The City of Milwaukee cannot cancel JusticePoint's contract while JusticePoint fights a Milwaukee County Circuit Court decision allowing the city to do so, an appellate judge ruled Monday.
Circuit Judge J.D. Watts on Oct. 5 rejected JusticePoint's argument that the state's Fair Dealership Law protected it from being abruptly dismissed, allegedly without cause, proper notice, or a chance to cure any deficiency.
JusticePoint provides and coordinates services for indigent Municipal Court defendants, something it has done since 2015. The assistance JusticePoint provides, such as coordinating community service jobs, drug treatment, or mental health services, are meant to provide alternatives to fines as court sanctions for municipal violations.
Watts stayed his decision in favor of the city for 30 days to give JusticePoint a chance to file an appeal, but made clear that he would not extend the stay.
In his ruling Monday, District I Court of Appeals Judge M. Joseph Donald said Watts was wrong.
"JusticePoint has demonstrated an erroneous exercise of discretion in the trial court’s balancing of factors when denying a stay during the pendency of an appeal in this case," Donald wrote.
A circuit court is not supposed to use his own opinion of a case to determine whether a stay should be granted, Donald wrote. Rather, it is supposed to decide whether the requesting party is likely to succeed on appeal.
Watts should have "recognized that reasonable jurists could differ about the outcome and that JusticePoint showed more than a mere possibility that it would prevail," Donald said.
The city notified JusticePoint in May that the organization's contract, which was supposed to run through December, would be terminated in July. No reason was given, other than the termination was for the city's convenience.
The firm's CEO, Nick Sayner, has said the only potential problem he was aware of was JusticePoint's practice of providing copies of municipal citations to Legal Action of Wisconsin attorneys representing the indigent defendants involved in the cases.
The agreement to provide the tickets was negotiated five or more years ago in talks involving both JusticePoint and city officials, including representatives of the city attorney's office, Sayner said. When Municipal Court raised concerns about it last March, he said, JusticePoint stopped providing the citations.
Two Municipal Court judges, Phil Chavez and Valarie Hill, arranged the contract termination.
JusticePoint in July sued the city, alleging the manner in which it was terminated — without cause, without proper notice, and without a chance to cure any deficiency — violated state law.
The original circuit judge in the case, Hannah Dugan, said in July that JusticePoint had a reasonable probability of success on the merits and would be irreparably harmed without the restraining order. She put the organization's firing on hold while the case proceeded.
Watts, though, who took over the case, said the Fair Dealership Law did not apply to JusticePoint and that the call was not even close.
While he held a hearing, there was a clue that maybe, just maybe, he had pretty much decided the case before the hearing eve
n started. After the lawyers finished their arguments, Watts said he needed about five minutes. He went into his chambers and returned about 10 to 15 minutes later with an 11-page written and
footnoted decision in favor of the city.
It appeared all he may have done with that hearing is run up legal bills for JusticePoint and city taxpayers.
Watts found that the Fair Dealership Law "did not apply because 'there was no dealership between [JusticePoint] and the city,'" Donald wrote. "When the trial court then turned to consideration of whether to stay its ruling, the trial court emphasized its confidence in the correctness of its decision and its view that the outcome was not 'a close call.' ”
Watts, though, did not consider that Judge Dugan had found differently, showing that reasonable jurists could disagree, a likely determinative factor in deciding whether to issue a stay, Donald wrote.
Watts also did not consider the state Supreme Court's previous caution in another instance that “there is rarely an obvious answer” in Fair Dealership cases, the appellate judge said.
Watts trial erroneously exercised his discretion in the matter, Donald wrote.
Watts also erred when he found that JusticePoint's injury was loss of revenue and that it could be remedied later if the agency won on appeal.
"JusticePoint, however, also identifies other types of injuries, including its risk of losing full-time staff members that are trained to do the work required under JusticePoint’s contract with the city, as well as reputational harm if the contract is abruptly terminated," Donald wrote.
"In the absence of a stay, the parties’ relationship will be interrupted, and an interruption of the parties’ relationship cannot be undone if JusticePoint prevails," Donald said.
In this instance, too, "the trial court erroneously exercised its discretion," he said.
Watts also focused on potential financial harm to the city in determining whether there would be substantial harm to other interested parties.
"The city, however, frankly acknowledged at the October 5, 2023 hearing that the potential harm is 'not so much an economic cost' but rather that a stay would thwart the city’s wish to terminate the contract with JusticePoint," Donald said.
"In this court, the city appears to identify the substantial harm at issue as continued professional interaction between the city and Jus
ticePoint, suggesting that tension exists between the municipal court judges and JusticePoint personnel," Donald wrote.
Neither party, however, cites authorities that suggest that tension among professionals is a relevant "substantial harm," he said.
Those receiving JusticePoint services may indeed suffer substantial harm, he said, listing some of the services the agency provides.
An amicus brief filed by former Municipal Court Justices James Gramling and Louis Butler "says that the services at issue 'enabled the defendants to be heard,' allowed the judges to 'determine a course of action which would properly hold defendants accountable without being incarcerated,' and facilitated appointments of guardians ad litem for mentally incompetent defendants," Donald said. "The city does not appear to dispute that the services provide a benefit to members of the community."
Butler also was a state Supreme Court justice.
The city said that it will provide some services that JusticePoint now does, but “ '[m]aybe some services are not – are not being done,' and that no alternative is currently in place to provide those services," Donald said.
Finally, Donald said, the city does not appear to dispute that JusticePoint's program advances the public interest.
"To the contrary, the city quotes the trial court’s observation that 'this program, MCAP, is a wonderful program and serves the community,' " he wrote.
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