Tetra Tech EC, Inc. v. Wisconsin Department of Revenue , 382 Wis. 2d 496 ( 2018 )

2018 WI 75
SUPREME COURT OF WISCONSIN
CASE NO.: 2015AP2019
COMPLETE TITLE: Tetra Tech EC, Inc., and Lower Fox River
Remediation LLC,
Petitioners-Appellants-Petitioners,
v.
Wisconsin Department of Revenue,
Respondent-Respondent.
REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 373 Wis. 2d 287, 890 N.W.2d 598
PDC No: 2017 WI App 4 - Published
OPINION FILED: June 26, 2018
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: December 1, 2017
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Brown
JUDGE: Marc A. Hammer
JUSTICES:
CONCURRED: A.W. BRADLEY, J., concurs, joined by ABRAHAMSON,
J. (opinion filed).
ZIEGLER, J., concurs. ROGGENSACK, C.J., joins
Part I (opinion filed).
GABLEMAN, J., concurs, joined by ROGGENSACK,
C.J. (opinion filed).
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the petitioners-appellants-petitioners, there were
briefs filed by Barret V. Van Sicklen, Frederic J. Brouner,
Donald Leo Bach, and DeWitt Ross & Stevens S.C., Madison. There
was an oral argument by Barret Van Sicklen.
For the respondent-respondent, there was a brief filed by
Misha Tseytlin, solicitor general, with whom on the brief were
Brad D. Schimel, attorney general, and Kevin M. LeRoy, deputy
solicitor general. There was an oral argument by Misha
Tseytlin.
An amicus curiae brief was filed on behalf of Wisconsin
Institute for Law & Liberty, Inc. by Richard M. Esenberg, Thomas
C. Kamenick, and Wisconsin Institute for Law & Liberty,
Milwaukee.
An amicus curiae brief was filed on behalf of Wisconsin
Utilities Association by James E. Goldschmidt, Bradley Jackson,
and Quarles & Brady LLP, Madison and Milwaukee.
An amicus curiae brief was filed on behalf of Wisconsin
Manufacturers and Commerce, Inc., Midwest Food Products
Association, Metropolitan Milwaukee Association of Commerce,
Wisconsin Bankers Association, Wisconsin Cheese Makers
Association, Wisconsin Paper Council, Dairy Business
Association, Inc., Associated Builders and Contractors, Inc.
(Wisconsin Chapter), Wisconsin Potato and Vegetable Growers
Association, Wisconsin Farm Bureau Federation, and Wisconsin
Corn Growers Association by Robert I. Fassbender and Great Lakes
Legal Foundation, Madison.
2
2018 WI 75
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2015AP2019
(L.C. No. 2015CV132)
STATE OF WISCONSIN : IN SUPREME COURT
Tetra Tech EC, Inc. and Lower Fox River
Remediation LLC,
Petitioners-Appellants-Petitioners, FILED
v.
JUN 26, 2018
Wisconsin Department of Revenue,
Sheila T. Reiff
Clerk of Supreme Court
Respondent-Respondent.
REVIEW of a decision of the Court of Appeals. Affirmed.
¶1 DANIEL KELLY, J. The Wisconsin Department of Revenue
(the "Department") imposed a tax on the petitioners pursuant to
Wis. Stat. § 77.52(2)(a)11. (2007-08) for the "processing" of
river sediments into waste sludge, reusable sand, and water.
The petitioners say the statutory term "processing" is not
expansive enough to cover the separation of river sediment into
No. 2015AP2019
its component parts, and so they asked us to reject the
Department's interpretation of that term.1
¶2 Because resolving this question implicates the
authoritativeness of an administrative agency's interpretation
and application of a statute, we asked the parties to also
address this issue: "Does the practice of deferring to agency
interpretations of statutes comport with Article VII, Section 2
of the Wisconsin Constitution, which vests the judicial power in
the unified court system?"2
¶3 We conclude that the term "processing" in Wis. Stat.
§ 77.52(2)(a)11. includes the separation of river sediment into
its component parts. Therefore, we affirm the court of appeals.
We have also decided to end our practice of deferring to
1
This is a review of a published decision of the court of
appeals, Tetra Tech EC, Inc. v. DOR, 2017 WI App 4, 373
Wis. 2d 287, 890 N.W.2d 598, which affirmed an order of the
Brown County Circuit Court, the Honorable Marc A. Hammer
presiding, that affirmed an order of the Wisconsin Tax Appeals
Commission ("Commission").
2
All references to the Wisconsin Statutes with respect to
the question of whether we defer to an administrative agency's
interpretation of a statute are to the 2015-16 version unless
otherwise indicated.
All references to the Wisconsin Statutes with respect to
the meaning of "processing," as that term is used in Wis. Stat.
§ 77.52(2)(a)11., are to the 2007-08 version unless otherwise
indicated. We cite this version, as the court of appeals did,
because the relevant tax years for the case are 2007-09 and
because the 2005-06 version of the Wisconsin Statutes, which
would govern the 2007 tax year, is not materially different from
the 2007-08 version. See Tetra Tech EC, Inc., 373 Wis. 2d 287,
¶1 n.1.
2
No. 2015AP2019
administrative agencies' conclusions of law.3 However, pursuant
to Wis. Stat. § 227.57(10), we will give "due weight" to the
experience, technical competence, and specialized knowledge of
an administrative agency as we consider its arguments.4
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
¶4 On November 13, 2007, the United States Environmental
Protection Agency ("EPA") ordered several paper companies to
remediate the environmental impact of polychlorinated biphenyls
("PCBs") they had released into the Fox River as part of their
manufacturing activities. The paper companies created Lower Fox
River Remediation, LLC ("LFR Remediation") to carry out the
EPA's order. LFR Remediation hired Tetra Tech EC, Inc. ("Tetra
Tech") to perform the actual remediation activities. Tetra Tech
subcontracted a portion of the work to Stuyvesant Dredging, Inc.
