Wisconsin Administrative Code
Department of Natural Resources
NR 700-799 - Environmental Protection - Investigation and Remediation of Environmental Contamination
Chapter NR 747 - PETROLEUM ENVIRONMENTAL CLEANUP FUND
Subchapter V - Legal Issues
Section NR 747.54 - Arbitration
Universal Citation: WI Admin Code ยง NR 747.54
Current through August 26, 2024
(1) APPLICATION.
(a) If a claimant who files an appeal under
s.
NR 747.53
requests use of arbitration and if the amount at issue is $100,000 or less, the
appeal shall be processed under this section.
(b)
1. A
request for arbitration shall be considered as a withdrawal of the appeal filed
regarding the subject of that arbitration and precludes the claimant from going
forward with an administrative appeal regarding the same issues under s.
NR 747.53.
2.
Proceeding to an appeal hearing under s.
NR 747.53
precludes the claimant from filing an arbitration request regarding the same
issues.
(c) A request
for arbitration shall be in writing signed by the claimant or their attorney,
shall include the names and addresses of all parties, and shall be made after
denial of costs submitted for reimbursement, but prior to commencement of a
hearing under ch. 227, Stats.
(2) SCOPE. Only the costs in the following categories may be the subject of arbitration under this section:
(a) Investigating a petroleum product
discharge.
(b) Planning remedial
action.
(c) Conducting remedial
action activities.
(3) DEFINITIONS.
(a)
Deadlines.
All time deadlines in this section, except in sub. (10) (e) 1., are specified
in calendar days.
(b)
Terms. Except where otherwise specified, the following terms
are defined as follows for the purposes of this section:
1. "Administrator" means the administrator of
the environmental and regulatory services division of the department, or his or
her designee.
2. "Arbitrator" means
a person appointed in accordance with s.
292.63(6s),
Stats., and governed by the provisions of this section.
Note: Section 292.63(6s) Stats., reads as follows: "Upon the request of a person who files an appeal of a decision of the department under this section, if the amount at issue is $100,000 or less, the appeal shall be heard by one or more individuals designated by the department to serve as arbitrator under rules promulgated for this purpose by the department. In such an arbitration, the arbitrator shall render a decision at the conclusion of the hearing, or within 5 business days after the conclusion of the hearing if the arbitrator determines that additional time is needed to review materials submitted during the hearing, affirming, modifying or rejecting the decision of the department. The arbitrator shall promptly file his or her decision with the department. The decision of the arbitrator is final and shall stand as the decision of the department. An arbitrator's decision may not be cited as precedent in any other proceeding before the department or before any court. A decision under this subsection is subject to review under ss. 227.53 to 227.57 only on the ground that the decision was procured by corruption, fraud or undue means. The record of a proceeding under this subsection shall be transcribed as provided in s. 227.44(8)."
3. "Claim" means the amount sought
by a claimant as remediation costs actually incurred by the claimant at a
remediation site.
4. "Ex parte
communication" means any communication, written or oral, relating to the merits
of an arbitration proceeding, between an arbitrator and any party or their
agent, which was not originally filed or stated in the administrative record of
the proceeding. Such communication is not ex parte communication if all parties
to the proceeding have received prior written notice of the proposed
communication and have been given the opportunity to be present and to
participate therein.
5. "Party"
means the department and any person who has agreed, pursuant to s.
292.63(6s),
Stats., to submit to an arbitrator one or more issues arising from a denial of
incurred costs that have been claimed for reimbursement by a
claimant.
(4) APPOINTMENT OF ARBITRATOR.
(a) The department
shall establish and maintain a panel of environmental arbitrators.
(b) Within 10 days of receiving a request for
arbitration, the administrator shall identify and submit simultaneously to all
parties an identical list of 6 individuals chosen from the panel of
arbitrators, whom the administrator believes will not be subject to
disqualification because of circumstances likely to affect impartiality. Each
party shall have 10 days from the date of receipt of the list to identify any
individuals objected to, to rank the remaining individuals in the order of
preference, and to return the list to the administrator. If a party does not
return the list within the time specified, all individuals on the list are
deemed acceptable to that party. From among the individuals whom the parties
have indicated as acceptable, and, in accordance with the designated order of
mutual preference, if any, the administrator shall appoint an arbitrator to
serve. If the parties fail to mutually agree upon any of the individuals named,
or if the appointed arbitrator is unable to serve, or if for any other reason
the appointment cannot be made from the submitted lists, the administrator
shall make the appointment from among the other members of the panel. In no
event shall appointment of the arbitrator by the administrator take longer than
30 days from the filing of the request for arbitration. The administrator's
appointment notice to the arbitrator shall include the names and addresses of
all of the parties, as provided in the request for arbitration.
