Winebow, Inc. v. Capitol-Husting Co., Inc.

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Justia Opinion Summary

A wine grantor-dealer relationship is not included within the definition of a dealership in Wis. Stat. 135.02(3)(b).

The United States Court of Appeals for the Seventh Circuit certified to the Supreme Court the question answered above in order to determine whether Winebow, Inc.’s attempt to end its business relationship with two wine distributors was governed by the unilateral termination limitations of the Wisconsin Fair Dealership Law (WFDL), Wis. Stat. 135.03. Winebow argued that its unilateral termination of its relationship with the distributors was permissible because the parties’ business relationship was not an “intoxicating liquor” dealership entitled to the protections of the WFDL. The Supreme Court held that the operative definition of “intoxicating liquor” for purposes of Wis. Stat. ch. 135 explicitly excludes wine, and therefore, a wine grantor-dealer relationship is not included within the definition of a dealership in section 135.02(3)(b).

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2018 WI 60 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2017AP1595-CQ Winebow, Inc., Plaintiff-Appellee, v. Capitol-Husting Co., Inc. and L'Eft Bank Wine Co. Limited, Defendants-Appellants. ON CERTIFIED QUESTION FROM THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: June 5, 2018 February 19, 2018 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: BRADLEY, R. G., J. joined by ABRAHAMSON, J. and KELLY, J. dissent (Opinion filed). NOT PARTICIPATING: ATTORNEYS: For the defendants-appellants, there were briefs filed by Thomas L. Shriner, Jr., Gregory N. Heinen, and Foley & Lardner LLP, Milwaukee. There was an oral argument by Thomas L. Shriner, Jr. For the plaintiff-appellee, there was a brief filed by E. King Poor (pro hac vice) and Quarles & Brady LLP, Chicago, Illinois, with whom on the brief were Daniel M. Janssen, and Quarles & Brady LLP, Milwaukee. 2018 WI 60 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2017AP1595-CQ STATE OF WISCONSIN : IN SUPREME COURT Winebow, Inc., FILED Plaintiff-Appellee, v. JUN 5, 2018 Capitol-Husting Co., Inc. and L'Eft Bank Wine Co. Limited, Sheila T. Reiff Clerk of Supreme Court Defendants-Appellants. CERTIFICATION of question of law from the United States Court of Appeals for the Seventh Circuit. Certified question answered in the negative and cause remanded. ¶1 ANN WALSH BRADLEY, J. This case is before the court on a certified question from the United States Court of Appeals for the Seventh Circuit. Winebow, Inc. v. Capitol-Husting Co., Inc., 867 F.3d 862 (7th Cir. 2017); see Wis. Stat. § 821.01 (2015-16).1 definition 1 It certified the following question: of a dealership contained in "Does the Wis. Stat. All subsequent references to the Wisconsin Statutes are to the 2015-16 version unless otherwise indicated. No. § 135.02(3)(b) include wine grantor-dealer 2017AP1595-CQ relationships?" Winebow, 867 F.3d at 871. ¶2 Our answer to this certified question will aid the Seventh Circuit in determining whether Winebow, Inc.'s (Winebow) attempt to distributors end is its business governed by relationship the with unilateral two wine termination limitations of the Wisconsin Fair Dealership Law (WFDL). See Wis. Stat. § 135.03. ¶3 Winebow unilaterally terminated its relationship with Capitol-Husting Co., Inc. and L'Eft Bank Wine Co. Limited (the Distributors) after becoming dissatisfied. It argues that the action parties' was permissible because the business relationship is not an "intoxicating liquor" dealership entitled to the protections of the WFDL. See §§ 135.02(3)(b), 135.066. On the other hand, the Distributors contend that a wine grantordealer relationship is a "dealership" entitled to such protections and thus Winebow cannot unilaterally terminate its relationship with the Distributors absent a showing of good cause. ¶4 We conclude that a wine grantor-dealer relationship is not included within the definition of a dealership in Wis. Stat. § 135.02(3)(b). Section 135.066(2) provides the operative definition of "intoxicating liquor" for purposes of ch. 135, and such definition explicitly excludes wine. ¶5 Accordingly, we answer the certified question in the negative. 2 No. 2017AP1595-CQ I ¶6 Winebow is engaged in the business of importing and distributing wine to downstream wholesalers. Since 2004, Winebow has used Capitol-Husting as a distributor of its wines, and in 2009 it commenced a similar relationship with L'Eft Bank. ¶7 After Winebow becoming abruptly terminated February of 2015. agreement dissatisfied its with the Distributors, relationship with them in The parties did not have any express written that would prevent Winebow from unilaterally terminating their relationships. ¶8 The Distributors responded to Winebow's termination by letter, indicating their belief that they are entitled to the protections of the WFDL. Such protections would prevent Winebow from terminating their relationships absent "good cause." See Wis. Stat. § 135.03. ¶9 action Winebow in the countered United by States District of Wisconsin. filing a District declaratory Court for the judgment Eastern Winebow, Inc. v. Capitol-Husting Co., Inc., No. 15-CV-225, slip op. at *1 (E.D. Wis. June 18, 2015). It sought a declaration that it has no continuing obligations to the Distributors. ¶10 The determined context Id. District that of relationship the Court "[w]ine WFDL, with is and Winebow ruled not thus is in intoxicating the not favor. liquor [Distributors'] subject termination limitations of Chapter 135." 