Wis. Property Tax Consultants, Inc. v. Wis. Department of Revenue
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The Supreme Court reversed the decision of the court of appeals affirming the judgment of the circuit court declining to decide whether a letter from the Wisconsin Department of Revenue (DOR) constituted an unpromulgated rule, deferring instead to the Tax Appeals Commission to first decide that question, holding that the circuit court erroneously exercised its discretion.
Wisconsin, Manufactures and Commerce, Inc. (WMC) sent a letter to the Wisconsin Department of Revenue (DOR) articulating its view that machinery, patterns and tools that are not used in manufacturing are exempt from tax under Wis. Stat. 70.111(27)(b) even if that property is "located on manufacturing property." DOR sent a letter in return explaining that the exemption does not apply to manufacturers. WMC filed a declaratory judgment action claiming that DOR's letter was an invalid umpromulgated rule and that DOR's interpretation of the exemption violated the state and federal Constitutions. The circuit court dismissed all claims under the primary jurisdiction doctrine. The court of appeals affirmed. The Supreme Court reversed, holding that deference to the Tax Appeals Commission was not warranted under the primary jurisdiction doctrine.
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2022 WI 51 SUPREME COURT OF WISCONSIN CASE NO.: 2020AP485 COMPLETE TITLE: Wisconsin Property Tax Consultants, Inc. and Wisconsin Manufacturers and Commerce, Inc., Plaintiffs-Appellants-Petitioners, v. Wisconsin Department of Revenue, Defendant-Respondent. REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 398 Wis. 2d 654, 963 N.W.2d 103 PDC No: 2021 WI App 47 - Published OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: June 30, 2022 April 5, 2022 Circuit Ozaukee Sandy A. Williams JUSTICES: HAGEDORN, J., delivered the majority opinion of the Court, in which ANN WALSH BRADLEY, DALLET, and KAROFSKY, JJ., joined. ZIEGLER, C.J., filed a concurring opinion. ROGGENSACK, J., filed a concurring opinion, in which REBECCA GRASSL BRADLEY, J., joined. NOT PARTICIPATING: ATTORNEYS: For the plaintiffs-appellants-petitioners, there were briefs filed by Don M. Millis, Karla M. Nettleson and Reinhart Boerner Van Deuren S.C., Madison. There was an oral argument by Don M. Millis. For the defendant-respondent, there was a brief filed by Brian P. Keenan, assistant attorney general, with whom on the brief was Joshua L. Kaul, attorney general. There was an oral argument by Brian P. Keenan. An amicus curiae brief was filed by Lucas T. Vebber, Anthony F. LoCoco and Wisconsin Institute for Law & Liberty, Milwaukee, for the Wisconsin Property Taxpayers, Inc. 2 2022 WI 51 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2020AP485 (L.C. No. 2019CV226) STATE OF WISCONSIN : IN SUPREME COURT Wisconsin Property Tax Consultants, Inc. and Wisconsin Manufacturers and Commerce, Inc., FILED Plaintiffs-Appellants-Petitioners, JUN 30, 2022 v. Sheila T. Reiff Clerk of Supreme Court Wisconsin Department of Revenue, Defendant-Respondent. HAGEDORN, J., delivered the majority opinion of the Court, in which ANN WALSH BRADLEY, DALLET, and KAROFSKY, JJ., joined. ZIEGLER, C.J., filed a concurring opinion. ROGGENSACK, J., filed a concurring opinion, in which REBECCA GRASSL BRADLEY, J., joined. REVIEW of a decision of the Court of Appeals. Reversed and cause remanded. ¶1 BRIAN HAGEDORN, J. When both a court and an agency may address an issue, who should decide first? That is the question the this case presents, jurisdiction doctrine answers. and the question primary We have held that a circuit court may stay its hand pending an agency's determination if the issue before it turns primarily on factual or technical No. questions within the agency's expertise. primarily one of law outside 2020AP485 But if the question is the agency's specialized competence, the circuit court should decide the question. In this case, the circuit court declined to decide whether a letter from the Wisconsin Department of Revenue (DOR) constituted an unpromulgated rule, deferring instead to Commission to decide that question first. the Tax We conclude that the circuit court erroneously exercised its discretion. Tax