Kahn v. McCormack
| Decision Date | 14 October 1980 |
| Docket Number | No. 80-051,80-051 |
| Parties | , 19 A.L.R.4th 346 Gerald A. KAHN, Robert I. Hodgson, and Meiroff-Kahn Bonding & Insurance, Inc., a Wisconsin Corporation, Plaintiffs-Appellants, v. Francis X. McCORMACK, Clerk of the Circuit Court for Milwaukee County, Harold A. Breier, Chief of Police for the City of Milwaukee, and Michael S. Wolke, Sheriff of Milwaukee County, Defendants-Respondents. |
| Court | Wisconsin Court of Appeals |
Nathaniel D. Rothstein, Milwaukee, for appellant.
Bronson C. La Follette, Atty. Gen., Howard B. Klein, Asst. Atty. Gen., on brief; Marquerite M. Moeller, Asst. Atty. Gen., argued, for respondent.
Before DECKER, C. J., MOSER, P. J., and CANNON, J.
Plaintiffs challenge the validity of sec. 969.12(1) and (2), Stats., sec. 1121m, ch. 34, Laws of 1979, which eliminates corporate sureties and sureties for profit for criminal bail bonds. The trial court held that the legislative act was a proper exercise of the state's police power, violative of neither the fourteenth amendment of the United States Constitution, nor article 1, section 1 of the Wisconsin Constitution, and vacated a temporary restraining order staying enforcement of the statute. We agree and affirm.
Prior to vacation of the temporary restraining order, plaintiff Meiroff-Kahn was a corporation lawfully engaged in the criminal bail bond business. Meiroff-Kahn arranged with surety companies for the posting of a bond in an amount required for the release of a criminal defendant. Defendants were charged a nonrefundable ten percent of this amount, and plaintiff guaranteed the surety companies full indemnification if a bond was forfeited because of a defendant's noncompliance with bail conditions. To minimize such indemnification payments, Meiroff-Kahn dealt only with defendants likely to comply with bail bond conditions, informed them of court dates and other bail conditions, and occasionally requested release from bonds where defendants exhibited potential noncompliance. The individual plaintiffs wrote bonds on behalf of Meiroff-Kahn and the surety companies.
Before amendment by ch. 34, Laws of 1979, sec. 969.12(1) and (2), Stats., provided:
969.12 Sureties. (1) Every surety, except a corporate surety, shall be a resident of the state.
(2) A corporate surety shall be licensed to do business in the state and the commissioner of insurance shall file with the clerk in each county a list of corporate sureties so licensed.
As amended, sec. 969.12(1) and (2), Stats., now reads:
969.12(1) Every surety under this chapter, except a surety under s. 345.61, shall be a resident of the state.
(2) A surety under this chapter shall be a natural person, except a surety under s. 345.61. No surety under this chapter may be compensated for acting as such a surety.
All counsel agree that the amendments effectively put plaintiffs out of the criminal bail bond business.
The state's police power has been defined as "the inherent power of government to promote the general welfare." State v. Interstate Blood Bank, Inc., 65 Wis.2d 482, 490, 222 N.W.2d 912, 916 (1974). This power is broad, and includes the right to regulate the use of property and the conduct of business. Chicago & North Western Railway v. La Follette, 43 Wis.2d 631, 644, 169 N.W.2d 441, 447 (1969) (quoting Nebbia v. New York, 291 U.S. 502, 524, 54 S.Ct. 505, 510, 78 L.Ed. 940 (1934)). It is a well-settled rule that "(i)n the exercise of its police power, the state may forbid, as inimical to the public welfare, the prosecution of a particular type of business, or regulate a business in such manner as to abate evils deemed to arise from its pursuit." Great Atlantic & Pacific Tea Co. v. Grosjean, 301 U.S. 412, 425-26, 57 S.Ct. 772, 777, 81 L.Ed. 193 (1937). See also John F. Jelke Co. v. Emery, 193 Wis. 311, 318, 214 N.W. 369, 371-72 (1927); 16A Am.Jur.2d Constitutional Law § 432 (1979). Our supreme court has held that:
(O)nce within the area of proper exercise of police power, it is for the legislature to determine what regulations, restraints or prohibitions are reasonably required to protect the public safety and only the abrogation of a basic and substantial individual liberty would justify judicial intervention to set aside the legislative enactments. Bisenius v. Karns, 42 Wis.2d 42, 54, 165 N.W.2d 377, 383 (1969).
