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Two months ago, in the case Tavern League v. Palm, the Wisconsin Supreme Court reiterated its earlier ruling that the Wisconsin governor could not use executive orders to circumvent the checks and balances of constitutional governance provided by its rulemaking processes. In the first case on the topic, Legislature v. Palm, Governor Tony Evers and his Department of Health Services (DHS) Secretary Andrea Palm, through an executive order, shut down portions of Wisconsin’s economy at the beginning of the COVID-19 pandemic.[1] The court determined the order actually constituted a rule, and that because it did not go through the appropriate procedures,[2] it was invalid. As Wisconsin experienced an increase in COVID-19 cases in the fall of 2020, Palm issued a substantively similar order, Emergency Order Three (EO 3), which restricted indoor public gatherings in Wisconsin to 25 percent of a premise’s permitted capacity or ten people if no capacity was prescribed (with several sets of exemptions).[3] By taking this action, the court ruled Palm once again circumvented the rulemaking requirements the legislature placed on the authority it granted DHS (and all state agencies). In Tavern League v. Palm, in a split decision, the court reaffirmed its ruling in Legislature v. Palm and declared EO 3 unenforceable.

The Tavern League of Wisconsin, Inc., a trade association representing bars and restaurants, and their co-plaintiffs[4] (Plaintiffs) filed the lawsuit in Sawyer County Circuit Court against then-Secretary Palm and DHS (Defendants). Plaintiffs successfully sought a temporary restraining order enjoining EO 3. However, after a judicial substitution, the Plaintiffs’ motion for a temporary injunction was denied, and the temporary restraining order was rescinded. At the same hearing the judge granted a motion to intervene by a group of businesses, public interest groups, and individuals[5] (Intervenors). The Intervenors appealed the ruling to Wisconsin’s Third District Court of Appeals, which summarily reversed the circuit court, stating that under the state Supreme Court’s prior Legislature v. Palm precedent, EO 3 was invalid and unenforceable and that because the Intervenors had an “apparent certainty” of success on the merits they were entitled to a temporary injunction.[6] The Defendants appealed the decision to the Wisconsin Supreme Court.

The Wisconsin Supreme Court accepted review of the case and issued a decision on April 14th, 2021. Then-Chief Justice Patience Roggensack wrote the lead opinion and was joined by Justices Annette Ziegler and Rebecca Bradley. Justice Brian Hagedorn concurred with the ruling on stare decisis grounds, while Justice Ann Walsh Bradley dissented, joined by Justices Jill Karofsky and Rebecca Dallet.

The court addressed two issues on review: (1) whether the case was moot—EO 3 expired on November 6, 2020, prior to the court’s decision—and (2) whether EO 3 was a rule subject to the rule promulgation process.[7] The court reviewed both issues de novo.[8]

The court found that, while the issue was moot, it met several exemptions to the mootness doctrine.[9] The court found that it could review the case primarily because the issue was likely to arise again.[10]

The court affirmed the court of appeals’ ruling, holding that EO 3 “on its face” was a rule[11] and must comply with the rulemaking procedures in Wisconsin’s Administrative Procedure Act.[12]

In its briefing, DHS attempted to distinguish EO 3 from the order at issue in Legislature v. Palm, which the Wisconsin Supreme Court had held was a rule. DHS argued the scope of the statute that EO 3 was issued under, Wis. Stat. § 252.02(3), was not discussed in Legislature v. Palm and also was so specific there was no need to interpret it and thus no rulemaking was required.[13] The lead opinion rejected these arguments, holding it does not matter what statute DHS issued EO 3 under—what matters is whether EO 3 met the definition of a rule.[14]

The court determined EO 3 met all five elements of a rule.[15] First, it was a general order. Second, it was of general application because the class was broad—any individual in Wisconsin who attended a public gathering and any entity open to the public as defined in the order—and individuals and entities could be added to the class if they moved into Wisconsin.[16] Third, EO 3 had the effect of law because it was enforceable by civil forfeiture.[17] Fourth, the order was issued by a state agency, the DHS.[18] Fifth, the order “both implemented and interpreted Wis. Stat. § 252.02(3)’s grant of authority” by interpreting the phrase “public gatherings” in the statute to mean “‘limit’ numerically” and carrying out the statute’s authority to “forbid public gatherings.”[19] The court concluded that because EO 3 met the definition of a rule but was not properly promulgated, it was invalid and unenforceable.[20]

Justice Brian Hagedorn filed a brief concurring opinion where he noted that while he objected to the legal analysis in Legislature v. Palm,[21] the doctrine of stare decisis applies to this case, where the same party—DHS—“does the very same thing again under the same circumstances.”[22] Justice Hagedorn concluded his opinion by opening the possibility of reexamining the holding in Legislature v. Palm in the future, but he noted that none of the parties asked the court to do so here.[23]

Justice Ann Walsh Bradley, joined by Justices Karofsky and Dallet, dissented on two points. First, they argued that stare decisis did not apply because the court never interpreted Wis. Stat. § 252.02(3), and that even if Legislature v. Palm did interpret that statutory section, stare decisis should not apply because the Legislature v. Palm decision was unsound.[24] Second, they said the statutory language in Wis. Stat. § 252.02(3) is unambiguous, so no interpretation was required by the agency to effectuate the statutory grant of authority and therefore no rulemaking was necessary because Wis. Stat. § 227.10(1) only requires rulemaking if an agency adopts an interpretation of an ambiguous statute.[25]

The court’s decision is the third time in less than a year the court has ruled against Governor Evers’ administration for taking an action that the majority held should have been promulgated as a rule. With this ruling, the court continues to decide that the legislature has the right to oversee administrative agencies when those agencies use delegations of legislative authority. The case also reinforces past decisions by the court that agencies can only create law through rulemaking, a process heavily influenced by the legislature.

