Title: WYOMING OUTDOOR COUNCIL and POWDER RIVER BASIN RESOURCE COUNCIL V. WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, WATER QUALITY DIVISION and MARATHON OIL COMPANY and PETROLEUM ASSOCIATION OF WYOMING

State: wyoming

Issuer: Wyoming Supreme Court

Document:

WYOMING OUTDOOR COUNCIL and POWDER RIVER BASIN RESOURCE COUNCIL V. WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, WATER QUALITY DIVISION and MARATHON OIL COMPANY and PETROLEUM ASSOCIATION OF WYOMING2010 WY 20225 P.3d 1054Case Number: S-09-0062Decided: 02/25/2010
OCTOBER 
TERM, A.D. 2009

 
 
WYOMING 
OUTDOOR COUNCIL and POWDER RIVER BASIN RESOURCE 
COUNCIL,Appellants(Petitioners),v.WYOMING DEPARTMENT 
OF ENVIRONMENTAL QUALITY, WATER QUALITY 
DIVISION,Appellee(Respondent),andMARATHON OIL 
COMPANY and PETROLEUM ASSOCIATION OF 
WYOMING,Appellees(Intervenor-Respondents).

 
 

Appeal 
from the District Court of Laramie County

The 
Honorable Edward L. Grant, Judge

 
 
Representing 
Appellants:

Steve 
Jones, Watershed Protection Program Attorney, Wyoming Outdoor Council, Lander, 
Wyoming.

 
 
Representing 
Appellee Wyoming Department of Environmental Quality, Water Quality 
Division:

Bruce 
A. Salzberg, Wyoming Attorney General; Jay A. Jerde, Deputy Attorney General; 
John Burbridge, Senior Assistant Attorney General.  Argument by Mr. 
Burbridge.

 
 
Representing 
Appellee Marathon Oil Company:

Brent 
R. Kunz of Hathaway & Kunz, P.C., Cheyenne, Wyoming; John C. Martin, Duane 
A. Siler and Ben A. Ellison of Patton Boggs LLP, Washington, D.C.  Argument by Mr. 
Martin.

 
 

Representing 
Appellee Petroleum Association of Wyoming:

John 
A. Masterson of Rothgerber Johnson & Lyons LLP, Casper, 
Wyoming.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
KITE, 
Justice.

 
 
[¶1]  After the Wyoming Environmental Quality 
Council (EQC) adopted the Department of Environmental Quality's (DEQ) proposed 
revisions to Chapter 1 of the Wyoming Water Quality Rules and Regulations 
(WWQR&R), the Wyoming Outdoor Council and the Powder River Basin Resource 
Council (Petitioners) filed a petition challenging the new rules.  The Petitioners named the DEQ as the 
respondent.  Finding that the proper 
party was the EQC, which the petition did not name, the district court dismissed 
the petition for lack of jurisdiction.  
The Petitioners appeal, claiming the district court erred in dismissing 
the petition.  We 
reverse.

 
 
ISSUES

 
 
[¶2]  The Petitioners state the issues for 
this Court's determination as follows:

 
 
1. 
In a case brought pursuant to the Wyoming Administrative Procedure Act to 
challenge the promulgation of rules and regulations, is the proper party to be 
named in the petition for review the agency, the agency's hearing body, or 
both?

 
 
2. 
Where a petition for review of agency rules and regulations is brought, and the 
agency itself is named as a party, but the agency's hearing body is not named, 
is it proper to dismiss the petition for lack of jurisdiction, or rather, is it 
proper to either allow the joinder of the hearing body as a party or acknowledge 
that the real party in interest has been named, and refuse to dismiss the 
case?

 
 
The 
DEQ asserts the district court acted properly in dismissing the petition on the 
ground that it did not name the EQC as respondent.  Marathon Oil Company and the Petroleum 
Association of Wyoming (Intervenors), whom the district court allowed to 
intervene in the action, agree that the petition was properly dismissed and 
contend that joinder of the EQC would not have been 
proper.

