Racine Harley-Davidson v. State, 2003AP2628.
| Decision Date | 06 July 2006 |
| Docket Number | No. 2003AP2628.,2003AP2628. |
| Citation | 717 N.W.2d 184,2006 WI 86 |
| Parties | RACINE HARLEY-DAVIDSON, INC., Petitioner-Respondent-Petitioner, v. STATE of Wisconsin DIVISION OF HEARINGS AND APPEALS, Respondent, Harley-Davidson Motor Company, Inc., Participant-Appellant. |
| Court | Wisconsin Supreme Court |
For the petitioner-respondent-petitioner there were briefs by Paul R. Norman, Sarah A. Zylstra and Boardman, Suhr, Curry & Field LLP, Madison, and oral argument by Sarah A. Zylstra.
For the participant-appellant there were briefs by Peter J. Stone, Kelli A. Taffora and Foley & Lardner LLP, Milwaukee, and oral argument by Peter J. Stone.
An amicus curiae brief was filed by Brian E. Butler, Michelle Affatati and Stafford Rosenbaum LLP, Madison, on behalf of the Wisconsin Automobile and Truck Dealers Association, and there was oral argument by Brian E. Butler.
¶ 1
Racine Harley-Davidson, Inc. (Racine H-D) seeks review of a published decision of the court of appeals.1
¶ 2 The court of appeals reversed an order of the circuit court for Racine County, Charles H. Constantine, Judge, and reinstated a ruling of the Department of Administration, Division of Hearings and Appeals, granting summary judgment to Harley-Davidson Motor Company (Harley-Davidson) against Racine H-D.
¶ 3 The court of appeals gave great weight deference to the decision of the Division of Hearings and Appeals that Harley-Davidson's assignment of territory to Racine H-D, namely a zip code list,2 is not part of the motor vehicle dealer agreement between the parties under Wis. Stat. § 218.0116(8).3 Accordingly, the court of appeals determined that Harley-Davidson's unilateral modification of the assignment of territory did not trigger the requirement in Wis. Stat. § 218.0116(8) of an administrative determination of good cause for the modification of a motor vehicle dealer agreement.
¶ 4 In contrast, the circuit court had overturned the decision of the Division of Hearings and Appeals. The circuit court concluded that Harley-Davidson's zip code assignment of territory to Racine H-D is part of the motor vehicle dealer agreement between the parties under Wis. Stat. § 218.0116(8) and that the cause should be remanded to the Division of Hearings and Appeals to reinstate Racine H-D's amended complaint and to conduct further proceedings pursuant to Wis. Stat. § 218.0116(8).
¶ 5 The issue presented here is the same as that presented to the Division of Hearings and Appeals, the circuit court and the court of appeals, namely whether Harley-Davidson's assignment of territory to Racine H-D (a zip code list) is part of their motor vehicle dealer agreement under Wis. Stat. § 218.0116(8). If the assignment is part of their motor vehicle dealer agreement, the cause should be remanded to the circuit court for remand to the Division to reinstate the amended complaint and to conduct further proceedings to determine whether Racine H-D should prevail on its claim under Wis. Stat. § 218.0116(8).
¶ 6 We conclude that read together, Wis. Stat. § 218.0101(1) and (13); § 218.0114(9) and (11); and § 218.0116(1)(r), (7), and (8); and the purpose of §§ 218.0101 to 218.0163, support the conclusion that a more reasonable reading of the statutes than that of the Division of Hearings and Appeals is that a manufacturer's assignment of territory is an essential aspect of the franchise relationship and therefore part of the motor vehicle dealer agreement.
¶ 7 Accordingly we reverse the decision of the court of appeals and hold (1) that Harley-Davidson's assignment of territory (the zip code list) to Racine H-D is part of the motor vehicle dealer agreement between Harley-Davidson and Racine H-D under Wis. Stat. § 218.0116(8); and (2) that the cause should be remanded to the circuit court for remand to the Division of Hearings and Appeals to reinstate Racine H-D's complaint and to conduct further proceedings under Wis. Stat. § 218.0116(8) consistent with this opinion.