3 Winebow's to the Id. at *4. in It the business unilateral No. ¶11 of The Distributors appealed to the United States Court Appeals for dealerships are the Seventh per se Circuit, contending "intoxicating liquor" entitled to the protections of the WFDL. 867. of 2017AP1595-CQ that wine dealerships Winebow, 867 F.3d at The Seventh Circuit certified to this court the question whether the definition of "dealership" contained in Wis. Stat. § 135.02(3)(b) includes wine grantor-dealer relationships. Id. at 870-71. II ¶12 the Underlying this case are proposed statutory changes to WFDL and changes. the governor's partial veto of some See 1999 Wis. Act 9, §§ 2166m, 2166s. of these We thus provide brief background on the WFDL, the proposed changes to it, and the partial veto. ¶13 The WFDL provides in part that a grantor of a dealership may not terminate a dealership agreement without good cause. Inc., Wis. Stat. § 135.03; see Ziegler Co., Inc. v. Rexnord, 139 underlying Wis. 2d 593, 594, purposes policies and 407 N.W.2d 873 include (1987). "[t]o promote Its the compelling interest of the public in fair business relations between dealers and grantors, dealerships on a fair basis." it aims grantors, "[t]o who protect in the continuation § 135.025(2)(a). dealers inherently and have against superior unfair of Additionally, treatment economic power by and superior bargaining power in the negotiation of dealerships[.]" § 135.025(2)(b). 4 No. ¶14 2017AP1595-CQ A grantor who violates the WFDL may be subject to an action for "damages sustained by the dealer as a consequence of the grantor's violation, together with the actual costs of the action, including § 135.06. reasonable attorney fees." Wis. Stat. Further, a "dealer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances." ¶15 However, the WFDL does not apply Id. to all business relationships, but only to those defined as "dealerships." In 1999, the legislature sought to broaden the WFDL's reach to ensure that "intoxicating liquor" dealers were protected. See 1999 Wis. Act 9, §§ 2166m, 2166s. ¶16 it It did so by making two significant changes. amended distributors § 2166m. the definition of "intoxicating The new of a "dealership" liquors." definition, 1999 codified First, to include Wis. at Act Wis. 9, Stat. § 135.02(3)(b), included within a "dealership": A contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons by which a wholesaler, as defined in s. 125.02(21), is granted the right to sell or distribute intoxicating liquor or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol related to intoxicating liquor. This paragraph does not apply to dealerships described in s. 135.066(5)(a) and (b). 1999 Wis. Act 9, § 2166m. ¶17 This revised "dealership" definition explicitly incorporated the definition of "intoxicating liquor" found in Wis. Stat. ch. 125, which regulates alcohol beverages. 5 Pursuant No. 2017AP1595-CQ to Wis. Stat. § 125.02(8), "vinous liquors," or in other words "wine," is expressly included under the umbrella of "intoxicating liquor": "Intoxicating liquor" means all ardent, spirituous, distilled or vinous liquors, liquids or compounds, whether medicated, proprietary, patented or not, and by whatever name called, containing 0.5 percent or more of alcohol by volume, which are beverages, but does not include "fermented malt beverages." § 125.02(8). ¶18 Second, the legislature created Wis. Stat. § 135.066. 1999 Wis. Act 9, § 2166s. legislature's liquor desire market. See for This new provision expressed the a competitive § 135.066(1). and Like stable the wholesale legislature's revised definition of "dealership," the newly enacted § 135.066 imported the § 125.02(8). ¶19 bill. definition of "intoxicating liquor" from § 135.066(2). Both of these changes were included in the 1999 budget See 1999 Wis. Act 9. However, Governor Tommy Thompson used his partial veto power to alter the revisions passed by the legislature.2 2 The governor's partial veto power arises from Article V, § 10 of the Wisconsin Constitution, which sets forth, "Appropriation bills may be approved in whole or in part by the governor, and the part approved shall become law." Wis. Const. art. V, § 10(1)(b). Pursuant to the partial veto power, the governor may strike out language in an appropriation measure, but may not add language. See State ex rel. Wisconsin Senate v. Thompson, 144 Wis. 2d 429, 437, 424 N.W.2d 385 (1988); State ex rel. Kleczka v. Conta, 82 Wis. 2d 679, 707-08, 264 N.W.2d 539 (1978). (continued) 6 No. ¶20 the 2017AP1595-CQ Specifically, the governor struck language proposed by legislature 135.066. from both Wis. Stat. §§ 135.02(3)(b) and With respect to § 135.02(3)(b), he deleted the cross- reference to the existing definition of "intoxicating liquor" found in ch. 125.3 ¶21 Edits extensive. to The Wis. Stat. governor § 135.066 eliminated were large much more portions of The partial veto power was originally a very broad power, but has been subsequently limited. Originally, the governor could "veto individual words, letters and digits, and also may reduce appropriations by striking digits, as long as what remains after veto is a complete, entire, and workable law." Wisconsin Senate, 144 Wis. 2d at 437. A 1990 amendment slightly limited the power, dictating that "the governor may not create a new word by rejecting individual letters in the words of the enrolled bill." Wis. Const. art. V, § 10(1)(c) (1990). This was the version in effect when Governor Thompson exercised the veto at issue in this case. A subsequent revision in 2008 brought Article V, § 10 to its present form, further limiting the partial veto power by stating that "the governor may not create a new word by rejecting individual letters in the words of the enrolled bill, and may not create a new sentence by combining parts of 2 or more sentences of the enrolled bill." Wis. Const. art. V, § 10(1)(c). 3 The governor's veto § 135.02(3)(b) was as follows: with respect to Wis. Stat. A contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons by which a wholesaler, as defined in s. 125.02(21), is granted the right to sell or distribute intoxicating liquor, as defined in s. 125.02(8), or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol related to intoxicating liquor. This paragraph does not apply to dealerships described in s. 135.066(5)(a) and (b). 7 No. § 135.066(2)-(4). "'Intoxicating What liquor' remained has the was same the sole meaning 2017AP1595-CQ sentence, given in s. 125.02(8) minus wine."4 4 Observe that the words "minus" in Wis. Stat. § 135.066(2)(a), formerly subsection (2)(b) in draft legislation, and "wine" in former subsection (2)(d) are left unscathed: (2) DEFINITIONS. In this section: (a) "Intoxicating liquor" has the same meaning given in s. 125.02(8). (b) "Net revenues" means the gross dollar amount received from the sale of intoxicating liquor minus adjustments for returns, discounts and allowances. (c) "Wholesaler" 125.02(21). has the meaning given in s. (d) "Wine" has the meaning given in 125.02(22). (3) LIABILITY GRANTOR. OF TRANSFEREE OF INTOXICATING LIQUOR (a) In this subsection: 1. "Goodwill" includes the use of a trademark, trade name, logotype or other commercial symbol, and the use of a variation of a trademark, trade name, logotype, advertisement or other commercial symbol. 2. "Transferee" means a person who acquires any asset or activity of a grantor's intoxicating liquor business and who uses the goodwill associated with the intoxicating liquor of the grantor. (b) A transferee shall be bound by each of the grantor's dealerships with the grantor's wholesalers and consequently shall be considered (continued) 8 No. ¶22 Legislative findings enumerated in 2017AP1595-CQ Wis. Stat. § 135.066(1) and a severability provision in sub. (6) escaped the veto pen, but the governor struck several references to wine in sub. (5), a nonapplicability provision.5 The legislature did not override the governor's veto. a grantor for the purposes of, and shall comply with, the requirements of this chapter. (4) CHANGE IN OWNERSHIP. (a) In this subsection, "successor wholesaler" means a wholesaler who succeeds to the management, ownership or control of a wholesaler or wholesaler's business or any part of a wholesaler's business by any means including by stock purchase, sale of assets or transfer or assignment of a brand of intoxicating liquor that is the subject of a dealership agreement. (b) A change in the management, ownership or control of a wholesaler, a wholesaler's business or any part of a wholesaler's business is not good cause for a grantor to terminate, cancel, fail to renew or substantially change the competitive circumstances of its dealership with a successor wholesaler if the successor wholesaler meets the grantor's reasonable and material qualifications for wholesaler applicants in effect at the time of the change. If the successor wholesaler meets the grantor's reasonable and material qualifications for wholesaler applicants in effect at the time of the change, the successor wholesaler shall succeed to the dealership rights of the predecessor wholesaler and the grantor shall continue to be bound by the dealership. 