Stafford Helps Municipalities Preserve “Discretionary” Immunity in Wisconsin Supreme Court

Published on | Permalink

Last month, in a decision with far-ranging consequences, the Wisconsin Supreme Court rejected a call to abrogate the existing “discretionary” immunity standard applied to tort claims made against municipal actors.  Representing the League of Wisconsin Municipalities, the Wisconsin Towns Association, and the Wisconsin Counties Association as amici curiae (friends of the court), we filed a brief and participated in oral argument.

In Engelhardt v. City of New Berlin, 2019 WI 2, 385 Wis. 2d 86, 921 N.W.2d 714, the Court held that the City of New Berlin was not protected by governmental immunity because the known-and-present-danger exception applied.  However, as urged by Stafford, the Court preserved the discretionary immunity standard for tort claims against municipal actors.  As explained below, because only a narrow, 4-3 majority of the Wisconsin Supreme Court favored preserving the “discretionary” immunity standard, further challenges to that long-established standard are foreseeable.

Background on Governmental Immunity

Stafford Rosenbaum frequently defends municipal parties against tort claims. Immunity is often a key issue in such cases. Wis. Stat. § 893.80 provides immunity to a municipal actor “for acts done in the exercise of its legislative, quasi-legislative, judicial or quasi-judicial functions.”  Recognizing the separation of powers pitfalls implicated by permitting individual parties to use the courts to intrude and review the policy decisions of elected bodies (e.g., Town and Village boards, City councils, etc.), the Court has long interpreted Wis. Stat. § 893.80 to provide immunity for the “discretionary” decisions of municipal actors. 

However, there are two main exceptions to immunity – one for ministerial duties and another for known and present dangers.  Duties are ministerial for the purposes of governmental immunity when a duty is “absolute, certain and imperative, involving merely the performance of a specific task” imposed by law.  This exception to immunity applies when statutes, ordinances, or policies obligate the municipality to take a specific action.  Where there is no discretion, there is no immunity.  For example, the Court held that where regulations require railings on a stadium’s camera stand, there is no discretion to place the railings, and therefore no immunity from claims to recover damages caused by the failure to install such railings.

The second exception, the known-and-present-danger exception, applies only “where the danger is so severe and so immediate” that a response is demanded.  Once again, because there is no discretion, there is no immunity.  However, application of this judicially created exception is narrow and very fact-specific.  For example, the seminal case involves a fall, arguably caused by a park ranger’s failure to give warning that a path passed within inches of a partially concealed 90-foot drop. 

Case Background for the Engelhardt decision

The Engelhardt case arose when Lily Engelhardt, age eight, drowned during a summer camp field trip to a swimming pool.  Lily’s mother had informed the camp supervisor that Lily could not swim; however, no other camp staff were informed of this fact.  Lily’s mother granted permission for Lily to attend the field trip after assurances that Lily would be given a swim test upon arrival at the pool.  If Lily did not pass the swim test, the camp supervisor promised to keep her in the shallow, splash pad area. 

However, when the nearly 80 campers arrived at the pool, Lily was not tested before she entered the water.  Although campers like Lily were instructed to see a camp staff member for a swim test, no one was directly supervising Lily. As camp staff completed ushering campers through the locker rooms, Lily was discovered drowned in the pool by lifeguards who were unable to revive her.

Lily’s parents brought suit against the City (which ran the summer camp program) for wrongful death.  The City moved for summary judgment, arguing that the suit was barred by governmental immunity.  After the circuit court denied the City’s motion, the Court of Appeals reversed. The appellate court held that the City had not breached any alleged “ministerial duty” and that the facts of the case did not constitute a known and present danger. 

Majority Opinion

The Wisconsin Supreme Court reversed. It denied the City’s invocation of immunity because the “obvious dangers” under the circumstances met the standard for the “narrow” known-and-present danger exception. 

The portion of the decision with broader impact is the majority’s rejection of the plaintiffs’ request that the Court eliminate the “discretionary” immunity standard.  The majority, written by Justice Shirley Abrahamson, highlighted the seminal 1976 decision in Lister v. Board of Regents. There, the Court applied the discretionary standard based on the “public policy considerations” of protecting the public purse and a preference for “political rather than judicial redress for the actions of public officers.” 

The Engelhardt majority also highlighted the fact that the Legislature has acquiesced for decades in the discretionary-immunity standard; this acquiescence includes, but is not limited to, the 1977 repeal and recreation of the immunity statute.  Because this revision was after the Lister decision applying the discretionary standard, the Engelhardt majority found that the Legislature’s inaction expressed implicit approval of that standard.  In other words, the majority reasoned that if the Legislature thought the Court was wrong to interpret the statute as applying to “discretionary” decisions in 1976, then the Legislature would have addressed that issue when it repealed and recreated the immunity statute in 1977. 

Finally, the majority noted that just two years ago, in Melchert v. Pro Elec. Contractors, the Court rejected the interpretation proposed by the Engelhardts (which was reflected in the dissent written by Justice Rebecca Bradley and joined by Justice Daniel Kelly). 

Concurrence

The three Justices (Rebecca Dallet, Rebecca Bradley, and Daniel Kelly) who did not join the majority filed a separate opinion. That opinion, while technically a concurrence, agreed with nothing in the majority except the end-result that the City was not entitled to immunity.  In her first opinion on the Court, Justice Dallet argued that the majority “expanded” the “narrow” exception for known and present dangers to accommodate the facts of this case. She explained that the exception typically applied only where the potential danger was high and imminent and the act required to prevent the danger was clear. By comparison, Justice Dallet reasoned that, if camp staff had seen Lily walking along the edge of the deep end of the pool, then the exception may have applied.  Because Lily’s presence at the pool facility did not on its own create a compelling danger, she concluded that the exception should not apply.