 
 
FACTS

 
 
[¶3] 
On December 20, 2006, the DEQ filed a notice of intended rulemaking with the 
Wyoming Secretary of State's Office in accordance with Wyo. Stat. Ann. § 
16-3-103(a) (LexisNexis 2009).  On 
the same date, the DEQ provided copies of the proposed rules to the Legislative 
Service Office (LSO), Attorney General, and the Governor.  The DEQ also provided notice of the 
proposed rule changes to interested members of the public.  The Petitioners and others submitted 
written comments on the proposed changes and a public hearing was held on 
February 15 and 16, 2007.  On 
February 26, 2007, the DEQ sent the final rules to the Attorney General's Office 
for the Governor's signature and filing with the Secretary of State.  On April 25, 2007, the Governor approved 
and signed the rules and they were filed with the Secretary of State.     

 
 
[¶4]  The Petitioners filed their petition for 
judicial review of the rules on May 29, 2007.  They claimed the adoption of the rules 
was arbitrary, capricious, an abuse of discretion, not in accordance with 
federal and state law, unsupported by substantial evidence and otherwise in 
violation of Wyo. Stat. Ann. § 16-3-114(c)(ii) (LexisNexis 2009).  An understanding of the grounds for 
their claim is not necessary in order to decide the issues presented on 
appeal.  Suffice it to say that they 
asserted the new rules violated the Clean Water Act, 33 U.S.C. § 1251 et seq. and federal regulations enacted 
pursuant thereto in that they allowed the DEQ to establish new standards for 
newly created classes of water, downgraded a number of bodies of water in 
Wyoming from primary contact recreational waters to secondary contact 
recreational waters without conducting required analyses, and provided for 
variances from water quality standards.  
They further alleged the DEQ violated the Wyoming Administrative 
Procedure Act by adopting policies that fit the definition of rules without 
following rulemaking procedures and acted arbitrarily by abandoning the fecal 
coliform standard for water quality and removing chloride protection standards 
for Class 3 waters in Wyoming. 

 
 
[¶5]  Intervenors filed their motions to 
intervene, which the district court granted.  The parties filed briefs.  Among the issues raised was whether the 
petition should be dismissed for failure to name the EQC as a party.  By order dated February 2, 2009, the 
district court dismissed the petition for lack of jurisdiction because the EQC 
was not named as a party.   The 
Petitioners timely filed a notice of appeal.

 
 
STANDARD 
OF REVIEW

 
 
[¶6]  Pursuant to W.R.A.P 12.11, an aggrieved 
party may obtain review of a district court's final judgment by appeal to this 
Court.  We accord no deference to, 
and are not bound by, a district court's decision on a question of law.  State Bd. of Control v. Johnson Ranches, 
Inc., 605 P.2d 367, 373 (Wyo. 1980).  
The question of whether a district court has jurisdiction to review a 
matter is one of law, which we review de 
novo.  Douglass v. Wyoming Dep't of Transp., 
2008 WY 77, ¶ 9, 187 P.3d 850, 853 (Wyo. 2008).  

 
 
DISCUSSION

 
 
[¶7]  The Petitioners challenge the district 
court's conclusion that the DEQ was not the proper party to be named as the 
respondent and they should have named instead the EQC.  Petitioners assert that the DEQ was the 
proper party because the rules they were challenging were those of the DEQ, not 
the EQC.  They further contend that 
the EQC is merely an adjudicatory panel of the DEQ with no stake in the 
administration or enforcement of the rules and no legal interest in maintaining 
its decision to promulgate the rules the DEQ recommended.  The DEQ and Intervenors respond in their 
written arguments to this Court that the district court correctly ruled that the 
EQC was the proper party to be named in the petition because it, not the DEQ, 
promulgated the rules the Petitioners were challenging and thereby created the 
harm about which Petitioners complained.  
In its oral argument to this Court, however, the DEQ essentially conceded 
that it was a proper party to the appeal, would not have felt comfortable moving 
to dismiss the petition as to itself, and would not have objected to joinder of 
the EQC.  Despite the DEQ's 
concessions, we consider the question of whether the district court erred in 
concluding it lacked jurisdiction because the petition did not name the 
EQC.  In resolving this issue, we 
look first to the legislation creating these entities.