 


[1] See Wis. Legislature v. Palm, 2020 WI 42, 391 Wis. 3d 497, 942 N.W.2d 900.

[2] Wis. Stat. Ch. 227 (all statutory citations are current unless stated otherwise).

[3] Wis. Dep’t of Health Services, Emergency Order #3 Limiting Public Gatherings (Oct. 6, 2020), https://evers.wi.gov/Documents/COVID19/EmO03-LimitingPublicGatherings.pdf.

[4] The Sawyer County Tavern League and the Flambeau Forest Inn (a restaurant).

[5] The Mix UP, Inc., (a restaurant), Pro-Life Wisconsin Education Task Force, Inc., Pro-Life Wisconsin, Inc., and two individuals Liz Sieben and Dan Miller.

[6] Tavern League, Inc., et al. v. Palm et al., 2021 WI 33, ¶ 12, 957 N.W.2d 261.

[7] Id. at ¶ 13.

[8] Id.

[9] Id. at ¶¶ 15-16. Exceptions to the mootness doctrine include, “(1) the issues are of great public importance; (2) the constitutionality of a statute is involved; (3) the situation arises so often a definitive decision is essential to guide the trial courts; (4) the issue is likely to arise again and should be resolved by the court to avoid uncertainty; or (5) the issue is capable and likely of repetition and yet evades review.” Portage Cnty. V. J.W.K., 2019 WI 54, ¶ 10, 386 Wis. 2d 672, 927 N.W.2d 509.

[10] Tavern League, 2021 WI 33 at ¶ 16, n.4.

[11] The definition of a rule has five elements. Wis. Stat. § 227.01(13). First, the action must be a general order, and second, of general application, which are both satisfied if "the class of people regulated . . . 'is described in general terms and new members can be added to the class.'" Tavern League, 2021 WI 33 at ¶ 20 (citing Palm, 2020 WI 42 at ¶ 22). Third, the action has to have the force of law, which is satisfied if it is enforced through a civil or criminal sanction. Tavern League, 2021 WI 33 at ¶ 21 (citing Cholvin v. DHFS, 2008 WI App 127, ¶ 26, 313 Wis. 2d 749, 758 N.W.2d 118). Fourth, the action is taken by an agency. Tavern League, 2021 WI 33 at ¶ 23. Fifth, the agency implements or interprets a statute when it takes the action, which is generally satisfied by an agency adopting its own understanding of a statute under its purview. Tavern League, 2021 WI 33 at ¶¶ 24-25. See Frankenthal v. Wis. Real Est. Brokers' Bd., 3 Wis. 2d 249, 253, 89 N.W.2d 825 (1958). Agencies must conform to the rulemaking process anytime an action meets the definition of a rule. Tavern League, 2021 WI 33 at ¶ 19, (citing Palm, 2020 WI 42 at ¶ 22, quoting Citizens for Sensible Zoning, Inc. v. DNR, 90 Wis. 2d 804, 814, 280 N.W.2d 702 (1979)).

[12] Tavern League, 2021 WI 33 at ¶ 26. See Wis. Stat. Ch. 227.

[13] Tavern League, 2021 WI 33 at ¶ 27. Wis. Stat. § 252.02(3) in whole reads, “[t]he department may close schools and forbid public gatherings in schools, churches, and other places to control outbreaks and epidemics.”

[14] Id. at ¶ 28.

[15] See supra note 11.

[16] Id. at ¶¶ 30-31.

[17] Id. at ¶ 32.

[18] Id.

[19] Id. at ¶ 33.

[20] Id. at ¶ 34.

[21] Palm, 2020 WI 42 at ¶¶ 165-263 (Hagedorn, J., dissenting).

[22] Tavern League, 2021 WI 33 at ¶ 37 (Hagedorn, J., concurring).

[23] Id. ¶ 38.

[24] Id. at ¶¶ 39-41 (A.W. Bradley, J., dissenting) (citing Johnson Controls, Inc., v. Emp. Ins. of Wausau, 2003 WI 108, ¶ 99, 264 Wis. 3d 60, 665 N.W.2d 257).

[25] Id. at ¶¶ 75-77 (citing Lamar Cent. Outdoor, LLC v. Div. of Hearings & Appeals, 2019 WI 109, ¶ 24, 389 Wis. 2d 486, 936 N.W.2d 573).