("Stuyvesant Dredging").5 Stuyvesant Dredging's responsibilities
3
Although a majority of the court agrees we should no
longer defer to administrative agencies' conclusions of law,
there is disagreement with respect to why we should end the
practice. This opinion describes one rationale; other opinions
will contain alternative bases for our conclusion.
4
Justice Rebecca Bradley joins the opinion in toto. Chief
Justice Roggensack joins Sections I., II.A.1., II.A.2., II.B.,
and III. Justice Gableman joins Paragraphs 1-3, Sections I.,
II. (introduction), II.A. (introduction), II.A.1., II.A.2.,
II.A.6., II.B., and III., and the mandate, although he does not
join Section II.A.6. to the extent that the first sentence of
Paragraph 84 implies a holding on constitutional grounds.
Therefore, this opinion announces the opinion of the court with
respect to Sections I., II.A.1., II.A.2., II.B., and III.
5
Stuyvesant Dredging is now known as Stuyvesant Projects
Realization, Inc.
3
No. 2015AP2019
included receiving sediment dredged from the Fox River, and then
using membrane filter presses to separate it into its component
parts: water, sand, and PCB-containing sludge. Part of the
purpose of Stuyvesant Dredging's work was to "provide a supply
of relatively clean sand that could be sold for off-site use or
used beneficially on site."
¶5 In 2010, the Department conducted a field audit of
both Tetra Tech and LFR Remediation (collectively, "Taxpayers").
During that same year, the Department issued a Notice of Field
Audit Action that assessed a use tax on LFR Remediation's
purchase of the portion of Tetra Tech's remediation services
that represented Stuyvesant Dredging's work. The Department
also issued a Notice of Field Audit Action that assessed a sales
tax on the portion of Tetra Tech's sale of remediation services
to LFR Remediation (to the extent it reflected Stuyvesant
Dredging's work). In both notices, the Department said
Stuyvesant Dredging's activities constituted the "repair,
service, alteration, fitting, cleaning, painting, coating,
towing, inspection and maintenance of tangible personal
property," and so were taxable under Wis. Stat. § 77.52(2)(a)10.
¶6 Tetra Tech and LFR Remediation petitioned the
Department for redetermination of the assessed taxes. The
Department denied the petitions, concluding that Stuyvesant
Dredging's "dewatering and desanding of dredged, contaminated
sediment that is not returned to the river is a service to
tangible personal property" that was taxable under Wis. Stat.
§ 77.52(2)(a)10. Tetra Tech and LFR Remediation then filed
4
No. 2015AP2019
petitions with the Wisconsin Tax Appeals Commission (the
"Commission") requesting review of the Department's denial of
their reassessment requests. In its presentation to the
Commission, the Department argued that Stuyvesant Dredging's
activities were taxable under § 77.52(2)(a)10., or
alternatively, under § 77.52(2)(a)11. as "processing" of
tangible personal property. The Commission issued a Ruling and
Order in favor of the Department.6 Upholding the sales and use
taxes, the Commission concluded that "what SDI [Stuyvesant
Dredging] does with the sediment is 'processing . . . for a
consideration for consumers [Tetra Tech] who furnish directly or
indirectly the materials [sediment] used in
the . . . processing' under the meaning of Wis. Stat.
§ 77.52(2)(a)11." The Commission reasoned that "[t]he
dictionary definition of 'processing' is 'to put through the
steps of a prescribed procedure; or, to prepare, treat, or
convert by subjecting to a special process.' SDI's activities
certainly fall within that definition."7
¶7 Tetra Tech and LFR Remediation timely filed a petition
for judicial review, pursuant to Wis. Stat. § 227.52, in the
6
Tetra Tech and LFR Remediation's petitions received
separate docket numbers (12-S-192 and 12-S-193, respectively),
but the Commission decided the cases together.
7
See Processing, The American Heritage Dictionary 1444 (3d
ed. 1992) (defining "processing" in relevant part: "1. To put
through the steps of a prescribed procedure," and as "2. To
prepare, treat, or convert by subjecting to a special process").
5
No. 2015AP2019
Brown County Circuit Court. The petition requested the circuit
court to set aside the Commission's Ruling and Order that
Stuyvesant Dredging's work subjected Tetra Tech and LFR
Remediation to sales and use taxes. The circuit court affirmed,
relying on the same definition of "processing" the Commission
had used. LFR Remediation and Tetra Tech appealed. The court
of appeals, using a dictionary definition of "processing"
similar to the one used by the circuit court and the Commission,
affirmed. Tetra Tech EC, Inc. v. DOR, 2017 WI App 4, ¶¶2, 17,
373 Wis. 2d 287, 890 N.W.2d 598. We granted Tetra Tech and LFR
Remediation's petition for review, and now affirm.
II. DISCUSSION
¶8 The ultimate question we must answer in this case is
whether the petitioners are subject to the tax levied on them by
the Department of Revenue pursuant to Wis. Stat.
§ 77.52(2)(a)11. The Commission says they are, and urges us to
agree with its interpretation and application of that statute.