Appeals Commission unpromulgated rule has question, jurisdiction it is a Appeals pure to Even if the address question outside the Tax Appeals Commission's expertise. of the law The circuit court should have assumed jurisdiction and decided it. I. ¶2 BACKGROUND In 2017, the Wisconsin Legislature enacted a new tax exemption for "machinery, tools, and such items used in manufacturing." (codified at Wis. Stat. patterns, not including 2017 Wis. Act 59, § 997j § 70.111(27)(b) (2017-18)). Seeking guidance on how the new exemption would be applied, Wisconsin Manufactures and Commerce, Inc. (WMC) sent a letter to DOR. In the letter, WMC articulated its view that "machinery, patterns and tools that are not used in manufacturing" are exempt even if that property disagreed. It is "located explained on by manufacturing letter its exemption does not apply to manufacturers." 2 property." view that "the DOR new No. ¶3 2020AP485 WMC responded by filing a declaratory judgment action in circuit court under Wis. Stat. § 227.40 (2019-20)1 raising three claims: (1) DOR's letter is an unpromulgated rule and is therefore invalid; (2) DOR's letter is invalid because it is inconsistent with the text of the new exemption; and (3) DOR's proffered interpretation violates various provisions Wisconsin and United States constitutions.2 of the Following cross- motions for summary judgment, the circuit court dismissed all three claims under the primary jurisdiction doctrine.3 It observed that the Tax Appeals Commission was then "considering how to interpret and apply Wis. Stat. § 70.111(27) to property owned and used by the manufacturers" and was "well suited to use its expertise in determining this issue." It therefore declined to assume jurisdiction over any of the three claims. ¶4 WMC appealed the circuit court's dismissal of the unpromulgated rule and constitutional claims only, and the court of appeals affirmed. 2021 WI App 47, 398 Wis. Prop. Tax Consultants, Inc. v. DOR, Wis. 2d 654, 963 N.W.2d 103. WMC then sought this court's review, but only regarding the unpromulgated rule claim. We granted the petition for review. All subsequent references to the Wisconsin Statutes are to the 2019-20 version. 1 Wisconsin Property Tax Consultants, Inc. is also a plaintiff with WMC. We refer to the plaintiffs collectively as WMC. 2 The Honorable Sandy A. Williams of the Ozaukee County Circuit Court presided. 3 3 No. II. ¶5 2020AP485 PRIMARY JURISDICTION DOCTRINE The primary jurisdiction doctrine comes into play when "both a court and an administrative agency have jurisdiction over resolution of issues in a dispute." Milwaukee Metro. Sewerage N.W.2d 484 (1992). efficiency, with Dist., 171 City of Brookfield v. Wis. 2d 400, 420, 491 It is "a doctrine of comity" and judicial the purpose of promoting "the proper relationship between administrative agencies and courts." Id. Thus, primary jurisdiction deals not with the court's ability to decide the settling matter, but with apparatus——the interests of "which courts judicial or portion the of the dispute- agency——should, administration, first in the take the jurisdiction that both the agency and the courts share." Gen. Tel. Co. of Wis. v. Auto-Owners Ins. Co., 140 Wis. 2d 10, 23, 409 N.W.2d 133 (Ct. App. 1987). agency have authority to Where both the court and the answer the question presented, the circuit court has discretion to allow the agency to address the matter in the first instance or decide the question itself. Sawejka v. Morgan, 56 Wis. 2d 70, 78-79, 201 N.W.2d 528 (1972). ¶6 One of the primary considerations for a court determining whether to let an agency address a question first is the nature of the issue raised. City of Brookfield, 171 Wis. 2d at 420-21; Wis. Collectors Ass'n, Inc. v. Thorp Fin. Corp., 32 factual counseled or Wis. 2d 36, 44-45, technical issues that "the better 145 N.W.2d 33 predominate, course 4 may be" (1966). our Where cases deferring to have the No. agency.4 City of Brookfield, 171 Wis. 2d at 2020AP485 421. This recognizes that the legislature creates agencies "to afford a systematic method of factfinding and policymaking," typically in areas that involve technical expertise. McEwen v. County, 90 Wis. 2d 256, 271, 279 N.W.2d 469 (1979). are designed to "provide uniformity and fields of their specialized knowledge." 