Give us Liberty, or Give us… Guidance Documents

Well, that didn’t take very long.

It was inevitable that the 2020 Supreme Court decision that guidance documents were essentially just bureaucratic suggestions and administrative shop talk—rather than policy directives with the effective force of law—would come back to bite us, big time, and now they have.

The 5-2 Supreme Court decision this past week that the DNR can compel landowners to clean up PFAS pollutants before they are officially designated through rule promulgation as hazardous substances is a major setback for property rights. As state Rep. Rob Swearingen (R-Rhinelander) put it, the ruling creates uncertainty for landowners and gives DNR broad discretion to act without standards, process, or transparency:

“This ruling is a massive overstep. It bypasses the legislative process and opens the door for unelected bureaucrats to unilaterally impose penalties on landowners who had nothing to do with the presence of PFAS on their property. Northern Wisconsin families, farmers, and small business owners deserve clear protections—not threats from an agency acting without oversight.”

Specifically, after listing PFAS chemicals online as hazardous substances, the DNR ordered dry cleaner Leather Rich to test its groundwater for emerging contaminants, albeit without specifying what PFAS compounds or mixtures it actually considered hazardous. The dry cleaner countered that the agency could not do so without an official designation of PFAS chemicals as hazardous substances, and the lawsuit was on.

As the court observed, the question boiled down to whether the DNR was required to promulgate administrative rules before stating on its website and in letters to Leather Rich and others that PFAS and other emerging contaminants are “hazardous substances” and proceeding to set alleged standards for reporting discharges to the DNR.

Leather Rich prevailed in the lower courts but, to no one’s surprise, not in the extreme leftist Supreme Court. The progressive majority and justice Brian Hagedorn determined that the communications were guidance documents that do not have the force and effect of law.

They were just shop talk. Musings. Brotherly and sisterly advice to the communities they regulate.

According to the court’s majority, a guidance document, because it is a guidance document, inherently lacks the effect of law. It is inert and cannot be enforced, even if the communications direct others to adhere to and comply with certain standards. The majority observes:

Tell that to those property and business owners who are told to comply. In other words, in the majority’s view, a guidance document might tell recipients they will be heavily penalized if they don’t comply, but it’s still their choice not to do so.

You know, just like a rule with the force of law, or an actual law. People can choose not to obey them and get penalized, too, precisely because they have the force of law. Somehow guidance documents magically acquire compliance authority without being law or rule. They have no civil or even mortal legal source apparently; their power is sent from the gods, who must be the liberal progressives on the court.

Now there are two key takeaways from the decision, and, again to no one’s surprise, none of it has to do with a clean environment.

The first is that, in the broader sense, the bureaucratic state has re-established in Wisconsin broad unilateral authority over our lives with its ability to use guidance documents to make law, without any accountability to the legislature. The second is that, given an ideological fog that has descended over certain conservatives, none of this will change until a new governor is elected.

Expect guidance documents now to be issued frequently and ruthlessly.

As usual, justice Rebecca Bradley issued an insightful dissent framing the issues, or should we say, the mess. She’s was joined by justice Annette Ziegler. In the broader sense, Bradley wrote, the case is about a rogue and unaccountable bureaucracy operating in a space in which the separation of powers has been shattered.

“The majority leaves the people at the mercy of unelected bureaucrats empowered not only to enforce the rules, but to make them,” Bradley wrote. “Americans have lived under this unconstitutional arrangement for decades, but now, the majority says, the bureaucrats can impose rules and penalties on the governed without advance notice, oversight, or deliberation.”

It matters not what the agency calls the directives, Bradley wrote, if they impose legal obligations and can command penalties for noncompliance.

“Crucially, the way an agency characterizes its directive is immaterial in determining whether such an interpretation has the force of law,” she wrote. “Whether a statement must be promulgated as a rule is a question of substance, not form. … By newly declaring PFAS ‘hazardous substances,’ impairing the interests of property owners in receiving COCs [certificates of completion], imposing legal obligations binding the regulated community of property owners whose land contains them, and threatening to penalize those who do not comply, the DNR’s statements have the force of law.”

You can call an apple pie a peach pie, in other words, but that does not make it peachy. This decision is not peachy.

Conservative Blinkers

As for the second take-away, the court likely won’t change its outlook on this warped feature of bureaucratic law-making. In this case, purplish justice Brian Hagedorn voted with the majority.

And that’s not all. In the 2020 case striking down legislative oversight of guidance documents, conservative justice Daniel Kelly voted the same way and wrote the opinion for the majority. Bradley, too, voted with conservatives to declare guidance documents harmless.