 

[¶8]  The DEQ and the EQC were created by the 
Wyoming Environmental Quality Act, Wyo. Stat. Ann. § 35-11-101 through 
35-11-1904 (LexisNexis 2009).  The 
DEQ is a department within the executive branch and consists of six divisions, 
including the water quality division.  
Sections 35-11-104 and 35-11-105.  
The governor, with the advice and consent of the senate, appoints the 
director of the DEQ.  Among the 
director's duties is to perform "any and all acts necessary to promulgate, 
administer and enforce the provisions of [the Environmental Quality Act] and any 
rules . . . adopted, established or issued thereunder . . . ."  Section 35-11-109(a)(i).  The director also appoints 
administrators for each of the divisions.  
Section 35-11-108.  The 
division administrators, under the control and supervision of the director, are 
charged with enforcing and administering the Environmental Quality Act and the 
rules, regulations and standards promulgated under the Act.  Section 35-11-110(a).  The water quality division administrator 
is also charged with receiving public comment and, after consultation with the 
advisory board, recommending to the director rules to promote the purposes of 
the Act.  Section 
35-11-302(a).

 
 
[¶9]  In addition to the DEQ, the 
Environmental Quality Act also created the EQC.  Pursuant to § 35-11-111(a), the EQC is a 
separate and independent operating agency of state government consisting of 
seven members who are appointed by the governor with the advice and consent of 
the senate.  Section 35-11-112(a) 
provides in pertinent part as follows:

 
 
   (a)  The council shall act as the hearing 
examiner for the department and shall hear and determine all cases or issues 
arising under the laws, rules, regulations, standards or orders issued or 
administered by the department or its air quality, land quality, solid and 
hazardous waste management or water quality divisions.  At the council's request the office of 
administrative hearings may provide a hearing officer for any rulemaking or 
contested case hearing before the council, and the hearing officer may provide 
recommendations on procedural matters when requested by the council. . . .  The council shall:

(i)     
  Promulgate rules and regulations 
necessary for the administration of this act, after recommendation from the 
director of the department, the administrators of the various divisions and 
their respective advisory boards;

(ii)  Conduct hearings as required by the 
Wyoming Administrative Procedure Act for the adoption, amendment or repeal of 
rules, regulations, standards or orders recommended by the advisory boards 
through the administrators and the director.  The council shall approve all rules, 
regulations, standards or orders of the department before they become 
final;

. 
. . .   

(c)  Subject to any applicable state or 
federal law, and subject to the right to appeal, the council 
may:

     (i)  Approve, disapprove, repeal, modify or 
suspend any rule, regulation, standard or order of the director or any division 
administrator;

 
 
[¶10]  In addition to the DEQ and the EQC, the 
Environmental Quality Act provides for the creation of three advisory boards 
within the DEQ, one each for the air, land and water quality divisions.  Section 35-11-113(a).  Each division administrator serves as a 
non-voting member, specifically the executive secretary, for his or her 
respective advisory board.  Section 
35-11-110(a)(i).  One of the duties 
of the advisory boards is to recommend to the council through the administrator 
and director the adoption of and variance from rules, regulations and standards 
to implement and carry out the provisions and purposes of the Act as it relates 
to their divisions.  

 
 
[¶11]  There is no question from these 
provisions that the EQC is responsible for conducting public hearings on changes 
the DEQ proposes to the DEQ rules.  
The EQC also is charged with approving or disapproving the DEQ's proposed 
rule changes.  There is also no 
question that the DEQ and its divisions are responsible for recommending, 
enforcing and administering DEQ rules and changes to the rules.  

 
 
[¶12]  In the present case, the rulemaking 
process began in July of 2002, when the DEQ began a triennial review of Chapter 
1 of the Surface Water Quality Standards by publishing an outreach document 
disclosing its intent to revise the regulations.  The DEQ water quality division 
administrator solicited public comment and, after considering the comments, 
proposed draft revisions to the rules in November of 2004.  After several more solicitations of 
public comment and revisions to the proposed rule changes, the DEQ director 
reviewed the revisions and he and the division administrator presented them to 
the water quality advisory board.  
There, the revisions underwent an extensive review, including five public 
meetings and four solicitations of public comment over a two year period.  On October 18, 2006, the advisory board 
recommended that the DEQ propose the rule changes to the EQC.  

