range
usurpage for others. The resource, however, known as hy-
drocarbons needs to be developed, and the protection of
the air, water and wildlife needs to be attended to at the
same time.
As I have spoken of earlier in this lawsuit, the Commis-
sion has to balance the interest of many diverse groups
in its decision. The work, obviously, of the State must go
on. Progress, if we want to call it that, must be allowed,
and the interests of some must be balanced against the
interests of others. Defendant Commission has attended to
that duty, the Court believes, and the adverse impact here
55a
described by the evidence would have been greater, more
acutely persuasive, had not they acted as they did.
The conduct is therefore approved and is not condemned
as pollution, impairment or destruction.
Now, just expanding, then, on the only remaining point
the Court believes is in the Complaint, that of the legality
of the Consent Order, it is the Court’s judgment that a
determination was made and that, therefore, the Order
was properly entered into. Its determination was described
by many witnesses, Mr. Bails, Dr. Inman, Mr. Boushelle,
Mr. Kellum, Mr. Swan, Mr. Caveney, so forth, just to men-
tion a few. The main determination is presented in the
Environmental Impact Statement, which was prepared
under the direction of Dr. Inman, and in it, in the Court’s
judgment, it presents an accurate descriptive picture of
the standards expected in the Act.
The Environmental Impact Statement was incorporated
into and made a part of the Consent Order, along with
other important documents. This convincingly causes the
Court to say that the Defendant Commission has acted
properly.
The Plaintiffs argue that the Environmental Impact
Statement was not adopted in the regular course of busi-
ness, as other resolutions have been adopted in the past.
The Plaintiff failed to indicate that this Commission ever
adopted a rule for such matters, or if a matter of habit
and custom, why a deviation from the norm would work a
hardship on the Plaintiffs or constitute prejudice. The
most important consideration, in the Court’s view, is that
the Defendant Commission did give effect to the Environ-
mental Impact Statement, relied upon it, and sought to
soften its impact, all for the interest of the persons they
were appointed to protect. The request, therefore, of the
Plaintiff is denied in its entirety. An Order may enter
according to the judgment of the Court.
a OS, eee Se eee eee
57a
APPENDIX E
STATE OF MICHIGAN
IN THE CIRCUIT COURT FOR THE COUNTY OF INGHAM
File No. 76 19335 CE
West Micuican EnvironmentaL Action Councit, Inc.,
Piazon River Country Association, NortHLAND Sports-
MEN’s Cius, Detrorir Aupuson Society, Inc., MicHigan
Councw or Trout Unuimitep, Inc., Micnigan StTupDENT
E\NVIRONMENTAL FounpaTion, Inc., Micuicgan Nature Asso-
c1aTIon, Inc., East MicuigAN ENVIRONMENTAL COUNCIL,
Inc., Micuigan Lakes anp Streams Association, INc.,
Plaintiff s,
vs.
Natura Resources CoMMISSION OF THE STATE OF MICHIGAN,
Howarp Tanner, as Director of the Department of Natural
Resources of the State of Michigan, Defendants,
and
Suet, Or Company, a Delaware Corporation, Amoco
Propuction Company, a Delaware Corporation, and Nortu-
ERN MicHiGAN Expvoration Company, a Michigan Corpora-
tion, Intervening Defendants.
FINAL JUDGMENT
In this cause, more than one claim for relief is presented
against multiple party defendants.
After the plaintiffs completed the presentation of their
evidence to the court, in this action tried without a jury,
the defendants, without waiving their right to offer evidence
in the event such motion was not granted, moved, pursuant
to GCR 504.2, for dismissal of several counts and para-
graphs of the complaint on the ground that, upon the facts
and the law, the plaintiffs had shown no right to relief.
The intervening defendants joined in such motions.
58a
After extensive argument by counsel in open court on
the record, and a full review of the evidence presented in
eight (8) weeks of trial, the court as trier of the facts, de-
termined the facts and rendered judgment against the
plaintiffs.
For the reasons stated by the court in an opinion from
the bench, on November 17, 1977, Ir Is ApsupcED anp Or-
DERED that:
1. Those portions of the complaint, including but not lim-
ited to paragraphs 7 and 28, designed to invalidate the
hydrocarbon lease agreements entered into by the State of
Michigan in 1968 Br, anp THry Heresy Are, DisMIsseED.
2. Count V of the complaint, including paragraphs 37 to
42, inclusive, Br, anp Ir Heresy Is, DisMIssEp.
3. Count IV of the complaint, including paragraphs 33
to 36, inclusive, Be, anp Ir Heresy Is, Dismissep.
4. Count II of the complaint, including paragraphs 21
to 29, inclusive, Be, anp Ir Heresy Is, DisMissEp.
5. Paragraphs 5, 13, 14, 15 and 17 Be anp THey HEREBY
Arg, DIsMIsSED.
II
Further, for the reasons stated by the Court in an opin-
ion from the bench, on November 21, 1977, upon Motion
of Defendants and Intervening Defendants, Ir Is ApsupGED
AND OrperRED that Count III of the complaint, including
paragraphs 30 to 32, inclusive, Be anp It Heresy Is Dis-
MISSED pursuant to GCR 504.2.
Il
Further, for the reasons stated by the Court in an opin-
ion from the bench, on December 5, 1977, Ir Is Onperep
that judgment be and it hereby is entered for the defen-
dants and intervening defendants as to paragraphs 1, 2, 3,
59a
4, 6, 8, 9, 10, 11, 12, 16, 18, 19, and 20 of the complaint,
which dismisses, with prejudice, all of plaintiffs’ claims for
relief.
IV
Further, Ir Is OrpErep that judgment be and it hereby is
entered for defendants and intervening defendants and
against the plaintiffs as to every claim arising out of the
transactions and occurrences which are the subject matter
of the action, and which were, or might have been, actually
litigated. This paragraph is intended to be consistent with
the provisions of the General Court Rules.
V
Further, for the reasons stated by the Court in an opin-
ion from the bench, on November 21, 1977, the following
plaintiffs, to wit: Northland Sportsman’s Club, Thunder
Bay Audubon Society, Michigan Nature Association, Inc.,
and Michigan Chapter, Sierra Club, Inc., are dismissed
from the cause.
VI
Costs are awarded to intervening defendants by further
order of the Court.
This final judgment entered at Lansing, Michigan, on
December 5th, 1977.
/s/ THomas Brown
The Honorable Thomas Brown
Circuit Judge
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