Racine Harley-Davidson, Inc. v. State of Wisconsin Division of Hearings and Appeals

Annotate this Case
Download PDF
2006 WI 86 SUPREME COURT CASE NO.: OF WISCONSIN 2003AP2628 COMPLETE TITLE: Racine Harley-Davidson, Inc., Petitioner-Respondent-Petitioner, v. State of Wisconsin Division of Hearings and Appeals, Respondent, Harley-Davidson Motor Company, Inc., Participant-Appellant. REVIEW OF A DECISION OF THE COURT OF APPEALS 2005 WI App 6 Reported at: 278 Wis. 2d 508, 692 N.W.2d 670 (Ct. App. 2004-Published) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: November 8, 2005 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Racine Charles H. Constantine JUSTICES: CONCURRED: July 6, 2006 PROSSER, J., concurs (opinion filed). ROGGENSACK, J., concurs (opinion filed). WILCOX and BUTLER, J.J., join the concurrence. DISSENTED: NOT PARTICIPATING: ATTORNEYS: 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. 2 2006 WI 86 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2003AP2628 (L.C. No. 2003CV821) STATE OF WISCONSIN : IN SUPREME COURT Racine Harley-Davidson, Inc., Petitioner-RespondentPetitioner, FILED v. State of Wisconsin Division of Hearings and Appeals, JUL 6, 2006 Cornelia G. Clark Clerk of Supreme Court Respondent, Harley-Davidson Motor Company, Inc., Participant-Appellant. REVIEW of a decision of the Court of Appeals. Reversed and remanded. ¶1 SHIRLEY S. ABRAHAMSON, C.J. Racine Harley-Davidson, Inc. (Racine H-D) seeks review of a published decision of the court of appeals.1 ¶2 court 1 for The court of appeals reversed an order of the circuit Racine County, Charles H. Constantine, Judge, and Racine Harley-Davidson v. Div. of Hearings & Appeals, 2005 WI App 6, 278 Wis. 2d 508, 692 N.W.2d 670. No. 2003AP2628 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 The court of appeals gave great weight deference to 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, Davidson's territory the court unilateral did not of appeals modification trigger the determined of the requirement that Harley- assignment in Wis. of 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 decision of the Division of Hearings and Appeals. the 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). 2 Assignment of territory is sometimes also referred to as "area of sales responsibility" or "primary market area." 3 All references to the Wisconsin Statutes are to the 200304 version unless otherwise indicated. 2 No. 2003AP2628 ¶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 § 218.0116(8). vehicle dealer agreement under Wis. Stat. If the assignment is part of their motor vehicle dealer agreement, the cause should be remanded to the circuit court for complaint remand and to to the Division conduct to further reinstate proceedings the to amended determine whether Racine H-D should prevail on its claim under Wis. Stat. § 218.0116(8). ¶6 We § 218.0101(1) conclude and that (13); read together, § 218.0114(9) Wis. and Stat. (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 appeals Accordingly we reverse the decision of the court of 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 3 No. 2003AP2628 conduct further proceedings under Wis. Stat. § 218.0116(8) consistent with this opinion. I ¶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 4 When agency, it decision of Bend Co. v. this court reviews a decision of an administrative ordinarily reviews the agency decision, not the the court of appeals or the circuit court. West LIRC, 149 Wis. 2d 110, 117, 438 N.W.2d 823 (1989). The meaning of the word "agency" in ch. 227, and whether "agency" includes the Division of Hearings and Appeals for purposes of service, is discussed in All Star Rent a Car, Inc. v. DOT, 2006 WI 85, ___ Wis. 2d ___, ___ N.W.2d ___. The definition of "agency" in ch. 227 is not relevant in the instant case because Wis. Stat. § 218.0116(9) provides that any person aggrieved by a decision of the Division may have review of the decision as provided in ch. 227. Section 227.52 provides for judicial review of any "administrative decision" without linking that decision to an agency. See also Wis. Stat. § 227.46(2m) (providing for judicial review of Division decisions made under Wis. Stat. § 227.43(1)(bg)). 4 No. 2003AP2628 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, Transport, 145-49, Inc. v. 588 N.W.2d 667 Division of (Ct. App. Hearings and 1998); Roehl 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 5 of a statute great weight No. 2003AP2628 deference or due weight deference.5 agency interpretation and The standard of review of an application 5 of a statute (and the Keup v. DHFS, 2004 WI 16, ¶12, 269 Wis. 2d 59, 675 N.W.2d 755 ("This issue involves statutory interpretation, which is a question of law that this court reviews de novo. Thus, we are not bound by an administrative agency's determination. Nevertheless, we have generally used one of three standards of review, with varying degrees of deference, to review an agency's conclusions of law or statutory interpretation." (citations omitted)); Brown v. LIRC, 2003 WI 142, ¶¶11-13, 267 Wis. 2d 31, 671 N.W.2d 279 ("The interpretation of a statute presents a question of law. The application of a statutory standard to a fact situation is ordinarily a question of law for the courts. . . . Nevertheless, labeling an issue as a question of law does not mean that a court may disregard an agency's determination. . . . The appropriate level of scrutiny a court should use in reviewing an agency's decision on questions of law depends on the comparative institutional capabilities and qualifications of the court and the agency to make a legal determination on a particular issue"); Dodgeland Educ. Ass'n v. WERC, 2002 WI 22, ¶22, 250 Wis. 2d 357, 639 N.W.2d 733 ("Whether WERC properly interpreted Wis. Stat. § 111.70 is a question of law and we are not bound by WERC's interpretation. In certain circumstances, however, courts should defer to an administrative agency's interpretation of a statute." (citations omitted)); Ide v. LIRC, 224 Wis. 2d 159, 166, 589 N.W.2d 363 (1999) ("Whether the facts, as found by LIRC, fulfill a particular legal standard is a question of law which we review de novo. . . . When reviewing questions of law, we apply one of three levels of deference to the agency's interpretation . . . ."); LaCrosse Queen, Inc. v. DOR, 208 Wis. 2d 439, 445-46, 561 N.W.2d 686 (1997) (court "review[s] questions of law de novo" and "may substitute [its] judgment for that of the [Tax Appeals] Commission" but will accord deference when agency possesses particular expertise in an area of law); UFE Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996) ("Although we are not bound by LIRC's interpretation, we do defer to agency interpretations in certain situations."); Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 659, 539 N.W.2d 98 (1995) ("The guiding principle is that statutory interpretation is a question of law which courts decide de novo. Furthermore, a court is not bound by an agency's interpretation of a statute. As important, however, is the principle that courts should defer to an administrative agency's interpretation of a statute in certain situations." (citations omitted)); State ex rel. Parker v. Sullivan, 184 6 No. 2003AP2628 deference numerous to be cases, accorded as this thereto) opinion have been demonstrates, the subject and much of law review commentary.6 Wis. 2d 668, 699, 517 N.W.2d 449 (1994) ("The interpretation of a statute presents a question of law, and the 'blackletter' rule is that a court is not bound by an agency's interpretation. Nevertheless courts frequently refrain from substituting their interpretation of a statute for that of the agency charged with the administration of a law. . . . [C]ourts frequently give deference to the interpretation of statutes by administrative agencies charged with their enforcement."); Marris v. City of Cedarburg, 176 Wis. 2d 14, 32, 498 N.W.2d 842 (1993) (same); Richland School Dist. v. DILHR, 174 Wis. 2d 878, 890-91, 498 N.W.2d 826 (1993) (same); Lisney v. LIRC, 171 Wis. 2d 499, 505, 493 N.W.2d 14 (1992) (same); West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1, 11-12, 357 N.W.2d 534 (1984) ("Generally questions relating to interpretation and application of statutes are labeled questions of law, and the blackletter rule is that a court is not bound by an agency's conclusions of law. Courts, however, frequently refrain from exercising the power to substitute their interpretation or application of a statute for that of an agency charged with the administration of the law."). 6 See Salvatore Massa, The Standards of Review for Agency Interpretations of Statutes in Wisconsin, 83 Marq. L. Rev. 597 (2000); Patrick M. Zabrowski, Comment, The Standard of Review of Administrative Rules in Wisconsin, 1982 Wis. L. Rev. 691, (1982); Paul B. Hewitt, Comment, The Scope of Judicial Review of Administrative Agency Decisions in Wisconsin, 1973 Wis. L. Rev. 554 (1973). At the federal level too, "one of the most persistently intriguing puzzles has been to define the appropriate judicial and administrative roles in the interpretation of regulatory statutes. . . . To determine 'what the law is' in the context of an actual controversy that turns on a question of statutory meaning is the quintessential judicial function. At the same time, however, such questions are so bound up with successful administration of the regulatory scheme that it may seem only sensible to give principle interpretive responsibility to the 'expert' agency that lives with the statute constantly." Cynthia R. Farina, Statutory Interpretation and the Balance of Power in the Administrative State, 89 Colum. L. Rev. 452, 452-53 (1989). 7 No. 2003AP2628 ¶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 are in accord with Wis. Stat. The levels of deference § 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 For discussions of the deference given to federal agency interpretation of statutes, see United States v. Mead Corp., 533 U.S. 218 (2001); Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984); 6 Jacob A. Stein et al., Administrative Law § 51.01 (Rel. 75-8/02 Pub. 301). 7 For prior case law explaining the standard of review of an agency interpretation and application of a statute, including a comparison of the court's "analytical" approach to agency deference and "practical" or "policy" approach, see, e.g., DOR v. Exxon Corp., 90 Wis. 2d 700, 712-14, 281 N.W.2d 94 (1979); DOR v. Milwaukee Ref. Corp., 80 Wis. 2d 44, 48, 257 N.W.2d 855 (1977); Pabst v. Dep't of Taxation, 19 Wis. 2d 313, 322-23, 120 N.W.2d 77 (1963). 8 Brown v. LIRC, 2003 WI 142, ¶13, 267 Wis. 2d 31, N.W.2d 279 (citing State ex rel. Parker v. Sullivan, Wis. 2d 668, 699, 517 N.W.2d 449 (1994)). 8 671 184 No. 2003AP2628 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 whether the the agency agency with has administration expertise, of whether the the statute, agency interpretation is one of long standing, and whether the agency interpretation will provide uniformity and consistency. 9 See, e.g., Pinczkowski v. Milwaukee County, 2005 WI 161, ¶¶62-65, 286 Wis. 2d 339, 706 N.W.2d 642 (discussing levels of deference, but not stating the court's ultimate authority to decide questions of law); Clean Wisconsin, Inc. v. Pub. Serv. Comm'n, 2005 WI 93, ¶¶37-43, 282 Wis. 2d 250, 700 N.W.2d 768 (same); Crystal Lake Cheese Factory v. LIRC, 2003 WI 106, ¶¶2325, 28-30, 264 Wis. 2d 200, 664 N.W.2d 651 (same); Kitten v. DWD, 2002 WI 54, ¶¶26-29, 252 Wis. 2d 561, 644 N.W.2d 649 (same). 9 No. 2003AP2628 ¶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 it When a reviewing court applies great weight deference, sustains even if the an agency's court reasonable concludes that statutory another interpretation, interpretation is equally reasonable, or even more reasonable, than that of the agency.11 An agency's conclusion of law is unreasonable and may 10 UFE Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996) (citing Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 660, 539 N.W.2d 98 (1995)). 11 UFE Inc., 201 Wis. 2d at 287. "[W]hen the expertise of the . . . agency is significant to the value judgment (to the determination of a legal question)," if the agency's decision is reasonable it will be accepted by courts "irrespective of whether there may have been some other reasonable interpretation or application [of the statute]." Nottelson v. DIHLR, 94 Wis. 2d 106, 117 & n.10, 287 N.W.2d 763 (1980). 10 No. 2003AP2628 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 question, not on the expertise of the agency. court applies statutory due weight interpretation deference, if it is it not the statute in When a reviewing sustains contrary an to agency's the clear meaning of the statute, unless the reviewing court determines that a more reasonable interpretation exists.14 ¶19 A reviewing court accords an agency's statutory interpretation no deference when any of the following conditions is met: agency (1) the issue is one of first impression; (2) the has no experience or expertise in deciding the legal issue presented; or (3) the agency's position on the issue has 12 Brown, 267 Wis. 2d 31, ¶19 (citing Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 662, 539 N.W.2d 98 (1995); Barron Elec. Co-op. v. Pub. Serv. Comm'n, 212 Wis. 2d 752, 766, 569 N.W.2d 726 (Ct. App. 1997)). 13 UFE Inc., 201 Wis. 2d at 286. 14 Id. at 287. 11 No. 2003AP2628 been so inconsistent as to provide no real guidance.15 When a reviewing court accords an agency's statutory interpretation no deference, the court interprets the statute independently of the agency's interpretation and in effect adopts an interpretation that the court determines is the most reasonable interpretation.16 ¶20 Thus, due weight deference and no deference agency's interpretation of a statute are similar. to an Under both due weight deference and no deference, the reviewing court may adopt, without regard for the agency's interpretation, what it views as the When due most reasonable weight deference reviewing court will interpretation when reasonable.17 In agency's an is not interpretation accorded reverse alternative contrast, in a statutory interpretation, an the of the agency, agency's interpretation no the deference reviewing statute. however, a statutory is review court equally of an merely benefits from the agency's determination and may reverse the agency's interpretation even when an alternative statutory interpretation is equally reasonable to the interpretation of the agency.18 15 Id. at 285. 16 Harnischfeger Corp., 196 Wis. 2d at 660 n.4 (citing Village of Whitefish Bay v. Employment Relations Bd., 34 Wis. 2d 432, 445, 149 N.W.2d 662 (1967)). 17 UFE Inc., 201 Wis. 2d at 287 n.3. 18 Id. 12 No. 2003AP2628 ¶21 In the present case implement the licensing system. two administrative entities The parties agree that although the Department of Transportation licenses both Harley-Davidson and Racine H-D under Wis. Stat. §§ 218.101 to 218.0163 and supervises both Harley-Davidson's and Racine H-D's licenses,19 the Division of Hearings Transportation, is and charged Appeals, by the not the Department legislature with of hearing disputes under Wis. Stat. § 218.0116(8). ¶22 of its A dealer seeking to challenge a proposed modification motor § 218.0116(8) vehicle must file dealer a agreement complaint with under the Wis. Stat. Department of Transportation and the Division of Hearings and Appeals, and the Division must schedule a hearing and decide the matter.20 ¶23 The administrator of the Division of Hearings and Appeals is directed by statute, Wis. Stat. § 227.43(1)(bg), to assign a hearing examiner to preside over any hearing or review under Wis. Stat. § 218.0116(8)(a), the statute at issue in the 19 Wis. Stat. § 218.0111. 20 Wisconsin Stat. § 218.0116(8)(a) provides in relevant part: [T]he motor vehicle dealer may file with the department of transportation and the division of hearings and appeals and serve upon the respondent a complaint for a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall promptly schedule a hearing and decide the matter. 13 No. 2003AP2628 case.21 instant requires Although that the the system statute shall governing ensure, to the Division the extent practicable, that hearing examiners are assigned to different subjects on a rotating basis, the statute also allows the system to include the establishment of pools of examiners responsible for certain subjects.22 Division has examiners that It appears that the administrator of the established designates a a system for particular assigning examiner or hearing pool of examiners to be responsible for cases arising under §§ 218.0110 to 218.0163 to enable these examiners to develop expertise. 21 Wisconsin Stat. § 227.43(1)(bg) also grants the Division jurisdiction to appoint a hearing examiner to hear and preside over hearings: (1) The administrator of the division of hearings and appeals in the department of administration shall: . . . . (bg) Assign a hearing examiner to preside over any hearing or review under ss. . . . 86.16(5) . . . 218.0116 . . . (8)(a) . . . . See also Wis. Stat. § 218.0116(8)(a). The statutes refer to a "hearing examiner." The Division refers to the hearing examiner as an "administrative law judge." 22 Wisconsin Stat. § 227.43(1g) states: The administrator of the division of hearings and appeals shall establish a system for assigning hearing examiners to preside over any hearing under this section. The system shall ensure, to the extent practicable, that hearing examiners are assigned to different subjects on a rotating basis. The system may include the establishment of pools of examiners responsible for certain subjects. 14 No. 2003AP2628 ¶24 Each party adversely affected by a proposed decision of a hearing examiner under Wis. Stat. § 227.43(1)(bg) may seek review by the Appeals.23 administrator of the Division of Hearings and The decision of the administrator of the Division "is a final decision of the agency subject to judicial review under s. 227.52."24 Thus the administrator of the Division helps achieve uniformity and consistency in adjudicative proceedings. In the instant case the administrator did modify the decision of the hearing examiner. ¶25 in a The decision of the Division of Hearings and Appeals dispute adoption, under approval, § 218.0116(8) or is modification final25 by (not the 23 Department of Id. 25 to Wis. Stat. § 227.46(2m). 24 subject Wisconsin Stat. § 218.0116(8)(c) provides: The decision of the division of hearings and appeals shall be in writing and shall contain findings of fact and a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall deliver copies of the decision to the parties personally or by registered mail. The decision is final upon its delivery or mailing and no reconsideration or rehearing by the division of hearings and appeals is permitted. Wisconsin Stat. § 227.46(2m) provides, in relevant part: In any hearing or review assigned to a hearing examiner under s. 227.43 (1)(bg) [which includes a hearing under s. 218.0116(8)(a)] . . . [t]he decision of the administrator of the division of hearings and appeals is a final decision of the agency subject to judicial review under s. 227.52. 15 No. 2003AP2628 Transportation)26 and an aggrieved party may seek judicial review as provided in chapter 227 of the statutes.27 The Department of Transportation may petition for judicial review.28 ¶26 In debating whether this court should give any deference to the statutory interpretation of the Division of Hearings and Appeals, the parties agree that the Division, including the hearing examiner in the present case, handles many Department of Transportation cases involving the motor vehicle statutes, but that neither the Division nor a hearing examiner has specifically addressed whether a manufacturer's modification of a dealer's territory is a modification agreement under Wis. Stat. § 218.0116(8). 26 of the parties' Nor has the Division Wisconsin Stat. § 227.46(3) states, in relevant part: With respect to contested cases except a hearing or review assigned to a hearing examiner under s. 227.43(1)(bg) [which includes a hearing under § 218.0116(8)(a)], an agency may by rule or in a particular case may by order: (a) Direct that the hearing examiner's decision be the final decision of the agency . . . . Thus, because the Division of Hearings and Appeals assigns the hearing examiner for § 218.0116(8) cases under § 227.043(1)(bg), the Department of Transportation is not permitted to adopt the decision of the Division. 27 Wisconsin Stat. § 218.0116(9) states: Any person in interest aggrieved by a decision of the division of hearings and appeals or an order of the division of banking may have a review of the decision as provided in ch. 227. 28 Wis. Stat. § 227.46(2m). 16 No. 2003AP2628 addressed the definitions of "agreement" and "franchise" under §§ 218.0101(1) and 218.0101(13). The parties disagree, however, about what deference, if any, is due to the Division's decision in the present case. ¶27 Harley-Davidson interpreting the motor argues that vehicle the dealer Division's statutes decision should be afforded great weight deference or, at a minimum, due weight deference. deference Harley-Davidson urges great weight or due weight because the Division of Hearings and Appeals is charged with enforcing the statutory scheme and uses its motor vehicle distribution expertise to interpret and apply the phrase "motor vehicle dealer agreement." ¶28 Racine H-D and amicus Wisconsin Automobile and Truck Dealers Association contend that this court should not accord any deference to the statutory interpretation of the Division and should interpret and apply the statute independently of the Division. They argue that the Division has never before addressed whether a manufacturer's modification of a dealer's territory is a modification of the parties' agreement under Wis. Stat. § 218.0116(8) and that accordingly the Division has no expertise or specialized knowledge in forming the interpretation. ¶29 In the instant case the final decision in the dispute is not that of the Department of Transportation but rather is that of the Department of Administration, Division of Hearings 17 No. 2003AP2628 and Appeals.29 Under the statutes, we review the decision of the Division Hearings of and Appeals. The Department of Transportation, which has statutory licensing authority, is at odds with the statutory Division authority of to Hearings decide and disputes Appeals, under which Wis. has Stat. § 218.0116(8) relating to modification of a motor vehicle dealer agreement. ¶30 The question presented in the present case is whether the statutory interpretation of an administrative entity charged solely with an adjudicative function in certain disputes should be accorded any deference by the courts. Prior cases have answered this question in the affirmative.30 ¶31 The concept of deference to statutory interpretations by agencies has been developed and applied in case law involving numerous 29 administrative agencies, including agencies that See Wis. Stat. § 218.0116(8)(c). 30 The court has reviewed and accorded deference to the statutory interpretation of the adjudicative agency without deference to the other agency. See, e.g., DILHR v. LIRC, 161 Wis. 2d 231, 241-45, 467 N.W.2d 545 (1991) (court accords deference to LIRC's statutory interpretation, not DILHR's, even though DILHR is primary agency administering unemployment compensation law; court unpersuaded by DILHR's argument to the contrary); Dep't of Transp. v. Comm'r of Transp., 159 Wis. 2d 271, 463 N.W.2d 870 (Ct. App. 1990) (court reviews decision of Commissioner of Transportation, the adjudicative predecessor to the Division of Hearings and Appeals for Department of Transportation cases (with adjudicative authority to grant or deny an application for a motor vehicle dealer's license), according no deference to the Department of Transportation, the agency charged with other duties under the motor vehicle dealer code; Wis. Stat. § 218.01(3)(b) (1989-90)). 18 No. 2003AP2628 perform purely adjudicative functions. Some agencies, like the Labor and Industry Review Commission (LIRC), to which deference has been accorded, have solely final adjudicative functions.31 Other agencies are charged by statute with primary substantive administration and rule-making powers and also with interpreting statutes to resolve disputes.32 These agencies likewise have been accorded deference. ¶32 statutory Because many of interpretations the cases involved according decisions of deference to LIRC,33 it is useful to compare the Division of Hearings and Appeals to LIRC. LIRC is part of the Department of Workforce Development.34 The 31 e.g., UFE, Inc., 201 Wis. 2d at 281-88; See, Harnischfeger Corp., 196 Wis. 2d at 659-63; Lisney v. LIRC, 171 Wis. 2d 499, 505-07, 493 N.W.2d 499 (1992); DILHR v. LIRC, 161 Wis. 2d 231, 241-47, 467 N.W.2d 545 (1991) (deference was due to LIRC, not DILHR, reasoning that the legislature intended LIRC to have final review authority over disputed DILHR decisions; Wis. Stat. §§ 108.09(6)-(7), 108.10(3) (1989-90)). 32 See, e.g., Clean Wisconsin, Inc. v. Pub. Serv. Comm'n, 2005 WI 93, ¶¶35-44, 282 Wis. 2d 250, 700 N.W.2d 768 (Wis. Stat. § 196.02 (2001-02)); West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1, 12-14, 357 N.W.2d 534 (1984) (Wis. Stat. § 111.70(4) (1979-80)). 