(c) The arbitrator shall, within 5 days of
receipt of his or her notice of appointment, file a signed acceptance of the
case with the department and the claimant. The acceptance shall include a
disclosure to the parties of any circumstances likely to affect impartiality,
including any bias or any financial or personal interest in the result of the
arbitration, or any past or present relationship with the parties or their
counsel, or any past or present relationship with any known responsible party
to which the claim may relate.
(d)
If any appointed arbitrator should resign, die, withdraw, be disqualified, or
otherwise be unable to perform the duties of the office, the administrator may
fill the vacancy in accordance with the applicable provisions of this
subsection, and the arbitration process shall be resumed.
(5) CHALLENGE PROCEDURES.
(a) If any party wishes to request
disqualification of an arbitrator, that party shall notify the other parties in
writing of that request and the basis therefor within 5 days of receipt of the
information on which the request is based.
(b) The administrator shall make a
determination on any request for disqualification of an arbitrator within 7
days after the department receives the request, and shall notify the parties in
writing of the determination. This determination shall be within the sole
discretion of the administrator, and that decision shall be final.
(6) EX PARTE COMMUNICATION.
(a) No party or agent of a party may make or
knowingly cause to be made to the arbitrator an ex parte
communication.
(b) The arbitrator
may not make or knowingly cause to be made to any party or agent of a party an
ex parte communication.
(c) The
administrator may remove the arbitrator in any proceeding in which it is
demonstrated to the administrator's satisfaction that the arbitrator has
engaged in prohibited ex parte communication to the prejudice of any party. If
the arbitrator is removed, the procedures in sub. (4) (d) shall
apply.
(d) Whenever an ex parte
communication in violation of this subsection is received by or made known to
the arbitrator, the arbitrator shall immediately notify in writing all parties
to the proceeding of the circumstances and substance of the communication and
may require the party who made the communication or caused the communication to
be made, or the party whose representative made the communication or caused the
communication to be made, to show cause why that party's arguments or claim
should not be denied, disregarded, or otherwise adversely affected on account
of the violation.
(e) The
prohibitions of this subsection apply upon appointment of the arbitrator and
terminate on the date of the final decision.
(7) JOINT SUBMITTAL.
(a) Within 10 days after receipt of the
arbitrator's acceptance under sub. (4) (c), the claimant and the department
shall jointly submit to the arbitrator a summary of one or more issues arising
from the denial by the department of incurred costs claimed for reimbursement
concerning the site. The joint submittal shall be signed by the claimant or
their attorney, and a representative of the department, and shall include all
of the following:
1. A description of the
site and a brief summary of the actions taken at the site.
2. A statement of the issues arising from the
costs denied by the department in the claim, that are being submitted for
resolution by arbitration.
3. A
statement that the parties consent to resolution of the issues jointly
submitted to the arbitrator.
4. A
statement that the parties agree to be bound by the final decision on all
issues jointly submitted to the arbitrator, subject to the right to challenge
the final decision solely on the grounds and in the manner prescribed in sub.
(11) (b) and (c).
5. A statement
that the parties agree that the final decision shall be binding only with
respect to the costs at issue in the claim submitted for arbitration.
6. A statement that each signatory to the
joint submittal is authorized to enter into the arbitration and to bind legally
the party represented by him or her to the terms of the joint
submittal.
(b) Any party
may move to modify the joint submittal for arbitration to include one or more
additional issues arising in the referred claim. To be effective, the
modification must be signed by the arbitrator and all other parties.
(8) FILING OF PLEADINGS.
(a) Discovery shall be in accordance with
this subsection.