Instead of invoking the known-and-present-danger exception, the concurrence would have rejected immunity outright. To reach that outcome, the concurring Justices recommended eliminating the existing “discretionary” immunity standard.  In proposing abrogation of this standard, Justice Dallet referred to the “plain language” of statute and harkened back to the Court’s 1962 seminal decision in Holytz v. City of Milwaukee, which abrogated common-law immunity.  One year later in 1963, the Legislature enacted the predecessor to today’s Wis. Stat. § 893.80 which re-instated immunity based upon language in the Holytz decision.  In light of the relationship between Holytz and the re-instated statutory immunity, the concurrence emphasized Holytz’s assertion that, “so far as governmental responsibility for torts is concerned, the rule is liability – the exception is immunity.”

Justice Dallet went on to catalogue what she called the judicial chaos created by the discretionary standard, which, she asserted, seemed “almost random at times.”  The three-justice concurrence declared there was “no time like the present” to eliminate the existing “discretionary” immunity standard.  In its place, Justice Dallet proposed an interpretation that provides immunity “only for agents or employees of a governmental entity who are engaged in an act that, in some sense or degree, resembles making laws or exercising judgments related to government business.” 

Applying this proposed standard, the concurrence reasons that the “promulgation” of the City’s camp guidelines would receive immunity for the content of the guidelines, but the City would not be immune “from suit for its camp staff negligently failing to supervise Lily in accordance with the guidelines.”  Justice Dallet’s opinion highlighted that the camp guidelines provided clear instructions to “know where the kids in your care are at all times” and “under no circumstances should kids be left alone.”  Because the City allegedly failed to meet these guidelines, she concluded that no immunity should apply.

Analysis

The weakness of the majority’s opinion is that (as charged by the concurrence) it arguably expands the “narrow” known-and-present-danger exception.  In other words, Lily’s mere presence at the pool cannot create a known and compelling danger, at least as that exception had been applied previously.  Nonetheless, the facts of Lily’s drowning are tragic.  Perhaps, as footnoted by the concurrence, a modest expansion of the “known danger” exception would serve former Justice Crooks’ wish to strike a better “balance between too much immunity . . . and too much liability.”  Such a re-balancing could help to address the constant refrain to Holytz declaring that “liability is the rule, immunity the exception” and the repeated calls to eliminate the existing “discretionary” immunity standard.    

By comparison, the concurrence fails to mention any of the legislature’s acquiescence to the “discretionary” standard or its acting in reliance upon it – an argument emphasized by the majority.  After all, the governmental immunity applicable today is statutory, while the immunity abrogated by Holytz was judicially created.  Even in Holytz, which abrogated immunity and is relied upon by the concurrence, the court painstakingly distinguished its ability to abrogate immunity in 1962 because the doctrine was judicially created – which is entirely different from the present-day review of statutory immunity enacted by the Legislature.  The concurrence offers no explanation on how to rectify this distinction in order to alter now the longstanding application of statutory immunity.  Instead, the concurrence would simply overrule the Court’s precedent on the “discretionary” immunity standard.

It is also hard to see how the proposed alternative standard offers any more clarity than the standard the concurrence wants to abandon.  The proposed standard applies only where the municipal actor is “engaged in an act that, in some sense or degree, resembles making laws or exercising judgment related to government business.”  How this standard differs from the existing discretionary standard is entirely unclear.  To be fair, the proposed standard would apply to the promulgation of policies, but, if it did not extend to “acts done in the exercise of” such policies, it would directly contradict the statutory language (which the concurrence claims to be reliant upon).  Even more to the point, it would create a legal fiction to grant immunity to the decision to enact a policy yet deny immunity from the results of those policies being acted upon. 

Applying this newly proposed standard, Justice Dallet concludes that, because the camp staff negligently failed to supervise Lily according to camp guidelines, there would be no immunity.  There is a view of the facts that support such a conclusion in this case.  However, how this conclusion differs from the existing ministerial-duty standard is once again unclear.  If the three-justice concurrence concluded that the camp staff failed to comply with guidelines imposed upon them, then this constitutes a breach of a ‘ministerial duty’ and there is no “discretion” under the existing immunity standard.  In other words, the concurrence need not create a whole new standard just to reach the same result.  The concurrence could have simply applied the “ministerial-duty” exception under the existing discretionary immunity standard.  The concurrence does not explain why it did not.

Conclusion

For municipal clients, setting aside the fact-specific application of the known-and-present-danger exception in Engelhardt, the main takeaway from the decision is that Justice Dallet joined Justices Rebecca Bradley and Daniel Kelly in seeking to eliminate the existing discretionary-immunity standard.  Justice Abrahamson wrote the majority opinion preserving the standard; however, with an April judicial election to replace her on the bench (and Justice Kelly’s seat being up for election in April 2020), her following words appear likely prescient:

It is unwise for a court to frequently call into question existing and long-standing law.  Doing so gives the impression that the decision to overturn prior cases is ‘undertaken merely because the composition of the court has changed.’

            In light of the sharp disagreements on the court regarding the interpretation and application of Wis. Stat. § 893.80, the existing discretionary immunity standard for municipal actors is likely to remain a flashpoint for the Wisconsin Supreme Court in the coming years.

