Miller Brands-Milwaukee, Inc. v. Case

• Decision Date: 31 May 1990
• Docket Number: BRANDS-MILWAUKE,INC,No. 89-0984,89-0984
• Citation: 457 N.W.2d 896,156 Wis.2d 800
• Parties: MILLER, a Wisconsin corporation, Plaintiff-Respondent, d v. Karen A. CASE, Secretary of the Wisconsin Department of Revenue, and all Department Agents and Employees, Defendants-Appellants. . Orally
• Court: Wisconsin Court of Appeals

Page 896

457 N.W.2d 896

156 Wis.2d 800

MILLER BRANDS-MILWAUKEE, INC., a Wisconsin corporation Plaintiff-Respondent, ^d v. Karen A. CASE, Secretary of the Wisconsin Department of Revenue, and all Department Agents and Employees Defendants-Appellants.

No. 89-0984.

Court of Appeals of Wisconsin.

Orally Argued Dec. 14, 1989.

Opinion Released May 31, 1990.

Opinion Filed May 31, 1990.

Donald J. Hanaway, Atty. Gen., on brief, and Gerald S. Wilcox, Asst. Atty. Gen., argued, for defendants-appellants.

James M. Shellow, argued, and Robert R. Henak of Shellow, Shellow & Glynn, S.C. Milwaukee and Howard S. Goldman of Tomlinson, Gillman, Travers & Gregg, S.C. Madison, on brief, for plaintiff-respondent.

Before EICH, C.J., and DYKMAN and SUNDBY, JJ.

DYKMAN, Judge.

The Department of Revenue (DOR) appeals from a summary judgment declaring that trade spending, ¹ as defined by Miller Brands-Milwaukee, Inc., does not violate Wisconsin's tied-house law, sec. 125.33(1)(a), Stats. We address four issues: (1) whether the affidavit supporting Miller's motion contains sufficient evidentiary facts for summary judgment, (2) whether this is a proper case for declaratory judgment, (3) whether sec. 125.33(1)(a) prohibits trade spending, and (4) if so, whether the statute unconstitutionally prohibits trade spending.

We conclude that the factual allegations contained in the affidavit are sufficient and that declaratory relief is proper. We also conclude that trade spending violates sec. 125.33(1)(a), Stats., and that the statute survives Miller's constitutional challenges. Accordingly, we reverse.

BACKGROUND

Miller is a wholesaler of fermented malt beverages in Wisconsin subject to ch. 125, Stats. It sells its products to retailers holding Class "B" licenses under sec. 125.26. DOR is responsible for investigating possible violations of ch. 125. Sec. 125.145.

In February 1988, a DOR special agent met with Miller's attorneys and told them that the department had received a complaint that Miller had violated sec. 125.33(1)(a), Stats., by engaging in trade spending and that he had been authorized to investigate that complaint.

Miller then sought declaratory relief under sec. 806.04, Stats., requesting that the court determine whether trade spending violates sec. 125.33(1)(a), Stats., and, if so, whether the statute unconstitutionally prohibits trade spending. Miller moved for summary judgment. The court granted the motion, declaring that trade spending did not violate sec. 125.33(1)(a).

SUFFICIENCY OF THE AFFIDAVIT

DOR contends that the affidavit supporting Miller's motion for summary judgment is insufficient. The affidavit was made by Miller's attorney. Where, as here, a party is a corporation, counsel may make the affidavit on behalf of his corporate client. Kroske v. Anaconda American Brass Co., 70 Wis.2d 632, 641-42, 235 N.W.2d 283, 287 (1975).

DOR argues that Miller's affidavit cannot support the motion for summary judgment because it does not contain sufficient evidentiary facts. Affidavits in support of a motion for summary judgment must contain evidentiary facts. Hopper v. Madison, 79 Wis.2d 120, 130, 256 N.W.2d 139, 143 (1977). We disregard those portions of the affidavits that contain allegations of ultimate facts or conclusions of law. Id. We agree with DOR that the affidavit does contain allegations of ultimate fact and conclusions of law. We will disregard those portions of the affidavit. ²

The remaining portions of the affidavit contain allegations of material evidentiary facts. First, the affidavit alleges that, at a meeting between a DOR special agent and Miller's attorneys, the agent informed Miller that:

[T]he Department of Revenue had received a complaint that Miller Brands-Milwaukee, Inc. had engaged in trade spending and thereby had violated the provisions of Wis.Stat. sec. 125.33(1) and that [the agent] had been authorized by the Department to investigate these alleged violations....

Second, the affidavit states that " 'Trade spending' consists of the practice whereby sales people or other employees of a beer wholesaler purchase beverages for customers at Class 'B' licensed retail premises." Finally, the affidavit observes that "the price paid for the beverages is the price charged to the public by the retailer. Although customers are encouraged to sample products distributed by the wholesaler, the offer to purchase is not withdrawn if the customer chooses a different drink."

We understand from this affidavit that Miller has engaged in the practice of trade spending--i.e., its sales agents or employees have purchased beverages for customers of Class "B" retailers--and that the department sought to investigate the practice to determine whether it violated sec. 125.33(1)(a), Stats.

