State v. Poly-America, Inc.
| Decision Date | 13 August 1991 |
| Docket Number | INC,No. 91-0011,POLY-AMERIC,91-0011 |
| Citation | 164 Wis.2d 238,474 N.W.2d 770 |
| Parties | STATE of Wisconsin, Plaintiff-Appellant, d v., a Texas Corporation, Defendant-Respondent. |
| Court | Wisconsin Court of Appeals |
Bruce A. Craig, Asst. Atty. Gen., argued, James E. Doyle, Atty. Gen., and Bruce A. Craig, Asst. Atty. Gen., on briefs, for plaintiff-appellant.
Matthew J. Flynn, of Quarles & Brady, Milwaukee, argued, Michael G. Carter, on brief, for defendant-respondent.
Before CANE, P.J., and LaROCQUE and MYSE, JJ.
The state appeals a dismissal of its action charging Poly-America, Inc., with violations of sec. 98.26(1)(c), Stats. 1 The complaint charged that Poly-America, a manufacturer of polyethylene sheeting doing business in Wisconsin, sold 181 rolls of product that were underweight when compared to the weight stated on the package label. The parties request that we interpret the terms of Wis.Adm.Code § Ag 53.12(1) to determine whether the charges should have been dismissed. The trial court concluded that a lot may include those packages found on the retail shelf, but dismissed the action on summary judgment because the packages did not constitute a sufficient quantity to amount to a lot as that term is used in the Wisconsin Administrative Code.
We agree with the trial court that the term "lot" as used in § Ag 53.12(1) applies to an "inspection" lot consisting of packages packed at the same place, time and under the same conditions. Also, we conclude that the state must make reasonable efforts to construct a fair inspection lot and because this is a factual issue which cannot be determined at the summary judgment stage, we reverse and remand the matter to the trial court for a trial on this issue. Finally, we conclude that at the time the complaint was filed, the maximum allowable variation (MAV) for polyethylene sheeting was 7%. Because the parties agree that some packages exceeded this weight variation and would therefore constitute an unreasonable weight variation, we reverse the trial court's dismissal of this charge and remand the matter to the trial court for further proceedings.
The interpretation of an administrative rule is a question of law that we review de novo. Beloit Corp. v. LIRC, 152 Wis.2d 579, 591, 449 N.W.2d 299, 305 (Ct.App.1989). We are guided in this task by the same principles that apply to statutory construction. State v. Bucheger, 149 Wis.2d 502, 506, 440 N.W.2d 366, 368 (Ct.App.1989). If an administrative rule is unambiguous, we look to the plain meaning of its terms. Id. at 507, 440 N.W.2d at 368. An administrative rule is ambiguous if reasonable persons can understand its terms differently. Id.
Wis.Adm.Code § Ag 53.12(1) provides:
Variations to be allowed. (1) VARIATIONS FROM DECLARED NET QUANTITY. Except as otherwise provided by statutes or rules thereunder, variations from the declared net weight, measure, or count are permitted only when caused by unavoidable deviations in weighing, measuring, or counting the contents of individual packages that occur in good packaging practice, but such variations shall not be permitted to such extent that the average of the quantities in the packages of a particular commodity, or a lot of the commodity that is kept, offered, or exposed for sale, or sold, is below the quantity stated. No unreasonable shortage in any package shall be permitted, even though overages in other packages in the same shipment, delivery, or lot compensate for such shortage. Variations above the declared quantity shall not be unreasonably large. (Emphasis added.)
A "shortweight" violation occurs, then, in two ways: when the average weight of a particular "lot of the commodity that is kept, offered, or exposed for sale, or sold" falls under the labeled weight 2 or an individual package has an "unreasonable shortage." 3 We conclude that the term "lot of the commodity that is kept, offered, or exposed for sale, or sold" is ambiguous because reasonable persons could understand it to apply to any quantity of a product on a given retailer's shelf, or only to that quantity that represents a fair sampling of a manufacturer's product and, thus, we resort to extrinsic aids to determine the agency's intent in adopting the rule. See State ex rel. Staples v. Young, 142 Wis.2d 348, 354, 418 N.W.2d 333, 336 (Ct.App.1987). On the other hand, the term "unreasonable shortage" is not ambiguous because National Bureau of Standards (NBS) regulations exist to aid a court in determining its meaning. 4
DEFINITION OF A "LOT"
The language of § Ag 53.12(1) is virtually identical to that used in § 12.1.1 of the model 1978 Uniform Packaging and Labeling Regulation, as adopted by the National Conference on Weights and Measures. NBS Handbook 130, Uniform Laws and Regulations at IV-40 (1989). The National Conference is sponsored by the NBS "in partial implementation of its statutory responsibility for 'cooperation with the States in securing uniformity in weights and measures laws and methods of inspection.' " Id. at IV-3 n. 1. At oral argument, both sides agreed that except for Louisiana, every state, including Wisconsin, has adopted NBS Handbook 133, Checking the Net Contents of Packaged Goods (3d ed. Sept.1988), as its guidelines.