The reasoning is simple. In an interview I did with Kelly in his last run for the court, the former justice said the legislature itself defined a guidance document as an instrument that cannot create legally binding obligations or any standard against which people’s behavior can be measured, and further specifically said that guidance documents do not have the force of law:

In his concurring opinion this week, Hagedorn says much the same thing, that guidance documents are mere communications and expressions of executive thought, prerequisites to executing the law. In this view, what Bradley sees as compelling directives and threats of penalties for noncompliance is less a case of laying down the law as it is of giving stakeholders a neighborly heads up.

As much as I admire Kelly, and I do—Hagedorn, not so much—this is blinkered and flawed reasoning. It analyzes only some of the words in the statutory definition and not the way they are applied, or, as Bradley put it, the form, not the substance.

To put it another way, when the agency directs certain actions based on its interpretation, it is crossing the line from guidance or advice into commands for actions, or the lack thereof. By designating PFAS chemicals “hazardous substances” and then issuing orders based on that already existing but new interpretation, the agency had moved beyond musing about how it would likely act, it had acted and imposed obligations with the force of law.

This gets to the true crux of the guidance document issue: No guidance documents are truly non-compulsory when they are disseminated beyond the agency’s doors. Internal communications might be deliberative and shop-talky; but when “guidance” begins to give direction to the regulated community on how to act, it is signaling that decisions have been made, such as the designation of PFAS chemicals as hazardous. Everyone knows what’s coming.

It’s a de facto rule and everyone knows it.

Often enough, it becomes a de jure law because when county land use and zoning departments receive such documents, they take them as gospel and begin issuing permits—or rejecting permit applications—based on those guidance documents. That is standard local practice, not the exception, and often enough, counties and municipalities enact actual ordinances based on the guidance documents.

Here’s an example. During the years when Scott Walker was governor, the Legislature passed a law allowing a boathouse roof to be used as a deck. But when an Oneida County resident decided to actually construct a deck on his boathouse, the county asked the DNR for its opinion, and the DNR issued a guidance document to advise that he couldn’t do it. In the guidance document, the agency determined that, while the law allows boathouse roofs to be used as decks, the language didn’t actually state a deck could be constructed.

So you could use a deck but you couldn’t build one, which was a problem because most people didn’t have them due to DNR prohibitions back in the days when Democrat Jim Doyle was governor.

After a public outcry, the DNR backtracked and reversed itself. Still, the guidance document had already caused serious consequences. The county had stopped issuing permits for deck construction based on the guidance document, and, in 2018, before the agency reversed course, the county actually amended its ordinance to prohibit the placement of decking on a boathouse roof, despite the plain language of state law.

What Kelly and Hagedorn miss (and Bradley, who joined the majority in the previous decision) is that, in the statutory definition of guidance documents, the definition never expressly states that guidance documents cannot have the force of law. Indeed, under the statutory definition, a “guidance document” may be a directive [definition: “an official or authoritative instruction”], in other words a demand for compliance, that also gives guidance and advice.

A rule certainly may contain guidance, they are not mutually exclusive, as Bradley correctly pointed out this time, and a guidance document might also be mere guidance. But because any “guidance document” is allowed to contain a directive, all of them must come under legislative review, and when that review finds a directive as opposed to mere guidance, it must be promulgated as a rule.

Sequestering guidance documents from the people’s elected representatives allows the DNR to open the barn door and drive truckloads of camouflaged rules right out into the regulated community.

To be sure, both Hagedorn and Kelly argue that when a guidance document crosses the threshold, there can can be judicial scrutiny and the guidance can be challenged. Which is what is happened here. But look at the outcome, and, even if the outcome were different, years of expense and energy were expended fighting abusive bureaucratic authority. Bradley’s dissent actually squares with her earlier concurrence, but even she tallies up the toll of the Leather Rich ordeal—seven years, $300,000, and now a loss at the Supreme Court—and should understand that that was the price of unrestrained bureaucratic use of guidance documents.

In the boathouse case in Oneida County, the county improperly denied permits for years based on a guidance document. After-the-fact challenges to bureaucratic abuse are still injurious.

In any event, the reasoning of multiple conservatives that guidance documents are just that, it means that a court with a conservative majority would not likely reverse this misplaced legislative authority the bureaucracy has acquired, at least conservatives cannot count on it.

A new governor is needed, so the statutory definition of guidance documents can be revisited.

The problem of guidance documents—which the Competitive Enterprise Institute calls regulatory dark matter—is now being waged also on the federal level, but only because there is a president who understands how lethal the concentration of power in the bureaucracy is, and how guidance documents are one of the new engines of that concentration,

In her dissent this past week, Bradley understood the danger, too:

All conservatives should, too.