33 See, e.g., Brown, 267 Wis. 2d 31, ¶17 (great weight deference); UFE, Inc., 201 Wis. 2d at 286-87 (due weight deference); Harnischfeger Corp., 196 Wis. 2d at 660 (great weight deference); Lisney, 171 Wis. 2d at 522 (no deference because statutory language abides only one reasonable interpretation); DILHR v. LIRC, 161 Wis. 2d 231, 241-47, 467 N.W.2d 545 (1991) (LIRC, not DILHR, is the appropriate body to which deference is accorded). 34 Wis. Stat. § 15.225(1). 19 No. 2003AP2628 Division is part of the Department of Administration.35 Each has independent authority to make rules within the context of its authority.36 Each exercises its powers, duties, and functions independently of the head of the department to which it is connected.37 35 Wis. Stat. § 15.103(1). 36 Wisconsin Stat. § 103.04(2) provides: (2) Notwithstanding s. 227.11, the commission [LIRC] may not promulgate rules except that it may promulgate its rules of procedure. (Wisconsin Stat. § 227.11 provides for the general rule-making authority of administrative agencies.) Under Wis. Stat. § 227.43(1)(d), "The administrator of the division of hearings and appeals in the department of administration shall . . . (d) Promulgate rules relating to the exercise of the administrator's and the division's powers and duties under this section." 37 Wisconsin Stat. § 15.03, applying to the Division Hearings and Appeals and LIRC, provides in relevant part: Any division, office, commission, council or board attached under this section to a department or independent agency or a specified division thereof shall be a distinct unit of that department, independent agency or specified division. Any division, office, commission, council or board so attached shall exercise its powers, duties and functions prescribed by law, including rule making, licensing and regulation, and operational planning within the area of program responsibility of the division, office, commission, council or board, independently of the head of the department or independent agency, but budgeting, program coordination and related management functions shall be performed under the direction and supervision of the head of the department or independent agency . . . . 20 of No. 2003AP2628 ¶33 matters.38 LIRC handles appeals addressing a variety of subject In 2005, LIRC issued a total of 3,473 decisions.39 The Division of Hearings and Appeals handles appeals addressing a variety of subject matters.40 In 1998-99, the last year for which complete statistics are available, the Division conducted a total of 4,942 hearings.41 Hearings are ordinarily conducted by hearing examiners. ¶34 The three LIRC commissioners are appointed by the governor with the advice and consent of the Senate and they serve six-year terms.42 The administrator of the Division of 38 The subjects include unemployment insurance, compensation, equal rights, and employer tax status. worker's 39 Statistics available at LIRC website, http://www.dwd.state.wi.us/lirc/lrc_05st.htm/ (last visited June 27, 2006). LIRC decided 2,845 unemployment insurance cases, 455 worker's compensation cases, 144 equal rights cases, and 29 employer tax status cases. 40 The subjects include medical assistance, food stamps, nursing home and medical facility licensing, crime victim compensation, special education cases, and parole and probation review. Hearing information available at Division of Hearings and Appeals website, http://dha.state.wi.us/home/ (last visited June 27, 2006). A complete list of the agencies for which the Division conducts hearings, and the subject matters those hearings cover, is available on the Division website. 41 Statistics available in portable document format at the website of the Wisconsin State Legislature, http://www.legis.state.wi.us/lab/reports/00-7full.pdf (last visited June 27, 2006). 42 Wis. Stat. §§ 15.01(2), 15.06(1)(a). The LIRC chairperson is elected by the commissioners from among their own members for two-year terms. Wis. Stat. § 15.06(2)(a). 21 No. 2003AP2628 Hearings and Appeals is appointed by the Secretary of the Department of Administration,43 who is appointed by the governor with the advice and consent of the Senate.44 The administrator is in the classified service.45 ¶35 Thus, both LIRC and the Division are adjudicative bodies charged only with resolving certain disputes. Neither entity makes rules, except regarding the procedure by which the adjudications proceed. matters in Department handling of Both address a wide variety of subject appeals.46 Workforce LIRC's Development relationship is not with the substantively different from the Division's relationship with the Department of Administration and the entities for which it conducts adjudicative proceedings. ¶36 The Division of Hearings and Appeals is not the only adjudicative body Administration. that is attached to the Department of The Tax Appeals Commission is attached to the 43 Wis. Stat. § 15.103. 44 Wis. Stat. § 15.05(1)(a). 45 Wis. Stat. § 15.103(1). 46 There are, of course, differences between LIRC and the Division. For example, the hearing examiners who conduct the initial hearings reviewed on appeal by LIRC are not employed by LIRC; they are employed by the Department of Workforce Development. The hearing examiners in Division of Hearings and Appeals cases, on the other hand, are employees of the Division. 22 No. 2003AP2628 Department of Administration as well.47 The Tax Appeals Commission handles all appeals in a wide variety of tax matters, subject to judicial review under ch. 227.48 The agency with primary matters authority over non-adjudicated tax is the 47 Wis. Stat. § 15.105(1) ("There is created a tax appeals commission which is attached to the department of administration under s. 15.03."); see also 2001-2003 Biennial Report of the Wisconsin Tax Appeals Commission, at 1, available at http://www.doa.state.wi.us/docs_view2.asp?docid=1680 (last visited June 27, 2006) ("The Tax Appeals Commission is an independent state agency. Its organization, powers, duties, and functions are governed by Chapter 73 of the Wisconsin Statutes. Pursuant to Wis. Stat. § 15.03, budgeting, program coordination, and related management functions are performed by the Commission, under the general direction and supervision of the Secretary of the Department of Administration."). 48 Wis. Stat. § 73.01. See 2001-2003 Biennial Report of the Wisconsin Tax Appeals Commission, at 1, available at http://www.doa.state.wi.us/docs_view2.asp?docid=1680 (last visited June 27, 2006), for a list of the types of tax appeals handled by the Tax Appeals Commission. 23 No. 2003AP2628 Department of Revenue.49 This court has accorded deference to decisions of the Tax Appeals Commission.50 ¶37 If deference is accorded to statutory interpretation decisions by LIRC and the Tax Appeals Commission, both totally adjudicative agencies, the question remains whether deference should be denied to statutory interpretation decisions of the Division of Hearings and Appeals for the sole reason that the Division is a totally adjudicative entity. ¶38 determine The court of appeals has had several opportunities to whether interpretations to apply rendered by levels the of deference Division of to statutory Hearings and Appeals. 49 Wis. Stat. § 73.03. 50 See, e.g., Lincoln Savings Bank, S.A. v. DOR, 215 Wis. 2d 430, 443, 573 N.W.2d 522 (1998) (citing UFE, Inc., 201 Wis. 2d at 282 n.2, granting no deference to interpretation and application of statute by Tax Appeals Commission when interpretation contravened plain language of statute); LaCrosse Queen, Inc. v. DOR, 208 Wis. 2d 439, 445-46, 561 N.W.2d 686 (1997) (granting no deference to interpretation and application of statute by Tax Appeals Commission when Commission had no expertise on the meaning of the term "interstate commerce"); William Wrigley, Jr., Co. v. DOR, 176 Wis. 2d 795, 801, 500 N.W.2d 667 (1993) (granting deference to interpretation and application of a statute by Tax Appeals Commission because Commission is "the final administrative authority" for review of Department of Revenue decisions and is experienced in applying particular tax statute in issue); DOR v. Heritage Mut. Ins. Co., 208 Wis. 2d 582, 589, 561 N.W.2d 344 (Ct. App. 1997) (granting deference to interpretation and application of statute by Tax Appeals Commission because Commission "has primary responsibility for [tax] policy determinations" and has "expertise and experience in construing the tax laws generally, and the interrelationship between the federal and state tax laws specifically."). 24 No. 2003AP2628 ¶39 In Roehl Transport, Inc. v. Division of Hearings & Appeals, 213 Wis. 2d 452, trucking company 570 challenged N.W.2d 864 the (Ct. imposition of App. a 1997), tax by a the Department of Transportation based on a fuel taxation system under Wis. Stat. § 341.45(1g)(a), charged with administering.51 which the Department was The trucking firm's challenge was heard by a hearing examiner for the Division of Hearings and Appeals, which rejected the challenge.52 appeals reversed the decision of the On appeal, the court of Division, giving no deference to the Division's interpretation of the statute.53 ¶40 The Division's adjudicative responsibilities under Wis. Stat. § 341.45 are set forth in § 227.43(1)(br).54 That section (in contrast to § 227.43(1)(bg), the section applicable in the present case) authorizes the administrator of the Division of Hearings and Appeals to assign a hearing examiner to 51 Roehl Transport, Inc. v. Div. of Hearings & Appeals, 213 Wis. 2d 452, 460, 465-66, 570 N.W.2d 864 (Ct. App. 1997). 52 Id. at 455, 457. 53 Id. at 455-56. 54 Wisconsin Stat. § 227.43 states, in relevant parts: (1) The administrator of the division of hearings and appeals in the department of administration shall: . . . . (br) Assign a hearing examiner to preside over any hearing of a contested case which is required to be conducted by the department of transportation and which is not conducted by the secretary of transportation. 25 No. 2003AP2628 render decisions in disputes before the Department of Transportation in hearings not conducted by the Secretary of Transportation, Transport. The directed, decision including but in disputes Department did Roehl not of direct, Transport such as the one that was the the hearing final Department under Wis. Stat. § 227.46(3)(a). Roehl could Transportation in have examiner's decision of the Thus, the court of appeals reviewed the Division's decision as a final decision of the Division, not of the Department. ¶41 In determining the level of deference to be accorded the statutory interpretation of the Division of Hearings and Appeals, the court of appeals distinguished between an agency charged with the administration and enforcement of the statutes being interpreted and other administrative entities such as the Division of Hearings and Appeals that merely "provide management services and assistance to state agencies and departments."55 ¶42 The court of appeals emphasized two elements in deciding whether to grant deference to the Division's decision in Roehl Transport: expertise, or expert (1) Did knowledge? the and Division (2) Did have experience, the legislature impose on the Division the duty to enforce or administer the statute?56 ¶43 The court of appeals held in Roehl Transport that the Division of Hearings and Appeals had not shown that it possessed 55 Roehl Transport, 213 Wis. 2d at 460. 56 Id. at 460-61. 26 No. 2003AP2628 any experience, expertise, or specialized knowledge in the area of fuel or excise taxation.57 ¶44 The court of appeals also concluded in Roehl Transport that the legislature had not imposed on the Division of Hearings and Appeals because the (although decision it in the duty Department did Roehl not to of enforce or administer Transportation direct) Transport was that the the could the have hearing final statute directed examiner's decision of the Department under Wis. Stat. § 227.46(3)(a).58 57 Id. at 461 (emphasis added). A review of the Division of Hearings and Appeals website indicates that Roehl Transport was the first case the Division ever heard regarding Wis. Stat. § 341.45. See Decisions Issued by DHA for Dep't of Transportation, available at http://dha.state.wi.us (last visited June 27, 2006). In Commissioner of Insurance v. Fiber Recovery, Inc., 2004 WI App 183, ¶15, 276 Wis. 2d 495, 687 N.W.2d 755, the court of appeals, following Roehl Transport, concluded that the court "may give deference to an agency decision on a question of law where the agency has expertise" but that the Division of Hearings and Appeals lacked expertise regarding ch. 605 and the construction of insurance contracts. The Division apparently heard the Fiber Recovery case under its authority under Wis. Stat. § 227.43(1m), which states: (1m) Upon the request of an agency that is not prohibited from contracting with a 3rd party for contested case hearing services, the administrator of the division of hearings and appeals in the department of administration may contract with the agency to provide the contested case hearing services and may assign a hearing examiner to preside over any hearing performed under such a contract. 