When a state statute is modeled after a federal rule, we look to the federal interpretation of that rule for guidance and assistance. State v. Shillcutt, 116 Wis.2d 227, 232, 341 N.W.2d 716, 718 (Ct.App.1983), aff'd, 119 Wis.2d 788, 350 N.W.2d 686 (1984). We conclude that NBS handbooks interpreting various portions of the model legislation serve as persuasive authority in defining the terms of our state regulation.
The state contends that "lot," as referenced in § Ag 53.12(1), includes a selection of packages found on the retail shelf. In response, Poly-America argues that the state "cannot pick out as few as ten items remaining on a retail shelf, diminished by sale and distribution, and interpret that group of items as a 'lot.' " NBS Handbook 133 defines a "lot." Because we conclude that NBS handbooks are persuasive authority, and because the definition of this term is quite technical, we quote at length from the handbook:
2.3. Definition of the Lot
As a first step in package testing, the official designates the collection of packages upon which action will be taken as a result of the official's tests. This is the "INSPECTION LOT." Based on the factors likely to cause variations in quantity, the official should designate as the inspection lot the largest possible group of packages, in accordance with the following guidelines:
(i) The inspection lot must consist only of packages of the same product, with the same label, from the same packer....
This rule should never be violated.
(ii) To the greatest extent possible, the inspection lot should consist only of packages packed at the same place, at the same time, under the same conditions.
This guideline is in addition to the provisions of guideline (i). Therefore, a lot should consist of packages of the same product and the same label. They should also have the same lot code number if inspection is done at the warehouse, or be packages from the same filling line, packed during the same period, if inspection is done on-line at the packing plant. It is not absolutely necessary to sort by lot code when testing packages in a retail location; a shipment or delivery may in fact be composed of packages with different lot codes.
It is not always possible to take the second guideline into account in designating lots. In fact, taking both guidelines into account may lead to a very small inspection lot, the result which is undesirable. The inspection lot should be as large as possible without violating guideline (i), yet taking into account the factors mentioned in guideline (ii).
....
2.3.1. The Inspection Lot of Standard Pack Packages
"Standard pack" packages are defined as those packaged with identical labels in a few selected quantity sizes. For example, canned ham labeled "5 pounds" is a standard pack meat item. The packager "targets" the amount of product put into the package according to the net contents already selected to be on the package container's label.
The inspection lot must always consist of packages with identical labels (except for the lot code).
a. When the location of test is a retail store: Because state and local regulations apply to "lots, shipments or deliveries," a shipment or delivery comprised of packages with different lot codes may be acted upon as a single inspection lot. Follow-up inspection will require segregation of lots by lot code.
Id. at 2-5 to 2-6 (emphasis added).
As the state contends, the federal definition of an inspection lot contemplates inspections at retail sites. We note, however, that the Wisconsin regulation at issue does not apply to "lots, shipments, or deliveries" as indicated in NBS Handbook 133 § 2.3.1(a) above, but only to "lots." Additionally, even where retail site inspections are permitted, the guidelines anticipate a follow-up inspection, with segregation of lots by lot code.
Taken as a whole, the federal definition of a "lot" evidences concern that "[t]o the greatest extent possible, the inspection lot should consist of packages packed at the same place, at the same time, under the same conditions." Id., § 2.3. (ii) at 2-5. This concern does not mean, as Poly-America argues, that the state must test an entire 2,000-pound manufacturing lot in order to establish a violation of the statute. Section Ag 53.12(1) applies to an "inspection lot," as interpreted by the federal guidelines, and not to a "manufacturing lot." On the other hand, an "inspection lot" may be more than the product remaining on a retailer's shelf after being diminished by sale, distribution or otherwise.
In addition, the federal guidelines suggest, and we conclude, that the term "inspection lot"...
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