(b) Within 10 days
after receipt of the arbitrator's acceptance under sub. (4) (c), the claimant
shall submit to the arbitrator 2 copies of a written statement and shall serve
a copy of the written statement upon all other parties. The written statement
shall include all of the following:
1. A
statement of facts, including a description of the costs incurred by the
claimant in connection with the action taken at the site that have been denied
by the department, and statements which state with particularity the basis for
the claimant's assertion that the costs denied by the department are
eligible.
2. A description of the
evidence in support of both of the following:
a. The site at which the action was taken is
an eligible site pursuant to s.
NR 747.02.
b.
There was a discharge from a petroleum product storage system of an eligible
petroleum product at the site at which the remedial response action was
taken.
3. A complete
list of the specific costs which were denied by the department which the
claimant has requested be the subject of the arbitration proceeding.
4. To the extent such information is
available, the names and addresses of all identified owners for the site, and
the volume of the tanks and nature of the petroleum products that contributed
to the contamination.
5. Any other
statement or documentation that the claimant deems necessary to support its
claim.
(c) If any issue
concerning the adequacy of the claimant's remedial action has been submitted
for resolution or may arise during the arbitrator's determination of the dollar
amount of response costs recoverable by the claimant, the statement shall be
accompanied with an index of any documents that formed the basis for the
selection of the remedial action taken at the site, and a copy of all indexed
documents.
(d) Within 14 days after
receipt of the claimant's written statement, the department shall submit to the
arbitrator 2 copies of an answer and shall serve a copy of the answer upon all
other parties. The answer shall include all of the following:
1. A brief statement of the department's
basis for denying the costs at issue that are the subject of the
arbitration.
2. Any objections to
the statement of facts in the claimant's written statement, and, if so, a
counterstatement of facts.
3. A
description of the evidence in support of the department's denial of the costs
at issue and any supporting documentation thereof.
4. Any objections to the remedial action
taken by the claimant at the site based upon any documents that formed the
basis for the selection of the remedial action.
5. Any other documentation that the
department deems relevant, including documentation that the department deems
necessary to support its denial of costs submitted by the claimant for
reimbursement.
(9) JURISDICTION OF ARBITRATOR.
(a) In accordance with the procedures
established by this section, the arbitrator is authorized to arbitrate one or
more issues arising from the denial by the department of incurred costs in a
claim for reimbursement.
(b) The
arbitrator's authority is to render a decision regarding the denial of incurred
costs claimed and is limited to only the issues submitted for resolution by the
parties in the joint submittal for arbitration. Any issues arising from the
denial of incurred costs claimed that are not submitted for resolution shall be
deemed to be waived and shall not be raised in any action seeking enforcement
of the decision for the purpose of overturning or otherwise challenging the
final decision, except as provided in subs. (11) (b) and (c).
(c) If the issue of the dollar amount of
incurred costs that were denied by the department has been submitted for
resolution, the arbitrator shall determine, pursuant to par. (d), the dollar
amount recoverable by the claimant and shall award the amount of such costs to
the claimant.
(d) The arbitrator
shall uphold the department's denial of costs in full or in part unless the
claimant can establish that all or part of such costs were either of the
following:
1. Eligible costs based upon the
department's list of eligible costs in s.
NR 747.30, or the schedule of usual and customary costs
established by the department under for the period in which the costs were
incurred.
2. Clearly not excessive
and clearly necessary, taking into account the circumstances of the remedial
action and relative to the usual and customary cost schedule established by the
department under s.
NR 747.325 for the time period in which the costs were
actually incurred.
(e)
If the arbitrator upholds the department's denial only in part, the arbitrator
shall award to the claimant only those costs incurred in connection with the
portions of the remedial action that were upheld along with any associated
interest that was denied, less any remaining deductible and subject to
occurrence maximums.
(f) The
standard of review to be applied by the arbitrator to the department's
reimbursement denial decision shall be whether the decision was arbitrary and
capricious, or otherwise not in accordance with law.
(10) ARBITRATION DECISION.
(a) Within 5 days after receipt of the
statement and answer submitted under sub. (8), the arbitrator shall review the
submittals and request any needed additional information from the claimant or
the department.
(b) Any information
requested under par. (a) shall be submitted to the arbitrator and served upon
all other parties, within 5 days after receiving the request.