5 In this section, the partial veto was as follows: (5) NONAPPLICABILITY. This section does not apply to any of the following dealerships: (continued) 9 No. 2017AP1595-CQ III ¶23 §§ 135.02 This and case requires 135.066. us to Statutory interpret Wis. interpretation question of law we review independently. Stat. presents a Roberts v. T.H.E. Ins. Co., 2016 WI 20, ¶19, 367 Wis. 2d 386, 879 N.W.2d 492. We are not bound by the federal district court's interpretation, but it may aid in our analysis. Baldewein Co. v. Tri-Clover, Inc., 2000 WI 20, ¶10, 233 Wis. 2d 57, 606 N.W.2d 145 (citing Daanen & Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 400, 573 N.W.2d 842 (1998)). IV ¶24 With the preceding context and standard of review in hand, we examine next the specific question certified by the Seventh Circuit: whether the definition of a dealership (a) Dealerships in which a grantor, including any affiliate, division or subsidiary of the grantor, has never produced more than 200,000 gallons of intoxicating liquor in any year. (b) Dealerships in which the dealer's net revenues from the sale of all of the grantor's brands of intoxicating liquor, except wine, constitute less than 5% of the dealer's total net revenues from the sale of intoxicating liquor, except wine, during the dealer's most recent fiscal year preceding a grantor's cancellation or alteration of a dealership and the dealer's net revenues from the sale of all of the grantor's brands of wine constitute less than 5% of the dealer's total net revenues from the sale of wine during the dealer's most recent fiscal year preceding a grantor's cancellation or alteration of a dealership. 10 No. 2017AP1595-CQ contained in Wis. Stat. § 135.02(3)(b) includes wine grantordealer relationships. ¶25 Winebow asserts that the "minus wine" definition of "intoxicating liquor" in Wis. Stat. § 135.066 applies to the entirety of ch. 135, and that consequently we should answer the certified question Distributors in contend § 135.02(3)(b) the that negative. the incorporates Conversely, definition the of definition the "dealership" of in "intoxicating liquor" from ch. 125, a definition that expressly includes wine. ¶26 Statutory interpretation begins with the language of the statute. State ex rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. meaning of inquiry. ¶27 liquor" statute is plain, we need not further the Id. Wisconsin as wine." the If the having Winebow Stat. "the § 135.066(2) meaning suggests that given the defines in s. language "intoxicating 125.02(8) of the minus statute plainly and unambiguously excludes wine from the definition of "intoxicating liquor" for chapter 135. ¶28 Stat. We agree with Winebow. § 135.066(2) is supported Its interpretation of Wis. by several considerations. First, contrary to the Distributors' argument, the fact that the definition is not located in the "definitions" section of the statute is not dispositive. Neither the Distributors nor the dissent cite any case law that exclusively tethers definitions to a correspondingly labeled section of the statutes. 11 No. ¶29 Wisconsin Stat. § 135.066(2) 2017AP1595-CQ provides the sole definition of "intoxicating liquor" in ch. 135, and it excludes wine. The term "intoxicating liquor" is used eleven times in chapter 135, but defined only once. definitions within definitions. a statutory We aim for uniformity of chapter, not diversity of See Bank Mut. v. S.J. Boyer Const., Inc., 2010 WI 74, ¶31, 326 Wis. 2d 521, 785 N.W.2d 462. "When the same term is used throughout a chapter of the statutes, it is a reasonable deduction that the legislature intended that the term possess an identical meaning definition of each time "intoxicating it appears." liquor" to Id. control For one § 135.066 and another to control the rest of the chapter would run afoul of this maxim. ¶30 Rather, "[s]ections of statutes relating to the same subject matter must be construed in pari materia."6 State v. Clausen, 105 Wis. 2d 231, 244, 313 N.W.2d 819 (1982). Applying this canon on interpretation here, we arrive at the conclusion that the single "intoxicating liquor" definition supplied in ch. 135 should apply to the entirety of the chapter. ¶31 Further, the Wis. Stat. § 135.066(2) "minus wine" definition would serve no purpose if limited in its application 6 "In pari materia" refers to statutes and regulations relating to the same subject matter or having a common purpose. In re Jeremiah C., 2003 WI App 40, ¶17, 260 Wis. 2d 359, 659 N.W.2d 193. The statutory construction doctrine of in pari materia requires a court to read, apply, and construe statutes relating to the same subject matter together. Id. 12 No. to § 135.066 but not the remainder of ch. 135. "minus wine" findings, a provision. definition, nonapplicability § 135.066 provision, Outside of the contains and 2017AP1595-CQ a legislative severability The "minus wine" language does not affect any of these remaining provisions.7 Limiting the application of the "minus wine" definition to § 135.066 would render the language a nullity.8 ¶32 Additionally, treatises on both the WFDL and alcohol regulation uniformly support our application of the "minus wine" definition provided by Wis. Stat. § 135.066(2). As one treatise on the WFDL advises, "intoxicating liquor refers to spirits, not wine or beer." Michael A. Bowen et al., The Wisconsin Fair 7 The dissent asserts that "[t]he definition of intoxicating liquor in § 135.066 retains a function even if limited to its specific section of ch. 135." Dissent, ¶50. According to the dissent, "[i]t applies to the legislative findings of sub. (1), the non-applicability provisions of sub. (5), and the severability part of sub. (6). Id. But if the "minus wine" definition applies within § 135.066 only, what is its actual effect? The legislative findings are mere background and define no substantive rights. Further, as the Seventh Circuit correctly recognized in its certification, none of the other provisions of § 135.066 is affected by the "minus wine" language of sub. (2). See Winebow, Inc. v. Capitol-Husting Co., Inc., 867 F.3d 862, 868 (7th Cir. 2017). The dissent's interpretation thus renders the "minus wine" language superfluous. 