Wisconsin
Lawyer
Vol. 79, No. 10, October
2006
Supreme Court Digest
This column summarizes all decisions
of the Wisconsin Supreme Court (except those involving lawyer or
judicial discipline, which are digested elsewhere in the magazine).
Profs. Daniel D. Blinka and Thomas J. Hammer invite comments and
questions about the digests. They can be reached at Marquette University
Law School, 1103 W. Wisconsin Ave., Milwaukee, WI 53233, (414)
288-7090.
by Prof. Daniel D. Blinka &
Prof. Thomas J. Hammer
Administrative Law
Motor Vehicle Dealer Agreements - Assignments of Territory -
Judicial Deference to Administrative Decisions
Racine Harley-Davidson
Inc. v. Wisconsin Division of Hearings & Appeals, 2006 WI
86 (filed 6 July 2006)
The substantive dispute in this case centered on what documents
constitute a motor vehicle dealer agreement under Wis. Stat. section
218.0116(8). More specifically, the dispute focused on whether the
document (a zip code list) by which Harley-Davidson assigned territory
to a Harley-Davidson dealer was part of the motor vehicle dealer
agreement under the statute. In a published decision, the court of
appeals gave great weight deference to the decision of the Division of
Hearings and Appeals (DHA) that Harley-Davidson's assignment of
territory to the dealer was not part of the motor vehicle dealer
agreement between the parties. Accordingly, the court of appeals
determined that Harley-Davidson's unilateral modification of the
assignment of territory did not trigger the requirement in section
218.0116(8) of an administrative determination of good cause for the
modification of a motor vehicle dealer agreement. See 2005 WI
App 6.
In a majority decision authored by Chief Justice Abrahamson, the
supreme court reversed the court of appeals. The supreme court agreed
with the circuit court that the zip code list is part of the motor
vehicle dealer agreement between the par-ties under section 218.0116(8).
"We conclude that read together, Wis. Stat. § 218.0101(1) and (13);
§ 218.0114(9) and (11); and § 218.0116 (1)(r), (7), and (8);
and the purpose of §§ 218.0101 to 218.0163, support the
conclusion that a more reasonable interpretation of the statutes than
that of the [DHA] is that a manufacturer's assignment of territory is an
essential aspect of the franchise relationship and therefore part of the
motor vehicle dealer agreement" (¶ 94).
(Editors' Note: A substantial part of this very long opinion
deals with the level of deference (great weight, due weight, or no
deference) that a court should accord administrative agency decisions.
The court of appeals gave great weight deference to the DHA's decision
that the zip code list, used by Harley-Davidson to assign territory to a
dealership, was not part of the motor vehicle dealer agreement between
the parties under section 218.0116(8). The supreme court concluded that
"interpretation of a motor vehicle dealer agreement under §
218.0116(8)(a) is a matter of first impression and that the [DHA] lacks
the requisite expertise and experience for its statutory interpretation
to be accorded great weight deference. Even if we were to grant due
weight deference to the statutory interpretation of the [DHA] of §
218.0116(8)(a) in the present case, we do not adopt the [DHA's]
statutory interpretation of § 218.0116(8)(a) because, [as
summarized above], another interpretation is more
reasonable"(¶¶ 57-58).)
Justice Prosser filed a concurring opinion in which he joined the
majority opinion but wrote separately to reference his concurrence in
Hilton v. Department of Natural Resources, 2006 WI 84 (digested
below). Justice Roggensack also concurred in an opinion that was joined
by Justices Wilcox and Butler.
Top of page
Department of Natural Resources - Judicial Review of Agency
Decisions Requiring Reduction of Boat Slips at Unpermitted Piers
Hilton v. Department of
Natural Resources, 2006 WI 84 (filed 6 July 2006)
An unincorporated association, whose members all own an interest in a
riparian lot, has for many years placed an unpermitted pier, with boat
slips, that extended from the riparian lot into Green Lake. The pier
currently is 249 feet long and contains 22 boat slips. Between 1998 and
2002, staff of the Wisconsin Department of Natural Resources (DNR)
advised the association that "the existing pier and any proposed
expansion exceeded Wis. Stat. § 30.13 (1997-98) standards to
maintain a pier without a permit; that the Association must apply for a
permit if it wished to maintain the current pier or any pier exceeding
the § 30.13 (1997-98) standards; if the Association did not reduce
the pier to meet the standards, or submit a permit application, the DNR
would seek an abatement hearing under § 30.03 (1997-98)" (¶
7).