58 The court of appeals thus distinguished the Division of Hearings and Appeals from the Tax Appeals Commission, explaining that the Division is not "an independent agency such as the Tax Appeals Commission created for the express purpose of reviewing decisions of a line agency." 27 No. 2003AP2628 ¶45 The principles of deference enunciated in Roehl Transport regarding decisions of the Division of Hearings and Appeals under explained in Wis. 2d 138, under Wis. Sea 588 Stat. View Estates N.W.2d 667 § 227.43(1)(b).59 (applied in § 227.43(1)(br) Roehl As Beach (Ct. with Transport), Club, App. were applied and Inc. v. 223 1998), Wis. Stat. § 227.43(1)(b) a DNR, case arising § 227.43(1)(br) authorizes the administrator of the Division of Hearings and Appeals to assign a hearing examiner to render a decision in disputes such as the one in Sea View when the secretary of the Department of Natural Resources does not hear the matter. ¶46 In Sea View, a beach club had operated a 215-foot pier without a permit. Upon a complaint by Sea View's neighbor, the DNR conducted a site inspection and determined that a 190-foot pier would be more appropriate for the granting a permit for a 190-foot pier. this permit. contested Division 59 site and recommended Sea View applied for Several neighbors objected to the permit and a hearing regarding of Hearings and the Appeals, pier as was held provided by before Wis. the Stat. Wisconsin Stat. § 227.43 states in relevant parts: (1) The administrator of the division of hearings and appeals in the department of administration shall: . . . . (b) Assign a hearing examiner to preside over any hearing of a contested case which is required to be conducted by the department of natural resources and which is not conducted by the secretary of natural resources. 28 No. 2003AP2628 § 227.43(1)(b). The hearing examiner concluded that a 110-foot pier would be more appropriate for the location. ¶47 In accordance with Wis. Admin. Code § NR 2.155(1),60 the Department of Natural Resources adopted the decision of the 60 Wisconsin Admin. Code provides in relevant part: § NR 2.155(1) (Sept., 2002) Unless the department petitions for judicial review as provided in s. 227.46(8), Stats., the decision [of the Division of Hearings and Appeals hearing officer] shall be the final decision of the department, but may be reviewed in the manner described in s. NR 2.20. Wisconsin Admin Code § NR 2.20 (Aug., 1997) provides: (1) FILING. Any party to a contested case who is adversely affected by a final decision rendered after a contested case hearing on the matter may, within 20 days after issuance of the decision, file a written petition for review by the secretary or the secretary's designee. The petition shall specify in detail the grounds for the review, the relief which petitioner seeks and citation to supporting authorities which petitioner believes aids petitioner's case. The secretary may not delegate the review to anyone who has had prior involvement in either the hearing or decision-making process. (2) SERVICE. The petition for review under this section shall be served on the secretary as provided for in s. NR 2.03. Copies of the petition for review shall be served by regular mail upon the administrative law judge and upon all parties to the action. (3) DECISION. Within 14 days of the receipt of the petition, the secretary shall decide whether or not to grant the requested review. If the secretary decides to grant the review, the secretary may order the filing of briefs, presentation of oral argument, or a rehearing of all or part of the evidence presented at the original public hearing, or any combination thereof. 29 No. 2003AP2628 Division of Hearings and Appeals. The Department of Natural Resources had adopted Wis. Admin. Code § NR 2.155(1) pursuant to Wis. Stat. § 227.46(3),61 which authorizes an agency to direct by (4) APPEAL. A petition for review pursuant to this section is not a prerequisite for appeal or review under ss. 227.52 to 227.53, Stats. (5) SUSPENSION OF DECISIONS. The filing of a petition for review under this section does not suspend or delay the effective date of a decision, and the decision shall take effect on the date of the decision unless another date is set by the department or the administrative law judge, and shall continue in effect unless provisions of the decision are specifically suspended or delayed by the secretary in writing. Petition for suspension of the effective date of a decision shall be clearly specified in the petition for review under this section. (6) EFFECT ON JUDICIAL REVIEW. An action pending under this section does not in any manner affect or extend the time limits for filing actions in circuit court for review under ss. 227.52 and 227.53, Stats. See Sea View Estates Beach Club, Inc. v. DNR, 223 Wis. 2d 138, 144-45, 588 N.W.2d 667 (Ct. App. 1998). 61 Wisconsin Stat. § 227.46(3) states: With respect to contested cases except a hearing or review assigned to a hearing examiner under s. 227.43(1)(bg), an agency may by rule or in a particular case may by order: (a) Direct that the hearing examiner's decision be the final decision of the agency; (b) Except as provided in sub. (2) or (4), direct that the record be certified to it without an intervening proposed decision; or (c) Direct that the procedure in sub. (2) be followed, except that in a class 1 proceeding both written and oral argument may be limited. 30 No. 2003AP2628 rule or in a particular case that the Division of Hearings and Appeals decision be the final decision of the agency. club appealed reviewing and court argued owed that no under Roehl deference to The beach Transport, the the Division's interpretation of the statute in question.62 ¶48 On appeal, the court of appeals distinguished Sea View from Roehl Transport, reasoning that the Department of Natural Resources had adopted the decision of the Division of Hearings Accordingly, in Sea View the court of appeals and Appeals. reviewed the decision of the Division of Hearings and Appeals as a final decision of the Department of Natural Resources63 and determined adopting weight that the the Department decision deference.64 of The the of Natural Division Department was of Resources entitled Natural decision to great Resources, according to the court of appeals, is the administrative agency charged by the legislature with general administrative duties and rule-making authority and had expertise regarding the v. 223 relevant statutory provisions.65 62 Sea View, 223 Wis. 2d at 144-46. 63 Sea View Estates Beach Club, Inc. Wis. 2d 138, 149, 588 N.W.2d 667 (Ct. App. 1998). 64 Id. at 147, 149. 65 Id. at 149. 31 DNR, No. 2003AP2628 ¶49 Adhering to the distinction between Roehl Transport and Sea View, the court of appeals has granted no deference to decisions of the Division of Hearings and Appeals on behalf of the Department of Health and Family Services (DHFS). permitted by Wis. Stat. § 227.46(3), DHFS has not Although adopted decisions of the Division of Hearings and Appeals as final.66 Similarly, in Borsellino v. DNR, 2000 WI App 27, ¶¶5-6, 232 Wis. 2d 430, 606 N.W.2d 255, the court of appeals reviewed a Division of Hearings and Appeals decision regarding pier size that was adopted by the Department of Natural Resources under Wis. Admin. Code § NR 2.155(1). Relying on Sea View, the court of appeals reviewed the decision as the final decision of the Department of Natural Resources and gave the decision great weight deference. 66 In Artac v. DHFS, 2000 WI App 88, 234 Wis. 2d 480, 610 N.W.2d 115 (a case arising under Wis. Stat. § 227.43(1)(bu), which is parallel to Wis. Stat. § 227.43(1)(b) and (br)), the court of appeals, citing Roehl Transport and Sea View, gave no deference to a decision of the Division of Hearings and Appeals denying a medical assistance application. The court of appeals pointed out that, unlike the Department of Natural Resources in Sea View, the Department of Health and Family Services had not adopted the decision of the Division. Thus the court of appeals granted the Division's decision no deference. The court of appeals commented that "[I]t appears unusual to grant different levels of deference to what are effectively all [Division] decisions based on whether a particular agency has a rule by which it automatically adopts those decisions. However under Roehl and Sea View, it appears that we are bound to do so." 234 Wis. 2d 480, ¶13 n.6. 32 No. 2003AP2628 ¶50 A more recent case, Town Hearings & Appeals, App 2002 WI of Barton 169, 256 N.W.2d 293, is similar to the instant case. v. Division Wis. 2d 628, of 649 Town of Barton, like the present case, arose under Wis. Stat. § 227.43(1)(bg).67 ¶51 The City of West Bend had requested permission from the Town of Barton to build a sanitary sewer interceptor through the Town. the The Town denied the request, and the City appealed to Division § 86.16(5).68 of The Hearings and Division Appeals ordered the under Town Wis. Stat. to permit installation of the interceptor. The court of appeals followed Artac in Buettner v. DHFS, 2003 WI App 90, 264 Wis. 2d 700, 663 N.W.2d 282. In Buettner, the Department of Health and Family Services terminated Buettner's medical assistance benefits. Buettner appealed to the Division of Hearings and Appeals, which, after a hearing, affirmed. As in Artac, the Division's authority to hear Buettner's challenge came from Wis. Stat. § 227.43(1)(bu). The circuit court granted summary judgment for the Department. On appeal, the court of appeals determined that the Division of Hearings and Appeals decision had not been adopted by DHFS, the statutes were complex, and the Division's decision was entitled to no deference under Sea View and Artac. 67 Town of Barton addressed Wis. Stat. § 86.16(5), which is included in the list of statutes covered by Wis. Stat. § 227.43(1)(bg). See supra note 21. 68 Wisconsin Stat. § 86.16(5) states: Any person, firm or corporation whose written application for permission to construct such lines within the limits of a highway has been refused, or has been on file with the department or local authority for 20 days and no action has been taken thereon, may file with the department or local authority a notice of appeal to the division of hearings and appeals. The department or local authority shall thereupon return all of the papers and action of the department or local authority to the 33 No. 2003AP2628 ¶52 On appeal, the court of appeals concluded that due weight deference was appropriate to the decision of the Division of Hearings and Appeals permitting the City to install sewer equipment in the Town under Wis. Stat. § 86.16(5),69 because (1) the Division of Hearings and Appeals "has been charged with administering Wis. Stat. § 86.16(5)" and (2) the Division has "some experience, standing."70 even though its experience is not of long The court of appeals decision did not explain why it viewed the Division of Hearings and Appeals as charged with administering § 86.16(5) and did not refer to either Roehl Transport or Sea View or any other case in its discussion of the standard of review.71 ¶53 follows: These When court the of appeals Division of cases can Hearings be and explained Appeals as hears disputes under Wis. Stat. §§ 227.43(1)(b), (br), (bu), and (by), it appears to have jurisdiction concurrent with the Department of Natural Resources, the Department of Transportation, the division of hearings and appeals, and the division of hearings and appeals shall hear and try and determine the appeal on 10 days' notice to the department or local authority, and the applicant. The order entered by the division of hearings and appeals shall be final. See also Wis. Stat. § 227.43(1)(bg). 69 Town of Barton v. Div. of Hearings & Appeals, 2002 WI App 169, ¶¶10, 15, 256 Wis. 2d 628, 649 N.W.2d 293. 70 Id., ¶10. 