Administrative Law

COVID-19 Emergency Order 3 – Promulgation Required Under Rulemaking Procedures Set Forth in Wis. Stat. Chapter 227

Tavern League of Wis. Inc. v. Palm, 2021 WI 33 (filed 14 April 2021)

HOLDING: There was no majority opinion in this case. The lead opinion of three justices concluded that Emergency Order 3, issued in response to the COVID-19 pandemic, was invalid because it was an administrative rule that should have been promulgated through the rulemaking procedures of Wis. Stat. chapter 227. A fourth justice concurred in the court’s mandate but did not join the lead opinion.

SUMMARY: Wisconsin Department of Health Services (DHS) secretary-designee Andrea Palm issued Emergency Order 3 on Oct. 6, 2020, as a response to the COVID-19 pandemic. Emergency Order 3 limited the size of indoor public gatherings either to 25 percent of a facility’s permitted capacity or, if no general capacity limit were prescribed, to 10 people. The emergency order was enforceable by civil forfeiture.

The Tavern League of Wisconsin Inc. and other plaintiffs brought this action seeking injunctive relief. They alleged that Emergency Order 3 was unlawful because the DHS did not undertake proper rulemaking procedures under Wis. Stat. chapter 227 and as required under the recent decision in Wisconsin Legislature v. Palm, 2020 WI 42, 391 Wis. 2d 497, 942 N.W.2d 900. The circuit court denied injunctive relief. In an unpublished decision, the Wisconsin Court of Appeals reversed.

The Wisconsin Supreme Court affirmed the court of appeals. The lead opinion of the court, authored by Chief Justice Roggensack and joined in by Justice Ziegler and Justice R.G. Bradley, first addressed whether the issue raised by the plaintiffs was moot because Emergency Order 3 expired on Nov. 6, 2020. The justices concluded that an exception to the mootness rule applied in this case because the issue before the court was of great public importance (see ¶ 16).

Turning to the merits, the justices began their analysis with the proposition that administrative agencies must comport with the rulemaking procedures set forth in Wis. Stat. chapter 227 when the agency’s proffered directive satisfies the definition of a “rule” (see ¶ 17). Agency action that exhibits all the following criteria meets the definition of a “rule”: “(1) a regulation, standard, statement of policy or general order; (2) of general application; (3) having the effect of law; (4) issued by an agency; (5) to implement, interpret or make specific legislation enforced or administered by such agency” (¶ 19) (citations omitted). The lead opinion concluded that under these criteria, Emergency Order 3 met the definition of a “rule” and should have been promulgated according to the rulemaking procedures set forth in Wis. Stat. chapter 227 (see ¶ 34).

Justice Hagedorn filed an opinion concurring in the court’s mandate, but he declined to join the lead opinion (see ¶ 38). Justice A.W. Bradley filed a dissenting opinion that Justice Dallet and Justice Karofsky joined.

Criminal Law

Second Amendment – Armed While Intoxicated – Self-defense

State v. Christen, 2021 WI 39 (filed 4 May 2021)

HOLDING: The defendant was properly convicted of going armed with a firearm while intoxicated.

SUMMARY: The defendant and his roommates, who had been drinking alcohol, engaged in a heated argument. At some point the defendant armed himself with a firearm. His roommates took the handgun from him, but the defendant apparently armed himself with a shotgun. The defendant eventually called 911. Police officers came to the apartment and arrested the defendant, who appeared intoxicated. A jury convicted the defendant of violating Wis. Stat. section 941.20(1)(b) by going armed with a firearm while intoxicated and not acting in self-defense. In an unpublished decision, the court of appeals affirmed the conviction.

The supreme court affirmed in a majority opinion authored by Chief Justice Ziegler. The court rejected the defendant’s contention that Wis. Stat. section 941.20(1)(b), as applied, violates his Second Amendment right to bear arms. In this case, the defendant was not acting in self-defense, so the statute as applied did not severely burden the Second Amendment’s core right.

The supreme court rejected the defendant’s contention that it should adopt a “categorical approach” to Second Amendment challenges in place of the prevailing two-step approach. Step one considers whether “the regulated activity falls within the scope of the Second Amendment,” a step the court found unnecessary to resolve on these facts
(¶¶ 36, 39). The second step asks whether the statute violates the Second Amendment under a means-end analysis. The court held that Wis. Stat. section 941.20(1)(b) does not strike at the core of the Second Amendment; thus, strict-scrutiny analysis is inappropriate (see ¶ 50). Nor does it impose a “severe” burden on that right; thus, intermediate scrutiny is the appropriate level of review (¶ 52).

Applying this standard, the defendant’s as-applied challenge failed. The statute requires proof that a defendant was intoxicated while armed and was not acting in self-defense. Case law readily confirmed “the dangerous combination of alcohol and firearms,” which amply justify the statute (¶ 59). The facts at trial supported the conviction.

