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[WP]

STATE OF WISCONSIN

TAX APPEALS COMMISSION


XEROX CORPORATION,

Petitioner,

vs.

WISCONSIN DEPARTMENT OF REVENUE,

Respondent,

DOCKET NOS. 02-M-66 and
02-M-67

CITY OF MILWAUKEE AND
CITY OF LA CROSSE,

Intervenors.


These matters come before the Commission on the motions of City of Milwaukee and City of La Crosse to intervene in the above dockets. Petitioner, respondent, and the intervenors have all submitted briefs with respect to the motions. Petitioner is represented by Foley & Lardner, by Attorney Timothy C. Frautschi. Respondent is represented by Attorney Veronica Folstad. City of Milwaukee is represented by Assistant City Attorney Gregg C. Hagopian. City of La Crosse is represented by City Attorney Patrick J. Houlihan.

Based upon the submissions of the parties and the entire record in this matter, the Commision finds, rules, and orders as follows:

These dockets involve a dispute between petitioner and respondent concerning the valuation and taxability of personal property owned by petitioner, leased to lessees, and located in Milwaukee and La Crosse. (Docket No. 02-M-67 involves personal property located in Milwaukee; Docket No. 02-M-66 involves personal property located in La Crosse.(1)) These disputes are before the Commission by virtue of section 73.06(3) of the Statutes, incorporating the procedures set forth in section 70.995 of the Statutes.

The State Board of Assessors issued its notice of determination in Docket No. 02-M-66 on March 12, 2002, and in Docket No. 02-M-67 on April 16, 2002. On May 9, 2002, petitioner filed timely petitions for review with the Commission. The Commission sent a copy of the petition for review in Docket No. 02-M-66 to the clerk of the City of La Crosse and a copy of the petition for review in Docket No. 02-M-67 to the clerk of the City of Milwaukee. Neither intervenor exercised its right under section 70.995(8)(a) to file a cross-appeal within 30 days of the filing of the petitions for review by petitioner.

Respondent opposes the motions, noting that both intervenors had the opportunity to file a cross-appeal. Petitioner does not oppose intervention, so long as the terms of the intervention provide that the intervenors are not parties, they cannot interfere with a stipulation reached by petitioner and respondent, they cannot obtain an increase in the assessment, and that petitioner will have the opportunity to take discovery of the intervenors.

Intervenors seek full status as parties, and both rely on former Commissioner Mettner's decision in Kohler Co. v. Dep't of Revenue, Docket No. 96-M-20, Slip Op. (WTAC Aug. 23, 1996). In Kohler, the Commission granted the Village of Kohler the right to appear as a party (i.e., as a respondent) in a manufacturing appeal before the Commission. In part, Commissioner Mettner relied upon section 227.44(2m) of the Statutes for authority to grant party status to the Village of Kohler.

I do not believe that Kohler can be relied upon, especially in light of subsequent decisions of the Commission. In Niagara v. Dep't of Revenue, Wis. Tax Rptr. (CCH) ¶ 400-329 (WTAC 1997), the full Commission indicated its disapproval of the Kohler order and opined that if a municipality does not have the right to file an appeal or cross-appeal, or if it does have one of these rights but elects not to exercise these rights, it should not be allowed to appear as a party. Id. at 6 and n.31.

Subsequent to Kohler, the Commission has entertained motions to intervene, but has only allowed such intervention on a limited, non-party basis. S.C. Johnson & Sons, Inc., Docket No. 99-M-103, Slip Op. (WTAC Sept. 10, 1999); Newell Corp. v. Dept' of Revenue, Docket No. 96-M-35, Slip Op. (WTAC Feb. 28, 1997).

Both intervenors also point to the Commission's administrative rule, TA 1.39, which provides that the practice before the Commission "shall substantially follow the practice and procedures before the circuit courts of this state." Because Rule 803.09 of the Rules of Civil Procedure permits intervention in circuit court proceedings, the intervenors argue that intervention should be permitted in these cases.

