Loki Fiontar, LLC v. Dep't of Nat. Res.

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Loki Fiontar, LLC, Plaintiff-Appellant, v. Department of Natural Resources and Preston Cole, Defendants-Respondents.

No. 2023AP648

Court of Appeals of Wisconsin, District III

October 29, 2024

This opinion will not be published. See WIS. STAT. RULE 809.23(1)(b)5.

APPEAL from an order of the circuit court for Outagamie County: No 2022CV280 MARK J. McGINNIS, Judge. Affirmed.

Before Stark, P. J., Hruz and Gill, JJ.

Per curiam opinions may not be cited in any court of this state as precedent or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

PER CURIAM.

¶1 Loki Fiontar, LLC, ("Loki") appeals an order dismissing its claims against the Wisconsin Department of Natural Resources and the Department's then-secretary, Preston Cole (collectively, "the DNR"). The circuit court determined that Loki's claims against the DNR are barred by the doctrine of sovereign immunity. We agree, and we therefore affirm the order dismissing Loki's claims.

BACKGROUND

¶2 The following background facts are taken from Loki's complaint and its attachments, and they are assumed to be true for purposes of this appeal. See Peterson v Volkswagen of Am., Inc., 2005 WI 61, ¶15, 281 Wis.2d 39, 697 N.W.2d 61. Loki is the owner of a landfill located in Combined Locks, Wisconsin ("the Landfill"). The Landfill "is an older site" and was operated for many years by another entity "API." The Landfill's primary purpose, at the time of its creation, was for API's use in depositing sludge, a waste byproduct generated from paper mill operations.

¶3 In 1984, the DNR approved the Landfill to accept approximately 141,200 cubic yards of paper mill sludge. In 1985, API obtained a separate approval to deposit "flyash," another paper mill byproduct, in the Landfill. Thereafter, however, the "majority" of the deposits in the Landfill were sludge, rather than flyash-a fact that, according to Loki, the DNR either knew or should have known.

¶4 After being "introduced" to the Landfill by the DNR, Loki purchased the Landfill in 2019. The DNR "was aware that Loki intended to use the Landfill for continued paper[ ]mill sludge deposits, with it anticipated that the Landfill could accept an additional 50,000 cubic yards of sludge before being 'capped'-a process of closing the Landfill." Before Loki completed its purchase of the Landfill, the DNR objected to the purchase and "filed paperwork" in court opposing it. The DNR ultimately withdrew its objection, however, and a court confirmed Loki's purchase.

¶5 Following the purchase, the DNR withheld Loki's license for the Landfill for eighteen months, required Loki to expend additional time and money on the Landfill, and delayed providing its departmental file to Loki. The DNR never asserted-either before Loki's purchase of the Landfill or during the ensuing eighteen months-that it would be unsafe for the Landfill to accept additional sludge deposits beyond those already in the Landfill, that the Landfill had been redesigned to no longer accept sludge, or that the Landfill could not safely accept additional sludge in its current state.

¶6 On January 25, 2021, the DNR issued Loki a solid waste facility operation license for the Landfill, with an effective date of October 1, 2020.^[1] The license was sent to Loki with a letter from the DNR, which was also dated January 25 2021. The letter, which is attached to Loki's complaint advised Loki:

You have indicated to the [DNR] your intent to accept only paper mill sludge. Doing so would not be compliant with your plan of operation and would be in violation of [Wis. Stat. § 289.30(9)], unless the plan of operation is modified and approved by the [DNR] to accommodate the disposal of paper mill sludge rather than mostly ash in the [L]andfill.

¶7 The letter then explained that the "existing plan of operation" for the Landfill had been modified, with the DNR's approval, on February 15, 1985. The letter further explained:

The 1985 plan modification was based on a substantial and permanent change in the characteristics of the waste approved for acceptance at the [L]andfill. Condition 5 of the February 15, 1985 plan modification approval limits the waste acceptable for disposal to boiler ash and a [sic] "small amounts of dewatered sludge during times when the boiler is down for maintenance and repair." This limitation remains in effect to this day and would prevent the acceptance of the waste that we understand to be under consideration for acceptance from the Midwest Paper Group

The 1985 plan modification represented a redesign of the landfill from a paper mill sludge landfill to a boiler ash landfill. These two waste types behave entirely differently when landfilled, and [the Landfill] which is currently designed to accept ash cannot be safely utilized for the disposal of paper mill sludge without substantial redesign.