Stafford Rosenbaum attorneys (left to right) Ted Waskowski and Kyle Engelke in front of the Wisconsin Supreme Court Hearing Room in the East Wing of the State Capitol building in Madison, WI.

Court of Appeals Decides Wis. Stat., Ch. 90, Applies Equally to Cities, Villages, and Towns

Published on | Permalink

Over 150 years ago, the Wisconsin legislature passed a law, now codified in Chapter 90 of the Wisconsin Statutes, to resolve conflicts over fences separating neighboring agricultural lands.  Chapter 90 requires fences partitioning farmland from neighboring properties. Chapter 90 also provides detailed requirements for what constitutes a sufficient partition fence and provides cost sharing and dispute-resolution procedures. Chapter 90 assigns towns to assist in resolving disputes between property owners regarding partition fences on land located within their borders.  Chapter 90 also references cities and villages, but it makes no similar assignment to such municipalities. The law therefore is ambiguous about whether cities and villages are obligated to resolve fence disputes.  

In White v. City of Watertown, No. 2016AP2259 (Oct. 12, 2017), the Wisconsin Court of Appeals resolved this ambiguity and clarified that Chapter 90 applies to cities, villages, and towns alike.

The Whites owned and farmed land in the City of Watertown on which they maintained a partition fence. The cost and maintenance of the fence resulted in a dispute between the Whites and their neighbors. Invoking the procedures of Chapter 90, the Whites asked the City to assist in resolving this dispute. When the City refused, the Whites filed suit, asking the circuit court to clarify that the City was legally obligated to help. The circuit court observed that Chapter 90 is ambiguous but held that Chapter 90 applies to cities and villages, the same as it does to towns.

The City appealed, and the Court of Appeals affirmed. The appellate court agreed with the circuit court that the text of Chapter 90 is ambiguous. On the one hand, the statute requires “fence viewers” to carry out specified governmental duties, which include resolving disputes between property owners. And the statutory definition of fence viewers includes town supervisors, city alderpersons, and village trustees. On the other hand, most of Chapter 90’s references to “fence viewers” include only “town fence viewers.” Further, additional provisions in Chapter 90 appear to contemplate administration and enforcement only by towns.

To resolve this ambiguity, the Court of Appeals looked to the Chapter’s legislative history. The Court found that, prior to 1875, the Chapter contained no references to cities or villages. However, in 1875 the legislature amended Chapter 90 to apply to cities, villages, and towns alike. In 1878, the legislature revised the Wisconsin Statutes. Without reason, most of the language added in the 1875 amendments—language clarifying that the Act applied to cities and villages, as well as to towns—was omitted from the 1878 revised publication. Concluding that the omission “must have been inadvertent,” the Court of Appeals held that, when farmland is in a city or village, that municipality must administer and enforce Chapter 90’s requirements just as a town would if the land were within the town’s boundaries. As a result, the Whites prevailed and the City of Watertown will have to assume Chapter 90 duties with respect to the Whites’ land.

The Court of Appeals in White clarified that cities, villages, and towns must now assume the duties of fence viewers under Chapter 90. The main duty for fence viewers under Chapter 90 is to resolve disputes between adjoining property owners with lands divided by partition fence. For example, under Wis. Stat. § 90.10, fence viewers can direct property owners to repair or rebuild partition fences. Further, under § 90.07, fence viewers, under certain circumstances, may locate the line upon which a partition fence between adjoining lands must be built.

Wisconsin Supreme Court Holds Municipalities Are Subject to Wisconsin Fair Dealership Law

Published on | Permalink

In a shocking decision that will increase the cost of local governance and limit the ability of local governments to control their own affairs, the Wisconsin Supreme Court held last week that the Wisconsin Fair Dealership Law (“WFDL”) applies to municipalities. Benson v. City of Madison, 2017 WI 65. The remainder of this post discusses the municipal law implications of the decision; a companion post addresses additional aspects of the decision of interest to those who rely upon or follow the evolution of the WFDL.

The City of Madison owns four municipal golf courses. Beginning in 1977, the City contracted with golf pros, to operate, manage and provide services at the City-owned courses. Under the contracts, the golf pros were each responsible for one course, at which they collected green fees, hired and managed attendants, supervised golfing, operated the clubhouse and pro shop, sold concessions, and gave lessons; City employees handled all physical maintenance of the golf courses. On October 8, 2012 (less than 90 days before the most recent contracts’ expiration date of December 31, 2012), the City informed the golf pros that it would not be renewing their contracts.

The golf pros filed a lawsuit against the City. The lawsuit alleged that the City failed to comply with the WFDL in ending its contractual relationships with them and sought damages. Briefly, the WFDL, adopted in 1974, governs “dealerships,” which are specially defined contracts entered into between “grantors” and “dealers.” Wis. Stat. §§ 135.02-135.025. The WFDL prohibits grantors from terminating dealership contracts without good cause, Wis. Stat. § 135.03, and requires 90 days’ notice prior to termination, Wis. Stat. § 135.04. If a grantor violates the WFDL, a dealer may bring an action against such grantor for damages. Wis. Stat. § 135.06.

The circuit court dismissed the golf pros’ lawsuit on summary judgment, concluding that the relationships between the golf pros and the City did not constitute “dealerships” protected by the WFDL, Wis. Stat. § 135.02(3). When the golf pros appealed, the court of appeals affirmed. The golf pros appealed again, and the Wisconsin Supreme Court agreed to review the case.

The Wisconsin Supreme Court reversed, answering two principal questions in the affirmative: first, whether the WFDL applies to the City at all; and second, whether the relationships between the golf pros and the City are “dealerships” under the WFDL.