44. Pierce Agencies consistency in the Thorp, 32 Wis. 2d at So when the issue involves factual or specialized questions that fit "squarely within the very area for which the agency was created," it is appropriate to allow the agency to address the matter first. Id. On the other hand, "when statutory interpretation or issues of law are significant," the circuit court will have question first. less reason to let the agency decide City of Brookfield, 171 Wis. 2d at 421. the This is particularly so where the controlling issue is primarily a question of law that "rests within the special expertise of the circuit court," rather than the agency. State v. Dairyland Power Coop., 52 Wis. 2d 45, 56, 187 N.W.2d 878 (1971). ¶7 Our cases have consistently drawn the line between fact-bound and agency-specialized questions (which may warrant deference) and predominately legal or nonspecialized questions (which do not).5 Recent developments in our approach to By "deferring" to an agency, we refer only to allowing the agency to address the matter first, not deferring to the agency's legal conclusions, which we no longer do. See Wis. Stat. § 227.57(11); Tetra Tech EC, Inc. v. DOR, 2018 WI 75, 382 Wis. 2d 496, 914 N.W.2d 21. 4 5 Besides the cases already cited, see Beal v. First Fed. 5 No. reviewing the work of administrative agencies 2020AP485 reinforce this distinction. ¶8 When we review an agency decision, we defer to the agency's factual supported. findings unless Wis. Stat. § 227.57(6). they are insufficiently Furthermore, as the law instructs, we give "due weight" to "the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary § 227.57(10). administrative circumstances. DOR, 2010 Until authority recently, agencies' conferred we conclusions also of upon deferred law in it." to many See, e.g., Milwaukee Symphony Orchestra, Inc. v. WI 33, ¶¶34-37, 324 Wis. 2d 68, 781 N.W.2d 674 Sav. & Loan Ass'n of Madison, 90 Wis. 2d 171, 198, 279 N.W. 2d 693 (1979); Browne v. Milwaukee Bd. of Sch. Dirs., 83 Wis. 2d 316, 329-30, 265 N.W.2d 559 (1978) ("The issues remaining unresolved . . . must be mainly factual, rather than legal or constitutional. If not, the transfer was erroneous."); Kaski v. First Fed. Sav. & Loan Ass'n of Madison, 72 Wis. 2d 132, 143-44, 240 N.W.2d 367 (1976) ("The discretion . . . is usually predicated upon whether there is a substantial factual dispute which should first be resolved by the administrative agency."); Browne v. Milwaukee Bd. of Sch. Dirs., 69 Wis. 2d 169, 176, 230 N.W.2d 704 (1975) ("[W]here there is no factual issue to be decided under the pleadings of the case and 'issues of law are significant,' the court may properly in its discretion entertain the proceedings."); City Firefighters Union, Loc. No. 311 v. City of Madison, 48 Wis. 2d 262, 270, 179 N.W.2d 800 (1970); Noonan v. Nw. Mut. Life Ins. Co., 2004 WI App 154, ¶29, 276 Wis. 2d 33, 687 N.W.2d 254 ("[T]his case involves statutory and contract interpretation, which fall within the province of the court."); Providence Cath. Sch. v. Bristol Sch. Dist. No. 1, 231 Wis. 2d 159, 172, 605 N.W.2d 238 (Ct. App. 1999); Madison Tchrs., Inc. v. Madison Metro. Sch. Dist., 197 Wis. 2d 731, 746-47, 541 N.W.2d 786 (Ct. App. 1995); Wis. Bell, Inc. v. DOR, 164 Wis. 2d 138, 144, 473 N.W.2d 587 (Ct. App. 1991). 6 No. 2020AP485 (describing "three levels of deference to be granted to agency interpretations" of statutes). practice. Tetra Tech In 2018, however, we ended that EC, Wis. 2d 496, 914 N.W.2d 21. Inc. v. DOR, 2018 WI 75, 382 Since our decision in Tetra Tech, the legislature has codified our approach, directing that when reviewing "an agency action or decision, the court shall accord no deference to the agency's interpretation of law." the legal § 227.57(11). ¶9 This shift in our approach to reviewing interpretations of administrative agencies further strengthens—— and deepens——the historical distinction in our cases between issues raising factual and technical questions uniquely within the purview of an agency's expertise, and those raising predominantly legal and nonspecialized issues that are properly questions for the judicial branch. Although the analysis will depend on the specifics of each case, courts generally should decide pure questions of law when they are presented, particularly when those questions lie outside an agency's area of expertise. With this in mind, we examine the single claim WMC raises before us. III. ¶10 dismissed WMC its contends claim that that APPLICATION the the circuit letter court response improperly from DOR constitutes an unpromulgated rule in violation of Wis. Stat. ch. 227. We review the circuit court's decision to dismiss this claim under the primary jurisdiction doctrine for an erroneous 7 No. exercise of discretion. 