71 The briefs in Town of Barton made no reference to Roehl Transport or Sea View. 34 No. 2003AP2628 Department of Health and Family Services, and the Department of Workforce Development, respectively. Furthermore, each department may by rule or in a particular case may by order direct that the hearing decision of the agency.72 within these statutory examiner's decision be the final Roehl Transport and Sea View fall provisions. The level of deference depends on whether the department adopts the decision of the Division and whether the department has the requisite expertise in the issue before it. The court of appeals thus gave deference in Sea View but not in Roehl Transport. ¶54 hears In contrast, when the Division of Hearings and Appeals disputes under Wis. Stat. § 227.43(1)(bg), the statute involved in the present case and in Town of Barton, the Division is the only administrative entity with authority to conduct the hearing, and the judicial review.73 Division's decision is final subject to Furthermore, Wis. Stat. § 227.46(3) does not permit the Department of Transportation to promulgate a rule adopting, as a final decision of the Department, decisions of the Division rendered under § 86.16(5) (Town of Barton) or § 218.0116(8)(a) (the instant case). 72 Wis. Stat. § 227.46(3)(a). 73 Wis. Stat. §§ 227.43(1)(bg), 227.46(2m), (3). Wis. Stat. § 218.0116(8)(c), (9). See also Wisconsin Stat. § 227.46(2m) permits the Department of Transportation to seek judicial review of a Division decision made under § 227.43(1)(bg). 35 No. 2003AP2628 ¶55 After reviewing Roehl Transport, Sea View, Town of Barton, and other cases such as those involving LIRC and the Tax Appeals Commission, we conclude that the legislature imposed the adjudicative responsibilities under Wis. Stat. § 218.0116(8)(a) on the Division purposes of of Hearings and adjudication, Appeals charged and the thus, Division administration and enforcement of that statute. cases recognize ordinarily a court, that court a question interpretation may of although of law statutory for interpretation independently deference to § 218.0116(8)(a) with Therefore, our determined accord the the under by is a Division's appropriate circumstances set forth in the case law. ¶56 Applying these cases, we conclude that in the present case the Division of Hearings and Appeals is not entitled to great weight deference because it has no experience or expertise in the issue presented. due weight deference. under Wis. Stat. At most, the Division is entitled to The Division has heard numerous cases § 218.0116 and its predecessor statutes. However, besides the present case, only two of those cases have considered a subsection of § 218.0116 addressing a motor vehicle dealer agreement, and neither of those disputes addressed the definition of "motor vehicle dealer agreement" or § 218.0116(8) or its predecessor statute.74 Nor did these disputes address the 74 See Decisions Issued by DHA for Dept. of Transportation, available at http://dha.state.wi.us (last visited June 27, 2005). 36 No. 2003AP2628 definition of "agreement" or "franchise" under § 218.0101(1) and (13). ¶57 The other disputes before the Division of Hearings and Appeals relating to Wis. Stat. § 218.0116 addressed provisions of that section that impose licensing requirements on motor vehicle dealers and manufacturers or regulate the sale of motor vehicles. issues, While the Division may have expertise regarding these we conclude that interpretation of a motor vehicle dealer agreement under § 218.0116(8)(a) is a matter of first impression and that the Division lacks the requisite expertise and experience for its statutory interpretation to be accorded great weight deference.75 ¶58 Even if we were to grant due weight deference to the statutory interpretation of the Division of Hearings and Appeals of § 218.0116(8)(a) in the present case, we do not adopt the Division's statutory interpretation of § 218.0116(8)(a) because, as we explain below, another interpretation is more reasonable. II ¶59 what The substantive dispute in the present case centers on documents constitute the motor under Wis. Stat. § 218.0116(8). vehicle dealer agreement More specifically, the dispute focuses on whether the document assigning territory to Racine HD (the zip code list) is part agreement under § 218.0116(8). of the motor vehicle dealer We first set forth the facts, 75 See UFE Inc., 201 Wis. 2d at 284 (citing Harnischfeger Corp., 196 Wis. 2d at 660). 37 No. 2003AP2628 then determine the meaning of "motor vehicle dealer agreement" under § 218.0116(8) and apply the statutory interpretation to the present case. A ¶60 of The following are the undisputed facts. Hearings Davidson, and Appeals concluding as granted a summary matter of The Division judgment law on to the Harley- basis of undisputed facts that the zip code list assigning territory to Racine H-D was not part of the motor vehicle dealer agreement. ¶61 Harley-Davidson manufactures and sells motorcycles, parts, and accessories through a nationwide network of retail dealers. Harley-Davidson is licensed as a "manufacturer" under Wis. Stat. § 218.0101(20)(a) and Racine H-D is licensed as a "motor vehicle dealer" under Wis. Stat. § 218.0101(23). Racine H-D became a Harley-Davidson dealer in 1992 and entered into a series of contracts with Harley-Davidson, all granting Racine HD a non-exclusive right to purchase and sell Harley-Davidson products at retail from an approved location in Racine. ¶62 When Racine H-D became a Harley-Davidson dealer in 1992, the parties signed a contract that granted Racine H-D the right to sell Harley-Davidson products in a "territory" defined as "Racine County in the State of Wisconsin." includes the zip code 53105, which Racine County encompasses the City of Burlington, an area of very high sales. ¶63 early On expiration of the 1992 contract, in late 1993 or 1994, contract Harley-Davidson that made presented reference to 38 and Racine H-D expressly with a new incorporated No. 2003AP2628 Harley-Davidson's General Conditions of Sales and Service. Instead of assigning a territory, these documents stated that Harley-Davidson would assign Racine H-D a territory from "time to time" that could be modified based on Harley-Davidson's "good faith business judgment." ¶64 Before signing the 1994 contract, Racine H-D learned that Harley-Davidson intended to remove the Burlington zip code from Racine H-D's assigned territory and that the Burlington zip code would be reassigned to Uke's Harley-Davidson, a dealer located in Kenosha. ¶65 In response to Harley-Davidson's removal of the Burlington zip code, Racine H-D filed a complaint under Wis. Stat. § 218.0116(8) with the Division of Hearings and Appeals and the Department of Transportation, contesting the removal of the Burlington zip code. method of assigning Racine H-D asserted that under the new territory, which based assignment on a dealer's distance from the center of a zip code, Racine H-D was closer to Burlington than was Uke's Harley-Davidson. ¶66 Harley-Davidson then reevaluated its calculations and transferred the Burlington zip code back to Racine H-D. Racine H-D dealer then withdrew its complaint and signed the 1994 contract, dated May 25, 1994 and set to expire in 1998. ¶67 Racine H-D first received a list of zip codes to be included in its territory in 1994 in a meeting with its district manager. The list was on a sheet of paper, separate from any other documents. 39 No. 2003AP2628 ¶68 In 1998, Harley-Davidson and Racine H-D entered into the contract at issue in the present case. Like the contract entered into by the parties in 1994, the 1998 contract includes both a signed document entitled "Harley-Davidson Motor Company Motorcycle "General Dealer Contract" Conditions of and Sales and Contract expressly incorporates. zip code list but the a word second document Service," which entitled the Dealer Neither document includes the "territory" is used in both documents. ¶69 The Dealer Contract mentions the assignment territory in relevant parts as follows: 1. GRANT OF RIGHTS. Dealer, and Dealer hereby following rights: Seller hereby grants to accepts from Seller, the A. To purchase and resell at retail, primarily to persons residing or doing business in the Territory assigned under this Contract the motorcycles, parts, accessories, clothing, and other items (collectively referred to in this Contract as the "Harley-Davidson Products") identified in the Products Addendum to the Harley-Davidson Motor Company Motorcycle Dealer Contract (referred to in this Contract as the "Products Addendum"); . . . . Each of the foregoing rights granted to Dealer shall be non-exclusive. . . . . 6. SPECIAL MARKET RIGHTS. . . . Dealer's special market rights only limit the location at which an additional Harley-Davidson motorcycle dealership may be established and are not in any way related to, and have no impact upon, Dealer's Territory, which remains 40 of No. 2003AP2628 non-exclusive and subject to change by Harley-Davidson from time-to-time. ¶70 Service," The document entitled "General Conditions of Sales and expressly incorporated in the Dealer Contract,76 provides that Harley-Davidson can modify, alter, or adjust the territory at any time based on its good faith business judgment and that territory changes may result from the relocation of an existing dealership. The document provides, in relevant part, for the assignment of territory as follows: Seller will assign Dealer a geographic area from time to time as Dealer's Territory, in which Dealer is responsible for effectively selling at retail, servicing and otherwise representing Harley-Davidson Products. It is understood and agreed that (a) Seller may modify, alter or adjust Dealer's Territory at any time, based on Seller's good faith business judgment; and (b) Dealer's Territory is non-exclusive. Without limitation, Dealer recognizes that Seller may change its Territory if the change results from the establishment of an additional Harley-Davidson dealership or the relocation of an existing dealership. 76 Regarding the General Conditions of Sales and Service, the Dealer Contract provides: 2. General Conditions. The Harley-Davidson Motor Company General Conditions of Sales and Service (January 1999) (referred to in this Contract as the "General Conditions"), a copy of which has been provided to Dealer and has been read and agreed to by Seller and Dealer, and such General Conditions and any duly executed and delivered supplement or amendment thereto are hereby expressly made a part of this Contract and incorporated herein. Unless the context otherwise requires, any term defined in any part of this Contract shall have the same meaning in all parts of this Contract. (Emphasis added.) 41 No. 2003AP2628 ¶71 The General Conditions of Sales and Service document expressly provides that Racine H-D has rights and obligations related to a "Territory assigned under this Contract . . . ." The document also requires Racine H-D to "devote its best efforts to promote aggressively the sale at retail of HarleyDavidson products to customers within the Territory assigned to Dealer . . . ." In addition, the document requires Racine H-D to "develop, utilize and participate in various advertising and sales promotional programs . . . in fulfilling its responsibilities for selling, promoting and advertising HarleyDavidson products in the Territory" and obligates Racine H-D to maintain an inventory based on the "proper share of current and anticipated demand for Harley-Davidson Motorcycles in the Territory." ¶72 The parties agree that both the 1998 Dealer Contract and the General Conditions of Sales and Service are included in the agreement document spells although both under out Wis. the documents territory to Racine H-D. Stat. § 218.0116(8)(a). territory assigned refer Harley-Davidson to to Neither Racine H-D, assigning The dispute centers on whether other documents relating to the assignment of territory, in particular the zip code lists Harley-Davidson provided to Racine H-D, are part of the 1998 agreement. ¶73 As demonstrated by various documents and the parties' course of dealings, Racine H-D's territory continued to include the Burlington zip code from 1994 through 2001. For example, almost every year the parties sent direct mail promotional items 42 No. 2003AP2628 to residents of Racine H-D's territory, which was described as including the Burlington zip code. ¶74 The dispute between the parties arose when Harley- Davidson decided in 2001 to remove the Burlington zip code from Racine H-D's informed assigned Racine H-D territory. that the In 2001, Burlington zip Harley-Davidson code would be reassigned to Uke's Harley-Davidson once Uke's moved its Kenosha facility to a new location along Interstate 94. Using its standard distance calculations, Harley-Davidson determined that the new Uke's location was closer to the center of the of the with the Department of