(c) Within 10 days after receipt of either
the submittals under sub. (8) or the information requested under par. (a),
whichever is applicable, the arbitrator shall render a proposed decision and
shall mail the proposal to the parties, unless the parties have settled the
dispute prior to the decision.
(d)
Within 10 days after receipt of the proposed decision, a party may submit
additional information to the arbitrator, and if done, shall serve a copy of
the additional information to all other parties.
(e)
1.
Within 5 business days after receipt of any additional information submitted
under par. (d), the arbitrator shall render a final decision.
2. The final decision shall be in writing and
shall be signed by the arbitrator. It shall be limited in accordance with the
arbitrator's jurisdiction as established in sub. (9), and shall, if such issues
have been jointly submitted by the parties for resolution, contain the
arbitrator's determination of the dollar amount of costs denied by the
department, if any, to be awarded to the claimant.
(f) The parties shall accept as legal
delivery of the final decision the placing in the United States mail of a true
copy of the final decision, sent by certified mail, return receipt requested,
addressed to each party's last known address or each party's attorney's last
known address, or by personal service.
(g) Notice of the final decision shall be
published by the department on its Web site. The notice shall include the name
and location of the site concerned, the names of the parties to the proceeding,
and a brief summary of the final decision.
(11) EFFECT AND ENFORCEMENT OF FINAL DECISION.
(a) The final decision shall be
binding and conclusive upon the parties as to the issues that were jointly
submitted by the parties for resolution and addressed in the decision.
Note: As established in s. NR 747.54(1) (b) 1., an arbitrator's decision may not be appealed under s. NR 747.53.
(b) As established in s.
292.63(6s),
Stats., the final decision under this section is subject to review under ss.
227.53 to
227.57, Stats.,
only on the ground that the decision was procured by corruption, fraud, or
undue means.
(c) Except as
necessary to show fraud, misconduct, partiality, or excess of jurisdiction or
authority, in any enforcement action, a party may not raise, for the purpose of
overturning or otherwise challenging the final decision, issues arising in the
claim that were not submitted for resolution by arbitration.
(d) Neither the initiation of an arbitration
proceeding nor the rendering of a final decision shall preclude or otherwise
affect the ability of the State of Wisconsin, including the department, to do
any of the following:
1. Seek injunctive
relief or enforcement against the claimant for further remedial action at the
site concerned pursuant to s.
101.144, Stats., or
any other applicable statute, regulation, or legal theory.
Note: Section 101.144, Stats., was repealed by 2013 Wis. Act 20.
2. Seek any relief for any violation of
criminal law from any claimant, consultant, commodity provider, contractor, or
subcontractor.
3. Seek any relief,
civil or criminal, from any person not a party to the arbitration proceeding
under s. 292.63, Stats., or any other
applicable statute, regulation, or legal theory.
(12) FEES AND EXPENSES.
(a) In any arbitration conducted, all fees
and expenses of the arbitrator shall be divided equally among all parties. All
other expenses shall be borne by the party incurring them.
(b) The department shall establish the per
diem fee for the arbitrator prior to the commencement of any activities by the
arbitrator.
(13) MISCELLANEOUS PROVISIONS.
(a) Any party who
proceeds with arbitration knowing that any provision or requirement of this
section has not been complied with, and who fails to object thereto either
orally or in writing in a timely manner, shall be deemed to have waived the
right to object.
(b) The original
of any joint submittal for arbitration, modification to any joint submittal for
arbitration, pleading, letter, or other document filed in the proceeding,
except for exhibits and other documentary evidence, shall be signed by the
filing party or by his or her attorney.
(c) All papers associated with the proceeding
that are served by a party to an opposing party shall be served by personal
service, or by United States first class mail, or by United States certified
mail, return receipt requested, addressed to the party's attorney; or if the
party is not represented by an attorney or the attorney cannot be located, to
the last known address of the party. All papers associated with the proceeding
that are served by the arbitrator or by the department shall be served by
personal service or by United States certified mail, return receipt requested,
addressed to the party's attorney; or if the party is not represented by an
attorney or the attorney cannot be located, to the last known address of the
party.
(d) If any provision of this
section, or the application of any provision of this section to any person or
circumstance is held invalid, the application of that provision to other
persons or circumstances and the remainder of this section shall not be
affected thereby.
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