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Published in Michigan Environmental Law Journal, Spring–Summer 2016, Vol. 34, No. 1, Issue 101 [view full issue].
Cite: 34 Mich Env Law J 1 (2016)

DEQ v. Morley—A Wetland Enforcement Action the Issue of the Right to a Jury Trial, Penalties, Evidentiary Challenges, and Takings

by Susan J. Sadler, Dawda Mann Mulcahy & Sadler PLC

In Department of Environmental Quality v. Morley, ___ Mich App ___; ___ NW2d ___, 2015 WL 8972991 approved for publication February 9, 2016 (Docket No. 323019), the Michigan Court of Appeals reviewed the final order of the Ingham Circuit Court which granted judgment in favor of the plaintiff, the Michigan Department of Quality (MDEQ), against the defendant, Morley. ^[1]

Background

The case was brought by MDEQ against Morley for the dredging, filling, and draining of a wetland. Morley had planned to turn 30 acres of undeveloped land into a subdivision near the Kawkawlin River in Bangor Township. Originally, Morley had plans to create a subdivision with approximately 260 homes with waterfront near the Kawkawlin River, which would be created by excavation and digging of a well.^[2] Beginning in 2007, Morley also pursued farming on the property.

MDEQ alleged that the area was a regulated wetland and that Morley should first complete a wetland assessment and then apply for a wetland permit requesting the right to dredge soil, remove the spoils, and deposit fill in certain permitted areas. Morley rejected MDEQ's assertion that a wetland permit was required and argued that MDEQ's position was contrary to his private property rights.

When Morley refused MDEQ's attempts to inspect the land, MDEQ pursued inspection of the property pursuant to an administrative inspection warrant, which was granted by the Bay County District Court. This dispute between Morley and MDEQ continued until December 2012, when MDEQ filed a civil action for an injunction and civil fines against Morley in the Ingham County Circuit Court.

Trial Court Proceedings

The trial court conducted a bench trial and remedy hearing. It ruled that Morley had violated Part 303 of the Natural Resources Protection Act, MCL 324.101 et. seq. The trial court held that 92.3 acres of Morley's 106.5 acres was wetland and the court entered a Final Judgment finding that Morley had illegally placed fill material and had drained surface waters from that regulated wetland. The trial court concluded that these violations were actually committed for purposes of building a housing development on the property and not for agriculture. The court ruled that Morley had improperly begun farming the property after the violations had been committed and after MDEQ had notified him of having violated Part 303.

The circuit court ruled that Morley must remove approximately 4.1 acres of fill material in the area delineated as a wetland by MDEQ and restore the area to the conditions that existed prior to the unauthorized placement of fill material. Morley was also required to remove any and all drain tiles and pipes from the properties that were identified by MDEQ. Morley was required to retain the services of an environmental consultant to prepare a plan of restoration for review by MDEQ. Morley was also required to pay a civil fine of $30,000 and cease farming.

Appellate Court Action—Right to Jury Trial

Following entry of the Final Judgment by the trial court, Morley appealed the ruling. The Court of Appeals reviewed the various procedural and evidentiary rulings that the trial court made and Morley's demand for a jury trial. On appeal, the appellate court concluded that the relief sought by MDEQ was equitable in nature; therefore, Morley was not entitled to a jury trial.

The appellate court noted that a Part 303 cause of action did not exist when Michigan passed the State's Constitution and that wetland protection is not a cause of action known in common law. The appellate court stated that Part 303 is a new cause of action created by statute and that the relief requested is equitable in nature; therefore, there is no state constitutional right to a jury trial. The appellate court also concluded that Morley was not entitled to a jury trial because MDEQ brought the action as a civil lawsuit and not as a criminal proceeding.

Morley argued that Federal law should govern and this supports his right to a jury trial. The appellate court reviewed the matter of Tull v. United States, 481 US 412; 107 S Ct 1831; 25 L Ed 2d 1857 (1987) and rejected Morley's argument that Tull formed a basis for a right to a jury in this state matter. In the Tull case, the Supreme Court of the United States held that the Constitution provides a right to a jury trial in actions brought pursuant to the Federal Clean Water Act where monetary fines are an element of the relief requested.^[3]

By contrast to the Tull opinion, the appellate court pointed out that this matter was a civil action brought pursuant to Part 303, which is a state law that does not specifically provide for a jury trial in civil cases for violations.

Appellate Court—Evidentiary Challenges

The appellate court also reviewed multiple evidentiary challenges brought by Morley, which argued that certain evidence and testimony were admitted in error by the trial court. The appellate court rejected Morley's arguments.