The application of TA 1.39 has been circumscribed by the Court of Appeals twice in the past. Department of Revenue v. Hogan, 198 Wis. 2d 792 (Ct. App. 1995) (Hogan II), and Department of Revenue v. First Nat'l Leasing Corp., 125 Wis. 2d 476 (Ct. App. 1985). In each case, the Court of Appeals held that the Commission may not rely on TA 1.39 to grant a taxpayer its "day in court" when the specific statutes governing appeals to the Commission do not authorize such an opportunity. Hogan II, at 812-17 ; First National, at 478-79. I conclude that to allow either intervenor to have the status of a party in these dockets would directly contravene the holdings in Hogan II and First National.

While neither intervenor has raised section 227.44(2m) of the Statutes, it was relied upon by Commissioner Mettner in Kohler. I am, therefore, compelled to comment upon its application to this case. Section 227.44(2m) provides:

Any person whose substantial interest may be affected by the decision following the hearing shall, upon the person's request, be admitted as a party.

Nothing in the text or context of this statute suggests that it applies to a contested case hearing where other statutes prescribe time limits for filing appeals to initiate the contested case hearing. In fact, just the opposite. Section 227.42(1) of the Statutes--the section that creates a catchall right for a hearing before state agencies--provides, in part:

(1)In addition to any other right provided by law, any person filing a written request with an agency for hearing shall have the right to a hearing which shall be treated as a contested case if:

(a) A substantial interest of the person is injured in fact or threatened with injury by agency action or inaction;

* * *

Reading this section along with section 227.44(2m), it appears to me that these general provisions providing rights to force agencies to hold contested case hearings cannot be used to circumvent appeal deadlines. To hold otherwise would be to make every statutory appeal deadline irrelevant because nothing in section 227.42(1) suggests a time limit for such a request.

Therefore, I conclude that within the limitations derived from the above legal principles, whether the cities of Milwaukee and La Crosse may intervene rests with the sound discretion of the Commission. The City of La Crosse will be permitted to intervene in Docket No. 02-M-66 and the City of Milwaukee will be permitted to intervene in Docket No. 02-M-67, both subject to the following limitations:

1. Neither intervenor will be entitled to any relief with respect to any item of personal property that is more favorable to the intervenor than that provided by the State Board of Assessors;

2. Neither intervenor will have the power to object to any stipulation or settlement entered into by petitioner and respondent;

3. Each intervenor will be able to participate in all hearings, conferences, and trial; offer evidence (both documents and witness testimony); make arguments; and file briefs, except that an intervenor may not offer evidence that contradicts a fact established by a stipulation between petitioner and respondent or that has been rendered moot or irrelevant by such a stipulation.

4. Subject to the limitations of this paragraph, each intervenor may engage in discovery of petitioner and respondent as provided in Chapter 804, and petitioner and respondent may engage in discovery of each intervenor as provided in Chapter 804. Petitioner and respondent shall not serve requests for admission upon either intervenor, because an admission by either intervenor is meaningless and not binding on respondent and petitioner. Intervenors may serve requests for admissions upon both petitioner and respondent; however, any admission established by such service and response/non-response shall be disregarded to the extent it is contradicted by a stipulation between petitioner and respondent. In addition, the Commission is very concerned about the potential for overly burdensome discovery, given that each party and intervenor may engage in discovery. Therefore, the parties and intervenors are cautioned to use common sense and courtesy in formulating and serving discovery requests and in considering requests for extensions. Moreover, the parties are alerted to the provisions of TA 1.35(2).

ORDER

The motions to intervene by the City of Milwaukee and City of La Crosse are granted in part, subject to the limitations set forth above.

Dated at Madison, Wisconsin, this 23rd day of December, 2002.

WISCONSIN TAX APPEALS COMMISSION

Don M. Millis, Commission Chairperson

122 W. Washington Ave. ­ Suite 800

Madison, WI 53703

(608) 266-1391

pc: Attorney Timothy C. Frautschi

Attorney Veronica Folstad

Attorney Gregg C. Hagopian

Attorney Patrick J. Houlihan

1 City of La Crosse referenced Docket No. 02-M-67 in its petition for review. The Commission assumes this is a typographical error and construes its motion as seeking to intervene in Docket No. 02-M-66.