Eichenseer v. Madison-Dane Tavern League
| Decision Date | 26 October 2006 |
| Docket Number | No. 2005AP1063.,2005AP1063. |
| Citation | 2006 WI App 226,725 N.W.2d 274 |
| Court | Wisconsin Court of Appeals |
| Parties | Nic J. EICHENSEER, Plaintiff, Brian Dougherty and Eric B. Stener on Behalf of Themselves and all Other Similarly Situated Persons, Plaintiffs-Appellants,<SMALL><SUP>†</SUP></SMALL> v. MADISON-DANE COUNTY TAVERN LEAGUE, INC., Amy's Cafe, Inc., The Angelic Brewing Company, L.L.C., 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, L.L.C., Paul's Club, Inc., Plaza Tavern and Grill, Inc., The Pub, Inc., The Red Shed, Inc., Spices Restaurante, Inc., State Bar & Grill, L.L.C., State Street Brats, Stillwaters, Inc., Vintage L.L.C. 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. |
On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Kay Nord Hunt, Reid R. Lindquist, Brent R. Johnson and Steven E. Uhr of Lommen, Nelson, Cole & Stageberg, P.A., Minneapolis, MN.
On behalf of the defendants-respondents, the cause was submitted on the brief of Kevin J. O'Connor and Kendall W. Harrison of LaFollette Godfrey & Kahn, Madison; David L. Mandell of Mandell & Ginsburg Law, Madison; Alan G.B. Kim, Jr., of Davis & Kuelthau, Madison; and George B. Strother of Krekeler Strother, S.C., Madison.
A nonparty brief was filed by Eric J. Wilson, assistant attorney general, Peggy A. Lautenschlager, attorney general, and Nancy K. Lynch of the University Legal Counsel, University of Wisconsin-Madison.
Before LUNDSTEN, P.J., and DEININGER and HIGGINBOTHAM, JJ.
Two University of Wisconsin-Madison students and a third plaintiff commenced this class action suit for injunctive relief and damages against twenty-four campus-area taverns and the Madison-Dane County Tavern League, Inc. They alleged that the defendants had engaged in an illegal conspiracy in restraint of trade by voluntarily agreeing to limit "drink specials" on Friday and Saturday nights after 8:00 p.m. The circuit court granted summary judgment to the defendants and dismissed the action. The plaintiffs appeal, claiming the circuit court erred in concluding that the tavern owners are not liable for antitrust violations because they agreed to limit drink specials in response to City of Madison regulatory initiatives. We reject the claim of error and affirm the appealed order.
¶ 2 The complaint recites that plaintiffs Brian Dougherty and Nic Eichenseer are University of Wisconsin-Madison (UW) students and that plaintiff Eric Stener resides in Janesville.1 They commenced this action on behalf of themselves and as representatives of a class consisting of persons "who have purchased alcoholic beverages from one or more of the defendant drinking establishments since September 12, 2002 on a Friday night after 8:00 p.m. and/or a Saturday night after 8:00 p.m." The defendants ("the Taverns") moved for summary judgment, seeking dismissal of the action on several grounds. Dougherty opposed the motion and cross-moved for summary judgment.
¶ 3 Dougherty does not contend that disputed issues of material fact preclude summary judgment. Because both parties moved for summary judgment and neither argues that factual disputes bar the other's motion, the "`practical effect is that the facts are stipulated and only issues of law are before us.'" See Lucas v. Godfrey, 161 Wis.2d 51, 57, 467 N.W.2d 180 (Ct.App. 1991) (citation omitted). In its written summary judgment decision, the circuit court described the factual background that follows as the "undisputed evidentiary facts in the record." All footnotes are the circuit court's:
In 1999, the City of Madison began to address issues of high-risk drinking. The city's concerns were that alcohol and over-consumption issues seemed to be increasing in the campus area, leading to more frequent life-threatening conveyances to detoxification facilities and the great consumption of expensive police response services to the campus area....
