Coyne v. Walker

• Decision Date: 19 February 2015
• Docket Number: No. 2013AP416.,2013AP416.
• Citation: 862 N.W.2d 606,361 Wis.2d 225
• Parties: Peggy Z. COYNE, Mary Bell, Mark W. Taylor, Corey Otis, Marie K. Stangel, Jane Weidner and Kristin A. Voss, Plaintiffs–Respondents, v. Scott WALKER and Michael Huebsch, Defendants–Appellants. Anthony Evers, Defendant–Respondent.
• Court: Wisconsin Court of Appeals

361 Wis.2d 225

862 N.W.2d 606

Peggy Z. COYNE, Mary Bell, Mark W. Taylor, Corey Otis, Marie K. Stangel, Jane Weidner and Kristin A. Voss, Plaintiffs–Respondents

v.Scott WALKER and Michael Huebsch, Defendants–Appellants.^†

Anthony Evers, Defendant–Respondent.

No. 2013AP416.

Court of Appeals of Wisconsin.

Submitted on Briefs Oct. 7, 2013.

Opinion Filed Feb. 19, 2015.

On behalf of the defendants-appellants, the cause was submitted on the briefs of Maria S. Lazar, assistant attorney general, Kevin M. St. John, deputy attorney general, and J.B. Van Hollen, attorney general.

On behalf of the defendant-respondent, the cause was submitted on the brief of Ryan Nilsestuen and Janet A. Jenkins for Wisconsin Department of Public Instruction of Madison.

On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Lester A. Pines, Susan M. Crawford and Tamara B. Packard of Cullen Weston Pines & Bach LLP, Madison, and Stephen Pieroni of Wisconsin Education Association Council of Madison.

A nonparty brief was filed by Richard M. Esenberg, Charles J. Szafir, Michael Fischer, Thomas C. Kamenick and Brian W. McGrath for Wisconsin Institute for Law & Liberty of Milwaukee.

Before BLANCHARD, P.J., LUNDSTEN and SHERMAN, JJ.

Opinion

SHERMAN, J.

¶ 1 Scott Walker and Michael Huebsch, Governor and Secretary of Administration, respectively, of the State of Wisconsin, appeal from a summary judgment order holding that provisions in 2011 Wis. Act 21 involving the process of drafting and promulgating administrative rules are unconstitutional and, therefore, void as applied to Wisconsin's State Superintendent of Public Instruction (SPI), and permanently enjoining Walker and Huebsch from implementing the provisions with respect to the SPI. For the reasons discussed below, we affirm the circuit court.

BACKGROUND

¶ 2 In 2011, the Wisconsin legislature enacted, and Walker signed into law, Act 21, which made several changes to administrative rulemaking.¹ Pertinent here, Act 21 adds a procedural requirement that all state agencies, as well as the SPI, submit proposed scope statements to the Governor for approval. See Wis. Stat. § 227.135 (2013–14).² Under Act 21, rulemaking cannot proceed further until the Governor approves the scope statement. See § 227.135(2). Additionally, Act 21 directs that if the Governor approves the scope statement and a rule is drafted, the Governor must also approve the draft version of the rule before the proposed rule may be submitted to the legislature for review.See Wis. Stat. §§ 227.185 and 227.19. If the proposed rule could lead to a level of costs for businesses, municipalities, or individuals specified in the law, the Secretary of Administration must also review and approve the proposed rule before it can proceed to the legislature.

¶ 3 Shortly after Act 21 was enacted, Peggy Z. Coyne, Mary Bell, Mark W. Taylor, Corey Otis, Marie K. Stangel, Jane Weidner, and Kristin A. Voss (the Coyne parties) filed an action for declaratory judgment, asking the circuit court to declare Act 21 unconstitutional as it applies to the SPI. Walker and Huebsch challenged the Coyne parties' standing in a motion to dismiss, which the circuit court denied. Thereafter, both parties moved the circuit court for summary judgment. The circuit court granted summary judgment in favor of the Coyne parties, concluding that parts of Act 21 are unconstitutional as applied to the SPI. Walker and Huebsch appeal.

DISCUSSION

¶ 4 On appeal, Walker and Huebsch renew their argument that the Coyne parties lack standing. Also, Walker and Huebsch make several arguments supporting their view that Act 21, as applied to the SPI, is constitutional. In the latter respect, they first argue that administrative rulemaking is not a supervisory power of the SPI within the meaning of article X, section 1 of the Wisconsin Constitution, but is instead a legislative power that may be delegated by the legislature with qualifications. See Wis. Const. art. X, § 1. Second, Walker and Huebsch argue that even if rulemaking relating to education is a supervisory power of the SPI, Act 21 is constitutional because it does not give such powers to any other officers. Third, Walker and Huebsch argue that, even if rulemaking is a supervisory power and even if Act 21 gives such power to other officers, Act 21 is still constitutional because the role of the SPI is still the superior role.³