2020AP485 City of Brookfield, 171 Wis. 2d at 423. "We will sustain a discretionary act if we find the trial court examined the relevant facts, applied a proper standard of law, and using a demonstrative rational process, reached a conclusion that a reasonable judge could reach." Lane v. Sharp Packaging Sys., Inc., 2002 WI 28, ¶19, 251 Wis. 2d 68, 640 N.W.2d 788. ¶11 In briefing and oral argument, WMC contended the primary jurisdiction doctrine is inapplicable here "because the tax appeals § 227.40(1) commission declaratory lacks jurisdiction judgment over actions." Wis. Stat. Because other independently sufficient grounds are available to resolve this case, we do not address the Tax Appeals Commission's jurisdiction over the unpromulgated rule claim in this opinion. In particular, Property we Taxpayers, received Inc. amicus suggesting briefing the from primary doctrine was improperly applied for another reason. Wisconsin jurisdiction It argues, "When it comes to rulemaking challenges, such as the one brought in this case, the question presented is essentially a purely legal one," which the circuit court should decide in the first instance. ¶12 Our analysis proceeds under this second argument. WMC initially brought three claims against DOR: an unpromulgated rule claim, an inconsistent interpretation claim, and a constitutional claim. The circuit court dismissed all three under the primary jurisdiction doctrine. It explained: At this time, there are numerous similar cases pending before the Tax Appeal Commission. The Commission is considering how to interpret and apply Wis. Stat. 70.111(27) to property owned and used by the 8 No. 2020AP485 manufacturers. That is the exact issue in this case. The Commission is well suited to use its expertise in determining this issue. Therefore, this court will not assume jurisdiction. Regardless of whether this rationale had some relevance to the other claims originally filed, it is insufficient with respect to the only claim now before us——the unpromulgated rule claim.6 ¶13 should Under our generally cases, be the analyzed primary jurisdiction claim-by-claim. See doctrine City of Brookfield, 171 Wis. 2d at 424 (analyzing claims individually). The unpromulgated rule claim in this case would not benefit from the Tax Appeals Commission's specialized expertise in tax law or its fact-finding interpreting capabilities. and applying the Rather, it requires statute that defines only an administrative rule (Wis. Stat. § 227.01(13)) and its related procedural prerequisites. This presents a pure question of law. Indeed, absence recognizing the of any significant factual dispute, WMC and DOR both moved for summary judgment on the claim.7 It is a question that does not draw upon the Tax Appeals Commission's expertise in tax matters; it goes to the authority and process by which an agency must adopt and administer the law. Whatever the Tax Appeals Commission would conclude WMC's petition for review did not challenge the circuit court's dismissal of the inconsistent interpretation claim or the constitutional claim. We therefore offer no opinion on whether the circuit court properly exercised its discretion by dismissing those claims. 6 See Providence Cath. Sch., 231 Wis. 2d at 172 ("Factual issues are nonexistent; indeed, both parties moved the court for summary judgment, asserting that there were no material issues of fact."). 