Burlington zip code than was Racine H-D's location. ¶75 In Burlington Division 2002, zip of response code, Racine Hearings and Transportation.77 77 in H-D to the filed Appeals reassignment a and complaint the Racine H-D argued before the Division that the See Wis. Stat. § 218.0116(8)(a): A manufacturer or distributor may not modify a motor vehicle dealer agreement during the term of the agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer's rights, obligations, investment or return on investment without giving 60 days written notice of the proposed modification to the motor vehicle dealer unless the modification is required by law, court order or the licensor. Within the 60-day notice period the motor vehicle dealer may file with the department of transportation and the division of hearings and appeals and serve upon the respondent a complaint for a determination of whether there is good cause for permitting the proposed modification. The division of hearings and appeals shall promptly schedule a hearing and decide the matter. Multiple complaints pertaining to the same proposed modification shall be consolidated for hearing. The 43 No. 2003AP2628 removal of the Burlington zip code constitutes a modification of the motor vehicle dealer agreement between the parties. Harley- Davidson moved for summary judgment, and the hearing examiner granted the motion. ¶76 The decision of the hearing examiner was for the most part approved by the administrator of the Division of Hearings and Appeals. The final ruling stated that "[t]he assignment of a territory by Harley-Davidson for [Racine H-D] is not part of the motor vehicle dealer agreement" between the parties and that "the 'Harley-Davidson Motor Company Motorcycle Dealer Contract' and the 'Harley-Davidson Motor Company General Conditions of Sales and Service' together comprise the 'motor vehicle dealer agreement.'" that The Division of Hearings and Appeals further ruled "[a]lthough the vehicle dealer between a manufacturer specific is assignment territory an important and assigned a of a component dealer, is territory not the a of to the a agreement description necessary motor of the component." Finally, the Division concluded that Harley-Davidson's policy of not including specific zip codes in motor vehicle dealer agreements is sensible because the legislature did not intend that each modification of a dealer's assigned territory, when made under a uniform policy, should become the potential subject of a complaint. proposed modification may not take effect pending the determination of the matter. 44 No. 2003AP2628 ¶77 On review the circuit court concluded that the zip codes list provided to Racine H-D in 1994 was part of the motor vehicle dealer agreement because the motor vehicle dealer agreement "only makes sense if there is reference" to the zip code list. circuit The court of appeals reversed the order of the court. deference to The the court of decision Appeals, concluding that Division with Division had substantial vehicle code.78 The of appeals the the administration Division legislature of of great Hearings and had charged the and interpreting appeals weight of § 218.0116(8) experience court applied thus that the the motor reinstated the Division's decision and summary judgment order, holding that it was a reasonable interpretation of the meaning of the phrase "motor vehicle dealer agreement" under Wis. Stat. § 218.0116(8).79 B ¶78 We turn now to the question whether the assignment of territory is part of a motor vehicle agreement under Wis. Stat. § 218.0116(8). We conclude that a manufacturer's assignment of territory is an essential aspect of the franchise relationship and therefore part of a motor vehicle dealer agreement under § 218.0116(8). ¶79 dealer We begin our analysis of the meaning of "motor vehicle agreement" as used in § 218.0116(8) by examining 78 Racine Harley-Davidson, 278 Wis. 2d 508, ¶¶22, 24. 79 Id., ¶¶26-30. 45 No. 2003AP2628 §§ 218.0101(1) and (13), which define the words "agreement" and "franchise" respectively for the purposes of §§ 218.0101 to 218.0163 governing motor vehicle dealers. ¶80 mean "a between Wisconsin Stat. § 218.0101(1) defines "agreement" to contract that manufacturers, describes the distributors, franchise importers relationship and dealers." The statute does not define "agreement" as a written instrument and does not require that all terms of the agreement be included in a single instrument designated as the agreement and executed by both parties. ¶81 Section 218.0101(13) defines "franchise" to mean "the right to buy, sell, distribute or service a line make of motor vehicles that distributor is by a granted to a manufacturer, motor vehicle importer or dealer or distributor." Nothing in Wis. Stat. §§ 218.0101 to 218.0163 further defines the words "agreement," "contract" (as used in § 218.0101(1)) or "franchise" definition for of purposes agreement is of § 218.0116(8). broad, encompassing The the statutory parties' description of their franchise relationship.80 80 The original definition of "agreement" adopted in 1961 is substantially the same as the present definition. The original definition stated, "'Agreement' means contract or franchise or any other terminology used to describe the contractual relationship between manufacturers, distributors, importers and dealers." Wis. Stat. § 218.01(1)(u) (1961). A worksheet for a draft of the 1961 session law, ch. 560, Laws of 1961, states that "'[a]greement' is intended to include and be synonymous with contract or franchise, or any other terminology used to describe the contractual relationship between manufacturers, distributors, importers and their appointed dealers." 46 No. 2003AP2628 ¶82 Several other provisions in Wis. Stat. §§ 218.0101 to 218.0163 demonstrate essential aspect of that the the assignment franchise of territory relationship and is an therefore part of the motor vehicle dealer agreement. ¶83 The first sentence of Wis. Stat. § 218.0114(11) provides that "[a] manufacturer . . . shall designate in writing the area of sales responsibility assigned to a motor vehicle dealer." Thus a manufacturer's written assignment of territory is a statutory condition for licensing. ¶84 While this language does not explicitly require that the written territory assignment be part of the motor vehicle dealer agreement, the implication is that the assignment of territory is an essential aspect of the franchise relationship and therefore part of the motor vehicle dealer agreement. ¶85 The prohibits a second sentence manufacturer of from Wis. Stat. modifying the § 218.0114(11) area of sales responsibility to avoid the requirements of § 218.0116(7), which governs a manufacturer who seeks to enter into a franchise agreement establishing or relocating a motor vehicle dealership. If a manufacturer seeks to establish or relocate a dealership, an existing dealer franchise may file a protest with the Department of Transportation and the Division of Hearings and Appeals. proposes Thus territory plays establishing another a role dealership when within a manufacturer the "relevant The legislative history of the definition of "agreement" adopted in 1993 demonstrates no intent to change the substance of the prior definition. 47 No. 2003AP2628 market area" of an existing dealership. The implication in § 218.0116(7) and (11) is that the manufacturer's assignment of territory is an essential aspect of the franchise relationship and therefore part of the motor vehicle dealer agreement. ¶86 Section 218.0116(1)(r) (part of Wis. Stat. § 218.0116(1) governing the denial, suspension or revocation of licenses) provides that a manufacturer's license may be denied, suspended, or revoked if, among other matters, the manufacturer "fails to designate in writing the area of sales responsibility assigned to a motor vehicle dealer." Although subsection (1)(r) does not explicitly require that the assignment of territory be part of the motor vehicle agreement, it reaffirms the notion that the assignment of territory is an essential aspect of the franchise relationship and therefore part of the motor vehicle dealer agreement between the parties. ¶87 Stat. Another significant provision for our purposes is Wis. § 218.0114(9)(a)1. provisions in an prohibiting agreement that and "waive rendering a remedy void or any defense available to . . . a dealer or other provision protecting the interests of . . . a 218.0163 . . . ." dealer under ss. 218.0101 to If we were to hold that a manufacturer may exclude an assignment of territory from a motor vehicle dealer agreement and reserve territory according to for itself its good the faith power to business change the judgment, we would in effect be allowing a manufacturer to enter into a motor vehicle dealer agreement forcing the dealer to waive the remedy and protections available to it under Wis. Stat. § 218.0116(8). 48 No. 2003AP2628 ¶88 Unless an assignment of territory is treated as part of the motor vehicle dealer agreement, Wis. Stat. § 218.0116(8) will not provide an effective administrative remedy to motor vehicle dealers for a manufacturer's modification of territory. This result seems contrary to the purposes of Wis. Stat. §§ 218.0114(9)(a)1. and 218.0116(8). ¶89 Thus Wis. Stat. § 218.0101(1) and (13); § 218.0114(9) and (11); and § 218.0116(1)(r), (7), and (8) support the view that an assignment of territory is an essential aspect of the franchise relationship and therefore part of a motor vehicle dealer agreement. Failing to include an assignment of territory as a part of the motor vehicle dealer agreement not only would make it difficult to "effectively work under the terms of the contract[,]" as the circuit court stated, but also would permit manufacturers and dealers to circumvent by contract essential and non-waivable provisions of §§ 218.0101 to 218.0163. ¶90 The Division of Hearings and Appeals concluded that the assignment of territory is an important component of the franchise relationship between a manufacturer and dealer but that "the precise description of the assigned territory is not essential to the relationship." It concluded that the express language in Wis. Stat. § 218.0114(11) prohibiting a manufacturer from modifying "the area of sales responsibility to avoid the requirements of s. 218.0116(7) . . . implies that manufacturers may modify a dealer's area of instances." 49 sales responsibility in other No. 2003AP2628 ¶91 is not The reasoning of the Division of Hearings and Appeals persuasive and gives no consideration to Wis. Stat. § 218.0114(9)(a)1. prohibiting and rendering void any provisions in an agreement that "waive a remedy or defense available to . . . a dealer or other provision protecting the interests of . . . a dealer under Division's ss. interpretation 218.0101 of to § 218.0116(8) 218.0163." is not The the more reasonable interpretation because it allows a manufacturer to circumvent the protections afforded a dealer under Wis. Stat. § 218.0116(8) assignment of by allowing territory in the a manufacturer document to separate place from the other documents. ¶92 Furthermore, the statutory interpretation of the Division of Hearings and Appeals fails to serve the remedial purpose underlying the statute. to protect motor vehicle The dealership law is designed dealers from unfair treatment by manufacturers who are in a stronger bargaining position than dealers and to give dealers remedies against the manufacturer. In Forest Home Dodge, Inc. v. Karns, 29 Wis. 2d 78, 138 N.W. 2d 214 (1965), we explained that the legislature recognized this disparity of bargaining positions in adopting the motor vehicle dealership law: Implicit in this law is the recognition of the gross disparity of bargaining power between the manufacturer of automobiles and the local retailer. It was enacted in recognition of the long history of the abuse of dealers by manufacturers. . . . The purpose of the law 50 No. 2003AP2628 is to furnish the dealer with some protection against unfair treatment by the manufacturer.81 ¶93 The court has often stated that remedial legislation should be broadly construed to effectuate its purpose.82 We thus construe the relevant sections of ch. 218 broadly to effectuate the statute's remedial purpose. In so doing, we conclude that a more reasonable interpretation of these remedial 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. ¶94 We conclude that read together, Wis. Stat. § 218.0101(1) and (13); § 218.0114(9) and (11); and § 218.0116 (1)(r), 218.0163, (7), and (8); and support the conclusion interpretation of the the statutes purpose than that that of §§ 218.0101 a more of the to reasonable Division of 81 Forest Home Dodge, Inc. v. Karns, 29 Wis. 2d 78, 85, 138 N.W. 2d 214 (1965); see also Kuhl Motor Co. v. Ford Motor Co., 270 Wis. 488, 494, 71 N.W.2d 420 (1955) ("[T]he legislature recognized the inequality in bargaining power between an automobile dealer and an economically powerful manufacturer such as the defendant and that it desired to furnish him some protection by deterring unfair cancellation."). 