First, the Court determined that the WFDL applies to the City. To determine this issue, the Court started with the defined terms of the statute. The WFDL defines “dealer” as “a person who is a grantee of a dealership situated in this state,” Wis. Stat. § 135.02(2), and “dealership” as “[a] contract… between 2 or more persons, by which a person is granted the right to sell or distribute goods or services, or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol, in which there is a community of interest in the business of offering, selling or distributing goods or services at wholesale, retail, by [contract],” Wis. Stat. § 135.02(3)(a). Because the terms dealer and dealership require a “person” to be a party to the contract, the Court then turned to the first issue—whether the City is a “person” under the WFDL. Again, the Court looked to the definitions in the WFDL and found that the WFDL’s definition of “person” included “corporation or other entity.” Wis. Stat. § 135.02(6). The Court concluded that because the City is a municipal corporation, it falls within the category of “corporation” and therefore qualifies as a person subject to the WFDL.

Second, the Court held that the contractual relationships between the golf pros and the City are “dealerships” under the WFDL. The Court found that all three statutory elements for a dealership were satisfied: (1) a contract between two or more persons existed; (2) the contract granted the golf pros the right to sell or distribute a City service (here, access to the golf courses); and (3) the golf pros’ business of selling the City’s services created a “community of interest.”

In dissent, Justices Shirley Abrahamson and Ann Walsh Bradley argued that the Fair Dealership Law should not apply because the City is not a “person” under the WFDL. Notably, the dissent emphasized that the majority’s analysis “neglects to address the relationship of the Dealership Law, municipal constitutional and statutory home rule, and other statutes governing governmental entities.” 2017 WI 65, ¶136.

The majority’s analysis failed to consider the City’s home-rule authority at all. This case continues the trend in Wisconsin cases of ignoring entirely, or limiting the extent of, municipal home rule. As the dissent notes, this decision has far-reaching consequences.

Contracts municipalities thought were terminable at will or on a specific date now may not be terminable without giving 90 days notice and having good cause. Lacking the funds to continue a contractual relationship does not fall within the WFDL’s definition of good cause. Thus, if a municipality does not have sufficient funds to renew a contract, it may face the choice of either cutting essential services or getting sued by its golf pros or other contractors for violation of the WFDL.

In considering future contracts, municipalities will need to assess whether their contractual relationships might be considered dealerships and if there is a way to avoid that status. The municipality may decide not to provide certain services rather than take the chance of being bound under the WFDL.

Until or unless the law is changed in light of this decision, the Benson case will certainly give municipalities pause when considering privatizing municipal functions.

Court of Appeals Expands Municipal Protection Conferred by Wisconsin’s Recreational Immunity Statute

Published on | Permalink

Wisconsin’s recreational immunity statute, Wis. Stat. § 895.52, provides municipalities with broad immunity from liability for injuries to any person engaged in recreational activities on municipal property. The statute sets forth a three-part definition of recreational activity. The first part of the section defines recreational activity as “any outdoor activity undertaken for the purpose of exercise, relaxation or pleasure, including practice or instruction in any such activity.” The second part of the statutory definition of recreational activity lists 29 specific activities denominated as recreational. The third part of the statutory definition broadly adds “and any other outdoor sport, game or educational activity.”

Wisconsin courts have wrestled with applying the recreational immunity statute to varied fact situations since its enactment. The line between recreational and non-recreational activities can be difficult to draw under Wis. Stat. § 895.52, and the issue has been litigated with some frequency, most recently in Wilmet v. Liberty Mutual Ins. Co., 2015AP2259 (Wis. Ct. App. Feb. 28, 2017). The case is of particular importance to municipalities, because the court construed the statute to broaden municipal recreational-related immunity.  

Mrs. Wilmet was at a city-owned and operated swimming pool to drop off her grandchildren. After dropping them off, she remained outside the premises, supervising her grandchildren from behind the fenced perimeter of the pool as they swam. Mrs. Wilmet’s grandson shouted to her that he was going to jump off the high dive. When Mrs. Wilmet observed there were no lifeguards in the area, she became concerned about her grandson’s safety and told her grandson to wait. She then entered the pool premises without paying the entry fee (but with the attendant’s permission), and went immediately from the entrance through the locker room and toward the high dive. Mrs. Wilmet did not plan to swim at the pool or stay on the premises following her grandson’s dive. As she walked toward the high dive, she tripped on a cement doorstop and was injured.

The Wilmets sued the municipality and its insurer. The city invoked the recreational immunity statute as an affirmative defense and sought the action’s dismissal on that basis.  The city argued that Mrs. Wilmet’s activity of supervising her grandson, who was himself engaged in a recreational activity, was sufficient to bring the Wilmets’ claims within the ambit of the recreational immunity statute.  The court of appeals agreed, basing its holding on principles of statutory interpretation and previously developed tests under which courts consider, among other factors, whether the activity in question was undertaken in circumstances substantially similar to the circumstances of recreational activities set forth in the statute.

The court reasoned that supervising other persons, who are themselves engaged in recreational activities, involves actively overseeing or directing the performance of the recreational activity of another. Thus, the court concluded, “supervision” was akin to, and subsumed within, “practice” and “instruction” in a recreational activity, which the legislature specifically identified as giving rise to immunity. In addition, the court found that conferring recreational immunity for supervision is consistent with the legislature’s purpose in enacting the recreational immunity statute. Because it was undisputed that Mrs. Wilmet was supervising her grandson’s recreational activity on the city’s pool grounds at the time of her injury, the city was entitled to immunity under § 895.52 from her claims.