¶9 Before we may answer that question, however, there is
a predicate matter we must address: When we review an
administrative agency's decision, are there circumstances in
which we must defer to the agency's interpretation and
application of the law? Our current jurisprudence says there
are. And ever since Harnischfeger Corp. v. LIRC, 196
Wis. 2d 650, 659, 539 N.W.2d 98 (1995), we have treated that
deference as a "standard of review." Therefore, because
identifying the appropriate standard of review is an appellate
court's first task, we will begin there. Once we resolve that
6
No. 2015AP2019
issue, we will address the interpretation of Wis. Stat.
§ 77.52(2)(a)11. and how it applies to Tetra Tech and LFR
Remediation.
A. Deference to Administrative Agencies
¶10 Our assessment of the deference doctrine begins in the
following section with a brief overview of its current contours.
To truly understand its function, however, we need to search out
its roots, the results of which we discuss in the second
section. As preparation for our comparison of the deference
doctrine to our constitutional responsibilities, we examine in
the third section the nature of the judiciary's powers and how
they relate to the other governmental branches. In the fourth
and fifth sections, we separately assess "great weight" and "due
weight" deference in light of the constitutional provisions and
principles that govern our work.
1. Current Standard for Reviewing Administrative Agency
Decisions
¶11 We generally review administrative agency decisions in
accordance with chapter 227 of our statutes.8 As relevant here,
Wis. Stat. § 227.57 contains two specific directions regarding
how we are to conduct those reviews. First, it instructs a
court to "set aside or modify the agency action if it finds that
8
This decision applies to judicial review of all
administrative agency decisions. While chapter 227 applies to
judicial review of most administrative decisions, it does not
apply to all. See, e.g., Wis. Stat. § 102.23 (establishing
procedures for judicial review of workers compensation orders).
7
No. 2015AP2019
the agency has erroneously interpreted a provision of law and a
correct interpretation compels a particular action, or it shall
remand the case to the agency for further action under a correct
interpretation of the provision of law." § 227.57(5). And
second, it instructs that, "[s]ubject to sub. (11), 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."9
§ 227.57(10).
¶12 We have developed, over time, a contextualized
methodology of reviewing administrative agency decisions.10 The
provenance of this methodology lies partly with the preceding
statute, and partly with our own doctrinal developments. In its
modern iteration, this method begins with the principle that
"statutory interpretation is a question of law which courts
decide de novo." See Harnischfeger, 196 Wis. 2d at 659. And we
recognize that "a court is not bound by an agency's
interpretation of a statute." Id. But then we wrap those
principles within another, one we have said is of equal gravity:
9
Subsection 11 does not apply to the case before us today,
but it will play a small part in our discussion below. This
subsection provides that "[u]pon review of an agency action or
decision affecting a property owner's use of the property
owner's property, the court shall accord no deference to the
agency's interpretation of law if the agency action or decision
restricts the property owner's free use of the property owner's
property." Wis. Stat. § 227.57(11).
10
Whether, or how closely, our practice comports with the
preceding statutory instructions will be addressed below.
8
No. 2015AP2019
"As important, however, is the principle that courts should
defer to an administrative agency's interpretation of a statute
in certain situations." Id.
¶13 Calibrating this "deference principle" to those
"certain situations" resulted in our contextualized, three-
tiered treatment of an administrative agency's conclusions
regarding the interpretation and application of statutory
provisions. When reviewing those conclusions, we give them
(1) great weight deference; (2) due weight deference; or (3) no
deference at all. See id. at 659–60 & n.4.
¶14 We have said the first of these——great weight
deference——is appropriate upon concluding that:
(1) the agency was charged by the legislature with the
duty of administering the statute; (2) . . . the
interpretation of the agency is one of long-standing;
(3) . . . the agency employed its expertise or
specialized knowledge in forming the interpretation;
and (4) . . . the agency's interpretation will provide
uniformity and consistency in the application of the
statute.
Id. at 660. Giving "great weight" to an administrative agency's
interpretation means the court must adopt it so long as it is
reasonable. Id. at 661 ("[W]e have repeatedly held that an
agency's interpretation must then merely be reasonable for it to
be sustained."). An interpretation is reasonable if it does not
"directly contravene[] the words of the statute," is not
"clearly contrary to legislative intent," and is not "without
9
No. 2015AP2019
rational basis." See id. at 662.11 Deference is required even
when the court has a more reasonable interpretation of the law.
Racine Harley-Davidson, Inc. v. Wis. Div. of Hearings & Appeals,
2006 WI 86, ¶17, 292 Wis. 2d 549, 717 N.W.2d 184 (stating that
under great weight deference, a reviewing court must accept "an
agency's reasonable statutory interpretation, even if the court
concludes that another interpretation is equally reasonable, or
even more reasonable, than that of the agency"); Crystal Lake
Cheese Factory v. LIRC, 2003 WI 106, ¶24, 264 Wis. 2d 200, 664
N.W.2d 651 ("This [the need to defer] is true even if the court
were to conclude that another interpretation was more
reasonable."). These principles also apply to the agency's
application of the statute to undisputed facts, which is itself
a question of law.12 See, e.g., Crystal Lake Cheese Factory, 264
Wis. 2d 200, ¶30 ("LIRC's interpretations, including its
determination of reasonable accommodation in this case, should
be given 'great weight' deference.").
¶15 The second tier of review, "due weight" deference, is
appropriate when "the statute is one that the agency was charged
11
In the context of an ambiguous statute, "an agency's
interpretation cannot, by definition, be found to directly
contravene it." Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650,
662, 539 N.W.2d 98 (1995).