 
 
[¶13] 
Upon receipt of the proposed changes, the EQC solicited public comment and, in 
February of 2007, held a two day public hearing.  The hearing began with a presentation by 
the DEQ director explaining the proposed revisions.  The EQC then heard comments from members 
of the public in attendance.  After 
the public comments, the DEQ director and water quality division administrator 
were given an opportunity to respond.  
The EQC closed the record, met to consider the revisions and, that same 
day, concluded that "adoption of these rules was necessary to update the Wyoming 
surface water standards to comply with federal regulations and to carry out the 
responsibilities of the [DEQ] in regards to the protection of surface water 
quality in the state."  

 
 
[¶14]  Given this process, Petitioners argue 
that the DEQ is the proper party to this action because the rules are its rules 
and it, unlike the EQC, is the party having a legal interest in maintaining the 
rules.  They contend the EQC, unlike 
the DEQ, has no interest in maintaining its determination, was not a party to 
the administrative proceedings and acted instead in a quasi judicial capacity by 
conducting the hearing and approving the revisions proposed and advocated for by 
the DEQ.  Petitioners cite Antelope Valley Improv. and Serv. Dist. of 
Gillette v. State Bd. of Equalization, 4 P.3d 876, 878 (Wyo. 2000) 
(citations omitted), in which this Court stated:

 
 
[W]hen 
the Board [of Equalization] acts in its regulatory capacity and "any person 
adversely affected" by that decision appeals to the district court, the Board is 
the proper respondent to the appeal. . . . However, when the Board functions in 
its adjudicatory capacity, it is not a proper party to an appeal from its order 
resulting from that proceeding.  The 
law is well settled, and we reiterate it here:  "Generally a court or board exercising 
judicial or quasi judicial functions, not being a party to its proceedings, and 
not having any legal interest in maintaining its determination, can neither 
appeal from a judgment or order of a court reversing the proceedings nor be 
heard on the appeal."       

 
 
Asserting 
that the EQC acts in a quasi judicial capacity when it conducts rulemaking 
hearings and approves or disapproves the DEQ's proposed rule changes, 
Petitioners assert the EQC could not appeal from nor be heard on an appeal from 
its own ruling.

 
 
[¶15]  As noted in paragraph 7 above, the DEQ 
conceded at oral argument that it was a proper party to these proceedings.  Intervenors, however, asserted that the 
DEQ was not a proper party and the district court's holding that the EQC was the 
proper party was correct.  They 
contend this Court clearly held in Antelope Valley that when an agency acts 
in a regulatory, or rulemaking, capacity and a person adversely affected by its 
decision appeals to the district court, the agency is the proper respondent to 
the appeal; however, when an agency acts in an adjudicatory capacity and an 
aggrieved party appeals, the agency is not a proper party to the appeal.  Intervenors assert that the EQC acted in 
a regulatory, or rulemaking, capacity in conducting the public hearing and 
approving the revisions; therefore, it was the proper party to be named in the 
district court appeal.  

 
 
[¶16]  In Antelope Valley, a service district 
applied to the Department of Revenue for a sales and use tax exemption.  Id. at 877.  The Department denied the application 
and the service district appealed to the Board of Equalization.  The Board of Equalization dismissed the 
appeal as untimely.  The service 
district appealed to the district court and then to this Court and the Board of 
Equalization filed a brief.  Id.  We held the Board was not a proper party 
to the appeal because in considering the service district's appeal from the 
Department of Revenue, it was acting in its adjudicatory capacity.  We said: 

 
 
The 
administrative agency representing the State of Wyoming's legal interest in the 
adversarial hearing before the Board was the Department.  The adversarial parties before this 
Court remain the same, [the service district] and the Department.  The Board, as the impartial tribunal 
below, may not inject itself into this proceeding because it was not acting in 
its regulatory capacity when it heard the matter and issued its order. 