For more information about statutory exceptions to recreational immunity and case law interpretations of the recreational immunity statute that might expose a municipality to potential liability, contact any member of Stafford Rosenbaum LLP Government Team.

Wisconsin Supreme Court Favors Dodgeville on Retroactivity Question in Property Tax Litigation

Published on | Permalink

This week, the Wisconsin Supreme Court ruled in favor of the City of Dodgeville, represented by Stafford Rosenbaum, in a major procedural dispute related to property tax litigation between the City and Lands’ End. Lands’ End, Inc. v. City of Dodgeville, 2016 WI 64. The Court’s decision affirms the plain text of the statute governing offers of judgment and dispenses with several objections that Lands’ End raised to applying the statute as amended by the legislature. This decision saves the City of Dodgeville hundreds of thousands of dollars in accrued interest.

Lands’ End maintains its headquarters spread across six parcels of land in Dodgeville. In litigation challenging the calculation of its 2005 and 2006 property tax bills, Lands’ End convinced the circuit court that the tax bills relied upon an overly high assessment of the value of Lands’ End’s headquarters properties. Based on the new valuation adopted by the circuit court, Lands’ End received a refund for overpayment of taxes for those years. Lands’ End then challenged its 2008 tax bill, alleging that, in calculating that bill, the City relied upon the same assessment the circuit court had deemed inaccurate.

In the new suit over the 2008 taxes, Lands’ End made an offer of judgment for $724,000. The City rejected that offer. Lands’ End then filed a motion for summary judgment, which the circuit court denied. The court of appeals held that summary judgment should have been granted, and it remanded the case with instructions to enter judgment in favor of Land’ End for $724,292.68 plus applicable interest and costs.

On remand, the parties disputed the applicable interest rate. Lands’ End claimed it was entitled to 12 percent interest, as provided in the offer-of-judgment statute at the time that it made the $724,000 offer to the City. The City countered that Lands’ End was entitled to 4.25 percent interest, as calculated under the amended version of the offer-of-judgment statute that was in effect when the circuit court entered judgment. The circuit court agreed with the City. Lands’ End appealed, and the Wisconsin Supreme Court granted the City’s petition to bypass the court of appeals.

The case depended on which version of the offer-of-judgment statute controlled—the version in effect when Lands’ End made its offer in 2009, or the amended version in effect when the circuit court entered judgment in 2014. Under Wis. Stat. § 807.01(4), a party who makes a written offer of settlement that is not accepted and then obtains a judgment in an amount equal to or greater than the offer is entitled to interest from the date of the initial offer. From 1980 until 2011, the statute provided that interest was to be calculated at an annual rate of 12 percent. In 2011 Wisconsin Act 69, the legislature amended the interest provision, setting the applicable interest rate at “1 percent plus the prime rate in effect” on a specified date, depending on when judgment is entered in a given year. Thus, when Lands’ End made its offer of $724,000, the applicable interest rate was 12 percent. In the fall of 2014, when the circuit court entered judgment, the applicable interest rate calculated under the new statutory formula was 4.25 percent. The difference in accrued interest from July 1, 2009 amounts to hundreds of thousands of dollars.

The plain text of Wis. Stat. § 807.01(4), both before and after the 2011 amendment to the interest rate, contained “the same three basic requirements in order for a party who makes an offer of settlement to be entitled to interest on a judgment recovered: (1) an (unaccepted) offer of settlement; (2) recovery of a judgment; and (3) a judgment for greater than or equal to the amount of the offer.” 2016 WI 64, ¶28. From this observation, the Court reasoned that there cannot be an imposition of interest “unless an actual judgment is entered in a case.” Id. (internal quotation marks omitted). Because the actual judgment is the final prerequisite to accruing interest under Wis. Stat. § 807.01(4), the statute applies as of (and as in effect on) the date of judgment. See id., ¶38.

Lands’ End’s primary argument was that, because Lands’ End made its offer of judgment when Wis. Stat. § 807.01(4) still provided for 12 percent interest, using the lower interest rate amounted to improper retroactive application of the amended statute. The Court considered several factors in determining that there was no retroactive application in this case. Among those factors was that any entitlement to interest was contingent on the entry of judgment, such that the enactment of a statute altering the legal effect of the judgment did not alter any rights that had already vested in Lands’ End. See id., ¶50. Moreover, the purpose of the interest provision—to place parties in roughly the same position they would have been had the amount of the judgment been paid immediately”—favored the application of the amended statute rather than the prior version. Id., ¶59. Nor was the Court moved by the argument that, had the circuit court granted summary judgment to Lands’ End when it first asked, the applicable interest rate would have been 12 percent.

Lands’ End also argued that it had a vested right to the higher interest rate, that application of the lower interest rate violated its constitutional rights to due process and equal protection of the laws, and that Wis. Stat. § 990.04 forbade the application of the lower interest rate. The Court dismissed each of these arguments in turn. The Court’s reasoning in each instance revisited one or more aspects of the Court’s response to the retroactivity argument. See id., ¶¶67-111. Ultimately, the Court affirmed the circuit court’s application of the lower interest rate calculated under the amended version of Wis. Stat. § 807.01(4) and overruled a court of appeals decision reaching the opposite conclusion on the same question. See id., ¶¶114-15 (expressly overruling Johnson v. Cintas Corp. No. 2, 2015 WI App 14, 360 Wis. 2d 350, 860 N.W.2d 515).