8 Stated differently, to read the statute to include wine would render "minus wine" mere surplusage, a result that must be avoided. See Milwaukee Cty. v. Dep't of Indus., Labor and Human Relations Comm'n, 80 Wis. 2d 445, 452-53, 259 N.W.2d 118 (1977) (quoting Cook v. Indus. Comm'n, 31 Wis. 2d 232, 239-40, 142 N.W.2d 827 (1966) ("[S]tatutes should be so construed that no word or clause shall be rendered surplusage.")). 13 No. Dealership Law (explaining amendment § 4.34A that "the make it at 61 (4th governor's clear ed. 2012); partial that he see vetoes intended 2017AP1595-CQ of also the (3)(b) id. 1999 to be inapplicable to wine wholesalers.").9 ¶33 Similarly, a treatise on Wisconsin alcohol beverages regulation opines that "the applicable definition of intoxicating liquor in Wis. Stat. ch. 135 excludes wine, such that [ch. 135's] distilled-spirits special WFDL distribution provisions agreements." apply only Aaron R. to Gary, Alcohol Beverages Regulation in Wisconsin § 4.66 (2nd ed. 2016). ¶34 In the over eighteen years since the enactment of the "minus wine" acted to provision, amend the the law legislature if understanding was incorrect. governor's veto in 1999, it certainly thought the could have commentators' However, it did not override the and it has remained silent in the intervening years. ¶35 As certification, the Seventh there is Circuit "no express supporting the Distributors' position. 9 aptly observed statutory in its language" See Winebow, 867 F.3d at In his veto message, Governor Thompson was explicit regarding the reasons for his partial veto: "I am partially vetoing these provisions so that wine will be excluded from treatment under these changes to the Wisconsin Fair Dealership Law because I object to wine being treated the same as intoxicating liquor." Governor's Veto Message, Act 9, at § F.4 (Oct. 27, 1999); see State ex rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶51, 271 Wis. 2d 633, 681 N.W.2d 110 ("legislative history is sometimes consulted to confirm or verify a plain-meaning interpretation"). 14 No. 869. Cross references to their preferred 2017AP1595-CQ definition were removed from Wis. Stat. § 135.066 by Governor Thompson's partial veto. Following that veto, what remains is unambiguous in its effect to exclude wine from the definition of "intoxicating liquor." ¶36 Instead of giving effect to ch. 135's single definition of "intoxicating liquor," the Distributors would have the court follow a path through ch. 125 to arrive at their preferred definition. The Distributors' circuitous route begins at Wis. Stat. § 135.02(3)(b), which references the definition of "wholesaler" from § 125.02(21). Pursuant to § 125.02(21), "'[w]holesaler' means a person, other than a brewer, brewpub, manufacturer, or rectifier, who sells alcohol beverages to a licensed retailer or to another person who holds a permit to sell alcohol beverages at wholesale." § 125.02(1), which defines "alcohol We are then directed to beverages" malt beverages and intoxicating liquor." § 125.02(8), we arrive at the as "fermented Finally, moving to definition of "intoxicating liquor" as including "vinous liquors," more commonly known as wine. ¶37 of Our interpretation gives effect to the sole definition "intoxicating located in a liquor" located statutory in section "Intoxicating liquor dealerships." ch. 135, beneath one the which is heading, If the court here were to decide that it is acceptable to effectuate a definition from ch. 125 that is not referenced within ch. 135, there would be no clear stopping point to such a practice. 15 No. ¶38 In sum, relationship dealership is in we not Wis. conclude included Stat. that within a wine the § 135.02(3)(b). 2017AP1595-CQ grantor-dealer definition Wisconsin of a Stat. § 135.066(2) provides the operative definition of "intoxicating liquor" for purposes of Wis. Stat. ch. 135, and such definition explicitly excludes wine. ¶39 Accordingly, we answer the certified question in the negative and remand the cause to the United States Court of Appeals for the Seventh Circuit. By the Court.—Certified question answered in the negative and cause remanded to the United States Court of Appeals for the Seventh Circuit. 