82 See, e.g., Garcia v. Mazda Motors of America, Inc., 2004 WI 93, ¶8, 273 Wis. 2d 612, 682 N.W.2d 365 ("[W]e will liberally construe remedial statutes to suppress the mischief and advance the remedy that the legislature intended to afford."); City of Madison v. Hyland, Hall, & Co., 73 Wis. 2d 364, 373, 243 N.W.2d 422 (1976) (quoting Stone v. Inter-State Exchange, 200 Wis. 585, 589, 229 N.W. 26 (1930) ("Under the accepted law of Wisconsin and of other jurisdictions, remedial statutes should be liberally construed 'to suppress the mischief and advance the remedy which (the statute) intended to afford.'")). 51 No. 2003AP2628 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. ¶95 Applying our interpretation of the statutes to the present case, we agree with the circuit court that the zip code list is part of the motor vehicle dealer agreement under Wis. Stat. § 218.0116(8) between the parties. The circuit court astutely observed: "It is disingenuous to argue the [zip code] list is not part of the dealership agreement. . . . Neither [Racine H-D nor Harley-Davidson] can effectively work under the terms of the contract without reference to the territorial restrictions as set forth in the list." ¶96 Accordingly, we reverse the decision of the court of appeals and hold (1) that Harley-Davidson's assignment of territory to Racine H-D was 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 further proceedings under H-D's Wis. complaint Stat. and § 218.0116(8) to conduct consistent with this opinion. ¶97 By the Court. The decision of the court of appeals is reversed and the cause is remanded to the circuit court for remand to the Division of Hearings and Appeals. 52 No. ¶98 DAVID T. PROSSER, J. 2003AP2628.dtp The (concurring). majority opinion provides a valuable analysis of our standard of review for various administrative decisions. of when we afford interpretation of law. great weight It includes a discussion deference to an agency's I join the opinion and write separately only to reference my concurring opinion in Hilton v. DNR, 2006 WI 84, ___ Wis. 2d ___, ___ N.W.2d ___, which was written with the hope of generating discussion. 1 No. ¶99 PATIENCE DRAKE ROGGENSACK, J. 2003AP2628.pdr The (concurring). majority opinion concludes that the sales territory serviced by Racine Harley-Davidson, Inc. (Racine H-D) is part of its "motor vehicle dealer (2003-04).1 agreement" under Majority op., ¶78. Wis. Stat. § 218.0166(8)(a) I agree with this conclusion. I also applaud the majority opinion's thorough discussion of the common law standards of deference to agency decisions that have been applied in the past. concludes that the However, the majority opinion also Department of Hearings & Appeals' (DHA) interpretation of § 218.0166(8)(a), a question of law, may be accorded the same levels of deference that we have accorded the decisions of a line agency that is charged with administering a specific statutory scheme. Majority separately for two reasons: op., ¶¶55-58. I write (1) I disagree with the majority opinion's conclusion that common law levels of deference may be accorded to decisions administrator's agency, and decision (2) the of the has DHA not majority administrator been adopted opinion by overlooks when the the line contract interpretation that is central to deciding the issue presented for review. I. BACKGROUND ¶100 Racine H-D has been a franchised Harley-Davidson Motor Company (Harley-Davidson) dealer since 1992. relationship with Harley-Davidson, Racine H-D As part of its has agreed to service specific geographic areas that are referred to as Racine 1 All subsequent references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted. 1 No. H-D's "Territory." 2003AP2628.pdr Initially, Racine H-D's Territory was all of Racine County, which included the Burlington zip code, 53105. Subsequently, its Territory was described by a list of zip codes. ¶101 However, in 2001 when Harley-Davidson provided a new franchise agreement, the Burlington zip code was not included in Racine H-D's Burlington franchise Territory. from its Racine Territory agreement that H-D was claimed a substantially that removing modification and adversely of its affected its rights as a Harley-Davidson motor vehicle dealer and that the modification complaint with was DOT, made without alleging a good cause. violation of It filed Wis. a Stat. § 218.0116(8).2 ¶102 The complaint was referred to the DHA to adjudicate, as authorized by statute, Wis. Stat. § 218.0116(8)(a), and a DHA hearing examiner § 227.43(1)(bg). 2 was assigned to adjudicate it, Wis. Stat. The DHA hearing examiners are assigned to hear Wisconsin Stat. § 218.0116(8) provides in relevant part: (a) A manufacturer or distributor may not modify a motor vehicle dealer agreement during the term of the agreement or upon its renewal if the modification substantially and adversely affects the motor vehicle dealer's rights, obligations, investment or return on investment without giving 60 days written notice of the proposed modification to the motor vehicle dealer unless the modification is required by law, court order or the licensor. 2 No. 2003AP2628.pdr contested case proceedings from many different line agencies.3 The legislature has required the DHA administrator to establish a system for their assignments that "shall ensure, to the extent practicable, that hearing examiners are assigned to different subjects on a rotating basis." Section 227.43(1g).4 ¶103 Harley-Davidson moved for summary judgment to dismiss the complaint. It contended that Racine H-D's Territory was not a part of its "motor vehicle dealer agreement," as those terms are used in Wis. Stat. § 218.0116(8); and therefore, assigning the Burlington zip code to another dealer did not contravene § 218.0116(8). because the contained The hearing examiner agreed with Harley-Davidson description of Racine within the Harley-Davidson H-D's Territory Motor Company was not Motorcycle Dealer Contract (Dealer Contract) or the Harley-Davidson Motor Company General Conditions of Sales and Service (Conditions of Sales and Service) that the parties signed. The administrator affirmed the decision of the hearing examiner. is the decision of the DHA administrator, granting DHA It summary 3 The DHA conducts hearings for the Department of Corrections, the Department of Health & Family Services, the Department of Workforce Development, the Department of Administration, the Department of Natural Resources, the Department of Justice, the Department of Transportation, the Department of Public Instruction, and the Department of Employee Trust Funds. The DHA website, http://dha.state.wi.us/home (last visited June 14, 2006). 4 Even though the administrator may establish "pools of examiners responsible for certain subjects," Wis. Stat. § 227.43(1g), the record contains nothing in regard to the qualifications or experience of the hearing examiner who heard this case. 3 No. 2003AP2628.pdr judgment dismissing Racine H-D's complaint, that is before us for review. II. A. DISCUSSION Standards of Review 1. Statutes ¶104 Statutory construction is a question of law. Buettner v. DHFS, 2003 WI App 90, ¶6, 264 Wis. 2d 700, 663 N.W.2d 282. We have applied three levels of common law deference administrative agency's interpretation of a statute: to an (1) no deference, often referred to as de novo review; (2) due weight deference, where we affirm an agency's interpretation if it is reasonable and we conclude that another interpretation is not more reasonable; and (3) great weight deference, where we affirm an agency's interpretation if it is reasonable, even when we conclude that another interpretation is more reasonable. UFE Inc. v. LIRC, 201 Wis. 2d 274, 285-87, 548 N.W.2d 57 (1996). ¶105 Due weight deference requires that the legislature has charged the agency with the administration of the statute in question and that the agency has had at least some experience interpreting the statute in a consistent fashion. 87. Id. at 286- In according due weight deference, we defer to an agency's statutory interpretation only when we conclude that another interpretation of the statute is not more reasonable than that chosen by the agency. question, we make Id. at 287. a comparison In order to decide that between the agency's interpretation and alternate interpretations. This comparison requires us to construe the statute ourselves. In so doing, we 4 No. employ judicial embrace a expertise major in statutory responsibility of of deference is of a lesser construction, the government, deciding what statutes mean. concern 2003AP2628.pdr judicial and we branch of Therefore, this level than is great weight deference. ¶106 Great weight deference also requires that the legislature has charged the agency with the administration of the statute in question. accord great weight Id. at 284. deference, Additionally, in order to the agency must have long standing expertise in administering the statute; it must have used its expertise and specialized knowledge in forming its interpretation of the statute; and the agency's interpretation must provide more uniformity and consistency in the application of the statute than would a court's decision. Id. (citing Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 660, 539 N.W.2d 98 (1995)). ¶107 Our basis for giving even due weight deference to an agency's statutory interpretation is bottomed on two required assumptions: the statute is one that the agency was charged with administering and the agency has at least some expertise in the interpretation of the statute in question. UFE, 201 Wis. 2d at 284-86. ¶108 The majority opinion concludes the first assumption, that the DHA was charged § 218.0116(8), applies. with administering Majority op., ¶55. Wis. It also concludes that the DHA is charged with enforcing § 218.0116(8). conclude that neither conclusion pertains here. 5 Stat. Id. I First, the type No. 2003AP2628.pdr of legislatively assigned responsibility of a deciding authority for a line deference, agency e.g., to LIRC, which has we previously been limited have accorded the discrete to statutory context that the line agency, itself, administered. See, e.g., West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1, 11-13, 357 N.W.2d 534 (1984) (concluding that the agency (WERC) can provide uniformity and consistency in the field of its specialized knowledge); Jicha v. DILHR, 169 Wis. 2d 284, 290-91, 485 N.W.2d 256 (1992) (concluding that deference to an agency's statutory interpretation is appropriate only where the interpretation is based on the specialized knowledge, technical competence and experience particular to the agency (LIRC)). ¶109 Second, in cases brought to the DHA for a hearing, the DHA administrator makes the final agency decision that is then subject to judicial review Stat. § 227.46(2m). under Wis. Stat. § 227.52. Wis. However, the DHA administrator does not have the type of specialized knowledge and technical competence of other deciding authorities, such as LIRC and WERC, to which we have accorded deference in the past. This is so because the DHA administrator is the final decision maker for many types of DHA adjudications, e.g.: (1) the Department of Corrections (DOC) parole and probation revocations, Wis. Admin. Code § HA 2.05(8); (2) the DOC good time forfeitures, Wis. Admin. Code § HA 2.06(8); (3) all decisions of the DOT for which a hearing 6 No. examiner is appointed under Wis. 2003AP2628.pdr § 227.43(1)(bg);5 Stat. (4) decisions by the Department of Commerce in regard to permitting, suspending or revoking a permit for a manufactured home park, § 227.43(1)(bg); (5) decisions by the Department of Commerce in regard to licensing or suspending and revoking a license to be a manufactured home dealer, § 227.43(1)(bg); and (6) decisions by highway commissioners of municipalities to close a highway for safe transportation § 227.43(1)(bg). order in decision. an of certain hazardous materials, And finally, the DOT cannot by rule or by individual case Section 227.46(3). adopt the DHA administrator's Therefore, there is not even the assurance that the administrator's decision comports with the line agency's interpretation of the law. ¶110 Under current statutory provisions, the administrator of the DHA has become a general adjudicator of broadly ranging disputes rules. arising under numerous statutes and administrative This is the natural result of the 1977 creation of Wis. Stat. § 227.43, which began the process of bringing to the DHA the adjudication of claims arising under statutes administered 5 The decisions of the DOT involve regulation of outdoor advertising, regulation of junkyards, permits to construct entrances to state highways, placement of utility lines along highways, removal of highway signage, rescinding designations of marked highway routes within a municipality, certificates of approval to construct airports, regulations of structures that could affect airport operation, annual registration fees for aircraft, closing of highways for the safe transportation of hazardous materials, granting or suspending or revoking motor vehicle dealer or manufacturer or importer licenses, allegations of misuse of temporary operation permits and plates, the DOT acts or omissions under ch. 342, licenses for driver instructors and permits for oversized vehicles and loads. 