12
See DOR v. Exxon Corp., 90 Wis. 2d 700, 713, 281
N.W.2d 94 (1979) ("The question of whether the facts fulfill a
particular legal standard is itself a question of law.").
10
No. 2015AP2019
with administering,"13 and "the agency has some experience in an
area, but has not developed the expertise which necessarily
places it in a better position to make judgments regarding the
interpretation of the statute than a court."14 Under this
standard, "the fact that the agency's interpretation is
reasonable does not mean that its interpretation will
necessarily be upheld." UFE Inc. v. LIRC, 201 Wis. 2d 274, 287,
548 N.W.2d 57 (1996). Instead, "[i]f a court finds an
alternative interpretation more reasonable, it need not adopt
the agency's interpretation." Id. In effect, this creates a
"tie goes to the agency" rule in which deference is required
unless the court's interpretation is more reasonable than that
of the agency. ABKA Ltd. P'ship v. DNR, 2002 WI 106, ¶116, 255
Wis. 2d 486, 648 N.W.2d 854 (Sykes, J., dissenting) ("[T]he
agency's legal interpretation will be upheld even if there is a
different, equally reasonable interpretation——in other words, a
tie goes to the agency."); see also Daniel R. Suhr, Interpreting
Wisconsin Administrative Law at 7 (August 23, 2017),
https://ssrn.com/abstract=3025085 ("Due weight might be called
'tie goes to the agency' deference."). The agency's application
of a statute to undisputed facts is also entitled to due weight
13
Operton v. LIRC, 2017 WI 46, ¶20, 375 Wis. 2d 1, 894
N.W.2d 426 (quoting Racine Harley-Davidson, Inc. v. Wis. Div. of
Hearings & Appeals, 2006 WI 86, ¶107, 292 Wis. 2d 549, 717
N.W.2d 184 (Roggensack, J., concurring)).
14
UFE Inc. v. LIRC, 201 Wis. 2d 274, 286, 548 N.W.2d 57
(1996).
11
No. 2015AP2019
deference when it satisfies the Harnischfeger preconditions.
See DOR v. A. O. Smith Harvestore Prods., Inc., 72 Wis. 2d 60,
65-66, 240 N.W.2d 357 (1976) ("Due deference must be accorded
the agency's application of the law to the found facts when the
agency has particular competence or expertise in the matter at
hand." (citing Wis. Stat. § 227.20(2) (1973))).
¶16 When conditions support neither great weight nor due
weight deference, we give the administrative agency's statutory
interpretation no deference at all. See Racine Harley-Davidson,
Inc., 292 Wis. 2d 549, ¶19. In those circumstances, "the
reviewing court 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." Id., ¶20. This is the same
method we use in reviewing questions of law decided by our
circuit courts and court of appeals. State v. Alger, 2015 WI 3,
¶21, 360 Wis. 2d 193, 858 N.W.2d 346 ("The interpretation and
application of a statute present questions of law that this
court reviews de novo while benefitting from the analyses of the
court of appeals and circuit court.").
2. History of the Deference Doctrine
¶17 Although we often speak of the deference doctrine in a
manner that suggests it started and developed as a cohesive
whole, it did not. It is actually a portmanteau, derived from
two different sources, the pieces of which developed over two
different timelines, until they reached their fullest expression
12
No. 2015AP2019
in Harnischfeger. For purposes of clarity and ease of access,
we will rehearse their histories separately.
i. A Brief History of "Great Weight" Deference
¶18 The road to Harnischfeger's "great weight deference"
is a long one (it reaches as far back as Harrington v. Smith, 28
Wis. 43, 59-70 (1871)), but it is not an entirely clear one. As
originally conceived, the doctrine did not contemplate deference
at all, and it certainly did not purport to command the court's
obedience. But with time it developed into a decision-avoidance
doctrine that left to the administrative agencies the job of
statutory interpretation and application when the doctrine's
preconditions were satisfied. A dozen years ago, now-Chief
Justice Patience Drake Roggensack did yeoman's work in tracing
the development and effect of this doctrine. See The Honorable
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, 548-60 (2006). The
following history relies heavily on that scholarship.
¶19 In Harrington, we discussed some of the canons of
construction we used in discerning the proper meaning of an
ambiguous statute. One of those canons says that an agency's
understanding of the statute could be probative of its meaning:
"Long and uninterrupted practice under a statute, especially by
the officers whose duty it was to execute it, is good evidence
of its construction, and such practical construction will be
13
No. 2015AP2019
adhered to, even though, were it res integra,[15] it might be
difficult to maintain it." Harrington, 28 Wis. at 68. The
practice of executive branch employees "extending through a
period of so many years, ought, it would seem, to be some
evidence of what the law is; and some persons might be disposed,
perhaps, to think, evidence equal to a decision of this court."
Id. at 69. "Great weight," we concluded, "is undoubtedly to be
attached to a construction which has thus been given." Id.
¶20 This is not the language of deference, but of
persuasion. In a search for the proper meaning of an ambiguous
statute, we said we could properly have recourse to the views of
others and treat them as pieces of evidence for use in the
process of statutory construction in which we ourselves were
engaged. In support of our statement about the evidentiary
nature of the executive employees' views, we cited Edwards'
Lessee v. Darby, 25 U.S. (12 Wheat.) 206, 210 (1827). There,
the United States Supreme Court said that "[i]n the construction
of a doubtful and ambiguous law, the contemporaneous
construction of those who were called upon to act under the law,
and were appointed to carry its provisions into effect, is
15
"Res integra" means, literally, "an entire thing." Res
Integra, Black's Law Dictionary (10th ed. 2014) (citing Res
Nova, id.). Typically, the phrase refers to a matter of first
impression. See Res Integra, Black's Law Dictionary (10th ed.