16 No. ¶40 REBECCA GRASSL BRADLEY, J. 2017AP1595-CQ.rgb (dissenting). The legislature unquestionably intended to include wine distributors as dealers under Wis. Stat. ch. 135 and then-Governor Thompson1 obviously intended to exclude them. Tommy But legislative intent behind enactment of a law——or executive intent motivating the exercise of a veto——cannot govern statutory interpretation. Rather, our analysis must focus on the statutory language itself and "[i]f the meaning of the statute is plain, we ordinarily stop the inquiry." State ex rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. A plain meaning interpretation of ch. 135, giving effect to every word, requires answering the certified question from the Seventh Circuit Court of Appeals in the affirmative: The definition of a "[d]ealership" contained in Wis. Stat. § 135.02(3)(b) includes wine grantor-dealer relationships. Wis. Stat. reach the § 135.066(2)(a), opposite on The isolated definition in which conclusion, the applies majority only in relies to § 135.066. Because the majority's interpretation is wrong, I respectfully dissent. I ¶41 Wisconsin Stat. ch. 135, also known as the Wisconsin Fair Dealership Law, governs grantor-dealer relationships and "shall be liberally construed and applied to promote" the purposes set forth in Wis. Stat. § 135.025(2), which include, for example, (1) fairness in business 1 relationships between Then-Governor Tommy Thompson will subsequently be referred to as "Governor." 1 No. 2017AP1595-CQ.rgb dealers and grantors and in their continuation; (2) protection of dealers from grantors who "have superior economic power and superior bargaining power"; and (3) statutory rights and remedies for dealers.2 ¶42 The question before the court is whether the two wine distributors in this case are "[d]ealers" protected by ch. 135. The wine distributors claim dealership status, while Winebow insists ch. 135 does not apply to wine distributors at all. textual interpretation of ch. 135 provides a clear answer: A the wine distributors are "[d]ealers." ¶43 The analysis necessarily starts in Wis. Stat. § 135.02, which supplies the definitions to be used throughout 2 Wisconsin Stat. ch. 135 comprises eleven subsections. Wisconsin Stat. § 135.01 gives the title of chapter 135. Section 135.02 furnishes the definitions that apply throughout the entirety of ch. 135. Section 135.025 details the purposes of the chapter, requires liberal application to meet those purposes, and prohibits parties from contracting away ch. 135's protections. Section 135.03 explains that dealerships may not be altered or terminated without a showing of good cause. Section 135.04 imposes rules and notice deadlines for termination or changes in a dealership. Section 135.045 governs the repurchase of inventory upon termination of a dealership by the grantor. Section 135.05 discusses the applicability of arbitration agreements in ch. 135. Section 135.06 affords dealers the right to recover attorney fees and obtain injunctive relief in actions against grantors for violating ch. 135. Section 135.065 deems any violation of the chapter by a grantor an irreparable injury for purposes of seeking a temporary injunction. Section 135.066 contains legislative findings specific to intoxicating liquor dealers, defines "[i]ntoxicating liquor," renders this section inapplicable to two types of dealerships, and makes the provisions in this section severable. Section 135.07 declares ch. 135 inapplicable to motor vehicle dealers, insurance businesses, and door-to-door sales of goods or services. 2 No. ch. 135. 2017AP1595-CQ.rgb Section 135.02 defines both "Dealer" and "Dealership." Section 135.02 provides, as material: In this chapter: (2) "Dealer" means a person who is a grantee of a dealership situated in this state. (3) "Dealership" means any of the following: . . . . (b) A contract or agreement, either expressed or implied, whether oral or written, between 2 or more persons by which a wholesaler, as defined in s. 125.02(21), is granted the right to sell or distribute intoxicating liquor or use a trade name, trademark, service mark, logotype, advertising or other commercial symbol related to intoxicating liquor. This paragraph does not apply to dealerships described in s. 135.066(5)(a) and (b). (Emphasis added.) To determine whether a "[d]ealership" exists between Winebow and the two wine distributors, we need to know whether the wine distributors are "wholesaler[s]." ¶44 The language of Wis. Stat. § 135.02(3)(b) directs us to the definition of "wholesaler" under Wis. Stat. § 125.02(21).3 Section 125.02(21) defines "[w]holesaler" as "a person, other than a brewer, brewpub, manufacturer, or rectifier, who sells alcohol beverages to a licensed retailer or to another person who holds a permit to sell alcohol beverages at wholesale." The dispute in this case revolves around whether wine is an "alcohol beverage" as referenced in the 3 "wholesaler" definition. Wisconsin Stat. ch. 125 specifically governs the sale of alcohol beverages in the State of Wisconsin and addresses the importance of the three-tier system of "production, distribution, and sale." See Wis. Stat. § 125.01. 