 
 

Id. 
at 878.  We expressly distinguished 
between the Board of Equalization's adjudicatory and regulatory capacities and 
held that when the Board acts in its regulatory capacity and a person adversely 
affected by its decision appeals to the district court, the Board is the proper 
respondent to the appeal.  We made 
clear that when the Board is engaged in rulemaking, it is acting in its 
regulatory capacity.  Id. at 878 nn.2-3.  However, because the case before us 
involved an appeal to the Board from a final decision of the Department and the 
appeal was an adversarial proceeding in which the Department represented the 
State's interest against an aggrieved party, we held the Board was functioning 
in its adjudicatory capacity.  Id. at 878.

 
 
[¶17]  Unlike the Board of Equalization in Antelope Valley, the EQC was not 
deciding an appeal from a final decision of the DEQ.  Rather, the EQC was holding a public 
hearing for the purpose of deciding whether the DEQ's proposed rule changes 
ought to be approved, disapproved or modified.  In this sense, the EQC was involved in 
rulemaking, which is a regulatory function, and Antelope Valley would seem to suggest 
that the EQC was a proper party to the appeal in district court.  

 
 
[¶18]  However, "the administrative agency 
representing the State of Wyoming's legal interest" in the public hearing before 
the EQC was the DEQ.  Id. at 878.  At the hearing, the DEQ advocated for 
approval of its proposed revisions while members of the public urged the EQC to 
disapprove the revisions.  The EQC's 
function was to conduct the hearing and, on the basis of the opposing positions 
presented, approve, disapprove or modify the proposed revisions.  In this case, the EQC approved the DEQ's 
revisions.   

 
 
[¶19]  From this discussion, and the process 
that led to approval of the DEQ's proposed revisions, we conclude the DEQ was a 
proper party to the district court appeal.  
As the administrative agency statutorily charged with carrying out the 
purposes of the Environmental Quality Act, including the promulgation, 
administration and enforcement of the Act's provisions and any rules and 
regulations, the DEQ represented the State's legal interest at the public 
hearing before the EQC.  It clearly 
was a party to the proceedings before the EQCboth before and after members of 
the public offered their comments, the DEQ had the opportunity to advocate for 
approval of its proposed revisions.  
Given its responsibilities under the Act and the time involved in 
drafting the revisions, the DEQ just as clearly had a significant legal interest 
in obtaining approval of its proposed revisions.  We hold that the district court erred as 
a matter of law in concluding that it lacked jurisdiction because the 
Petitioners failed to name the EQC.  
As stated in Antelope Valley, 
an administrative agency acting in its regulatory, or rulemaking, capacity 
is a proper respondent to a district court appeal.  The DEQ was an administrative agency 
acting in its rulemaking capacity and was a proper party to the 
appeal.

 
 
[¶20]  Section 16-3-114(a) of the Wyoming 
Administrative Procedure Act supports this conclusion.  The provision states in pertinent 
part:

 
 
   (a)  [A]ny person aggrieved or adversely affected 
in fact by a final decision of an agency in a contested case, or by other agency action or inaction, 
or any person affected in fact by a rule adopted by an agency, is 
entitled to judicial review in the district court . . . .  The procedure to be followed in the 
proceeding before the district court shall be in accordance with rules 
heretofore or hereafter adopted by the Wyoming supreme court. 

(Emphasis 
added).  This provision expressly 
allows judicial review of an agency's final decision in a contested case, a rule 
adopted by an agency, or "other agency action." W.R.A.P. 12.01 contains the same 
language.  In a lengthy process, the 
DEQ through its director, water quality administrator and water quality advisory 
board, drafted the rules presented to the EQC and recommended to the EQC that it 
approve the revisions.  The DEQ, 
through its director, had the statutory authority to perform all acts necessary 
to promulgate the rules.  Section 
35-11-109(a)(i).  While the EQC had 
the authority to approve the rules after recommendation from the director, the 
division administrators and the advisory boards, the DEQ clearly took "action" 
with regard to the proposed rules.

  

[¶21]  The DEQ was a proper party.  Therefore, the district court erred as 
matter of law in dismissing the appeal for lack of jurisdiction.  The Petitioners properly invoked the 
district court's jurisdiction upon filing the petition naming the DEQ as 
respondent within the time required by W.R.A.P. 12.04(a).  