After the DNR received complaints about the pier but no permit
application was submitted, the DNR ultimately requested an abatement
hearing. An administrative law judge (ALJ) determined that the existing
pier violated public rights because it exceeded the "reasonable use"
threshold, negatively impacted the aquatic habitat, and created a safety
hazard. After considering both the rights of riparians and the rights of
the public, the ALJ determined that the association should be limited to
a 226-foot pier with no more than 11 slips (a number the ALJ concluded
represented the "historic use" of the pier) (see ¶ 10).
The DNR expressly adopted the ALJ's decision. On review in the circuit
court, the judge set the number of allowable slips at 17. The court of
appeals reversed the circuit court. It determined that the circuit court
had applied an improper standard of review and substituted its judgment
for the decision adopted by the DNR. The court of appeals, therefore,
reinstated the DNR's determination.
In a majority decision authored by Justice Crooks, the supreme court
affirmed the court of appeals. The court first concluded that "because
the DNR did not appeal the decision of the ALJ, and adopted by rule the
decision as its own, the decision is entitled to great weight deference,
because it is a decision within the DNR's area of expertise and
satisfies the other necessary criteria" (¶ 2).
The court further concluded that the DNR's decision was reasonable,
consistent with applicable law, and supported by substantial evidence in
the record (see ¶ 2). The court said that when considering
actions that affect navigable waters in the state, one must start with
the public trust doctrine, according to which the state holds the beds
of navigable waters in trust for all its citizens (see ¶
18). "However, the public trust analysis requires the DNR to go beyond
the [Wis. Stat. § 30.12(1g)(f) (2003-04)] statutory presumption
[regarding the size of piers and the number of boat slips permitted] to
determine what the `reasonable use' is in light of the relevant facts
particular to each situation. In this case, the ALJ examined
environmental impact, natural scenic beauty, historic use, safety, the
statutory presumption, the absence of a permit, and the DNR's delayed
enforcement, among other factors, in determining `reasonable use.' There
is ample evidence in the record that the ALJ considered the relevant
factors in this case and weighed them appropriately in light of the
public trust doctrine. We conclude, therefore, that the decision of the
DNR is consistent with applicable law" (¶ 22). On the facts of the
case the court also concluded that the DNR's decision was reasonable,
supported by substantial evidence in the record, and neither arbitrary
nor capricious (see ¶ 43). Applying great weight
deference, the supreme court therefore affirmed the ALJ's decision and,
thus, the DNR's decision.
(In a footnote the court noted that "the DNR recently adopted new
rules regarding the regulation of piers. Included in these rules is a
provision to `grandfather' in existing piers too big to qualify for an
exemption, up to a certain size. It is unclear whether the Association
pier would be within the category of piers eligible for
`grandfathering.' We also note that there is an effort by several
legislators to set standards on piers, different from those of the DNR"
(¶ 7 n.7).)
Chief Justice Abrahamson filed a concurring opinion in which she
joined the majority but wrote separately to reference the analysis of
judicial deference to agency decisions in Racine Harley-Davidson
Inc. v. Division of Hearings & Appeals, 2006 WI 86 (summarized
above). Justice Prosser also concurred in a decision that was joined by
Justices Wilcox and Roggensack.
Top of page
Criminal Procedure
Ineffective Assistance of Counsel - Failure to Hold Evidentiary
Hearing - Identification Evidence
State v.
Roberson, 2006 WI 80 (filed 30 June 2006)
The defendant was convicted of delivering cocaine. He claimed that
his trial counsel was ineffective for failing to file a motion to
suppress two out-of-court identifications made by police officers on the
ground that the identifications immediately followed a warrantless entry
into his home that he alleged was illegal. The circuit court denied the
postconviction motion without a hearing, concluding among other things
that "there was no reasonable probability that the failure of [the
defendant's] counsel to file a suppression motion would have altered the
result of the proceedings" (¶ 20). In a published decision the
court of appeals affirmed both the judgment of conviction and the motion
denying postconviction relief. See 2005 WI App 195. In a
majority decision authored by Justice Butler, the supreme court affirmed
the court of appeals.