2014); see also Res Nova, id. (stating that res nova is also
termed res integra, and defining res nova as a "case of first
impression").
14
No. 2015AP2019
entitled to very great respect." Id. One may respect an
interpretation, even greatly, without deferring to it.
¶21 Nor was Harrington expressing deference to an
administrative agency when it said we would adhere to the
executive branch's long-standing interpretation of a statute.
Instead, we were acknowledging that a change in an ancient
practice could have unacceptably disruptive consequences. For
this principle we cited Rogers v. Goodwin, in which the Supreme
Judicial Court of Massachusetts said:
Were the Court now to decide that this construction is
not to be supported, very great mischief would follow.
And although, if it were now res integra,[16] it might
be very difficult to maintain such a construction, yet
at this day the argumentum ab inconvenienti[17] applies
with great weight. We cannot shake a principle which
in practice has so long and so extensively prevailed.
If the practice originated in error, yet the error is
now so common that it must have the force of law.
2 Mass. (2 Tyng) 475, 477–78 (Mass. 1807).
¶22 Harrington cast a long shadow. The court was content
for many years to repeat and apply its formulation without
reading deference into its language. See, e.g., State ex rel.
Owen v. Donald, 160 Wis. 21, 111, 151 N.W. 331 (1915) (quoting
Harrington, and stating long practice is evidence of meaning);
State ex rel. State Ass'n of Y.M.C.A. of Wis. v. Richardson, 197
16
See supra n.15.
17
"Argumentum ab inconvenienti" means "[a]n argument from
inconvenience; an argument that emphasizes the harmful
consequences of failing to follow the position advocated."
Argumentum, Black's Law Dictionary (10th ed. 2014).
15
No. 2015AP2019
Wis. 390, 393, 222 N.W. 222 (1928) ("If we were in doubt as to
the proper construction to be placed upon the statute, we should
have to give much weight to the practical construction which has
been placed upon the statute ever since its enactment."); Wis.
Axle Div. (Timken-Detroit Axle Co.) v. Indus. Comm'n, 263
Wis. 529, 537b, 60 N.W.2d 383 (1953) (per curiam) ("This court
has held that where there is any obscurity in the meaning of a
statute, practical construction given by the administrative
agency charged with administering such law is entitled to great
weight."); Trczyniewski v. City of Milwaukee, 15 Wis. 2d 236,
240, 112 N.W.2d 725 (1961) (same). As Justice Rebecca Bradley
recently observed, "[b]y recognizing the value of executive
interpretations without entirely ceding interpretive authority
to the executive, these older cases reflect a more nuanced
appreciation for judicial interaction with agency
interpretation . . . ." Operton v. LIRC, 2017 WI 46, ¶78, 375
Wis. 2d 1, 894 N.W.2d 426 (R. Grassl Bradley, J., concurring).
¶23 But then came Pabst v. Wisconsin Department of
Taxation, 19 Wis. 2d 313, 120 N.W.2d 77 (1963). There, we
started our analysis of an agency's statutory interpretation
with the proposition that "[e]rrors of law are always reviewable
by the reviewing court." Id. at 322. But in our extended
discussion of the nature of that review, we did something new.
We imported the concept of deference. Federal courts, we noted,
afforded deference to an administrative agency's application of
a statute to undisputed facts under certain circumstances. See
id. at 322-24. In determining "whether the administrative
16
No. 2015AP2019
agency has correctly applied a statute to certain facts," the
federal courts would employ either the "analytical approach" or
the "practical approach." See id. at 322.
¶24 Under the analytical approach, "the court decides
which part of the agency's determination presents a question of
fact and which part a question of law." Id. As Professor
Kenneth Culp Davis described this methodology, the court upholds
the agency's factual findings if they have a reasonable basis.
4 Kenneth Culp Davis, Administrative Law Treatise § 30.01
(1958). But with respect to questions of law, the court
substitutes its judgment for that of the agency. Id.
Essentially, this creates a de novo standard for reviewing
questions of law.
¶25 The practical approach treats the agency's decision
more like legislation than adjudication. It avoids any attempt
to distinguish between facts and law, and instead holds that
"[t]he judicial function is exhausted when there is found to be
a rational basis for the conclusions approved by the
administrative body." Pabst, 19 Wis. 2d at 323 (quoting
Rochester Tel. Corp. v. United States, 307 U.S. 125, 146
(1939)).18
18
The practical approach is very similar to the "rational
basis" standard of review we apply to legislation. See Blake v.
Jossart, 2016 WI 57, ¶31, 370 Wis. 2d 1, 884 N.W.2d 484
(indicating that under rational basis review, "[i]n cases where
a statutory classification does not involve a suspect class or a
fundamental interest, the classification will be upheld if there
is any rational basis to support it" (quoting State v. Burgess,
2003 WI 71, ¶10, 262 Wis. 2d 354, 665 N.W.2d 124)).
17
No. 2015AP2019
¶26 Pabst observed that the method of review chosen by the
court would be outcome-determinative with respect to whose
application of the statute would control the case: "[Professor
Davis] concludes that the court applies the analytical approach
when it does not wish to be bound by the agency's application of
a statute to a set of facts, and the practical approach when it
believes the agency's application of the law should be deferred
to." Pabst, 19 Wis. 2d at 323. The primary factor driving the
selection of the review method, Professor Davis believed, was
the agency's expertise:
Davis believes that one of the most-important factors
which influences the court's choice of approach in
this field is the comparative qualification of court
and agency to decide the particular issue. The court
often deems agencies and their staffs to be expert
within their own specialized fields. In such
situations, the practical approach is likely to be
employed rather than the analytical in determining the
scope of review to be applied.