3 No. 2017AP1595-CQ.rgb Section 125.02(1) defines "alcohol beverage" as "fermented malt beverages and intoxicating liquor" and § 125.02(8) defines "[i]ntoxicating liquor" as: [A]ll ardent, spirituous, distilled or vinous liquors, liquids or compounds, whether medicated, proprietary, patented or not, and by whatever name called, containing 0.5 percent or more of alcohol by volume, which are beverages, but does not include "fermented malt beverages". (Emphasis added.) Everyone agrees that vinous liquors include wine. the Construing text of these statutes leads to the inexorable conclusion that the wine distributors are wholesalers whose agreements with Winebow create dealerships protected by ch. 135. ¶45 The majority decries this interpretive exercise as a "practice" with "no clear stopping point." Majority op., ¶37. While our judicial duty of declaring what a statute says would be easier if each statutory chapter confined its subject matter to that particular chapter, legislative enactments are rarely so linear. On the scale of interpretive complexity, our task falls on the easy end. definition from Inexplicably, the majority maintains the key Wis. Stat. ch. 125 is not referenced within ch. 135, see majority op., ¶37; this is of course inaccurate because Stat. Wis. Stat. § 135.02(3)(b) § 125.02(21), "[w]holesaler." This which explicitly provides cross-reference the to references definition ch. 125 Wis. of (governing alcohol beverages) within the rather brief ch. 135 requires no more than reading three definitions within the same section of ch. 125 (i.e., § 125.02), each of which is explicitly connected. 4 No. 2017AP1595-CQ.rgb Far from lacking a clear stopping point, the analysis requires us to start with ch. 135 and end in one section of ch. 125. The majority criticizes this statutory construction as "circuitous." Majority op., ¶36. Following a single cross-reference to find the meaning of a defined term is hardly circuitous; regardless of how it is characterized, it is nonetheless the only correct interpretation. II ¶46 Although the text clearly leads to the conclusion that ch. 135 applies to wine Seventh Circuit certified grantor-dealer the question relationships, because Wis. the Stat. § 135.066(2)(a) provides a seemingly contradictory definition of "[i]ntoxicating liquor."4 does not override the This conflicting definition, however, definition of "[i]ntoxicating liquor" within Wis. Stat. § 125.02(8). ¶47 Stat. First, the definition of intoxicating liquor in Wis. § 135.066 definition definition contains applies of no language throughout suggesting ch. 135. "intoxicating In liquor" that its contrast, the embedded within § 135.02(3)(b) resides in the "definitions" section of ch. 135, which specifically chapter"——that is, says that the ch. 135. definitions Because the apply "in definition this of intoxicating liquor that includes wine——which is rooted in Wis. Stat. § 135.02(3)(b)——applies across 4 the chapter, it is Wisconsin Stat. § 135.066(2)(a) provides: "'Intoxicating liquor' has the meaning given in s. 125.02(8) minus wine." 5 No. textually insupportable to apply 2017AP1595-CQ.rgb § 135.066's definition of "intoxicating liquor" beyond the section it inhabits. ¶48 within Second, in order to give effect to all the words used ch. 135, Wis. Stat. § 135.066's definition limited to that particular section where it appears. must be Allowing § 135.066's definition to apply anywhere else would render the "[i]n this chapter" language of Wis. Stat. § 135.02 superfluous. If definitions outside of § 135.02 also applied throughout the chapter, despite the absence of express language so directing, § 135.02's language rendering its definitions applicable "in this chapter" would amount to a bootstrap provision at best, merely emphasizing, ch. 135's but definitions. not controlling, Because basic the tenets operation of of statutory construction dictate avoiding surplusage, the majority errs in its interpretation by creating overlapping definitions. See Kelley Co. v. Marquardt, 172 Wis. 2d 234, 250, 493 N.W.2d 68 (1992) (we are to construe a statute, where possible, so that no part of it is rendered superfluous); see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174 (2012) ("If possible, every word and every provision is to be given effect (verba cum effectu sunt accipienda[ ]). should be ignored. None should needlessly be given None an interpretation that causes it to duplicate another provision or to have no consequence."). The majority's creation of overlapping but contradictory definitions requires it to select one and ignore the other. This consequence is objectionable but avoidable by giving effect to both definitions, as the text 6 No. directs us: 2017AP1595-CQ.rgb one applies throughout the chapter and the other applies only within its own section. ¶49 whether Third, a The definition chapter, is relationship "[d]ealership." ¶50 it Stat. between a § 135.02(3) grantor and that a defines dealer is a Wisconsin Stat. § 135.066 does not. majority of Wis. concludes "[i]ntoxicating thereby removing that Wis. Stat. § 135.066's liquor" must apply across ch. 135's protections from the the two wine distributors