The state argued that the defendant failed to allege sufficient facts
that would have satisfied his burden of making a specific offer of proof
that the suppression motion would have succeeded and therefore failed to
establish that his counsel provided ineffective assistance. Among other
things the state argued that the defendant could not prove prejudice,
which is a necessary element of an ineffective assistance of counsel
claim, because the record conclusively shows that the subsequent
in-court identifications of the defendant by the officers (one of whom
purchased the cocaine from the defendant while the other generally
observed the defendant's activities) were admissible.
The supreme court concluded that "the in-court identifications of
Roberson were properly admitted into evidence, regardless of whether the
warrantless entry was illegal and regardless of whether the out-of-court
identifications were inadmissible. We therefore conclude that Roberson's
counsel's failure to move to suppress the out-of-court identifications
did not prejudice his defense. We decline to address Roberson's
challenge to the warrantless entry and out-of-court identifications
immediately following the warrantless entry because exclusion of the
out-of-court identifications would not alter the outcome of our
analysis" (¶ 3).
The admissibility of an in-court identification depends on whether
that identification has been tainted by illegal activity (see
¶ 32). An illegal search is irrelevant to the admissibility of any
evidence that does not actually flow from that illegal activity. An
in-court identification is admissible, therefore, if the court
determines that it is based on an independent source (see
¶¶ 33-34). "We conclude that the officers' capacity to
identify Roberson during trial neither resulted from nor was biased by
the alleged unlawful police conduct. Even assuming that the entry was
illegal and the subsequent out-of-court identifications were
inadmissible, the police acquired nothing from the illegal entry or the
subsequent out-of-court identifications that was relevant to their
ability to identify Roberson at trial, and there is no evidence to show
that the subsequent in-court identification testimony was somehow
tainted" (¶ 40).
The supreme court further concluded that the circuit court did not
err in denying the defendant a hearing on his postconviction motion. A
circuit court has the discretion to deny a hearing on a claim of
ineffective assistance of counsel if the record conclusively
demonstrates that the defendant is not entitled to relief (see
¶ 43).
Chief Justice Abrahamson filed a dissenting opinion that was joined
by Justice Bradley.
Top of page
Search and Seizure - Determining When a "Seizure" Occurs
State v. Young,
2006 WI 98 (filed 12 July 2006)
The most important question before the court in this case involved
the standard to be used to determine when a "seizure" of the person
occurs. The defendant maintained that a person is seized "only if, in
view of all of the circumstances surrounding the incident, a reasonable
person would have believed that he was not free to leave," which is the
test first articulated in United States v. Mendenhall, 446 U.S.
544, 554 (1980). The state took the position that a person is seized
when an officer applies physical force, however slight, to restrain the
person's movement or when the person submits to a show of authority.
This is the test in California v. Hodari D., 499 U.S. 621, 626
(1991). In State v. Kelsey C.R., 2001 WI 54, ¶33, 243 Wis.
2d 422, 626 N.W.2d 777, the Wisconsin Supreme Court adopted the
Hodari D. test "for when a seizure occurs." Nevertheless, the
defendant argued that article I, section 11 of the Wisconsin
Constitution provides greater protections than the Fourth Amendment and
that the Wisconsin Supreme Court should join the state courts that
choose to follow Mendenhall rather than Hodari D.
(see ¶¶ 3-4).
In a majority opinion authored by Justice Prosser, the supreme court
affirmed the court of appeals and concluded that the Mendenhall
and Hodari D. tests "can coexist and that the Hodari
D. test applies when a suspect refuses to submit to a show of
authority" (¶ 5). The latter is what happened in this case. When an
officer stopped his marked squad car in the street next to a car that
was behind the parked car in which the defendant was a passenger,
activated his emergency flashers (not the red-and-blue rolling lights),
and exited the squad car to approach the defendant's car to investigate
suspicious activity, the defendant exited and began to walk away, twice
ignoring the officer's commands to stop. The defendant then ran to a
nearby house but was caught by the officer on the porch and was arrested
after a struggle.
Said the court, "Hodari D. compels the conclusion that Young
was not seized until [the officer] physically apprehended him on the
porch of the house" (¶ 26). "Hodari D. ... supplements the
Mendenhall test to address situations where a person flees in
response to a police show of authority" (¶ 38).
"Mendenhall is the appropriate test for situations where the
question is whether a person submitted to a police show of authority
because, under all the circumstances surrounding the incident, a
reasonable person would not have felt free to leave" (¶ 37).
