Eichenseer v. Madison County Tavern League

• Decision Date: 06 May 2008
• Docket Number: No. 2005AP1063.,2005AP1063.
• Parties: Nic J. EICHENSEER, Plaintiff, Brian Dougherty and Eric B. Stener on behalf of themselves and all other similarly situated persons, Plaintiffs-Appellants-Petitioners, v. MADISON-DANE COUNTY TAVERN LEAGUE, INC., Amy's Cafe, Inc., The Angelic Brewing Company, LLC, Brothers of Wisconsin, Inc. d/b/a Brothers, Oscar, Inc. d/b/a Buffalo Wild Wings Grill & Bar, Bull Feathers, Inc., Zapel, Inc. d/b/a City Bar, Wisconsin Ventures, Inc. d/b/a Club Amazon and The Church Key, Kollege Klub, Inc., Schooners Bar & Grill d/b/a Lava Lounge, The Church Key d/b/a Mad Dog's Pub & Pizzeria, B.A.T., Inc. d/b/a Madhatters, Orbut of State Street, Inc. d/b/a Mondays, Nitty Gritty, LLC, Paul's Club, Inc., Plaza Tavern and Grill, Inc., The Pub, Inc., The Red Shed, Inc., Spices Restaurante, Inc., State Bar & Grill, LLC, State Street Brats, Stillwaters, Inc., Vintage LLC d/b/a Vintage Spirits & Grill, Wando Ventures, Inc., The Bull Ring of Madison, Inc. d/b/a the Irish Pub and Does 1-50, Defendants-Respondents, Secura Supreme Insurance, Intervenor.
• Court: Wisconsin Supreme Court

748 N.W.2d 154

2008 WI 38

Nic J. EICHENSEER, Plaintiff Brian Dougherty and Eric B. Stener on behalf of themselves and all other similarly situated persons, Plaintiffs-Appellants-Petitioners, v. MADISON-DANE COUNTY TAVERN LEAGUE, INC., Amy's Cafe, Inc., The Angelic Brewing Company, LLC, Brothers of Wisconsin, Inc. d/b/a Brothers, Oscar, Inc. d/b/a Buffalo Wild Wings Grill & Bar, Bull Feathers, Inc., Zapel, Inc. d/b/a City Bar, Wisconsin Ventures, Inc. d/b/a Club Amazon and The Church Key, Kollege Klub, Inc., Schooners Bar & Grill d/b/a Lava Lounge, The Church Key d/b/a Mad Dog's Pub & Pizzeria, B.A.T., Inc. d/b/a Madhatters, Orbut of State Street, Inc. d/b/a Mondays, Nitty Gritty, LLC, Paul's Club, Inc., Plaza Tavern and Grill, Inc., The Pub, Inc., The Red Shed, Inc., Spices Restaurante, Inc., State Bar & Grill, LLC, State Street Brats, Stillwaters, Inc., Vintage LLC d/b/a Vintage Spirits & Grill, Wando Ventures, Inc., The Bull Ring of Madison, Inc. d/b/a the Irish Pub and Does 1-50, Defendants-Respondents Secura Supreme Insurance, Intervenor.

No. 2005AP1063.

Supreme Court of Wisconsin.

Argued October 3, 2007.

Decided May 6, 2008.

For plaintiffs-appellants-petitioners there were briefs by Kay Nord Hunt, Reid R. Lindquist, Brent R. Johnson, Steven E. Uhr (of counsel), and Lommen, Abdo, Cole, King & Stageberg, P.A., Minneapolis, Minn., and oral argument by Kay Nord Hunt.

For defendants-respondents there was a brief by Kevin J. O'Connor, Kendall W. Harrison, Patricia L. Wheeler, and Godfrey & Kahn, S.C., Madison, and oral argument by Kevin J. O'Connor.

An amicus curiae brief on behalf of the University of Wisconsin—Madison, and oral argument by Eric J. Wilson, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general.

An amicus curiae brief was filed by Peter C. Carstensen, on behalf of the American Antitrust Institute.

An amicus curiae brief was filed by Catherine M. Rottier and Boardman, Suhr, Curry & Field LLP; Attorney Michael P. May; and Claire Silverman, on behalf of the City of Madison and the League of Municipalities.

¶ 1 DAVID T. PROSSER, J

This is an antitrust case. The plaintiffs¹ accuse 24 taverns in the immediate vicinity of the University of Wisconsin campus in Madison and the Madison-Dane County Tavern League, Inc. (collectively, the defendants) of horizontal price-fixing violations under Wis. Stat. § 133.03(1)² because, in response to pressure from city government to ban all drink specials after 8 p.m. in the city, the 24 taverns agreed to eliminate drink specials at their establishments on Friday and Saturday nights after 8 p.m. We review here a published decision of the court of appeals, Eichenseer v. Madison-Dane County Tavern League, Inc., 2006 WI App 226, 297 Wis.2d 495, 725 N.W.2d 274, affirming the circuit court's grant of summary judgment to the defendants.

¶ 2 In the procedural posture of this case, we do not address whether the defendants' conduct constituted violations of antitrust law. We assume antitrust violations for purposes of determining whether the defendants have immunity for their actions. The defendants contend that their conduct is immune from Wisconsin antitrust law under: (1) the so-called "implied repeal doctrine" articulated in Town of Hallie v. City of Chippewa Falls, 105 Wis.2d 533, 314 N.W.2d 321 (1982) (Hallie I); (2) the Noerr-Pennington government petitioning doctrine articulated by the United States Supreme Court;³ and (3) the Local Government Antitrust Act (LGAA), 15 U.S.C. §§ 34-36.