Id. (citing Davis, supra ¶24, at § 30.01 et seq. (Professor
Kenneth Culp Davis, University of Chicago School of Law and
University of San Diego School of Law)). The "practical
approach" bears a close resemblance to the "great weight
deference" formulation. It also reaches the same result, to
wit, preference for the agency's conclusion of law over that of
the court.
¶27 We concluded in Pabst that the statutes as they
existed at the time bound us to use the analytical approach.
18
No. 2015AP2019
"We believe that pars. (b) and (d) of sec. 227.20(1), Stats.,[19]
require Wisconsin courts to employ the analytical approach when
reviewing agency decisions." Pabst, 19 Wis. 2d at 323. But we
also said that dividing the facts from the law would not
necessarily prevent us from deferring to the agency's
application of the statute (i.e., the practical approach):
Nevertheless, in fields in which an agency has
particular competence or expertise, the courts should
not substitute their judgment for the agency's
application of a particular statute to the found facts
if a rational basis exists in law for the agency's
interpretation and it does not conflict with the
statute's legislative history, prior decisions of this
court, or constitutional prohibitions.
Id. at 323-24.
19
At the time, Wis. Stat. § 227.20(1) (1961) provided, in
part:
The court may affirm the decision of the agency, or
may reverse or modify it if the substantial rights of
the appellant have been prejudiced as a result of the
administrative findings, inferences, conclusions or
decisions being:
. . . .
(b) In excess of the statutory authority or
jurisdiction of the agency, or affected by other error
of law; or
. . . .
(d) Unsupported by substantial evidence in view of the
entire record as submitted; . . . .
§ 227.20(1)(b), (d) (1961).
19
No. 2015AP2019
¶28 We used the analytical approach in Pabst, in
accordance with statutory requirements,20 but only because we did
not "deem the board more competent than this court to decide a
question of law involving trust administration." See id. at
324. Subsequent cases confirm that our commitment to the
analytical approach has always been more nominal than real. For
example, in DOR v. Exxon Corp., we said:
While this court has held that ch. 227, Stats.
requires that courts employ the "analytical" approach
when reviewing agency decisions, this court will give
deference to agency determinations, where the agency
has particular expertise, rational basis exists in law
for the agency's interpretation, and it does not
conflict with the statute's legislative history, prior
decisions of this court, or constitutional
prohibitions.
90 Wis. 2d 700, 713, 281 N.W.2d 94 (1979) (citing Pabst, 19
Wis. 2d at 323-24), aff'd, 447 U.S. 207 (1980). So although the
statutes require a de novo review of questions of law (the
analytical approach), we have deferred to an administrative
agency (the practical approach) when circumstances satisfied our
criteria.
¶29 Where we once treated an agency's interpretation of a
statute as evidence of its meaning (Harrington), Pabst put us in
a posture of deference to administrative agencies. The shift
was not a comfortable one, as evidenced by a sporadic, but
short-lived, return to a more Harrington-like understanding of
"great weight." See Mednis v. Indus. Comm'n, 27 Wis. 2d 439,
20
Wis. Stat. § 227.20(1)(b), (d) (1961).
20
No. 2015AP2019
444, 134 N.W.2d 416 (1965) ("The construction and interpretation
adopted by the administrative agency charged with the duty of
applying the law is entitled to great weight in the courts.");
see also Cook v. Indus. Comm'n, 31 Wis. 2d 232, 240, 142
N.W.2d 827 (1966) (same). Each of these cases relied on pre-
Pabst authorities, such as Wisconsin Axle Division and
Trczyniewski,21 in which the agencies' understanding of the law
assisted, but did not supplant, our own application of the
statutes.
¶30 When we eventually circled back to Pabst's
understanding of "great weight," we granted administrative
agencies even broader deference than they had enjoyed before.
See Roggensack, supra ¶18, at 558-59. Whereas Pabst called for
deference only to an agency's application of a statute to
undisputed facts, we extended that deference to the construction
of the statute itself in Bucyrus-Erie Co. v. DILHR, 90
Wis. 2d 408, 417, 280 N.W.2d 142 (1979). There, we acknowledged
that "questions of law are always reviewable by the court," and
that "[t]he construction of a statute or the application of a
statute to a particular set of facts is such a question of law."
Id. But when we applied the Pabst deference principle, we made
no distinction between interpreting a statute and applying it.
21
Trczyniewski v. City of Milwaukee, 15 Wis. 2d 236, 240,
112 N.W.2d 725 (1961); Wis. Axle Div. (Timken-Detroit Axle Co.)
v. Indus. Comm'n, 263 Wis. 529, 537b, 60 N.W.2d 383 (1953) (per
curiam).
21
No. 2015AP2019
We acknowledged the case "involve[d] the interpretation and
application of certain statutory provisions," but then said:
The court will hesitate to substitute its judgment for
that of the agency on a question of law if " . . . a
rational basis exists in law for the agency's
interpretation and it does not conflict with the
statute's legislative history, prior decisions of this
court, or constitutional prohibitions."