Plaintiffs contend that judicial intervention is needed because the statute as amended deprives them of property without due process of law and of equal protection of the laws contrary to the fourteenth amendment of the United States Constitution and article 1, section 1 of the Wisconsin Constitution. 1 When the exercise of the police power is challenged on due process grounds, "(t)he test is whether the means chosen have a reasonable and rational relationship to the purpose or object of the enactment; if it has, and the object is a real and proper one, the exercise of the police power is valid." State v. Jackman, 60 Wis.2d 700, 705, 211 N.W.2d 480, 484 (1973). See also Chicago & North Western Railway v. La Follette, supra, at 645, 169 N.W.2d at 447 (quoting Nebbia v. New York, supra).
A similar test is applied to an equal protection challenge:
A classification in police power means will be sustained if there is a reasonable and practical ground for the classification, even though some other classification might appear to be more in accord with general welfare. If the classification is reasonable and practical in relation to the objective, that is sufficient and doubts must be resolved in favor of the reasonableness of the classification. State v. Jackman, supra, at 705-06, 211 N.W.2d at 484. See also Stanhope v. Brown County, 90 Wis.2d 823, 837, 280 N.W.2d 711, 716 (1979); Wisconsin Bingo Supply & Equipment Co. v. Bingo Control Board, 88 Wis.2d 293, 307, 276 N.W.2d 716, 722 (1979).
Statutes are presumed to be constitutional, and those challenging a statute must prove unconstitutionality beyond a reasonable doubt. Laufenberg v. Cosmetology Examining Board, 87 Wis.2d 175, 181, 274 N.W.2d 618, 621 (1979). Under the above tests, this presumption is not overcome unless the challenger proves that no reasonable basis exists for the exercise of the police power. Id.; Chicago & North Western Railway v. La Follette, supra, at 646, 169 N.W.2d at 448. Stated conversely, a challenged statute must be sustained if there is any reasonable basis for its enactment. Clark Oil & Refining Corp. v. Tomah, 30 Wis.2d 547, 554, 141 N.W.2d 299, 302 (1966).
The due process question raised here is whether the legislature could, in the exercise of its police power, reasonably conclude that outlawing the bail bonding business is in furtherance of the public welfare. None of the parties to this appeal question the public interest inherent in bail considerations, the purpose of bail being "to assure the appearance of a defendant when it is his or her duty to appear to answer a criminal prosecution." Sec. 969.01(4), Stats. Consonant with this public interest, the legislature has prescribed those factors which a court must consider when exercising its discretion in determining the amount and conditions of bail. After all relevant data, including the ability of an accused to give bail, has been considered by a court, and the amount of bail has been judicially determined, the commercial bail bondsman subverts the entire process by facilitating the release of an accused, determined to be an economic "good risk," for a nonrefundable one-tenth of the judicially determined amount. This denigration of the court's discretion in determining bail has been recognized by the United States Supreme Court: "(P)rofessional bondsmen, and not the courts, exercise ... significant control over the actual workings of the bail system," Schilb v. Kuebel, 404 U.S. 357, 360, 92 S.Ct. 479, 482, 30 L.Ed.2d 502 (1971) 2, and is colorfully described in Pannell v. United States, 320 F.2d 698, 699 (D.C.Cir.1963) (Wright, J., concurring):
The effect of such a system is that the professional bondsmen hold the keys to the jail in their pockets. They determine for whom they will act as surety-who in their judgment is a good risk. The bad risks, in the bondsmen's judgment, and the ones who are unable to pay the bondsmen's fees, remain in jail. The court and the commissioner are relegated to the relatively unimportant chore of fixing the amount of bail.
See also Stephens v. Bonding Association, 538 S.W.2d 580 (Ky.1976), where the Kentucky Supreme Court sustained a statute expressly outlawing the commercial bail bondsman: Id. at 582. 3
Legislation protecting the integrity of judicial bail determinations, which are designed to assure the appearance of defendants, is clearly in the public interest, and the elimination of professional bondsmen in Wisconsin is a means rationally related to this end. See State v. Jackman, supra. Just as the legislature can set guidelines for courts to follow in determining bail, it is within the province of the legislature's police power to regulate who shall determine bail.
While we note that counsel have stipulated that the plaintiffs at all times conducted their business lawfully, criticism has been currently leveled against the commercial bail bonding system. See, e. g., ABA Project on Minimum Standards for Criminal Justice, Standards Relating to Pretrial Release § 5.4, Commentary at 62 (1968):
The bail bond business is subject to a variety of allegations of corruption. The charges range from alleged tie-ins with police and court officials, involving kickbacks for steering defendants to particular bondsmen, to collusion and corruption...
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