in this case, in order to give the definition meaning. I disagree. The definition of "[i]ntoxicating liquor" in § 135.066 retains a function even if limited to its specific section of ch. 135. It applies to the legislative findings of sub. (1), the non-applicability provisions of sub. (5), and the severability part of sub. (6). ¶51 The effect of confining the Wis. Stat. § 135.066(2)(a) definition of "[i]ntoxicating liquor" to § 135.066 may contravene the Governor's intention in excising wine from that definition. Regardless of what he intended in exercising his partial veto power, this is what the Governor wrote. We give effect to the text, not the intentions of its drafters. As a result, under sub. (1), the legislative findings regarding the three-tier system for distributing intoxicating liquor do not apply to wine dealerships. Subsection (5) renders § 135.066 inapplicable to certain "intoxicating liquor" dealerships whose production of "intoxicating liquor" thresholds in gallons or revenue. the "intoxicating liquor" not exceed certain Because wine was struck from definition 7 does in § 135.066(2)(a), the No. 2017AP1595-CQ.rgb non-applicability provision in sub. (5) does not apply to wine dealerships. Finally, sub. (6) makes the provisions of § 135.066 severable; under Wis. Stat. § 990.001(11), this means that if one section is declared invalid, the remaining sections shall stand unaffected. Restricting the application of the § 135.066(2)(a) definition of "intoxicating liquor" to § 135.066 may not be what the Governor intended, but it is what he left of the legislation in exercising his partial veto power. the text, not intentions, that reigns supreme. And it is State ex rel. Kalal, 271 Wis. 2d 633, ¶41 ("a 'policy favoring conventional meanings and general understandings over obscurely evidenced intention of the legislators is supported in the oftrepeated premise that intention must be determined primarily from the language of the statute itself'" (quoting 2A Norman J. Singer, Sutherland Statutory Construction § 45.08, at 40 (6th ed. 2000))); Scalia & Garner, supra ¶9, at 56 ("The words of a governing text are of paramount concern, and what they convey, in their context, is what the text means."). ¶52 The majority emphasizes the history of these statutes before enactment by including the full text proposed by the legislature, the strikethroughs made by the Governor's veto pen, and the Governor's substantial letter edits. explaining Placing the focus these for his non-textual improperly construction. "It is always perilous to derive the meaning of adopted provision drafting process." from another the on basis considerations an influenced the majority's provision statutory deleted in the District of Columbia v. Heller, 554 U.S. 8 No. 570, 590 (2008). 2017AP1595-CQ.rgb This caution applies no less to provisions deleted by the Governor exercising his veto power. ¶53 The majority underscores the legislature's ability to amend the law if it in fact disagreed with certain treatises' take on the effect of the Governor's partial vetoes to remove wine wholesalers from the fair dealership law. explained that legislative acquiescence is a This court has slim reed upon which to support a judicial construction of a statute because "[n]umerous variables, unrelated to conscious endorsement of a statutory interpretation, inaction." Wenke v. may Gehl explain Co., or 2004 cause WI legislative 103, ¶33, 274 Wis. 2d 220, 682 N.W.2d 405; see also Johnson v. Transp. Agency, 480 U.S. 616, 672 (1987) (Scalia, J., dissenting) ("[I]t [is] impossible to congressional assert failure with to act any degree represents of (1) assurance approval of that the status quo, as opposed to (2) inability to agree upon how to alter the status quo, (3) unawareness of the status quo, (4) indifference to cowardice."). to surmise the status quo, or even (5) political Our judicial duty is to say what the law is, not meaning from legislative quiescence. Legislative inaction cannot support an interpretation of the statute that is contrary to the plain meaning of the language used in the statute. III ¶54 Applying a textual analysis of the language in ch. 135 leads to but one conclusion: wine distributors are wholesalers as that term is defined in Wis. Stat. § 135.02. 9 The majority No. 2017AP1595-CQ.rgb fixates on what the Governor struck from the legislation rather than what remained, thereby giving effect to what the Governor intended rather than what he actually signed into law. the pertinent provisions of ch. 135 without the Reading obfuscating portions that did not survive the Governor's veto dissolves any ambiguity. The majority adopts a statutory construction that rewrites ch. 135 by subtracting language from it, rather than giving effect to every word. The majority errs. the affirmatively, certified question I would answer and therefore, respectfully dissent. ¶55 I am authorized to state that Justices ABRAHAMSON and DANIEL KELLY join this dissent. 10 SHIRLEY S. No. 1 2017AP1595-CQ.rgb

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