7 9 No. 2020AP485 (assuming it can opine on this question), the determination of whether DOR's letter constitutes an unpromulgated administrative rule would ultimately be decided independently without deference to the Tax Appeals Commission. by a court, See Wis. Stat. § 227.57(11); Tetra Tech, 382 Wis. 2d 496. ¶14 In view of this, and considering the circuit court's reasoning, we conclude the circuit court erroneously exercised its discretion because it did not apply the proper standard of law. Lane, 251 Wis. 2d 68, ¶19. The circuit court's reasoning was brief; it did not examine the unpromulgated rule claim at all. As best we can tell, it appears the court focused on the other claims presented to it——in particular, the interpretation of Wis. Stat. § 70.111(27)(b) DOR offered in its letter. So while the circuit court explained its decision to defer to the Tax Appeals Commission regarding the proper interpretation of § 70.111(27)(b), it gave no justification for its decision to defer on the question of whether DOR's letter was an unpromulgated rule. See City of Brookfield, 171 Wis. 2d at 423 (reversing court when a "failed to engage consideration" regarding a particular claim). in a reasoned Nor did the court observe the distinction our cases have made between factual and technical issues on the one hand, and pure questions of law outside the expertise of agencies like the Tax Appeals Commission on the other. ¶15 this case As we have explained, the unpromulgated rule claim in involves the interpretation statute to undisputed facts. and application of a As a pure question of law in a 10 No. 2020AP485 nonspecialized area, this is an issue properly addressed to the court's expertise. WI App 154, ¶29, Noonan 276 v. Nw. Wis. 2d 33, Mut. 687 Life Ins. N.W.2d 254 Co., 2004 (rejecting a claim that the primary jurisdiction doctrine required deference to the agency because the case was one of "statutory and contract interpretation, which fall within the province of the court"). By contrast, the Tax Appeals Commission interprets and administers the tax code and adjudicates taxpayer claims. Stat. § 73.01(4). letter fits § 227.01(13), administrative Wis. It has no unique expertise over whether a the definition which law defines statute of a a rule. rule, falling is a Wisconsin broadly outside the tax Stat. applicable code and beyond the Tax Appeals Commission's specialized knowledge. And although the we express no opinion on the merits of unpromulgated rule claim, which remains to be adjudicated by the circuit squarely court on within remand, the it presents expertise of the a question judicial that fits branch. We conclude the circuit court erroneously exercised its discretion when it dismissed this claim. Applying our precedents to the unpromulgated rule claim in this case, we conclude deference to the Tax Appeals Commission is not warranted under the primary jurisdiction doctrine. By the Court.——The decision of the court of appeals is reversed, and the cause is remanded to the circuit court for further proceedings consistent with this opinion. 11 No. ¶16 ANNETTE KINGSLAND ZIEGLER, C.J. Department of Manufacturers Stat. Revenue and ("DOR") Commerce § 70.111(27)(b), manufacturing ("WMC") a statute properties. In (concurring). provided an 2020AP485.akz the Wisconsin interpretation governing response, The of Wis. taxes for WMC brought a declaratory judgment suit challenging the DOR's interpretation. The circuit court dismissed jurisdiction doctrine. WMC's claims under the primary The majority concludes that the circuit court erred because the issue presented, i.e., whether the DOR followed proper rulemaking procedures, is one that falls squarely within the province and expertise of the courts. See majority op., ¶15 (reasoning that the issue presented is "a pure question of addressed law to in the a nonspecialized court's expertise"). area" and While is the "properly majority's reasoning may very well be correct, it is unnecessary. majority fails to recognize that WMC could not bring claims before the Tax Appeals Commission ("TAC"). The their WMC has no assessment that could be appealed; they are not a manufacturer. When a party could not possibly proceed before the TAC, the primary jurisdiction doctrine does not apply. jurisdiction for WMC to bring their claims: There is only one the courts. As a result, I respectfully concur. ¶17 The primary jurisdiction doctrine applies only where "a court and an administrative agency have jurisdiction over resolution Milwaukee of issues Metro. N.W.2d 484 (1992). in a Sewerage dispute." City Dist., Wis. 2d 400, 171 of Brookfield 420, v. 491 The doctrine cannot apply