Nowell v. City of Wausau

• Decision Date: 06 November 2013
• Docket Number: No. 2011AP1045.,2011AP1045.
• Citation: 2013 WI 88,351 Wis.2d 1,838 N.W.2d 852
• Parties: Thomas D. NOWELL and Suporn Nowell, d/b/a IC Willy's, LLC, Plaintiffs–Appellants, v. CITY OF WAUSAU, Defendant–Respondent–Petitioner.
• Court: Wisconsin Supreme Court

351 Wis.2d 1
838 N.W.2d 852
2013 WI 88

Thomas D. NOWELL and Suporn Nowell, d/b/a IC Willy's, LLC, Plaintiffs–Appellants,
v.
CITY OF WAUSAU, Defendant–Respondent–Petitioner.

No. 2011AP1045.

Supreme Court of Wisconsin.

Argued Sept. 18, 2013.
Decided Nov. 6, 2013.

[838 N.W.2d 853]

For the defendant-respondent-petitioner, there were briefs by Shane J. VanderWaal and Pietz, VanderWaal, Stacker & Rottier, S.C., Wausau, and Anne Jacobson, Wausau city attorney, and oral argument by Shane J. VanderWaal and Anne Jacobson.

For the plaintiffs-appellants, there was a brief by Ryan D. Lister, Wausau, and oral argument by Ryan D. Lister.

An amicus curiae brief was filed by Grant F. Langley, Milwaukee city attorney; Adam B. Stephens, Milwaukee assistant city attorney; Michael May, Madison city attorney; Roger Allen, Madison assistant city attorney; Robert Weber, Racine city attorney; and Nicole Loop, Racine assistant city attorney, on behalf of the cities of Milwaukee, Madison and Racine.

An amicus curiae brief was filed by Daniel M. Olson, Madison, on behalf of the League of Wisconsin Municipalities.

ANN WALSH BRADLEY, J.

¶ 1 The Petitioner, City of Wausau, seeks review of a published court of appeals

[838 N.W.2d 854]

decision that reversed a judgment entered by the circuit court affirming the City's decision not to renew Thomas and Suporn Nowell's Class B alcohol license.¹ The court of appeals determined that the circuit court had employed an incorrect standard of review.

¶ 2 The City of Wausau argues that the error lies with the court of appeals and not the circuit court. It contends that the de novo standard of review employed by the court of appeals is not prescribed by Wis. Stat. § 125.12(2)(d) (2009–10) ² and is inconsistent with the statute's legislative history, our prior case law, and sound public policy. Instead, it asserts that review of its licensing decisions under Wis. Stat. § 125.12(2)(d) is by certiorari.

¶ 3 Although the statute does not expressly address which standard of review is to be applied, we are persuaded that an examination of the legislative history, our prior case law, and the public policy underlying the deference due to a municipality's alcohol licensing decision militate in favor of certiorari review. Therefore, we conclude that certiorari is the correct standard of review for a court to apply when, pursuant to Wis. Stat. § 125.12(2)(d), it reviews a municipal decision not to renew an alcohol license. Accordingly, we reverse the court of appeals.

I

¶ 4 The City of Wausau issued a Class B combined intoxicating liquor and fermented malt beverage license to IC Willy's on October 1, 2009. IC Willy's is a tavern owned by Thomas and Suporn Nowell. Shortly after the license was issued, police began receiving noise complaints.

¶ 5 In November 2009, after being warned that adult entertainment was not permitted on the premises, IC Willy's hosted a “Girls Gone Wild” event. At the event, officers observed nudity and lewd behavior. The Nowells agreed to a voluntary 15–day suspension of their alcohol license, in lieu of revocation and any other citation or fines for the nudity. The City permitted the Nowells to take the suspension in January so that it would not conflict with their New Year's Eve commitments. Thereafter, the Nowells submitted a 16–point plan to address the problems IC Willy's had encountered.

¶ 6 On May 25, 2010, the City sent the Nowells notice of its intent not to renew their license. The notification indicated that this decision was based on numerous police service calls to the premises, failed compliance checks, and the Nowells' failure to implement the action steps put in place after their earlier suspension. After receiving the notice the Nowells requested a hearing on the non-renewal.

¶ 7 The City's Public Health and Safety Committee commenced that hearing on June 29, 2010, at 1:00 p.m. The hearing lasted for approximately 14 hours, during which the Committee heard testimony from 18 witnesses and examined 42 exhibits.

¶ 8 The Committee issued its findings of facts, conclusions of law, and recommendation on June 30, 2010. It found that after the police received four separate complaints, a citation for disturbing the peace was issued to IC Willy's on October 25, 2009. IC Willy's received another citation on November 8, 2009, for the same problem after the police had responded to seven

[838 N.W.2d 855]

additional complaints for loud music. On November 14, 2009, IC Willy's failed to take action to prevent nudity at its establishment after the police warned that nudity was not permitted.