Bucyrus-Erie Co., 90 Wis. 2d at 411, 417 (quoting Pabst, 19
Wis. 2d at 323-24). After Bucyrus-Erie Co., we never returned
to Harrington's formulation that an administrative agency's
application of a statute was evidence of its meaning that the
court could accept or reject in the process of authoritatively
resolving questions of law. By expanding the reach of the
deference principle, "the court continued a trend of applying
great weight deference more and more often, thereby construing
statutes less and less frequently." Roggensack, supra ¶18, at
556.
¶31 Only one transformation remains before we reach the
current expression of the deference doctrine. Prior to
Harnischfeger, we treated deference to administrative agencies
as a choice, something the courts could do in the process of
interpreting and applying a statute, but were not required to
do. Just a few years before we decided Harnischfeger, we said:
"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. Courts, however, frequently refrain
from substituting their interpretation of a statute for that of
the agency charged with the administration of a law." Lisney v.
22
No. 2015AP2019
LIRC, 171 Wis. 2d 499, 505, 493 N.W.2d 14 (1992). "Frequently
refrain" describes something episodic, not a rule of uniform
application. It implies the court will decide, on a case-by-
case basis, whether to defer to the administrative agency as it
resolves questions of law.
¶32 Harnischfeger, however, made the deference doctrine a
systematic requirement upon satisfaction of its preconditions.
See Roggensack, supra ¶18, at 553. It accomplished this feat by
promoting deference from a canon of construction to a standard
of review: "Whether or not a court agrees or disagrees with
LIRC's methodology, however, is not the issue in this case.
Instead, the central question is what standard of review the
courts of this state should apply when called upon to evaluate
an agency's interpretation of a statute." Harnischfeger, 196
Wis. 2d at 659.22 We then identified "great weight" deference,
"due weight" deference, and no deference as the available
options. Id. at 659-60. Determining the correct standard of
review, of course, is something an appellate court does at the
22
"In setting the frame for broad deference to agencies,
the court [in Harnischfeger] described the legal issue before
the court as deciding what level of deference it should accord
LIRC's decision. It did not characterize the legal issue as the
interpretation of an ambiguous statute." The Honorable 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, 553 (2006).
23
No. 2015AP2019
very beginning of its work, and it definitively controls how we
address questions of both fact and law.23
¶33 Enshrining this doctrine as a standard of review bakes
deference into the structure of our analysis as a controlling
principle. By the time we reach the questions of law we are
supposed to review, that structure leaves us with no choice but
to defer if the preconditions are met. Id. at 663 ("When, as in
this case, great weight deference is appropriate and the
agency's interpretation is not otherwise unreasonable, 'the
court of appeals and this court should refrain from substituting
their interpretation of [a] statute for the long-standing
interpretation of the agency charged with its administration.'"
(quoted source omitted) (emphasis omitted)). Harnischfeger made
good on this premise by reversing the court of appeals for
failing to defer to the administrative agency. Our subsequent
cases make it clear we understand the mandatory nature of the
deference doctrine. See, e.g., Crystal Lake Cheese Factory, 264
Wis. 2d 200, ¶52 ("As we have determined LIRC's interpretation
to be reasonable, under the 'great weight' standard of review,
23
Utah v. Thurman, 846 P.2d 1256, 1265-66 (Utah 1993) ("It
is widely agreed that the primary function of a standard of
review is to apportion power and, consequently, responsibility
between trial and appellate courts for determining an issue or a
class of issues. . . . In determining the appropriateness of a
particular allocation of responsibility for deciding an issue or
a class of issues, account should be taken of the relative
capabilities of each level of the court system to take evidence
and make findings of fact in the face of conflicting evidence,
on the one hand, and to set binding jurisdiction-wide policy, on
the other." (internal citations omitted)).
24
No. 2015AP2019
we must, therefore, defer to LIRC's conclusion." (emphasis
added)).
ii. A Brief History of "Due Weight" Deference
¶34 "Due weight deference" is of a much younger vintage
than "great weight deference." It also has a different source.
Whereas the latter developed as a home-grown doctrine within the
judiciary, the former has its roots in our statutes. In 1943,
our legislature adopted Wis. Stat. § 227.20(2) (subsequently
renumbered to § 227.57(10)), which read: "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."24
¶35 Our first opportunity to engage with that language
came in Ray-O-Vac Co. v. Wisconsin Employment Relations Board,
249 Wis. 112, 119, 23 N.W.2d 489 (1946). There, the Wisconsin
Employment Relations Board asserted:
[O]n a review of the board's findings, the court has
no jurisdiction to determine the factual issues anew
if there is some evidence before the board reasonably
tending to support a finding, and "the court may not
weigh the evidence to ascertain whether it
preponderates in favor of the finding" . . . ; or
substitute its judgment for that of the board even
though the court might have decided the question
differently had it been before the court de novo.
Id. (internal citation omitted).
24
Wis. Stat. § 227.20(2) (1943); see § 1, ch. 375, Laws of
1943 (creating § 227.20(2)); see also § 24, ch. 414, Laws of
1975 (renumbering); 1985 Wis. Act 182, § 41 (renumbering again).
25
No. 2015AP2019
¶36 We agreed with the Board, noting that "[i]n relation
to a court review of the board's findings and orders it must be
noted that there is applicable thereto" the terms of Wis. Stat.
§ 227.20(2) (1943). Ray-O-Vac Co., 249 Wis. at 119-20. The
court's reference to the Board's orders (in addition to its
findings) suggests the court gave "due weight . . . [to] the
experience, technical competence, and specialized knowledge of
the agency involved," see § 227.20(2) (1943), as it reviewed the
Board's conclusions of law as well. This is probable because
the court relied on a separate source of authority for the
proposition that it must defer to the Board's findings of fact.
