Brown County v. Department of Health and Social Services

• Decision Date: 30 June 1981
• Docket Number: No. 80-461,80-461
• Parties: BROWN COUNTY, Plaintiff-Appellant-Petitioner, v. DEPARTMENT OF HEALTH AND SOCIAL SERVICES, Defendant-Respondent.
• Court: Wisconsin Supreme Court

Page 247

307 N.W.2d 247

103 Wis.2d 37

BROWN COUNTY, Plaintiff-Appellant-Petitioner, v. DEPARTMENT OF HEALTH AND SOCIAL SERVICES, Defendant-Respondent.

No. 80-461.

Supreme Court of Wisconsin.

Argued June 2, 1981.

Decided June 30, 1981.

[103 Wis.2d 39] John C. Jacques, Asst. Corp. Counsel, Green Bay, for plaintiff-appellant-petitioner.

Donald P. Johns, Asst. Atty. Gen. (argued), for defendant-respondent; Bronson C. La Follette, Atty. Gen., on brief.

CALLOW, Justice.

On this review we are asked to determine whether a rule promulgated by the Department of Health and Social Services (Department) relating to relief for state dependents was enacted pursuant to statutory authority and whether the rule-making process complied with the procedures outlined in Chapter 227, Stats. Brown County (County) commenced a declaratory judgment action in circuit court under sec. 227.05 to challenge the validity of Wis.Adm.Code Sec. PW-PA 20.15(6), ¹ promulgated by the Department effective August 1, 1978. The County argued below, and again before this court, that the rule exceeds the scope of the Department's legislatively delegated rule-making authority and, further, that because the final version of the rule as adopted differs substantially from the version initially proposed and upon which public hearings were held, the final version should have been the subject of further public hearings. The circuit court for Dane county, Hon. P. Charles Jones presiding, determined that the rule was within the Department's statutory rule-making authority and, further, that the rule-making process complied with Chapter 227. The court of appeals, in an unpublished opinion, affirmed the circuit court. Brown County v. DH&SS, 99 Wis.2d 807, 301 N.W.2d 462 (Ct.App.1980). We affirm.

I.

We are confronted with a threshold problem raised by the Department concerning the County's standing to challenge the substance of the rule. Relying upon this court's opinion in Dane County v. H & SS Dept., 79 Wis.2d 323, 255 N.W.2d 539 (1977), the Department argues that while the County may have standing to question the Department's compliance with Chapter 227, Stats., rule-making procedures, it cannot otherwise contest the validity of a rule promulgated by a state agency. The County's position appears to be that the question of a rule being within the scope of an agency's delegated authority relates to the procedure by which it was enacted. Accordingly, the County, too, relies on Dane County to support its standing in this case.

It does not appear from the record that the Department questioned the County's standing until the case reached the court of appeals. Ordinarily we do not consider issues which were not raised at the trial court level, and we would have no difficulty concluding from the record before us that the Department waived its right to have this issue decided. But as we have often repeated, this rule is merely one of administration and does not limit our power to reach such issues in a proper case. Wirth v. Ehly, 93 Wis.2d 433, 443-44, 287 N.W.2d 140 (1980); Arsand v. City of Franklin, 83 Wis.2d 40, 55-56, 264 N.W.2d 579 (1978). The fact that the parties to this review rely on the same case to support conflicting positions on an important question of law is sufficient, in our view, to warrant discussing the matter, notwithstanding the Department's apparent failure to raise it in the circuit court.

This court has often expressed the fundamental rule that counties, as creatures of the legislature, exist largely for purposes of political organization and administrative convenience. State ex rel. Conway v. Elvod, 70 Wis.2d 448, 450, 234 N.W.2d 354 (1975); Kyncl v. Kenosha County, 37 Wis.2d 547, 555, 155 N.W.2d 583 (1968); State v. Mutter, 23 Wis.2d 407, 412-13, 127 N.W.2d 15 (1964), appeal dismissed 379 U.S. 201, 85 S.Ct. 328, 13 L.Ed.2d 339 (1964). Because of its status as an arm of the state, a county cannot be heard to challenge or question the wisdom of its creator. See: Marshfield v. Cameron, 24 Wis.2d 56, 63, 127 N.W.2d 809 (1964); McDougall v. Racine County, 156 Wis. 663, 665-66, 146 N.W. 794 (1914). It follows logically from this, for example, that a county may not raise a constitutional challenge to a statute. Columbia County v. Wisconsin Retirement Fund, 17 Wis.2d 310, 317, 116 N.W.2d 142 (1962).