¶ 9 The Committee further found that in February 2010 IC Willy's failed compliance checks involving underaged persons on the premises and that IC Willy's received another citation for disturbing the peace on May 8, 2010. Based on these findings, the Committee recommended that the City Council not renew the Nowells' license. After hearing additional arguments, the City Council voted to accept the Committee's recommendation.

¶ 10 On July 12, 2010, the Nowells filed a complaint with the Marathon County Circuit Court requesting judicial review of the City Council's decision pursuant to Wis. Stat. § 125.12(2)(d). The complaint alleged that the City of Wausau denied the Nowells due process of law, unfairly discriminated against them, and precluded them from presenting evidence of disparate treatment. The Nowells sought an order renewing their license and damages for lost income.

¶ 11 The Nowells asserted that the standard of review was de novo and that the circuit court should independently determine whether they were entitled to have their license renewed. After reviewing the parties' briefs on the issue, the circuit court issued an oral ruling. Citing Marquette Savings & Loan Assn. v. Village of Twin Lakes, 38 Wis.2d 310, 156 N.W.2d 425 (1968), the circuit court stated that “when a circuit court has the authority to review the action of a board or a commission, that review shall be one of certiorari.” Accordingly, the circuit court determined that its review was circumscribed by the four prongs of certiorari:

[1] whether the defendant kept within its jurisdiction; [2] whether it acted according to law; [3] whether its action was arbitrary, oppressive, or unreasonable, and represented its will and not its judgment; and, [4] whether the evidence was such that it might reasonably make the order of determination in question.

It further determined that the Nowells' presentation of evidence would be limited to those issues.

¶ 12 The circuit court held a two-day hearing on March 3 and 4, 2011. At the hearing, the Nowells advanced the argument that the City had treated it differently than other similarly situated establishments. The Nowells further argued that the City had denied their license renewal because it wanted to give their license to another business. In the alternative, the Nowells asserted that the City did not issue their renewal license because it disliked them and thus was exercising its will and not its judgment. The circuit found that these arguments went to the third prong of certiorari review (whether the City's action was arbitrary, oppressive, or unreasonable, and represented its will, not its judgment), and permitted the Nowells to introduce extensive evidence on these points.

¶ 13 After considering the evidence, the court affirmed the City's decision not to renew the Nowells' license. Specifically, the circuit court determined that the City Council had acted within its jurisdiction and according to law. Noting the “Girls Gone Wild” event that led to the 15–day suspension, the incidents involving disturbances of the peace, the two failed compliance checks, and the 14 police service calls after October 2009, the circuit court also determined that there was sufficient evidence for the City Council's decision.

¶ 14 The circuit court then turned to the question of whether the City's actions were arbitrary, oppressive, or unreasonable,

[838 N.W.2d 856]

and represented its will and not its judgment. It concluded that the Nowells had failed to show that there were similarly situated establishments that were treated differently. Moreover, there was no compelling evidence to support the Nowells' argument that the City was trying to pass their license on to another business. Additionally, the circuit court determined that the efforts by the City to work with the Nowells showed that it was not trying to drive IC Willy's out of business. Therefore, the Nowells' assertion that the City was exercising its will and not its judgment was unpersuasive. Accordingly, the circuit court affirmed the City's decision not to renew the Nowells' license.

¶ 15 The court of appeals reversed. It concluded that Wis. Stat. § 125.12(2)(d) requires the circuit court to employ a de novo standard of review, independently determining whether a licensee is entitled to renewal. Nowell v. City of Wausau, 2012 WI App 100, ¶ 8, 344 Wis.2d 269, 823 N.W.2d 373.

¶ 16 The court of appeals based its analysis on the requirement in Wis. Stat. § 125.12(2)(d) that the procedure on review shall be the same as in civil actions. Id., ¶ 6. It noted that the statute calls for pleadings, an answer, and a hearing without a jury, and permits the circuit court to issue subpoenas for witnesses. Id., ¶ 6. Citing State ex rel. Casper v. Board of Trustees, 30 Wis.2d 170, 176, 140 N.W.2d 301 (1966), and Merkel v. Village of Germantown, 218 Wis.2d 572, 577, 581 N.W.2d 552 (Ct.App.1998), the court stated that the practices applicable to ordinary civil actions are not applicable to certiorari. Id., ¶¶ 7, 8. It further noted that statutes requiring certiorari usually specify how return of the record is to be made. Id., ¶ 8. Thus, the court concluded that the procedures in Wis. Stat. § 125.12(2)(d) were incompatible with certiorari review. Id.

¶ 17 Recognizing that the circuit court had relied on Marquette Savings & Loan, the court of appeals distinguished it on the...