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Oneida Seven Generations Corp. v. City of Green Bay

United States District Court, E.D. Wisconsin

June 6, 2017

ONEIDA SEVEN GENERATIONS CORPORATION and GREEN BAY RENEWABLE ENERGY, LLC, Plaintiffs,
v.
CITY OF GREEN BAY, Defendant.

          DECISION AND ORDER GRANTING MOTION TO DISMISS

          William C. Griesbach, United States District Court Chief Judge

         Plaintiffs Oneida Seven Generations Corporation (OSGC) and Green Bay Renewable Energy, LLC, (GBRE) filed this action against the City of Green Bay pursuant to 42 U.S.C. § 1983 alleging the City violated their rights to substantive and procedural due process when the Common Council voted to revoke a conditional use permit it had granted only one year earlier. The case is before the Court on the City's motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules for Civil Procedure. The City also contends that the complaint fails to allege facts showing GBRE has any interest or suffered any loss in the transaction and that OSGC lacks capacity to sue under the laws of the Oneida Nation under which it was chartered. For these reasons, as well, the City argues that the claims against it should be dismissed.

         In deciding a motion to dismiss, the court must accept as true all well-pleaded factual allegations of the complaint, drawing all reasonable inferences in favor of the pleading party. Moranski v. General Motors Corp., 433 F.3d 537, 539 (7th Cir. 2005). I therefore begin with a summary of those allegations.

         ALLEGATIONS OF THE COMPLAINT

         On March 1, 2011, Plaintiff Oneida Seven Generations Corporation (OSGC) obtained a conditional use permit (CUP) from the City of Green Bay, Wisconsin to build a facility to convert municipal solid waste into electricity and other useful products through a process known as pyrolysis. The facility, which was to be built on Hurlbut Street near the mouth of the Fox River, was designed to first sort and shred municipal solid waste, and then convey the waste to the pyrolysis unit, which would heat the waste to extremely high temperatures in an oxygen-starved environment. The process produces “syngas, ” which is chemically similar to natural gas or methane. After being scrubbed, the syngas would then fuel three generators (large internal combustion engines) to produce electricity. Compl. ¶¶ 2-3.

         OSGC had applied for the CUP after it learned that the City was extremely interested in development of a waste-to-energy facility within the City limits of Green Bay. Representatives of OSGC met with staff of the City's Economic Development and Planning Departments to select a site which OSGC later purchased. OSGC then submitted a lengthy application in which it described the project, addressed potential environmental impacts, and acknowledged the oversight and enforcement responsibility that the Wisconsin Department of Natural Resources (DNR) would exercise over its operations. City planning staff reviewed the information and issued a report to the City's Plan Commission which recommended granting the application. After consideration of the staff report, a presentation by OSGC, and a public hearing on the matter, the Plan Commission unanimously recommended that the City approve the CUP conditioned upon the facility complying with all federal and state environmental regulations. The issue then went to the full Common Council which held a public hearing similar to the hearing held before the Plan Commission. Following the OSGC presentation and public comments, the Common Council voted ten-to-one to approve the permit. Id. ¶¶17-31.

         After the City approved the application for the CUP, OSGC spent a significant amount of money to purchase equipment for the new facility and pursue the additional permits it needed from the DNR, the U.S. Department of Energy and other state and local government agencies. On July 14, 2011, the Safety and Buildings Division of the Wisconsin Department of Commerce conditionally approved OSGC's plan, noting that the owner was “responsible for compliance with all code requirements.” On August 3, 2011, OSGC's detailed site plans and building plans were approved by the City and a building permit was issued. In September 2011, the DNR issued permits and approvals for the facility under the State's clean air and solid waste laws. The DNR issued a formal Environmental Analysis which concluded that approval of the facility was not a “major action” and would not have significant environmental effects. The U.S. Department of Energy likewise completed its Environmental Assessment and issued a “Finding of No Significant Impact.” With all the required approvals in hand, OSGC proceeded with preparatory construction work. Id. ¶¶ 32-40.

         In the meantime, citizen opposition to the project had grown more active. At an April 10, 2012 meeting of the Common Council the opposition groups accused OSGC of lying to the City in applying for the CUP by claiming that the facility would have no smokestacks and would produce no emissions. Responding to political pressure, the Common Council voted to hold a public hearing regarding the CUP and to “continue further information.” Id. ¶ 44. The Council directed the Plan Commission to hold a public hearing to “determine if the information submitted and presented to the Plan Commission was adequate for it to make an informed decision whether or not to advance the Seven Generation Conditional Use Permit (CUP) that was recommended.” Id. ¶ 45.

         The meeting before the Plan Commission was held on October 3, 2012. After hearing from all parties, including City Planning Director Rob Strong who was directly involved in reviewing the application, the Commission concluded there had been no misrepresentation. In a report to the Common Council, the Plan Commission stated:

Based on the information submitted and presented, the Plan Commission determines that the information provided to the Plan Commission was not misrepresented and that it was adequate for the Commission to make an informed decision, and recommends that the CUP stand as is. The Commission further determines that the information the Plan Commission received was adequate, and based upon information then available, that the Plan Commission did understand that there were emissions and venting as a part of the system, and therefore made sure that the Seven Generations Corporation would need to meet the requirements of the EPA and DOE, as well as meeting the requirements of the municipal code through a normal process of give and take.

Id. ¶ 51.

         Despite the unequivocal report from the Plan Commission, a letter from OSGC counsel that any effort by the City to revoke the CUP would be met with a damages claim for millions of dollars, and the advice of the City Attorney that there was no legal basis for the City to revoke the CUP, the Common Council voted on October 16, 2012, to reject the conclusions of the Plan Committee and to rescind the CUP previously granted to OSGC by a vote of seven to five. Two weeks later the City Attorney sent a letter to OSGC stating that the Council had rescinded the CUP because OSGC had made “false statements and misrepresentations” to the City “relat[ing] to the public safety and health aspect of the Project and the Project's impact upon the City's environment” and regarding “emissions, chemicals, and hazardous materials.” The letter did not identify the particular statements that were false, however, nor did it explain the basis for the City's determination that any statements were false. Id. ¶¶ 55-60.

         On November 14, 2012, OSGC requested an administrative appeal pursuant to Section 68.10 of the Wisconsin Statutes, and requested a hearing under Section 68.11. The City concluded that the hearings already conducted substantially complied with Section 68.11, however, and summarily denied the appeal. OSGC then commenced an action for certiorari review of the City's decision in the Circuit Court for Brown County, alleging that the City “had arbitrarily and capriciously rescinded the permit based on an implied, unwritten condition; had deprived OSGC of its vested right to develop the facility; had rescinded the permit without substantial evidence of misrepresentation; and had acted arbitrarily and unreasonably.” Id. ¶¶ 61-63.

         OSGC's petition for certiorari was denied by the Circuit Court for Brown County. OSGC appealed the court's decision to the Wisconsin Court of Appeals, which reversed the Circuit Court's decision in a twenty-page decision issued on March 25, 2014. Notwithstanding its stated reluctance to “interfere in such discretionary functions” as the decision to revoke a CUP, the Court of ...


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