The appellate court ruled that it would review only those evidentiary issues that had merit, were due to plain error, affected the substantial rights of a party, and were preserved in the trial court by an objection. The appellate court agreed that the trial court has a "basic gatekeeping obligations" with respect to the admission of expert witness testimony. Morley argued that MDEQ's expert witnesses were erroneously allowed to testify regarding wetland jurisdiction and boundaries without MDEQ's having laid a proper foundation. The appellate court noted that the conclusion by the MDEQ's experts that a portion of the property was marsh and a portion was swamp was properly admitted because it had been based on sufficient facts or data using applied principles and methods, which were reliably applied to the facts of the case. The appellate court held that there was "foundation to establish that 92.3 acres of [Morley's] property was wetland," that evidence to support this conclusion was properly admitted, and the expert testimony met the standard of reliability.

Morley argued that the admission of other evidence produced by MDEQ witnesses was improper because the witnesses had failed to establish proper foundation for admission. The appellate court concluded that the evidence was properly admitted even though it was done without testimony by the creator of the document because the documents at issue were not offered to prove that the property was a wetland and, therefore, were not hearsay.

Morley argued that MDEQ had acted improperly and relied upon the existence of an agriculture drain to determine that Morley's property is a regulated wetland. The appellate court noted that the defendant had failed to raise this issue at the trial court level; therefore, it was considered forfeited.

The appellate court rejected Morley's objections to several other MDEQ exhibits admitted in the trial court proceedings. In each instance, the appellate court concluded that the trial court had not abused its discretion and that the evidence was admissible and/or did not constitute a plain error that affected Morley's substantial rights in the proceeding.

Judicial Takings & Payment of Penalty

Morley next challenged the trial court's order requiring Morley to cease all actions on the delineated 92.3 acres of wetlands and argued this ruling constituted a judicial taking. The appellate court concluded that the taking issue was raised for the first time in a motion for reconsideration; therefore, the argument was not preserved for appellate review.

The appellate court noted that in other prior opinions it had concluded that when individuals buy property that contains a wetland and they are unable to obtain a permit to fill, it is not considered a taking. The appellate court pointed out that there was evidence that Army Corps of Engineers, as early as 1994, had advised Morley that this property contained a wetland. The appellate court noted that Morley had failed to introduce any evidence into the record that he had no other economically viable use for the property as a result of MDEQ's injunction. The appellate court concluded that "a decrease in value is insufficient to establish a compensable taking."

Morley had asserted that his payment of the $30,000 penalty should allow him to again farm his land. The appellate court concluded that the trial court had not conditioned any relief from the judgement on Morley's payment of a fine and that payment of the fine did not then give Morley the right to relief by undertaking farming without first obtaining a wetland permit.

Post Appellate Court Activity

Morley has filed an Application for Leave to Appeal with the Michigan Supreme Court on the issue of his right to a jury trial and judicial takings. The case has Michigan Supreme Court Docket No. 153072. The appellate docket is available online.

[1] Originally, the Michigan Court of Appeals initially issued the opinion unpublished, then subsequently granted the motion for publication.

[2] In 2009, following a dispute with the local town over placement of access roads and the Township's demand for installation of a bridge, Morley advised the public he had decided to not pursue the subdivision but instead decided to focus on farming the land.

[3] In Tull, the United States brought suit against Tull for illegal discharging fill material into a wetland, in violation of the Clean Water Act, 33 U.S.C. § 1251 et seq. The U.S. District Court for the Eastern District of Virginia had denied Tull's demand for a jury trial. After a bench trial, the court held that Tull had illegally filled a wetland area and imposed civil penalties. The Court of Appeals for the Fourth Circuit affirmed the District Court's decision. Tull appealed and the Supreme Court of the United States reversed and remanded the case for a jury determination of Tull's liability. The Supreme Court held that an action by the government seeking civil penalties and injunctive relief is analogous to a nuisance lawsuit that punishes culpable individuals in common law. This type of action does implicate the Seventh Amendment right to trial by jury. The Seventh Amendment states "[i]n suits at common law, where the value and controversy shall exceed twenty dollars, the right of trial by jury shall be preserved …" The Supreme Court construed this language to require a jury trial in those actions that are analogous to "suits at common law." The Supreme Court noted that this right to a jury trial applies to not only common law forms of action, but also causes of actions created by a congressional enactment. The Supreme Court held that actions brought by the government for civil penalties are considered a type of action in debt and requires a trial by jury. The Supreme Court noted that "[a] civil penalty was a type of remedy at common law that could only be enforced in courts of law." Id. at 422. The Court also noted that if a legal claim is joined with an equitable claim, the right to jury trial remains intact. Id. at 425. The right to a jury trial remains even where an equitable claim is joined with a legal claim. The Supreme Court concluded that the Seventh Amendment required that petitioner's demand for jury trial be granted with respect to a determination of liability, but that a demand for jury trial with respect to determining the amount of a penalty was not applicable. The trial court could determine the penalty, if any.