(Editors' Note: The defendant in this case urged the court
to reject Hodari D. and to interpret the Wisconsin Constitution
to afford greater protection to individual liberty interests than does
the Fourth Amendment. The court did not do so, indicating that "[w]e
embrace the Fourth Amendment jurisprudence of the United States Supreme
Court when we perceive soundness in Supreme Court analysis and value in
uniform rules. We follow that course in this case" (¶ 30).)
The supreme court also addressed questions relating to the
sufficiency of the evidence to support the defendant's convictions for
obstructing an officer and resisting an officer. The questions concerned
whether the officer was acting with lawful authority when he ordered the
defendant to stop (an element of the obstructing charge) and whether he
was acting with lawful authority when he chased and apprehended the
defendant (an element of the resisting charge). As to the former, the
court concluded that, on the facts of this case, the officer had
reasonable suspicion that the defendant was involved in criminal
activity before he issued his second command to the defendant to stop
(see ¶ 76); with regard to the latter the court held that
the officer had probable cause to arrest the defendant before he
physically apprehended the defendant (see ¶ 78).
Accordingly, as to both charges, the officer was acting with lawful
authority. The court held that the marijuana that was seized at the time
of arrest and that formed the basis for a drug charge against the
defendant was discovered during a valid search incident to arrest
(see ¶ 77).
Justice Butler filed an opinion concurring in part and dissenting in
part. Justice Bradley filed a dissenting opinion that was joined by
Chief Justice Abrahamson.
Top of page
Taxation
Taxation Personal Property Tax Assessments - Assessing Value of
Billboards
Adams Outdoor
Advertising Ltd. v. City of Madison, 2006 WI 104 (filed 13 July
2006)
The plaintiff, Adams Outdoor Advertising Ltd., challenged as
excessive the city of Madison's personal property tax assessments of the
plaintiff's billboards for the years 2002 and 2003. There was no dispute
that billboards are personal property, subject to the personal property
tax. The questions the supreme court accepted on certification concern
how an assessor should arrive at the value of a billboard and what
elements of the billboard may be included in the assessment. Wisconsin
Stat. section 70.34 provides that "[a]ll articles of personal property
shall, as far as practicable, be valued by the assessor upon actual view
at their true cash value[,]" and that assessments should be performed in
accordance with the Property Assessment Manual.
The Property Assessment Manual and case law set forth a
three-tier assessment methodology to ascertain true cash value. If there
has been no recent sale of the subject property, an assessor must
consider sales of reasonably comparable properties. Only if there has
been no arm's-length sale and there are no reasonably comparable sales
may an assessor use any of the third-tier assessment methodologies. When
determining fair market value using tier three, an assessor may consider
all the factors collectively that bear on the property's value. These
factors include cost, depreciation, replacement value, income,
industrial conditions, location and occupancy, sales of like property,
book value, amount of insurance carried, value asserted in a prospectus,
and appraisals produced by the owner. The income approach, which seeks
to capture the amount of income the property will generate over its
useful life, and the cost approach, which seeks to measure the cost to
replace the property, both fit into this analytic framework
(see ¶¶ 34-35). Before 1994 the city of Madison used
the cost approach to appraise billboards; since then it has used the
income approach.
In a majority decision authored by Justice Prosser, the supreme court
concluded that "[t]he City was entitled to use third tier methods of
assessment to assess Adams' billboards because there was not a recent
arms-length sale of the property and Adams did not produce evidence of
reasonably comparable sales" (¶ 3). It also held that, "[a]lthough
net income from billboard rentals may be a factor to consider in a third
tier analysis, it cannot be the sole controlling factor in determining
value. When the Madison City Assessor acknowledged that he considered
but rejected all other approaches and factors, his assessment
contravened long-standing assessment principles articulated in Waste
Management of Wisconsin, Inc. v. Kenosha County Board of Review,
184 Wis. 2d 541, 558, 516 N.W.2d 695 (1994); Bischoff, 81 Wis.
2d at 619; and State ex rel. I.B.M. Corp. v. Board of Review,
231 Wis. 303, 311-12, 285 N.W. 784 (1939), as well as the prevailing
practice for assessing billboards throughout Wisconsin and the United
States" (¶ id.).
The court further concluded that the city erred by including the
value of billboard permits in the assessment of Adams' billboards.
Billboard permits are not tangible personal property. For property tax
purposes, billboard permits constitute an interest in real property, as
defined by Wis. Stat. section 70.03 (see ¶ 92).
Chief Justice Abrahamson filed a dissenting opinion that was joined
by Justice Bradley.
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