An administrative agency, too, is a creature of the legislature. State ex rel. Thompson v. Nash, 27 Wis.2d 183, 189, 133 N.W.2d 769 (1965). Where the legislature has set forth the "fundamentals of a law, it may delegate to administrative agencies the authority to exercise such legislative power as is necessary to carry into effect the general legislative purpose." State ex rel. Wisconsin Inspection Bureau v. Whitman, 196 Wis. 472, 505, 220 N.W. 929 (1928). See also: Schmidt v. Local Affairs & Development Dept., 39 Wis.2d 46, 59, 158 N.W.2d 306 (1968). As a general matter, an administrative agency has only those powers as are expressly conferred or necessarily implied from the statutory provisions under which it operates, State (Dept. of Admin.) v. ILHR Dept., 77 Wis.2d 126, 136, 252 N.W.2d 353 (1977), but acting within that grant of delegated power, an agency effectuates the will of the legislature.

The Dane County case, consistent with these principles, stated that a county could not challenge "the mandate of its creator" or "attack supervisory powers of the agency." 79 Wis.2d at 331, 255 N.W.2d 539. Where an administrative agency acts wholly within the scope of its delegated authority, any challenge to the substance of its actions is, in effect, a challenge to the wisdom of the legislature and is barred by the traditional no-standing rule. But where the challenge is directed not at the wisdom of a rule or its substantive validity, but rather at whether its enactment complied with statutory rule-making procedures, we found that a county did have standing to proceed. Although it is true, as the Department points out, that in Dane County we based our finding of the county's standing on the language of sec. 227.16, Stats., that case need not be so narrowly read. There the county sought to question the department's compliance with rule-making procedures established by the legislature. To raise such a challenge is to charge the agency with acting in contravention of the express wishes of the legislature, and while we declined to rely upon this reasoning in the Dane County case, it is nonetheless true that such a challenge, because it deals with an alleged failure to comply with a legislative mandate, does not transgress the fundamental prohibition against questioning the wisdom of the creator which we were careful to leave intact.

Allegiance to this rationale leads us to conclude that the County must also have standing to charge an administrative agency with acting beyond the scope of its delegated authority. If administrative agencies may legitimately act only within the bounds of their delegated authority, then to charge an agency with exceeding that authority is not to question the propriety of legislative action but, as we said in Dane County, "to vindicat(e) legislative requirements." 79 Wis.2d at 332, 255 N.W.2d 539. We are aware that this holding may open the way for challenges to administrative rules on vaguely articulated grounds relating to the scope of delegated authority, and the prospect is not pleasing. Yet the alternative is equally unpleasant: Without a forum in which to challenge the authority of an agency to enact a particular rule, a county affected thereby could be subject to the unchecked whims of unauthorized administrative lawmaking. We reiterate again the caveat in Dane County : We are not retreating from the traditional rule that an arm of the state has no standing to challenge the state's decisions; once it is established that a particular rule is within the scope of an agency's lawfully delegated rule-making authority and, if questioned, that it was enacted in conformity with statutory rule-making procedures, there is no further inquiry.

II.

Concluding that the County has standing to raise the issue, we turn our attention to whether Wis.Adm.Code Sec. PW-PA 20.15(6) is within the scope of the Department's lawfully delegated rule-making authority.

(A)

Eligible dependent persons are entitled to general relief in Wisconsin under one of two basic administrative arrangements: Sec. 49.02(1), Stats., ² provides that municipalities (towns, cities, or villages) shall provide such relief; and sec. 49.03, ³ establishes two optional programs whereby counties may, at their election, assume some or all of the responsibility for the provision of general relief. Counties in which relief is administered by municipalities are said to be on the "unit" system, and counties electing to provide relief directly to recipients, pursuant to sec. 49.03, are said to be on the "county" system.

With respect to a particular group of relief recipients, denominated "state dependents" in sec. 49.04(1), Stats., ⁴ the state rather than the local relief granting agencies, bears the ultimate cost of any assistance granted on a temporary basis as defined by sec. 49.01(7). In State ex rel. Milwaukee County v. Schmidt, 50 Wis.2d 303, 310-11, 184 N.W.2d 183 (1971), we explained:

"The underlying purpose of sec. 49.04, Stats., was to relieve counties of the added burden of relief to transients from outside the state as a result of the migrations following World War II by providing state reimbursement for aid given to persons who had no legal settlement within the state, and who had resided in the state for less than one year. It was intended that the counties or local units of government should remain primarily liable for the relief of persons whose need for relief could be fairly said to have arisen in the background of local conditions."

Under the provisions of sec. 49.04(1), a county can be reimbursed by the state for relief granted to state...