¶8 Accordingly, the DNR's letter informed Loki that the license enclosed with the letter allowed the Landfill "to be operated in accordance with its current plan of operation that allows accepting [fly] ash and only small amounts of dewatered paper mill sludge." The letter described the modifications that would be required for the Landfill to accept paper mill sludge and reiterated that "[t]he modified design must be approved by the [DNR], and any necessary construction completed, documented and approved by the [DNR], before waste filling can begin." The letter advised Loki that WIS. STAT. § 289.30(9) "requires the operator of a licensed landfill to operate in compliance with the approved plan of operation," which meant that Loki could operate the Landfill "under the attached license only in accordance with the conditions of the modified plan of operation attached to this letter," including "the limitation that the [L]andfill only accepts ash and small amounts of dewatered paper mill sludge." Finally, the letter informed Loki that "[f]ailure to comply with [the] plan of operation could result in suspension or revocation of [Loki's] operating license under [WIS. STAT. § 289.31]."

¶9 According to Loki's complaint, a meeting between Loki, the DNR, and other interested parties was scheduled to take place in February 2021 to address the DNR's January 25, 2021 letter. The DNR, however, canceled the meeting "based on Loki's involvement of legal counsel in the dispute." Thereafter, the DNR issued a "notice" to Loki in June 2021 and issued another "notice" in December 2021 that "asserted problems with the site."

¶10 It is undisputed that Loki did not attempt to obtain review under WIS. STAT. ch. 227 of its license, of the DNR's January 25, 2021 letter, or of the June 2021 and December 2021 notices. Instead, in March 2022, Loki filed the instant lawsuit against the DNR, asserting four causes of action.

¶11 Count One of Loki's complaint-a claim for declaratory judgment and injunctive relief-sought: (1) a declaration setting aside the January 25, 2021 letter and the June 2021 and December 2021 notices; (2) a declaration "[h]olding the [DNR] solely responsible for any regulatory sanction or penalty issued related to the Landfill, its ownership and operations, and for reimbursement of past licensing fees paid by Loki"; and (3) "any other equitable relief necessary, including but not limited to the ordering of injunctive relief and the [DNR's] abatement of a nuisance condition created by the [DNR]."

¶12 Count Two of Loki's complaint asserted a nuisance claim. It alleged that for the past four decades, the DNR had been responsible for the Landfill's oversight and had a general duty to enforce Wisconsin's environmental laws and policies. According to Loki's complaint, the DNR "failed to adhere to that duty and instead allowed for the use of the Landfill, by others, in a manner that was substantially certain to cause environmental harm." Loki alleged that the DNR's past failures "have now interfered with Loki's interest in the private use and enjoyment of the Landfill, and Loki cannot use the Landfill as intended." Loki therefore asserted that the DNR had "created and maintained a nuisance" at the Landfill and was "responsible for any and all costs of abatement."

¶13 Count Three of Loki's complaint-denominated "Estoppel/Bad Faith"-alleged that Loki was entitled to "injunctive relief and/or a declaration that estops the [DNR]" from taking a position "that would inhibit the use of the Landfill as intended, and/or that would be considered not taken in good faith."

¶14 Finally, Count Four of Loki's complaint-denominated "Fraudulent Inducement/Interference with Property"-alleged that Loki had purchased the Landfill "after having been introduced to the site by the [DNR] and following the [DNR's] withdrawal of any objection to the purchase." Because the DNR had not "mentioned or otherwise objected to the use of the Landfill for acceptance of sludge" prior to the purchase, Loki asserted that the DNR "fraudulently induced or otherwise damaged Loki, as a bona fide purchaser of the Landfill." According to Loki, these actions "have damaged Loki in multiple ways, to include incurring costs, expenses, and fees." Loki further alleged that under WIS. STAT. § 840.03, it was "entitled to other additional remedies against the [DNR], to include an award of restitution; a directive that the [DNR] restrain on interference with Loki's rights in, on or to the land; and a general award of damages."

¶15 Ultimately, Loki's complaint sought the following relief (1) a declaration of Loki's rights and interests related to the Landfill; (2) an order directing the DNR to abate the nuisance; (3) reimbursement for Loki's "costs incurred to-date ... for responding to and/or otherwise owning the Landfill"; (4) all costs of investigation and litigation...