The Michigan Court of Appeals has affirmed a lower court’s holding that MDEQ had the authority to issue an air permit to the Holland, Michigan Board of Public Works for the expansion of a coal-fired power plant. The suit, by the Natural Resources Defense Council and Sierra Club, claimed that the permit did not comply with federal and state regulations requiring MDEQ to evaluate clean fuels and consider alternate technologies, and that MDEQ’s analysis of these fuels and technologies was inadequate and flawed. The petitioners also claimed that the circuit court had failed to apply the proper standard of review to the MDEQ’s action. The circuit court had upheld MDEQ’s issuance of the permit, citing an enormous administrative record and stating that the court could not substitute its judgment for MDEQ’s as long as MDEQ’s decision was supported by substantial evidence. The petitioners argued that the circuit court had improperly deferred to MDEQ rather than reviewing de novo whether MDEQ’s decision complied with the Clean Air Act.

The appeals court agreed with the petitioners that the circuit court was required to review de novo whether MDEQ’s action complied with the statute. However, the appeals court held that, even if the circuit court had erroneously deferred to MDEQ’s evidentiary findings, it was harmless error because the circuit court had correctly reviewed de novo whether MDEQ’s decision was authorized by law. The appeals court found that MDEQ had performed an adequate review of alternate fuel sources, including “clean” fuels, and alternative technologies. Therefore, it held that the circuit court had properly concluded that MDEQ’s issuance of the permit was authorized by law and affirmed its decision. Natural Resources Defense Council v. MDEQ, No. 310036 (Mich. Ct. App. Mar. 21, 2013).