About the same time, the UW began to involve itself actively in the City's decisions on issuing retail liquor licenses in the campus area. The University's view was that drink specials2 encouraged high-risk, high-volume drinking. The University had received a grant from the Robert Wood Foundation to fund multi-year research, political action and monitoring efforts to try to reduce binge drinking in the campus area. Under pressure from the University, the City began to flex its regulatory muscle by imposing the so-called "Luther's Blues conditions" requested by UW officials on virtually all liquor licenses issued to new or relocating liquor establishments in the campus area. These conditions did not either limit or set prices, but rather appear to be designed to discourage price reduction "specials" that city official believed encouraged high-volume and dangerous drinking.3 The city committee charged with making recommendations on liquor licenses was the Alcohol License Review Committee (ALRC), chaired for many years by Alderman Tim Bruer. 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 Ald. Bruer functioned as the powerful face and voice of the City's formal and informal regulation of alcohol sold in the City of Madison.4
While the "Luther's Blues" conditions were termed "voluntary," they were in fact required at the time by the ALRC and the City for new and relocated liquor licenses to be granted. This new policy of the City also extended to existing licensees, who faced substantial pressure from ALRC to limit drink specials.5
In the summer of 2001, the ALRC created a "Sub-Committee on Comprehensive Alcohol Issues" to continue its efforts to address problems associated with high-risk drinking, including life-threatening detox conveyances and other frequent, high risk and expensive calls for police services. The subcommittee held public hearings at which the UW, tavern owners and the public stated their views on drink specials and other drinking issues. The subcommittee's final report recommended that ALRC recommend inter alia an ordinance regulating drink specials. That report issued on April 25, 2002 contains draft ordinance language banning all drink specials at all Madison taverns seven days a week after 8:00 P.M. The subcommittee report was accepted by the ALRC, which referred the report to the City Council, which also accepted the report. Once received by the council, the recommendations went back to the ALRC for the development of possible ordinance language incorporating the recommendations for a citywide drink special ban.
Madison taverns and the downtown business community opposed this report and the concept of a drink special ban, because the bar owners felt the ban was overbroad and that drink specials contributed little to high-risk drinking behavior on campus. Notwithstanding the opposition to the report, it was adopted by the ALRC at a meeting on May 21, 2002.
On July 10, 2002, the ALRC held a meeting at the UW Memorial Union, at which UW Chancellor John Wiley expressed his strong support for a comprehensive drink special ban. Richard Lyshek, campus tavern owner and Barbara Mercer, the President of the Dane County Tavern League, continued to express opposition. At the end of the meeting, ALRC Chair Bruer told Richard Lyshek and Barbara Mercer that he believed there were sufficient votes on the City Council to pass an ordinance banning drink specials. Bruer specifically directed Lyshek and the Tavern League to come up with a solution to the City's drink special concerns and explained that if they didn't the City would take care of the issue itself. Lyshek and Mercer spoke with one another about the need to respond to the City's regulatory demands on drink specials. Lyshek offered to coordinate outreach to the bar owners in the campus area on the subject of a tavern owners' response to the direct pressure being brought to bear on the industry to self-regulate drink specials.
Around the same time, Alderman Mike Verveer, who represented most of the campus area and ALRC Chair Bruer had numerous meetings and discussions with Lyshek (also a member of ALRC) and others concerning the City's developing policy against drink specials. Despite opposition of tavern owners to any type of ban on drink specials, Bruer told Lyshek and Barbara Mercer that the bars needed [to] come up with their own solutions to the excessive drinking problems caused by drink specials or the City would do it for them. ALRC member Lyshek believed that any bar that did not take steps to address the City's concerns on drink specials would be subject to increased police scrutiny and would have difficulties with the ALRC at the time of liquor license renewal.
As a result of Lyshek's outreach efforts among campus bar owners, Lyshek identified a number of bar owners willing to announce that they would "voluntarily" discontinue drink specials on Friday and Saturday nights after 8 P.M. in order to see whether that would prevent the City from enacting a seven-day-a-week drink special ban. Lyshek presented the idea to Ald. Verveer, who agreed that it might be acceptable to the City. Lyshek also spoke directly about this approach with ALRC Chair Bruer, who reportedly liked the idea as well.
A press conference was organized for September 12, 2002, at which various downtown bar owners would...
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