Justice Ziegler wrote a separate concurrence—itself longer than the Court’s decision—“to reemphasize the relevant framework when the court analyzes a claim that legislation is retroactive and cannot be applied in a particular case.” Id., ¶117 (Ziegler, J., concurring). Justice Prosser and Chief Justice Roggensack dissented, arguing that applying the lower interest rate under the amended version of Wis. Stat. § 807.01(4) to Lands’ End’s offer of settlement made when the statute provided for 12 percent interest undermines the purposes of using interest accruals both to encourage settlement and to punish parties who do not accept reasonable offers of judgment. See id., ¶¶203-05, 219-24 (Prosser, J., dissenting). 

Wisconsin Supreme Court Holds that Milwaukee Cannot Enforce City Employee Residency Requirements

Published on | Permalink

In Milwaukee Police Association v. City of Milwaukee, 2016 WI 47, the Wisconsin Supreme Court held that Wis. Stat. § 66.0502 precludes the City from enforcing its residency requirement.

For many years, the City of Milwaukee has required its city employees to reside within city limits as a condition of employment. On June 20, 2013, the legislature created Wis. Stat. § 66.0502, which prohibits local governments from enacting and enforcing residency requirements of any kind, except those that require police officers, firefighters, or other emergency personnel to reside within fifteen miles of the local government.

On the day the statute took effect, the City of Milwaukee Common Council adopted and the Mayor signed a resolution concluding that the new statute violated the Wisconsin Constitution’s home-rule amendment, which allows cities and villages to “determine their local affairs and government, subject only to this constitution and to such enactments of the legislature of statewide concern as with uniformity shall affect every city or village.” Art. XI, § 3(1). The resolution further directed all City officials to continue enforcing Milwaukee’s local residency rule.

The Milwaukee Police Association filed suit, seeking a declaratory judgment that the City’s residency ordinance and resolution were unenforceable to the extent they conflicted with § 66.0502. The Police Association also sought judgment and damages under federal civil rights law (42 U.S.C. § 1983), alleging that the City’s continuing enforcement of its residency ordinance constituted a deprivation of individual officers’ liberty interests. Sometime later, the Fire Fighters Association intervened in the action. All parties filed for summary judgment. The circuit court declared the City Ordinance and Common Council Resolution void and unenforceable to the extent they violate § 66.0502. The trial court further found that § 66.0502 creates a protectable liberty interest, but that there was no evidence of actionable deprivation to justify an award of damages. The City appealed, and the Police Association cross-appealed.

The court of appeals reversed in part and affirmed in part. With respect to the § 1983 claim, the court of appeals affirmed the circuit court’s decision not to award damages. With respect to the home-rule amendment, the court of appeals concluded, “because Wis. Stat. § 66.0502 does not involve a matter of statewide concern and does not affect all local government units uniformly, it does not trump the Milwaukee ordinance.” The court of appeals expressed deep concern over the disproportionate “impact” it believed Wis. Stat. § 66.0502 could have on the City – even to the extent of concerns expressed by the court that Milwaukee could become the next Detroit. The Wisconsin Supreme Court granted the Police Association’s petition for review.

In a decision announced last week, the Wisconsin Supreme Court affirmed in part and reversed in part. First, the Court held that Wis. Stat. § 66.0502 precludes the City from enforcing its residency requirement. The Court clarified that a legislative enactment can trump a city charter ordinance either (1) when the enactment addresses a matter of statewide concern, or (2) when the enactment with uniformity affects every city or village. Without much analysis or review of the facts of this case, the Court concludes that because Wis. Stat. § 66.0502 uniformly affects every city or village on its face, it trumps § 5-02 of the City’s charter on residency requirements.

Second, in affirming the court of appeals, the Court held that the Police Association is not entitled to relief or damages under 42 U.S.C. § 1983. The Court noted that the § 1983 claim failed because the Police Association did not meet the requirements necessary to prevail. Particularly, the Police Association failed to show a deprivation of rights, privileges, or immunities protected by the Constitution or laws of the United States.  Justices Ann Walsh Bradley and Shirley Abrahamson concurred with majority’s holding on the § 1983 claim, but dissented from the majority’s holding regarding the City’s home rule power.

Interpreted broadly, this decision grants the state legislature the right to govern municipal matters as long as the legislature enacts a statute that uniformly applies to municipalities even if that statute is specifically targeted at matters of local concern. In the dissent, Justice Ann Walsh Bradley theorizes that “under the majority opinion, the only legislation that would not uniformly affect all municipalities is one that would overtly single out a particular city or village.” This decision serves as a blow to the home-rule power that was originally “intended to free municipalities from legislative interference” and to municipalities. 

Court of Appeals Addresses Scope of Wisconsin's Right-to-Farm Law

Published on | Permalink

In Village of Black Earth v. Black Earth Meat Market, LLC, Nos. 2015AP912 & 2015AP913 (Wis. Ct. App. Mar. 17, 2016) (per curiam), the Court of Appeals considered the scope of Wisconsin’s Right-to-Farm law and its interaction with municipal authority.

Black Earth Meats operated a slaughterhouse and retail meat market business in the Village. As part of that operation, Black Earth Meats received routine delivery of animals from a third party. Between October 2013 and January 2014, the Village issued Black Earth Meats ten citations relating to delivery of those animals. These included: two citations for obstructing a street, two citations for street pollution, three citations for harboring noisy animals or fowl, one citation for idling an unattended vehicle, and two citations for permitting street obstruction.

In the municipal court, Black Earth Meats pled not guilty to all ten citations. The municipal court found Black Earth Meats was guilty of eight infractions, dismissing two citations—one for permitting street obstruction and one for harboring noisy animals or fowl.