 
 
[¶22]  Having concluded that the DEQ was a 
proper party to the appeal, it is not necessary to address the Petitioners 
argument that, if the DEQ was not a proper party, they should have been allowed 
to join the EQC.  Intervenors 
contend, however, that joinder of the EQC would not have been proper whether the 
DEQ was or was not a proper party because by the time the issue was raised the 
thirty day time limit imposed by W.R.A.P. 12.04(a) for filing the petition for 
review had passed.  They further 
contend the EQC was a necessary party without which the appeal could not be 
decided.  Asserting that it was too 
late to add the necessary party, Intervenors assert the district court properly 
dismissed the appeal.  We address 
this contention because it may arise on remand. 

 
 
[¶23]  W.R.A.P. 12.03 
provides:

 
 

(a)  
 The proceedings for judicial review under 
Rule 12 shall be instituted by filing a petition for review in the district 
court having venue.  No other 
pleading shall be necessary, either by petitioner or by the agency or any other 
party.  No summons shall be 
necessary.  The petition shall 
conform to the requirements set forth in Rule 12.06.

(b)  
Copies 
of the petition shall be served without unnecessary delay upon the agency and 
all parties in accordance with Rule 5, Wyo. R. Civ. P.

 
 
Petitioners 
in this case served the petition on both the DEQ and the EQC.  There is no contention that the EQC did 
not have notice of the appeal. 

 
 
[¶24]  W.R.A.P. 12.06(c) provides in relevant 
part:

 
 
The 
petition for review shall include: 

 
 
. 
. . .

 
 
(c) 
For petitions in contested cases, a list of all persons or agencies formally 
identified as parties, as defined in W.S. 16-3-101(b)(vi); in all other cases, a 
person seeking judicial review of agency action must affirmatively file as a 
petitioner under W.S. 16-3-114 to be considered as a 
party.

 
 
Except 
in contested cases, this rule does not specify that the petition must list all 
agencies formally identified as parties.  

 
 
[¶25]  Section 16-3-101(b)(vi) of the Wyoming 
Administrative Procedure Act provides:

 
 
"Party" 
means each person or agency named or admitted as a party or properly seeking and 
entitled as of right to be admitted as a party[.]  

 
 
This 
provision states that the term "party" includes persons or agencies named or admitted as a party, suggesting that 
persons or agencies not named in the petition may be admitted.  The provision does not state that a 
person or agency not named in the petition must be admitted within a specified 
time period.

 
 
[¶26]  From these provisions, we conclude that 
the district court could have admitted the EQC as a party after the time for 
filing the petition for review had passed. There is nothing suggesting otherwise 
in either the statutes governing administrative actions or the rules governing 
judicial review of administrative action.  The district court properly obtained 
jurisdiction when the petition for review naming a proper party, the DEQ, was 
timely filed. Under the facts of this case particularly, where the EQC was 
served with notice of the petition, we are aware of no reason that the EQC could 
not have been made a party to the proceeding at the time the issue arose on 
motion of either party or by the district court on its own initiative.   

 

[¶27]  Application of the Wyoming Rules of 
Civil Procedure would also suggest the EQC could have been added as a 
respondent.  Rule 19 requires 
joinder of all parties having a real interest in a proceeding.  The EQC had a real interest in the 
proceeding.  Rule 20 allows joinder 
of defendants against whom a right to relief is asserted and if questions of law 
or fact common to all defendants will arise in the action.  The Petitioners assert a right to relief 
from the EQC's rules and questions of fact and law common to both the DEQ and 
EQC will arise in the action.  Rule 
21 allows a district court to drop or add parties at any stage of an action and 
on such terms as are just.  Under 
the circumstances existing here, the district court could have added the EQC at 
the time the issue arose without causing any injustice.  

 
 
[¶28]   The EQC and the DEQ were both 
proper parties to this proceeding.  
The district court obtained jurisdiction when the petition naming the DEQ 
was filed.  The district court erred 
in dismissing the petition for lack of jurisdiction on the ground that the EQC 
was not named in the petition.  

 
 
[¶29]   Reversed and remanded to the 
district court for further proceedings consistent with this 
opinion.