7 No. by many different line agencies. This 2003AP2628.pdr separated the "administrative and prosecutorial functions of the department[s] from [their] adjudicative functions," and established the potential for general adjudicative authority in the DHA. See DOT v. Office of the Comm'r of Transp., 159 Wis. 2d 271, 277-78, 463 N.W.2d 870 (Ct. App. 1990); see also 1995 Wis. Act 370, § 14 (transferring to the Department of Administration, personnel and financial resources formerly used by agencies to adjudicate disputes relating to agencies' interpretation and administration of sections of the statutes assigned to them). ¶111 In my view, these legislative changes have shifted the factual underpinnings that we employed in our decisions accord deference to an agency's statutory interpretation.6 to This shift causes the DHA administrator to function more like a court system that hears disputes on widely divergent topics, than like a final adjudicator for a line specialized adjudicative authority. agency, which has more We do not apply common law levels of deference to a court's interpretation of Wisconsin 6 The majority opinion relies in part on Town of Barton v. Div. of Hearings & Appeals, 2002 WI App 169, 256 Wis. 2d 628, 649 N.W.2d 293, for concluding that the legislature assigned the DHA the responsibility for enforcing Wis. Stat. § 218.0116(8). Majority op., ¶¶50-55. The author of this concurrence was also the author of Town of Barton; however, the question of whether common law deference should be accorded to the DHA was not presented to the court of appeals as it has been presented to the supreme court. Rather, the question in Town of Barton was whether Wis. Stat. § 86.16(1) applied to waste water pipelines as well as to fresh water pipelines because if it did not, then § 86.16(5) did not permit the DHA to decide the controversy. Town of Barton, 256 Wis. 2d 628, ¶¶11, 15. The parties did not dispute whether the DHA was charged with administering § 86.16(5) when § 86.16(1) did apply. 8 No. statutes. Therefore, administrator, who in is my view, by decisions contract 2003AP2628.pdr of the performing DHA general adjudicative functions and has no special expertise in the areas of law decided by multitudes of line agencies for which the DHA administrator has become the "deciding authority," treated similarly to decisions of circuit courts. should be That is, no deference should be accorded the DHA administrator's decision. ¶112 The majority opinion also concludes that the common law levels of § 227.57(10)," deference majority "are op., in ¶13, accord and with that Wis. this Stat. shows the "legislature has thus entrusted responsibility to the agencies." Id. I disagree with both assertions. As an initial matter, there is no indication in § 227.577 that great weight deference8 should ever be accorded. § 227.57(10) as being In addition, we have never interpreted consistent, or inconsistent, with the common law standards of deference. ¶113 I also am concerned that by setting up a system of hearing 7 examiners, often referred to as administrative law Wisconsin Stat. § 227.57(10) states in relevant part: Upon such review due weight shall be accorded the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it. I do not contrast or compare the common law doctrine of due weight deference with the phrase "due weight" in § 227.57(10) because that issue has not been briefed for the court. 8 When we apply great weight deference, we affirm an agency's interpretation of a statute even though we conclude that another interpretation is more reasonable. UFE, 201 Wis. 2d at 287. 9 No. 2003AP2628.pdr judges,9 to whom the DHA administrator and the courts may defer, the legislature may have inadvertently established a system of judges who are not accountable to the voters and whose decisions, if great weight deference is accorded, will never receive a meaningful review. This arrangement may thereby deny access to justice that the judicial branch of our tripartite system of conclude government that was decisions meant of the to provide. DHA Accordingly, administrator should I be accorded no deference.10 2. Contracts ¶114 This case interpretation. be accorded construction. to which we also presents a question of contract Therefore, I address the standard of review to an agency decision that turns on contract Construction of a contract is a question of law give administrative agency. no deference to the decision of an See Wisconsin End-User Gas Ass'n v. PSC, 218 Wis. 2d 558, 565, 581 N.W.2d 556 (Ct. App. 1998) (concluding that the courts are more experienced in contract construction than are administrative agencies). 9 See majority op., ¶23 n.21. 10 See Patience Drake Roggensack, Elected to Decide: Is the Decision-Avoidance Doctrine of Great Weight Deference Appropriate in this Court of Last Resort?, 89 Marq. L. Rev. 541 (Spring 2006). 10 No. B. 2003AP2628.pdr Interpretation of Wis. Stat. § 218.0116(8) ¶115 The DHA administrator affirmed the decision of the DHA hearing examiner who interpreted the terms "motor vehicle dealer agreement" in Wis. Stat. Racine H-D's Territory. § 218.0116(8)(a) as not including The validity of this determination is affected by whether the description of Racine H-D's Territory was an "agreement" between Harley-Davidson and Racine H-D, as agreement is defined in Wis. Stat. § 218.0101(1). Section 218.0101(1) provides that an "agreement" is "a contract that describes the franchise relationship distributors, importers and dealers." of § 218.0116(8) is a contract between manufacturers, Therefore, the agreement that covers a particular ch. 218; relationship. ¶116 "Contract" is not defined in however, "contract" is a legal term of art to which courts apply an accepted meaning. Wis. Citizens Concerned for Cranes & Doves v. DNR, 2004 WI 40, ¶6, 270 Wis. 2d 318, 677 N.W.2d 612; see also Wis. Stat. § 990.01 (explaining that legal terms of art are to be given their accepted legal meanings). defined generally enforceable or as an otherwise agreed set of recognizable A "contract" has been "obligations at law." that are Black's Law Dictionary 341 (8th ed. 2004). ¶117 The terms that make up a contract can be ascertained by employing construction. to the DHA well-settled legal principles of contract Therefore, I would give no common law deference administrator's statutory interpretation, as an initial matter because I conclude it is not the type of decision 11 No. 2003AP2628.pdr to which common law deference has been accorded, as I explained above, and answered also is: because, What are simply the stated, terms of the the question parties' to be contract? Neither the DHA hearing examiner nor the DHA administrator is more skilled than is a court in deciding this question. End- User Gas Ass'n, 218 Wis. 2d at 565. C. Contract Interpretation ¶118 Racine H-D's Territory is described in a document separate from the Dealer Contract and the Conditions of Sales and Service. Therefore, common law principles of contract construction require that in order to ascertain whether this separate writing is part of Racine H-D's contract with HarleyDavidson, we must determine whether the parties intended it to be part of their contract. Gen. Cas. Co. of Wis. v. Hills, 209 Wis. 2d 167, 175, 561 N.W.2d 718 (1997). When we attempt to ascertain the terms of a contract, we begin with all writings of the parties that relate to the subject matter because all the components of a contract are not required to be set forth in one document. App Appleton Papers, Inc. v. Home Indemnity Co., 2000 WI 104, ¶34, contemporaneous relationship 235 Wis. 2d writings are that construed 39, 612 relate to together. N.W.2d the 760. same Wipfli All contractual v. Bever, 37 Wis. 2d 324, 326-27, 155 N.W.2d 71 (1967). ¶119 The zip code description of Racine H-D's Territory is a writing contemporaneous to the two signed writings, the Dealer Contract and the Conditions of Sales and Service. 12 However, the No. 2003AP2628.pdr Conditions of Sales and Service has an integration clause11 that provides: "Except as explicitly agreed in this Contract, [Harley-Davidson] has made no promises to [Racine H-D] and there are no other agreements or understandings, either written or oral, between the parties Harley-Davidson contends affecting this this integration Contract clause . . . ."12 prevents the written description of Racine H-D's Territory from becoming part of the contract between the parties. though it integrated is generally cannot be true that supplemented I disagree because, even contracts with that are additional fully terms, see Restatement (Second) of Contracts § 216(1) (1981), a contract is not completely integrated if it omits an agreed upon term that is necessary to carrying out the intent of the parties. Thomsen v. Olson, 219 Wis. 145, 151, 262 N.W. 601 (1935) (concluding that the agreement to buy stock with corporate funds and distribute the shares to achieve equality of ownership for the two remaining shareholders also included the unstated terms that neither shareholder could use company funds to purchase stock that he would refuse to divide with the other shareholder). ¶120 Here, the parties' rights and obligations under the Dealer which Contract and the both parties Conditions agree they are of Sales bound, and Service, cannot be ascertained without reference to Racine H-D's Territory. to fully For example, Racine H-D is granted the right to "purchase and resell at retail, primarily to persons residing or doing business in 11 The Dealer Contract makes no attempt at integration. 12 Conditions of Sales and Service at 20. 13 No. the assigned."13 Territory Racine H-D had 2003AP2628.pdr the authority to operate a retail store only within its Territory and only at the specific location approved by Harley-Davidson.14 Territory is also the geographic area where The dealer's Racine H-D was required to "effectively" sell, service and represent HarleyDavidson products.15 Racine H-D was required to actively solicit sales of Harley-Davidson merchandise "to customers within the Territory"16 and to maintain an inventory of motorcycles, parts, accessories and clothing demand the Territory."17 "in advertise in sufficient newspapers, to Racine Yellow meet H-D Pages, appropriate to "the Territory."18 the was and anticipated obligated other to places One of the ways that Harley- Davidson could evaluate Racine H-D's performance was to review Racine H-D's activities in its Territory. For example, Harley- Davidson H-D could Harley-Davidson determine products whether in the Racine Burlington was zip advertising code, as it contracted to do, by reviewing all advertisements Racine H-D placed. Accordingly, I conclude that the contract between Racine H-D and Harley-Davidson included the written description of Racine H-D's Territory because it is a component necessary to completely describing the rights and obligations of the parties. 13 Dealer Contract at 1. 14 Id. at 3. 15 Conditions of Sales and Service at 2. 16 Id. 17 Id. at 2-3. 18 Id. at 9. 14 No. 2003AP2628.pdr ¶121 In conclusion, even though I agree with the mandate of the majority opinion, because I disagree with its conclusion that common law standards decisions of the DHA decision has not been of deference administrator adopted by may when the the line be accorded to administrator's agency and that contract interpretation is central to the issue presented for review, I respectfully concur. ¶122 I am authorized to state that Justices JON P. WILCOX and LOUIS B. BUTLER, JR. join this concurrence. 15 No. 1 2003AP2628.pdr

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.