¶ 3 We conclude that the defendants' challenged actions are immune from state antitrust law under the implied repeal doctrine of Hallie I. Because of this conclusion, we determine that it is not necessary to decide the validity of the defendants' second and third defenses. Accordingly, we affirm the decision of the court of appeals.

I. FACTS AND PROCEDURAL POSTURE

¶ 4 This case was filed in Dane County Circuit Court on March 24, 2004. It was assigned to Circuit Court Judge Angela B. Bartell. The parties engaged in some discovery and filed documents with the court. The defendants moved for summary judgment in December 2004, and the plaintiffs moved for summary judgment in February 2005. The effect of counter-motions for summary judgment, together with the various filings in this case, is an assertion by the parties that the facts are undisputed, that in effect the facts are stipulated, and that only issues of law are before the court.⁴

¶ 5 In this opinion, we closely follow the circuit court's written account of the undisputed background facts, with supplementation from the summary judgment record.

¶ 6 In 1999 the City of Madison (City) began to address issues of high-risk drinking. The City was concerned that alcohol issues, especially over-consumption, were increasing in the area of the University of Wisconsin-Madison (University) campus, leading to more frequent conveyances of students and others to detoxification facilities in life-threatening circumstances and increased need for expensive police response services to the campus area. The City focused on how over-consumption of alcohol reduced the health, welfare, and quality of life of people in the campus area. Mayor Sue Baumann appointed a Work Group on Downtown Alcohol Issues to address these concerns. The group included representatives from the Madison-Dane County Tavern League, Inc. (Tavern League), the University, the mayor's office, the city attorney's office, and the Madison Police Department. In April 2000 the work group issued a report making suggestions related to the perceived "over-saturation" of downtown taverns, capacity violations at the taverns, and the need for greater enforcement of existing ordinances.

¶ 7 The City's concerns were shared, and to some extent inspired, by the University. On March 1, 2000, then Provost of the University John Wiley wrote a letter to local tavern keepers in which he said that "high-risk drinking is clearly the primary health risk of our students and a major threat to their academic success." Several years earlier, the University had received a grant from the Robert Wood Johnson Foundation to fund multi-year research, political action, and monitoring to try to reduce "binge" drinking in the campus area.⁵ Thus, by early 2000, the University had begun to involve itself actively in the City's decisions on retail liquor licenses near the campus.

¶ 8 The University took the position that drink specials—that is, advertised promotions offering either: (1) special high-potency drinks containing multiple shots of liquor; or (2) multiple drinks for the price of one regular drink—were encouraging high-risk, high-volume drinking by University students.

¶ 9 The University applied pressure to the City; and the City, in turn, began to flex its regulatory muscle. It imposed special conditions on the license of a tavern called Luther's Blues, and thereafter imposed the "Luther's Blues conditions"⁶ on virtually all liquor licenses issued to new or relocating liquor establishments near the campus. These conditions did not limit or set alcohol prices but were designed to discourage price reduction "specials" that the City believed encouraged high-volume and dangerous drinking.

¶ 10 The "Luther's Blues conditions" were sometimes characterized as "voluntary." They were, however, required for new licensees⁷ and existing licensees who relocated or attempted to make significant changes to their businesses.⁸ The circuit court pinpointed two taverns in the second category, namely, Regent Street Retreat and Buck's. None of the taverns with the "Luther's Blues conditions" imposed by the City is a defendant in this suit. By contrast, the Nitty Gritty was threatened with "conditions" at the time of a planned expansion, but avoided them after intense negotiations. The Nitty Gritty is now a defendant in this suit.

¶ 11 The City committee charged with making recommendations on liquor licenses is the Alcohol License Review Committee (ALRC), which was then chaired by Madison Alder Tim Bruer. The circuit court said of the ALRC:

ALRC's recommendations regarding whether licenses should or should not be granted and the various conditions that should be attached to those licenses were so powerful that they were almost inevitably followed by the City Council. ALRC and its chairman[,] [Alder] Bruer[,] functioned as the powerful face and voice of the City's formal and informal regulation of alcohol sold in the City of Madison.

¶ 12 In the summer of 2001 the ALRC created a "Sub-Committee on Comprehensive Alcohol Issues" (subcommittee) to continue its efforts to address problems associated with high-risk drinking. The subcommittee held public hearings at which University representatives, tavern owners, and the public stated their views on drink specials and other drinking issues.

¶ 13 The subcommittee's final report recommended that the ALRC seek an ordinance regulating drink specials. That report, issued on April 25, 2002, contained draft ordinance language banning all drink specials at all Madison taverns seven days per week after 8 p.m.⁹ Madison taverns and the downtown business community opposed this report and the concept of a drink specials ban because the bar owners believed that the ban was overbroad and that drink specials contributed little to high-risk drinking behavior around campus. Notwithstanding this opposition, the ALRC received the subcommittee report by a unanimous vote on May 21, 2002. The report was then referred to the Common Council, which also accepted it. Once the report was received by the Council, its recommendations went back to the ALRC for the development of an ordinance for a citywide drink specials ban.

¶ 14 On July 10, 2002, the ALRC held a meeting at the University Memorial Union at which John Wiley, who had become University Chancellor, expressed his strong support for a comprehensive drink specials ban. Richard Lyshek, a campus...