Justice Hagedorn concurred. He reached the same result as the majority but relied instead “on the history of the Second Amendment right as understood when adopted and incorporated against the states” (¶ 65).

Justice R.G. Bradley dissented, charging the majority with “misapprehend[ing] the difference between operating a firearm in self-defense and going armed in case of confrontation” (¶ 87).

Election Law

Voter-registration Cleanup – Wis. Stat. Section 6.50(3) – Wisconsin Elections Commission

State ex rel. Zignego v. Wisconsin Elections Comm’n, 2021 WI 32 (filed 9 April 2021)

HOLDING: The Wisconsin Elections Commission (WEC) has no duty to carry out the commands of Wis. Stat. section 6.50(3).

SUMMARY: Wis. Stat. section 6.50(3) directs “the municipal clerk or board of election commissioners” to act when they receive “reliable information that a registered elector has changed his or her residence to a location outside of the municipality.” In particular, “the municipal clerk or board of election commissioners” must send a letter regarding the move to the elector, and if the registered elector does not respond within 30 days, the “clerk or board of election commissioners shall change the elector’s registration from eligible to ineligible status” (¶ 2).

In this case the petitioners (who are registered electors and taxpayers in Wisconsin) sought a writ of mandamus to compel the WEC and its commissioners to carry out the commands of Wis. Stat. section 6.50(3) and change the registration of electors who may have moved. The circuit court granted the writ. In a published decision, the court of appeals reversed. See 2020 WI App 17. In a majority opinion authored by Justice Hagedorn, the supreme court modified the decision of the court of appeals and, as modified, affirmed it.

A writ of mandamus would lie in this case only if the WEC has a positive and plain duty to carry out the commands of Wis. Stat. section 6.50(3) (see ¶ 3). The court concluded that the statute “does not give any duty to the Commission, much less a positive and plain duty” (¶ 39). “Under Wis. Stat. § 6.50(3), the responsibility to change the registration of electors who may have moved out of their municipality is given to ‘the municipal clerk or board of election commissioners’” (¶ 4).

The court rejected the petitioners’ argument that the WEC is a “board of election commissioners” (id.). Rather, “a board of election commissioners is established in our high population cities and counties – at this point, only in the City of Milwaukee and Milwaukee County – to carry out the duties otherwise accomplished by municipal and county clerks everywhere else” (¶ 17).

In short, the duties imposed by Wis. Stat. section 6.50(3) are the responsibility of municipal clerks and a municipal board of election commissioners. According to the supreme court, the WEC has no mandatory duties under Wis. Stat. section 6.50(3) and therefore cannot be compelled by mandamus to act under the statute (see ¶ 29).

The circuit court found the WEC and several commissioners in contempt for failing to comply with the writ of mandamus it had issued. The court of appeals reversed the contempt order. Because the writ of mandamus must be reversed, the supreme court agreed with the court of appeals that the contempt order on which it was based also must be reversed (see ¶ 42).

Justice R.G. Bradley filed a dissenting opinion that Justice Ziegler joined.

Real Property

Right of First Refusal – Valuation – “Prospective Offer Price”

Country Visions Coop. v. Archer-Daniels-Midland Co., 2021 WI 35 (filed 21 April 2021)

HOLDING: The circuit court properly considered a property’s “unique synergies” when it set the exercise price higher than the appraised value on property subject to a right of first refusal.

SUMMARY: Country Visions Cooperative held a right of first refusal on property that its owner, Archer-Daniels-Midland (ADM), was attempting to sell to United Cooperative along with other properties. When Country Visions exercised its right of first refusal, United offered to purchase the property for $20 million, a price Country Visions did not match. The sale closed, and Country Visions brought this lawsuit claiming the sale price was a sham and seeking specific performance at a lower price. At a bench trial, the judge found that the sale price was a sham and set the value at $16.6 million. Both parties appealed. In a published decision, the court of appeals affirmed in part and reversed in part. See 2020 WI App 32.

A unanimous supreme court affirmed the court of appeals in an opinion authored by Justice Ziegler. The circuit court properly considered the property’s “unique synergies” in setting the exercise price higher than its appraised value. When a property is part of a “package deal,” a prospective buyer might offer substantially more than a property’s appraised value (¶ 6).

The court discussed case law on rights of first refusal, including cases involving package deals (see ¶ 25). The goal is not to determine the property’s fair market value; rather, “the circuit court must determine the actual price that the prospective third-party buyer would have offered for the burdened property, based on the terms of the contract and facts of the case” – a concept the court termed the “prospective offer price” (¶ 27). The case was remanded, however, for a determination of whether the $16.6 million price included property rights outside the right of first refusal.

Chief Justice Roggensack filed a concurring opinion in which she joined the majority opinion but explained why “additional briefing or testimony” might be necessary on remand based on the record (¶ 65).