Both parties sought review in the Circuit Court for Dane County. The Circuit Court granted summary judgment to Black Earth Meats and dismissed all of the citations. The Village appealed.

The Court of Appeals affirmed the dismissal of one citation for as idling an unattended vehicle, but reversed the dismissal of the other nine citations.  In so doing, the Court of Appeals addressed two major issues.

First, Black Earth Meats argued that Wisconsin’s Right-to-Farm law precluded the Village from issuing the citations. That law affords certain protections to an “agricultural use” or “agricultural practice.” See WIS. STAT. § 823.08(3). The Court determined that it did not need to address whether Black Earth Meat’s operation constituted an “agricultural use” or “agricultural practice” as those terms are used in the statute because, in any event, the Right-to-Farm law does not protect against the Village’s forfeiture actions. As the court explains, the Right-to-Farm law concerns only nuisance actions to recover damages or abate a public nuisance. Here, the Village sought only to enforce its ordinances and impose forfeitures; it did not bring an action against Black Earth Meats to recover damages or to abate a public nuisance. Thus, the Court held that the Right-to-Farm law did not insulate Black Earth Meats from the Village’s enforcement of citations.

Second, Black Earth Meats argued that it was entitled to summary judgment with respect to some of the citations because it neither owned nor had custody of or have control over the vehicles giving rise to those citations.  The Court concluded that the only reasonable inference from the record evidence was that Black Earth Meats did not have sufficient control over the delivery vehicle’s early arrival to the facility such that Black Earth Meats could be found to have parked or left the vehicle idling unattended. Thus, Black Earth Meats was entitled to summary judgment for the Idling Unattended Vehicle citation. However, with respect to the citations for permitting street obstruction, the Court concluded that the record evidence supported an inference that Black Earth Meats allowed the vehicles identified in those citations to obstruct the public street adjacent to its property.

Black Earth Meats and the Village now head back to the Circuit Court for proceedings on the remaining citations. Beyond the specific concerns of the litigants, this case is of interest because it appears to be the first appellate decision clarifying the scope of the Right-to-Farm law.

Governor Signs Four New Bills Impacting Municipalities and Towns Into Law

Published on | Permalink

On Wednesday, November 11 the Governor signed four bills into law relating to municipalities and towns.

2015 Wisconsin Act 79 allows municipalities that opt to post legal notices to post the notice in one public place and publish the notice on the municipality’s Internet site, instead of posting the notice in three public places.

2015 Wisconsin Act 96 permits any town authorized to create a tax incremental financing district (TID) under Wis. Stat. § 66.1105(16) or § 60.85 to participate in a multijurisdictional TID created according to Wis. Stat. § 66.1105(18). Prior to 2015 Wisconsin Act 96, towns could not participate in multijurisdictional TIDs.

2015 Wisconsin Act 105 eliminates the monetary limit on town expenditures for material and equipment for construction and maintenance of highways previously required under Wis. Stat. § 82.03(2).

2015 Wisconsin Act 113 removes the requirement under Wis. Stat. § 256.15(4) that an ambulance transporting a sick, disabled, or injured individual must contain any two emergency medical technicians (EMTs), licensed registered nurses, licensed physician assistants, physicians, a combination of those individuals, or one EMT and one individual with an EMT training permit. An ambulance transporting a sick, disabled, or injured individual may now be staffed with one EMT and one first responder.

Each of these bills go into effect Friday, November 13. If you have questions about these bills, please contact any of Stafford Rosenbaum’s Government Law or Government Relations team members.

Disciplinary Process – Police and Fire Commission

Published on | Permalink

Police officers and firefighters manage difficult and often dangerous situations. Fortunately, most protective services employees are dedicated public servants, and smaller communities may see years go by without need for formal disciplinary action against an officer or firefighter. When an issue arises, the municipality must adhere to applicable procedures to reach a just resolution that will withstand judicial review.

The process for disciplining police officers and firefighters is a matter of statewide concern governed by state law. Absent agreement by the employee, a suspension, reduction in rank or termination can be imposed only after a due process hearing before a board of police and fire commissioners (“PFC”) or its equivalent. While the right to a hearing does not extend to newly-hired employees still in a probationary status, an employee promoted on a probationary basis is entitled to a hearing if a reduction in rank is based on misconduct allegations.

The disciplinary process is governed by Wis. Stat. § 62.13(5) and any administrative rules adopted by the PFC (“PFC rules”). PFC rules in some municipalities are posted online. This article provides an overview of the PFC disciplinary process.

Initiation of disciplinary proceeding.

Charges seeking discipline of a police officer or firefighter may be filed by a department chief, by a member of the PFC, the PFC as a body, or any aggrieved person. Complaints by “aggrieved persons” are also referred to as “citizen complaints.” Once charges are filed, the municipality should provide the PFC with legal counsel independent from municipal counsel to assist in managing the disciplinary process.

Upon the PFC finding “just cause,” an officer or firefighter may be “suspended, reduced in rank, suspended and reduced in rank, or removed.” For that reason, a chief will not file charges unless an unpaid suspension or greater penalty is sought.

While the PFC as a body or any member may file and prosecute charges, this is generally inadvisable. If an occasion arises where this is appropriate, the PFC should delegate its prosecutorial role to a special counsel. A PFC member who prosecutes should act solely in that capacity and should not participate in the decisional process.

The Charges.