when the party 1 No. 2020AP485.akz bringing the issue cannot bring the matter before the agency. See, e.g., Ryan v. Chemlawn Corp., 935 F.2d 129, 131-32 (7th Cir. 1991) (explaining that the plaintiff must be allowed "the opportunity to [obtain relief] from the only provide [it], the court" forum that can and declining to apply the primary jurisdiction doctrine); United States v. Haun, 124 F.3d 745, 750-52 (6th Cir. 1997) (holding that the primary jurisdiction doctrine does not apply where the plaintiff could not go before the relevant agency, reasoning that "[i]f no administrative forum is available . . . a court should reassert or, as the case may be, retain its jurisdiction"); City of Brookfield, 171 Wis. 2d at 416-24 (applying the primary jurisdiction doctrine where the plaintiffs could present their dispute to the relevant agency). ¶18 it goes I do not join Justice Roggensack's concurrence because too far to answer questions not before the court. Justice Roggensack may very well be correct that the TAC lacks jurisdiction to resolve unpromulgated rule. 34. whether a DOR interpretation is an See Justice Roggensack's concurrence, ¶¶30- But I am hesitant to answer an issue so broadly such that it appears that a litigant might be precluded from even raising that as a part of their broader argument before the TAC. For example, perhaps a litigant should be able to argue that an assessment is faulty for a variety of reasons, one of which being that the assessment stems from an unpromulgated rule. Even if the TAC does not have jurisdiction over rulemaking, Wis. Stat. § 227.40(2)(e) seems to suggest that persons who challenge 2 No. administrative decisions under Wis. Stat. 2020AP485.akz § 227.52 may be statutorily required to present rulemaking arguments to the TAC. See § 227.40(2)(e) claim may (stating dispute the that persons "validity of bringing [a] rule a § 227.52 or guidance document" if that rule or guidance document was "duly challenged in the proceeding before the agency in which the decision sought to be reviewed was made or entered"). order or Here, we need not decide that issue because WMC could not have brought this challenge before the TAC. ¶19 that To apply the primary jurisdiction doctrine to a party cannot discretion. go before the TAC is an erroneous exercise of Employing the primary jurisdiction doctrine against WMC would deny them their day in court and require WMC to sit idly by presented while to they the await TAC. another party Accordingly, I to bring join the the issues majority's mandate. ¶20 For the foregoing reasons, I respectfully concur. 3 No. ¶21 PATIENCE DRAKE ROGGENSACK, J. 2020AP485.pdr (concurring). The majority opinion concludes that, under the primary jurisdiction doctrine, the circuit court erroneously exercised its discretion because Wisconsin Manufacturers and Commerce's (WMC) unpromulgated rule challenge turns on a question of law, which the circuit court should have decided. bottom line conclusion that the While I agree with the circuit court should have decided WMC's unpromulgated rule challenge, I part ways with the majority opinion's reasoning. The circuit court should have decided WMC's challenge to the Department of Revenue's (DOR) interpretation of Wis. Stat. § 70.111(27)(b) (2017-18) claiming it was an unpromulgated rule, because jurisdiction did not exist in the Tax Appeals Commission to decide whether DOR's response to WMC was an unpromulgated rule. Because the majority misses step one in analyzing a question of primary jurisdiction, i.e., whether the Tax Appeals Commission and the circuit court both had jurisdiction to decide whether DOR's letter-response to WMC was an unpromulgated rule, I respectfully concur. I. ¶22 exemption BACKGROUND1 In 2017, the Wisconsin Legislature enacted a new tax for "machinery, tools, such items used in manufacturing." and patterns, not including 2017 Wis. Act 59, § 997j (codified at Wis. Stat. § 70.111(27)(b) (2017-18)). Seeking a determination on how the new exemption would be applied, WMC sent a written inquiry to the DOR. WMC's inquiry expressed its The majority opinion capably sets out the background underlying this controversy. Therefore, I describe here only that which is necessary to understand my writing below. 