Even shorter than the case "briefs" I've been posting, these summaries - lifted straight from appeals documents - allow me to cover even more cases. Each summary will include a link to the relevant brief or document for anyone interested in reading more. My insertions are in italics.
Note: Wisconsin Manufacturers and Commerce (WMC) has filed its response to this petition for review. I will post a summary of that response later this week.
This post was updated 5/3/24 to correct an error. Appellate Judge Lisa Neubauer, not Shelley Grogan, was a member of the Court of Appeals panel that heard the case.
The case: Wisconsin Manufacturers and Commerce v Village of Pewaukee
Case no.: 23AP690
Filed in: Wisconsin Supreme Court, petition for review
From Court of Appeals: District II
Circuit Judge: Michael Aprahamian, Waukesha County
Court of Appeals: District II, Appellate Judges Mark Gundrum, Maria Lazar, Lisa Neubauer; opinion by Lazar
Filing Attorney: Joseph Wirth
Issues
Is the Village of Pewaukee’s Transportation User Fee (TUF) a fee that lawfully funds the services provided by the Village’s utility or is it instead an unlawful tax? Waukesha County Circuit Judge Michael Aprahamian said it's a lawful fee; Court of Appeals said it was an unlawful tax.
Did the Wisconsin Supreme Court decision in Wisconsin Property Taxpayers, Inc. v Town of Buchanan, wherein the parties stipulated that the Town’s transportation utility charge was a “tax,” bind the Court of Appeals to hold that the Village of Pewaukee’s charge, although specifically designed as a user fee, was nonetheless an unlawful tax? The Circuit Court didn't answer the question – the Buchanan decision had not yet been issued — and the Court of Appeals said it was bound by Buchanan.
If the Village of Pewaukee’s TUF is, in fact, a fee, is such a fee nonetheless preempted by state law? The Circuit Court said it was not preempted and the Court of Appeals did not reach the issue.
A short history In a decision issued by the Circuit Court on March 9, 2023, the court found that the Village of Pewaukee TUF was a lawful fee not otherwise preempted by state law and dismissed the WMC lawsuit upon its merits.
WMC timely appealed. While this matter was on appeal, the Wisconsin Supreme Court released its decision in the Town of Buchanon. On February 7, 2024, the Court of Appeals issued a summary disposition that reversed the Circuit Court upon finding that the Supreme Court’s decision in Town of Buchanon required that it rule that the TUF is an unlawful tax.
WMC moved the court to withdraw its summary disposition and reissue its decision as a formal opinion with recommendation for publication. WMC argued that the decision in this case is of statewide importance and wanted the case to be citable. On March 5, 2024, the Court of Appeals granted the motion of WMC and withdrew its summary disposition. On March 13, 2024, the Court of Appeals issued its decision in a formal opinion finding that the Village’s TUF is an unlawful tax, reversing the Circuit Court, and recommended its opinion for publication. Criteria and argument
A. The Petition raises a genuine issue of state constitutional law The petition raises a genuine issue of state constitutional law. First, the issues presented here raise a real and significant question of state constitutional law. Specifically, the “Home Rule” provision of the Wisconsin Constitution, Article XI, Section 3. ... That section is quite long. The key part, though, says "Cities and villages organized pursuant to state law may 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 every village. The method of such determination shall be prescribed by the legislature." The Village’s TUF is a financing mechanism that treats its street system and other transportation services like a utility. Under the TUF, residents and businesses are charged fees based on their use of the transportation system, analogous to how municipalities provide and pay for water, sewer, electric, and stormwater services. In deciding that the Village’s TUF was a tax, the Court of Appeals relied upon the Supreme Court’s analysis of a funding mechanism enacted by a town – but towns do not possess home rule authority. The Court of Appeals got its analysis backwards: feeling bound by Town of Buchanon to start from the proposition that Pewaukee’s fee was automatically a tax, the Court of Appeals found no significance in the Village’s home rule authority. ... B. Review will establish policy within the court’s authority. In Buchanon, the concurrence undertook a lengthy analysis of the circumstances under which special assessments differ from taxes. However, no such analysis was undertaken as to the distinction between fees and taxes. ... The distinction, propriety and legality of municipal fees must be the subject of judicial review. With language in Buchanon that appears to subsume the important constitutional powers of cities and villages to finance the provision of services is at sharp odds with a policy that “funds raised for utility districts are property taxes.” C. Clarify or harmonize the law Review in this matter will permit the court to harmonize the Village’s use of fees to fund its utilities and reiterate that municipal fees are a lawful exercise of home rule authority. In the state’s early years, no statutes existed expressly authorizing cities and villages to own and operate water, sewer, and other common municipal utilities. Instead, municipalities relied on non-specific, broad police power authority to create and fund such now-familiar utilities. *** Make no mistake about it, the Buchanon case and the Court of Appeals’ decision below are already being used by “tax advocates” to challenge municipal fees for other village services. While occurring after the Court of Appeals’ decision and therefore not specifically part of the appellate record below, it is public record that, since the appellate decision in this case, WMC has served Notices of Claim and Claims upon the Village of Pewaukee asserting that its Fire and EMS Fee is illegal, and against the Village of Dousman asserting that its Fire Protection Fees are illegal. Accordingly, review in this case will help establish that home rule authority for villages and cities is the “rule” in Wisconsin, and the “exception” occurs when the state specifically preempts that authority through statutory legislation – rather than the other way around. Supreme Court review and a consequent opinion present an opportunity to inform litigants in those claims and help avoid repetitive appellate litigation of the issues.
Comments