DOR submitted no affidavits in opposition to the motion for summary judgment. Because DOR submitted no counter-affidavits, we must accept the evidentiary facts in Miller's affidavit as uncontroverted. Jones v. Sears Roebuck & Co., 80 Wis.2d 321, 326, 259 N.W.2d 70, 72 (1977).

DECLARATORY JUDGMENT

We next consider whether the issues presented are ripe for declaratory relief. Declaratory relief cannot be granted absent a justiciable controversy. Loy v. Bunderson, 107 Wis.2d 400, 410, 320 N.W.2d 175, 182 (1982); sec. 806.04, Stats. To be justiciable, the issue involved in the controversy must be ripe for judicial determination, among other things. Loy, 107 Wis.2d at 410, 320 N.W.2d at 182. A matter is not ripe for declaratory relief unless the declaration "is conclusive upon the controversy submitted to the court." Id. at 411, 320 N.W.2d at 182. " 'It is not a judicial function' to declare rights based on 'issues that are fictitious, colorable, or hypothetical.' " Sipl v. Sentry Indemnity Co., 146 Wis.2d 459, 466-67, 431 N.W.2d 685, 688 (Ct.App.1988) (quoting E. Borchard, Declaratory Judgments 84-85 (2nd ed. 1941)).

DOR argues that the issues presented are not ripe for judicial determination because insufficient facts exist regarding the nature and scope of Miller's trade spending activities. Our response to this issue depends on how we interpret sec. 125.33(1)(a), Stats. Cf. Town of Walworth v. Fontana-on-Geneva Lake, 85 Wis.2d 432, 440, 270 N.W.2d 442, 446 (Ct.App.1978) (holding that plaintiff stated cause of action because, under one interpretation of the statute, the plaintiff would be entitled to declaratory relief).

We conclude below that sec. 125.33(1)(a), Stats., prohibits trade spending. A violation of the statute is not dependent on the amount of money a wholesaler spends or on the number of beverages it buys. The uncontroverted facts show that Miller's sales agents or employees have purchased beverages for customers of Class "B" retailers. In light of our interpretation of sec. 125.33(1)(a), we conclude that the affidavit provides enough facts regarding Miller's trade spending practice that we can apply the statute.

DOR also argues that declaratory judgment is not proper because no prosecution is pending against Miller. See secs. 125.33 and 125.11, Stats. (Wholesalers may be prosecuted for violations of sec. 125.33(1)(a), Stats.). DOR says that it has only sought to investigate Miller's potential violation of ch. 125 and that it might not take further action. ³ Though no prosecution is pending, Miller is a potential defendant and needs not wait to be prosecuted before seeking declaratory relief. "Potential defendants may seek a construction of a statute or a test of its constitutional validity." State ex rel. Lynch v. Conta, 71 Wis.2d 662, 674, 239 N.W.2d 313, 325 (1976).

APPLICATION OF SEC. 125.33(1)(a), STATS.

This case involves the application of sec. 125.33(1)(a), Stats., ⁴ to the uncontroverted facts contained in the affidavit supporting Miller's motion for summary judgment. The application of a statute to a set of facts presents a question of law, which we review de novo. Burlington Northern R. v. Superior, 153 Wis.2d 206, 208, 450 N.W.2d 486, 487 (Ct.App.1989).

The purpose of statutory interpretation is to give effect to the intent of the legislature. To determine legislative intent, we look first to the language of the statute itself. State v. Pham, 137 Wis.2d 31, 34, 403 N.W.2d 35, 36 (1987). If the statutory language is clear andunambiguous, we interpret that language according to its ordinary meaning. State v. Trongeau, 135 Wis.2d 188, 191, 400 N.W.2d 12, 13 (Ct.App.1986). If the language is unclear or ambiguous, we look to the legislative history, context, subject matter, or object of the statute to ascertain legislative intent. Pham, 137 Wis.2d at 34, 403 N.W.2d at 36.

Section 125.33(1)(a), Stats., provides in part:

[N]o brewer or wholesaler may furnish, give, lend, lease or sell any ... thing of value to any ... Class "B" licensee or permittee, or to any person for the use, benefit or relief of any ... Class "B" licensee or permittee.... Such actions may not be taken by the brewer or wholesaler directly or indirectly....

The object of Wisconsin's tied-house law is:

[T]o prevent manufacturers and wholesalers from acquiring complete or partial control of specific Class "B" retailers, directly by owning them or indirectly by creating financial or moral obligations. The purpose is clearly to assure the freest competition in the industry by preventing monopolistic practices and, to divorce entirely the wholesaler from the Class "B" retailer.

61 Op. Att'y Gen. 68, 69 (1972).

At issue is the meaning of "thing of value." We conclude the term is unambiguous. Reasonable people could not disagree as to the meaning of "thing of value." See Sturgis v. Neenah Board of Canvassers, 153 Wis.2d 193, 198, 450 N.W.2d 481, 483 (Ct.App.1989) (statute is ambiguous if reasonably well-informed person would understand it in more than one way). When a wholesaler's sales agents or employees buy beverages for a retailer's customers, the wholesaler is giving the retailer a thing of value within the meaning of ...