Wetland development permit; MCL 324.30311(4)(b); “Feasible & prudent alternative”; Impermissibly narrowing a project’s purpose; MI Admin Code, R 281.922a(4); Consideration of parcels the applicant does not own but could reasonably obtain; MCL 324.30311(5); Piercing the corporate veil; Green v Ziegelman; The substantial evidence standard; Administrative law judge (ALJ)

In this case arising from a wetland development permit application, the court held that the ALJ’s finding “that petitioner impermissibly narrowed the project purpose was supported by substantial evidence[.]” But the record did not support piercing the corporate veil. Thus, the ALJ “erred as a matter of law by disregarding the separate legal existence of” a corporation (Green Bridge) wholly owned by petitioner “and treating the rebuttable presumption of MCL 324.30311(5) as categorically inapplicable.” The court found that “the ALJ reasonably determined that petitioner’s hearing testimony did not ‘completely define’ the project purpose within the meaning of Rule 281.922a(4) and that the appropriate project purpose was the construction of a single-family home.” In setting aside this determination, “the circuit court substituted its own assessment of petitioner’s credibility and intent for that of the ALJ. That is not the role of a reviewing court applying the substantial evidence test.” But the ALJ erred in its legal reasoning in concluding that the corporate-owned property (Finger Farm) “may properly be treated as an alternative for purposes of the wetland permit analysis.” Under MCL 324.30311(5), in performing a feasible and prudent alternative analysis respondent may “consider parcels ‘not presently owned by the applicant which could reasonably be obtained.’ The statute also establishes a ‘rebuttable presumption that alternatives located on property not presently owned by the applicant are not feasible and prudent’ under certain circumstances.” The ALJ determined “as a matter of law that petitioner ‘shall be treated as the owner of the property for purposes of feasible and prudent alternatives analysis’ because he is the corporation’s sole shareholder.” The circuit court was correct that the ALJ’s analysis was flawed. “The ALJ did not find that Green Bridge was used to perpetrate fraud, evade legal obligations, or otherwise subvert justice. Without such findings, the ALJ could not simply disregard” its separate legal existence. Given that petitioner did not currently own “Finger Farm, there is a rebuttable presumption that [it] is not a feasible and prudent alternative location, and whether that presumption has been overcome must be determined through factual findings by the ALJ in the first instance.” Reversed as to the ALJ’s project-narrowing ruling, affirmed as the piercing-the-corporate-veil ruling, and remanded.