1 1 No. 2020AP485.pdr view that "machinery, patterns and tools that are not used in manufacturing" are exempt even if that property is "located on manufacturing property." § 70.111(27)(b) under WMC asked for DOR's interpretation of those proposed facts. In a letter- response, DOR disagreed with WMC's interpretation and said that the new exemption does not apply to manufacturers, even though the property is not used in manufacturing. ¶23 circuit that: WMC then court filed pursuant a declaratory to Wis. Stat. judgment action § 227.40 in asserting (1) DOR's response to WMC was an unpromulgated rule and is therefore invalid; (2) DOR's response is invalid because it is inconsistent with the text of the new exemption; and (3) DOR's response violates various provisions of the Wisconsin and United States Constitutions. ¶24 circuit Following court cross-motions dismissed jurisdiction doctrine. WMC's for summary claims under judgment, the the primary The circuit court observed that the Tax Appeals Commission was then "considering how to interpret and apply Wis. Stat. § 70.111(27) to property owned and used by the manufacturers" and was "well suited determining this issue." to use its expertise in Accordingly, it declined to exercise jurisdiction over WMC's claims. ¶25 WMC appealed the court's dismissal of only unpromulgated rule claim and the constitutional claims. court of appeals affirmed. the The Wis. Prop. Tax Consultants, Inc. v. DOR, 2021 WI App 47, 398 Wis. 2d 654, 963 N.W.2d 103. 2 WMC then No. 2020AP485.pdr sought our review of only the unpromulgated rule claim. We granted review. II. A. ¶26 exercised We review its DISCUSSION Standard of Review whether discretion in the not circuit court exercising its erroneously jurisdiction. McEwen v. Pierce Cnty., 90 Wis. 2d 256, 268, 279 N.W.2d 469 (1979). In so doing, we review, as a matter of law, whether the Tax Appeals Commission had jurisdiction to resolve the dispute. Id. We further interpret and apply Wis. Stat. § 73.01(4) and Wis. Stat. § 227.40. We independently statutes as questions of law. interpret and apply Townsend v. ChartSwap, LLC, 2021 WI 86, ¶11, 399 Wis. 2d 599, 967 N.W.2d 21. B. ¶27 Primary Jurisdiction When both a court and an administrative agency have jurisdiction over resolution of issues in a dispute, courts may look to the primary jurisdiction should decide the case first. doctrine to determine who City of Brookfield v. Milwaukee Metro. Sewerage Dist., 171 Wis. 2d 400, 420, 491 N.W.2d 484 (1992). As we have concluded in the past, the doctrine is not one of "power[,] but comity." Wis. Collectors Ass'n, Inc. v. Thorp Fin. Corp., 32 Wis. 2d 36, 44, 145 N.W.2d 33 (1966). "The purpose of the primary-jurisdiction rule is to promote proper relationships between the courts and administrative agencies." Id. However, the question of primary jurisdiction does not arise until there first has been a conclusion that both the agency and the court have jurisdiction over the dispute. 3 Beal No. 2020AP485.pdr v. First Fed. Sav. & Loan Ass'n of Madison, 90 Wis. 2d 171, 197, 279 N.W.2d 693 (1979). If the administrative agency does not have jurisdiction to decide the question presented, the primary jurisdiction doctrine is not implicated. See Ass'n of Career Emps. v. Klauser, 195 Wis. 2d 602, 612-13, 536 N.W.2d 478 (Ct. App. 1995) (explaining that primary jurisdiction assumes jurisdiction in both a court and an agency, and if that does not exist, primary jurisdiction is not at issue). ¶28 provides Article VII, Section 8 of the Wisconsin Constitution that: "[e]xcept as otherwise provided by law, the circuit court shall have original jurisdiction in all matters civil and criminal within this state." Accordingly, we have stated that "in Wisconsin, 'no circuit court is without subject matter jurisdiction claims].'" Wis. 2d to entertain actions [on state law Vill. of Trempealeau v. Mikrut, 2004 WI 79, ¶8, 273 76, 681 N.W.2d 190 (quoting Mueller v. Brunn, 105 Wis. 2d 171, 176, 313 N.W.2d 790 (1982)). ¶29 Furthermore, Wis. Stat. § 227.40(1) states that "the exclusive means of judicial review of the validity of a rule or guidance document shall be an action for declaratory judgment as to the validity of the rule or guidance document brought in the circuit court for the county where the party asserting the invalidity