The minimum requirements of a due process hearing include timely and adequate notice, an impartial decision-maker, and the opportunity to confront and cross examine adverse witnesses. Accordingly, disciplinary charges must contain sufficient detail to allow the respondent to prepare an adequate defense. The charges should be framed in light of the seven “just cause” standards. The charges should identify the department rule or order allegedly violated, describe any investigation of the charges, and set forth fact allegations supporting the charges.

Initial processing.

The PFC must set a date for hearing not less than 10 days nor more than 30 days after service of the charges. Most matters will not be concluded within 30 days. While it is advisable to confirm the consent of the parties to continue the hearing beyond 30 days, if necessary, there is no reported decision suggesting that “continuing” the hearing beyond the 30 days violates the statute.

Typically the PFC sets an initial hearing to be held within 30 days of filing to address issues such as scheduling, discovery and pre-hearing motion practice. Months may elapse between the filing of charges and the final resolution, partly because due process requires that the employee be given a reasonable opportunity to be heard and partly because the PFC is composed of private citizens, often requiring that hearings be conducted during evening hours. If the charges are serious enough that termination is sought, commonly the employee is placed on a paid leave status pending resolution of the process.

PFC rules may allow for dismissal of charges without an evidentiary hearing, if the charges are facially groundless or frivolous, have been resolved in a prior proceeding, or the complainant lacks standing. Although the statutes do not address it, PFC rules may provide for pre-hearing discovery. A PFC that has not adopted such rules may consider allowing some discovery to avoid a possible claim of a due process deprivation upon later judicial review. If your PFC has not formally adopted administrative rules, it may be prudent to review rules developed in other municipalities to use as guidance in managing the pre-hearing process.

Hearing and Decision.

The evidentiary hearing is a quasi-judicial administrative proceeding. It is public. Both the complainant and respondent may compel the attendance of witnesses by subpoenas to be issued by the PFC president on request. The Wisconsin Supreme Court has upheld PFC rules providing for the employment of a hearing examiner to conduct both the pre-hearing process and the evidentiary hearing, at least where the rules have provided for the hearing to be videotaped. The PFC issues its final decision based on the evidence as well as the examiner’s report.

PFC rules may specify what, if any, evidentiary rules apply at the hearing. Given that the  Wisconsin Supreme Court has described the hearing as having the elements of “fair play” fundamental to due process in an administrative law setting, following the procedures applicable in Case 3 contested hearings under Wis. Stat. ch. 227, including the rules of evidence set forth in § 227.45, should satisfy due process. Erroneous evidentiary rulings may result in a due process deprivation, which would require a new hearing.

The complainant bears the burden of proof by a preponderance of the evidence. The PFC’s deliberations on the evidence should be conducted privately with its counsel; other municipal officials should not be present. The PFC must issue its determination in writing within three days after the conclusion of the hearing. Counsel for the PFC will assist is crafting a decision that clearly states the PFC’s findings of fact and conclusions of law, as well as an order either imposing discipline or dismissing the charges. The written decision should address the seven just cause standards contained in Wis. Stat. § 62.13(5)(em). The decision and order must be filed with the secretary of the PFC.

Review.

If the PFC imposes discipline, the respondent has two avenues for judicial review: a right of statutory appeal to the circuit court under Wis. Stat. § 62.13(5)(i) and a petition to the circuit court for common law writ of certiorari. The respondent may pursue both avenues of review, and the resolution of issues on the appeal is not binding relative to issues on certiorari review, even though the issues on the two methods of review may overlap. These are the exclusive methods of review; the PFC’s decision cannot be collaterally attacked in another proceeding. A charging party can challenge the PFC decision to dismiss the charges by seeking certiorari review.

The statutory appeal focuses solely on whether there is just cause to sustain the charges. The respondent initiates an appeal by serving written notice on the PFC secretary within 10 days after PFC files its order. Service on the secretary must be in person. The secretary must certify the record to the clerk of circuit court within 5 days. Unless otherwise agreed by the parties, trial is to be scheduled not be later than 15 days after an application by either party. Trial is to the court on the record, but the court may require the return of further evidence. No costs are allowed and the municipality pays the clerk’s fees. If the PFC’s order is reversed, the respondent is reinstated and entitled to backpay. If the PFC’s order is sustained, respondent has no further no right of appeal.

Certiorari review is initiated by the respondent filing an action in circuit court and must be commenced within six months of the PFC action the respondent seeks to challenge. On certiorari, the court determines whether (1) the PFC exceeded its jurisdiction, (2) the PFC proceeded on a correct legal theory, (3) the PFC acted in an arbitrary, oppressive, or unreasonable manner that represented its will and not its judgment, and (4) whether the evidence was such that the PFC could reasonably make the determination at issue. Most allegations of error in the disciplinary process are addressed on certiorari review, given the limited scope of review on the statutory appeal. In contrast to the statutory appeal, the circuit court’s decision on certiorari review is subject to appellate review.

Summary.

Discipline of employees in protective services poses a unique challenge to municipalities. This challenge falls to the PFC, a body ordinarily comprised of citizens not trained in the law. Providing the PFC with independent legal counsel to assist it in managing the process and conducting the disciplinary hearing best insures a just resolution that will withstand judicial review.

If you have questions about the PFC disciplinary process, contact Paul Schwarzenbart. Paul is a partner with Stafford Rosenbaum LLP, has extensive experience representing boards as well as individual clients in disciplinary hearings, and he has served as a member of the Village of Waunakee Police Commission. This article was prepared with the assistance of Attorneys Jeffrey A. Mandell and Holly J. Wilson, who are also members of Stafford’s Government Law Team.

This article originally appeared in the League of Wisconsin Munipalities' publication The Municipality.