¶ 8 To determine whether the assignment of territory (the zip code list) is part of the motor vehicle dealer agreement under § 218.0116(8), we must first address the threshold issue of the proper level of deference to be given to the decision of the Division of Hearings and Appeals.4
¶ 9 The court requested supplemental briefs from the parties on the level of deference to be accorded the decision of the Division of Hearings and Appeals, "considering Wis. Stat. §§ 227.43(1)(bg) and 227.46(3), and the following cases (and any other statute or case the parties consider applicable to the subject): State ex rel. Kaminski v. Schwarz, 2001 WI 94, ¶¶ 16, 21, 245 Wis.2d 310, 630 N.W.2d 164; Buettner v. DHFS, 2003 WI App 90, ¶¶ 6-8, 264 Wis.2d 700, 663 N.W.2d 282; Town of Barton v. Division of Hearings and Appeals, 2002 WI App 169, ¶ 10, 256 Wis.2d 628, 649 N.W.2d 293; Artac v. DHFS, 2000 WI App 88, ¶ 13, ¶ 13 n. 6, 234 Wis.2d 480, 610 N.W.2d 115; Sea View v. DNR, 223 Wis.2d 138, 145-49, 588 N.W.2d 667 (Ct.App.1998); Roehl Transport, Inc. v. Division of Hearings and Appeals, 213 Wis.2d 452, 460-61, 570 N.W.2d 864 (Ct.App.1997)."
¶ 10 The issue of deference to be accorded a decision involving the Division of Hearings and Appeals is also raised in Hilton v. DNR, 2006 WI 84, ___ Wis.2d ___, ___ N.W.2d ___, mandated this date.
¶ 11 Although statutory interpretation is ordinarily a question of law determined independently by a court, a court may accord an agency's interpretation of a statute great weight deference or due weight deference.5 The standard of review of an agency interpretation and application of a statute (and the deference to be accorded thereto) have been the subject of numerous cases, as this opinion demonstrates, and much law review commentary.6
¶ 12 In an attempt to clarify prior statements of the standard of review for agency interpretation and application of statutes, the court set forth three levels of deference of agency interpretations of statutes in adjudicative matters in Jicha v. DILHR, 169 Wis.2d 284, 290-91, 485 N.W.2d 256 (1992) and Sauk County v. WERC, 165 Wis.2d 406, 413-14, 477 N.W.2d 267 (1991): great weight deference, due weight deference, and no deference.7
¶ 13 These levels of deference take into account the comparative institutional qualifications and capabilities of the court and the administrative agency.8 The levels of deference are in accord with Wis. Stat. § 227.57(10), in which the legislature provides that upon review of an agency's decision, "due weight shall be accorded the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it." The legislature has thus entrusted responsibility to the agencies.
¶ 14 By granting deference to agency interpretations, the court has not abdicated, and should not abdicate, its authority and responsibility to interpret statutes and decide questions of law. Some cases, however, mistakenly fail to state, before launching into a discussion of the levels of deference, that the interpretation and application of a statute is a question of law to be determined by a court.9 In any event, it is the court's responsibility to decide questions of law and determine whether deference is due and what level of deference is due to an agency interpretation and application of a statute. The court determines the appropriate level of deference by comparing the institutional qualifications and capabilities of the court and the agency by considering, for example, whether the legislature has charged the agency with administration of the statute, whether the agency has expertise, whether the agency interpretation is one of long standing, and whether the agency interpretation will provide uniformity and consistency.
¶ 15 Furthermore, giving deference to the agency interpretation does not mean that the court accepts the agency interpretation without a critical eye. The court itself must always interpret the statute to determine the reasonableness of the agency interpretation. Only reasonable agency interpretations are given any deference.
¶ 16 A reviewing court accords an agency's statutory interpretation great weight deference when each of the following requirements are met: (1) the agency is charged by the legislature with the duty of administering the statute; (2) the agency interpretation is one of long standing; (3) the agency employed its expertise or specialized knowledge in forming its interpretation; and (4) the agency's interpretation will provide uniformity and consistency in the application of the statute.10
¶ 17 When a reviewing court applies great weight deference, it sustains an agency's reasonable statutory interpretation, even if the court concludes that another interpretation is equally reasonable, or even more reasonable, than that of the agency.11 An agency's conclusion of law is unreasonable and may be reversed by a reviewing court if it directly contravenes the statute or the federal or state constitution, if it is clearly contrary to the legislative intent, history, or purpose of the statute, or if it is without a rational basis.12
¶ 18 A reviewing court accords an agency's statutory interpretation due weight deference when the agency has some experience in an area but has not developed the expertise that necessarily places it in a better position than a court to make judgments regarding the interpretation of the statute.13 Due weight deference is based on the fact that the legislature has charged the agency with the enforcement of the statute in question, not on the expertise of the agency. When a reviewing court applies due weight deference, it sustains an agency's statutory interpretation if it is not contrary to the clear meaning of the statute, unless the reviewing court determines that a more reasonable interpretation exists.14
¶ 19 A reviewing court accords an...
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