of the rule . . . resides or has its principal place of business . . . ." ¶30 The jurisdiction Tax by the § 227.40(1). Appeals Commission legislature which states that, 4 in Wis. also Stat. was granted § 73.01(4)(a), No. 2020AP485.pdr Subject to the provisions for judicial review in s. 73.015, the commission shall be the final authority for the hearing and determination of all questions of law and fact arising under sub. (5) and s. 72.86(4), 1985 stats., and ss. 70.38(4)(a), 70.397, 70.64, and 70.995(8), s. 76.38(12)(a), 1993 stats., ss. 76.39(4)(c), 76.48(6), 77.26(3), 77.59(5m) and (6)(b), 78.01, 78.22, 78.40, 78.555, 139.02, 139.03, 139.06, 139.31, 139.315, 139.33, 139.76, 139.78, 177.1103, 177.1206(3), 341.405, and 341.45, subch. XIV of ch. 71, and subch. VII of ch. 77. § 73.01(4)(a). No administrative remedy was provided therein to the Tax Appeals Commission to review the validity of a DOR rule. Generally, when a statute sets forth a procedure by which to provide review of administrative agency decisions and states that the procedure is the final review, other forms of remedy are not available in addition to the listed procedure. Nodell Inv. Corp. v. City of Glendale, 78 Wis. 2d 416, 422, 254 N.W.2d 310 (1977). ¶31 If an agency is interpreting its own declaration that is being characterized as a rule made in contravention of its own rule-making procedures, review that claim. the to WMC has jurisdiction to County of Dane v. DHSS, 79 Wis. 2d 323, 331- 33, 255 N.W.2d 539 (1977). responded agency in a However, here, it is DOR who has way that is challenged as a DOR unpromulgated rule, and it is the Tax Appeals Commission who is asked to decide whether DOR followed proper rule-making procedures in making its letter-response to WMC. ¶32 DOR In order for Tax Appeals Commission to decide whether followed proper rule-making procedures in its letter- response to WMC, Tax Appeals Commission must have the authority to say, "yes," DOR did or "no," DOR didn't. 5 No. ¶33 Administrative agencies are 2020AP485.pdr creations of the legislature and have only those powers expressly given to them by the legislature. Heritage Credit Union v. Office of Credit Unions, 2002 WI App 213, ¶12, 247 Wis. 2d 589, 634 N.W.2d 593. No authority to judge whether DOR followed proper rule-making procedures in issuing its letter-response is granted to the Tax Appeals Commission by Wis. Stat. § 73.01(4)(a). Further, no one has provided us with a statute or other grant of authority that gives the Tax Appeals Commission the power to decide whether DOR properly exercised its rule-making authority. and searched, but I have found none. I have searched Without such a grant of authority from the legislature, there is no jurisdiction in the Tax Appeals Commission to decide the dispute at issue here. ¶34 Under Wis. Stat. § 227.40(1), only the circuit court had jurisdiction to decide whether DOR's letter-response to WMC was a rule that was created without following required rulemaking procedures. Tax Appeals Accordingly, I conclude that, because the Commission had no jurisdiction over WMC's unpromulgated rule claim, reliance on the primary jurisdiction doctrine to decide this case is inappropriate. Only the circuit court had the power to review WMC's unpromulgated rule claim against DOR. III. ¶35 CONCLUSION It is DOR who has responded to WMC in a way that is challenged by WMC as a DOR rule, and it is the Tax Appeals Commission who is asked to decide whether DOR followed proper rule-making procedures in making 6 its response to WMC. The No. 2020AP485.pdr circuit court should have decided WMC's challenge to the DOR's interpretation of Wis. Stat. § 70.111(27)(b) (2017-18) claiming it was an unpromulgated rule, because jurisdiction did not exist in the Tax Appeals Commission to decide whether DOR's response to WMC was an unpromulgated rule. Because the majority misses step one in analyzing a question of primary jurisdiction, i.e., whether the Tax Appeals Commission and the circuit court both had jurisdiction to decide whether DOR's letter-response to WMC was an unpromulgated rule, I respectfully concur. ¶36 I am authorized to state that Justice REBECCA GRASSL BRADLEY joins this concurrence. 7 No. 1 2020AP485.pdr
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