A. Standing

¶ 5 Before we reach the constitutionality of Act 21, we first address the preliminary question of whether the Coyne parties have standing to bring the present action. In the circuit court, Walker and Huebsch challenged the standing of the Coyne parties in a motion to dismiss prior to filing a responsive pleading. See Wis. Stat. § 802.06(2). The circuit court denied the motion. Walker and Huebsch then answered the complaint and asserted affirmative defenses. The answer and affirmative defenses did not reassert the challenge to the standing of the Coyne parties. In their later motion for summary judgment, Walker and Huebsch did not raise the issue of standing, and the circuit court did not address standing in its decision and order on motions for summary judgment. Therefore, we address the issue of standing in the context of a challenge to the complaint. See Town of Eagle v. Christensen, 191 Wis.2d 301, 315, 529 N.W.2d 245 (Ct.App.1995).

¶ 6 Whether a party has standing to seek declaratory relief presents a question of law, which we review de novo. Chenequa Land Conservancy, Inc. v. Village of Hartland, 2004 WI App 144, ¶¶ 11–12, 275 Wis.2d 533, 685 N.W.2d 573. When a standing argument comes before us upon a motion to dismiss, we take all claims in the complaint as true. McConkey v. Van Hollen,

2010 WI 57, ¶ 14 n. 5, 326 Wis.2d 1, 783 N.W.2d 855. We construe the complaint in favor of the complaining party. Town of Eagle, 191 Wis.2d at 316, 529 N.W.2d 245. We do not construe standing narrowly or restrictively. Id. ¶ 7 “Unlike the federal courts, which can only hear ‘cases' and ‘controversies,’ standing in Wisconsin is not a matter of jurisdiction.”McConkey, 326 Wis.2d 1, ¶ 15, 783 N.W.2d 855. Rather, it is sound judicial policy, the purpose of which is to ensure that the issues and arguments presented will be carefully developed, zealously argued, and allow the court to understand the consequences of its decision. Id., ¶¶ 15–16. In Wisconsin's Envtl. Decade, Inc., v. PSC, 69 Wis.2d 1, 10, 230 N.W.2d 243 (1975), the supreme court set forth a two-step analysis for a challenge to standing: “(1) Does the challenged action cause the petitioner injury in fact? and (2) is the interest allegedly injured arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question?”

¶ 8 The Coyne parties stated their claim for standing in their complaint on three different grounds: as taxpayers,⁴ as public school teachers, and as parents. Walker and Huebsch challenged the Coyne parties' standing on each of the three grounds. Applying the two-part test and case law specific to taxpayer standing, we agree with the Coyne parties that they have standing as taxpayers, and therefore do not address whether they also have standing as teachers and parents.

¶ 9 The supreme court has held that a taxpayer has standing to challenge the constitutionality of a statute when “ ‘any illegal expenditure of public funds directly affects taxpayers and causes them to sustain a pecuniary loss. The fact that the ultimate pecuniary loss to the individual taxpayer may be almost infinitesimal is not controlling.’ ” City of Appleton v. Town of Menasha, 142 Wis.2d 870, 879–80, 419 N.W.2d 249 (1988) (quoted source omitted). This statement of law in City of Appleton is consistent with the two-part test for standing because the expenditure of public funds is treated as a pecuniary loss.

¶ 10 Walker argues that “Act 21 does not require the expenditure of public funds.” Whatever the merits of this factual assertion, it is part of an argument that Walker forfeited after moving to dismiss by failing to litigate whether the standing-related allegations in the complaint were true.

¶ 11 As we have explained, Walker moved to dismiss based on the pleadings, but did not subsequently seek to litigate whether the standing-related allegations in the complaint were true. Accordingly, under the law we have described, we must accept as true the allegation in the complaint that Act 21 will result in the expenditure of funds and construe the complaint in favor of the Coyne parties. What remains is the question of whether this alleged fact, if true, along with the allegation that Act 21 is unconstitutional, is sufficient to confer standing on the Coyne parties.

¶ 12 Walker and Huebsch sum up the law on taxpayer standing by stating: “These cases stand at most for the principle that taxpayer standing may exist if the portion of the statute claimed to be unconstitutional by its terms or implementation directly requires the expenditure of tax funds.” Walker and Huebsch then assert that this legal standard is not met because “the challenged portions of Act 21 do not implicate any taxpayer funding.” But Walker and Huebsch do not explain why the allegations in the complaint, if true, do not meet this standard.⁵ In the complaint the Coyne parties assert that Act 21 will result in the disbursement of tax revenues to “implement the unconstitutional procedures for the promulgation of administrative rules” and to “meet the increased costs of the Department of Public Instruction.” Walker and Huebsch may disagree with the accuracy of these allegations, but for purposes of a challenge to standing, their opportunity to litigate the accuracy of these claims has passed.

¶ 13 In sum, because the Coyne parties have alleged in their complaint that Act 21 will cause the illegal expenditure of public funds affecting them as taxpayers and causing them to sustain a pecuniary loss, we conclude that the Coyne parties have sufficiently...