It cited Wisconsin Labor Relations Board v. Fred Rueping Leather
Co., which held:
[I]f th[e] evidence supports the finding of the
industrial commission, the finding must stand. The
Wisconsin Labor Relations Act in sec. 111.10 (5), Wis.
Stats., provides what is lacking in the Workmen's
Compensation Act, namely, an implied authorization to
the courts to review the facts, coupled with the
express provision that the findings, "if supported by
evidence in the record," shall be conclusive.
228 Wis. 473, 494, 279 N.W. 673 (1938).25
25
We were, perhaps, even more enigmatic with respect to the
doctrine's application to questions of law in Milwaukee Electric
Railway & Transport Co. v. Public Service Commission, 261
Wis. 299, 302–03, 52 N.W.2d 876 (1952). There, we said "[t]he
court must also recognize that the commission has expert
knowledge, that such knowledge may be applied by it, and that
even though we might differ with the commission, we are without
power to substitute our views of what may be reasonable." Id.
In the next sentence, however, we said only that "[w]e may not
disturb the commission's findings," which is a reference only to
the facts that the agency found. See id. at 303.
26
No. 2015AP2019
¶37 We were not any more specific about how "due weight"
consideration affects conclusions of law when we decided
Muskego-Norway Consolidated Schools Joint School District No. 9
v. Wisconsin Employment Relations Board, 35 Wis. 2d 540, 151
N.W.2d 617 (1967). But we did frame the statute's provision in
terms of "deference":
[I]n this court's judicial review we are not required
to agree in every detail with the WERB as to its
findings, conclusions and order. . . . Sec[tion]
227.20 (2), Stats., requires that upon such review due
weight shall be accorded the experience, technical
competence, and specialized knowledge of the agency
involved. In short, this means the court must make
some deference to the expertise of the agency.
Muskego-Norway Consol. Sch. Joint Sch. Dist. No. 9, 35 Wis. 2d
at 562. We applied the statute's "due weight" mandate to the
Board's findings and conclusions of law without differentiation.
"Some deference" was due, we said, but we did not say how that
should be applied or quantified.
¶38 We were a little more direct on this topic in Vivian
v. Examining Board of Architects, Professional Engineers,
Designers and Land Surveyors, in which we reviewed the Board's
determination of whether the defendant's conduct could satisfy a
"gross negligence" standard. 61 Wis. 2d 627, 638, 213
N.W.2d 359 (1974). We strongly implied that the Board was
qualified not just to apply that standard, but to define it as
well:
The legislative command that due weight is to be given
to "the experience, technical competence, and
specialized knowledge of the agency involved," in
determining what is gross negligence, indicates the
27
No. 2015AP2019
determination of the grossness of the negligence is to
be made by those knowledgeable as to the particular
profession involved.
Id. (emphasis added) (quoting Wis. Stat. § 227.20(2) (1971)).
¶39 A few years later, we stated explicitly that Wis.
Stat. § 227.20(2) (1973) applies to an administrative agency's
legal conclusions. And we described deference as a requirement
when its preconditions were met. In A. O. Smith Harvestore
Products, Inc., we acknowledged that "[t]his court has uniformly
held that whether or not the facts found fulfill a particular
legal standard is a question of law, not a question of fact."
72 Wis. 2d at 65. And then we said that under § 227.20(2)
(1973), "[d]ue deference must be accorded the agency's
application of the law to the found facts when the agency has
particular competence or expertise in the matter at hand."
A. O. Smith Harvestore Prods., Inc., 72 Wis. 2d at 65-66
(emphasis added) (citing § 227.20(2) (1973)).
¶40 As we mentioned above, Harnischfeger elevated the
deference doctrine from a canon of construction to a standard of
review. "Whether or not a court agrees or disagrees with LIRC's
methodology, however, is not the issue in this case. Instead,
the central question is what standard of review the courts of
this state should apply when called upon to evaluate an agency's
interpretation of a statute." Harnischfeger, 196 Wis. 2d at
659. So, just like "great weight" deference, "due weight"
deference has become an integral, and therefore unavoidable,
part of the framework within which we review an administrative
agency's conclusions of law.
28
No. 2015AP2019
¶41 Fortified by this history of our deference
jurisprudence, we can now determine whether the doctrine is
consistent with the judiciary's constitutional responsibility.26
3. The Judiciary's Constitutional Responsibilities
¶42 As the deference doctrine developed, we recognized
that its operation allowed the executive branch of government to
authoritatively decide questions of law in specific cases
brought to our courts for resolution. But nowhere in the
journey from Harrington to Harnischfeger did we determine
whether this was consistent with the allocation of governmental
power amongst the three branches. So, as a matter of first
impression, we consider whether our deference doctrine is
compatible with our constitution's grant of power to the
judiciary:
The judicial power of this state shall be vested in a
unified court system consisting of one supreme court,
a court of appeals, a circuit court, such trial courts
of general uniform statewide jurisdiction as the
legislature may create by law, and a municipal court
if authorized by the legislature under section 14.
Wis. Const. art. VII, § 2. It is, perhaps, tautological to say
that the judicial power should reside in the judiciary. But the
26
Roggensack, supra n.22, at 542 ("[B]ecause the Wisconsin
Supreme Court's members were elected to decide what the law is,
and because the court restricts its own docket in order to
maintain its law-declaring status, it [is] appropriate for the
court to re-examine whether decision-avoidance is too often
replacing the court's full consideration of the issues raised on
appeal, at least in regard to state agency decisions to which
the highest level of deference, great weight deference, is
accorded.").
29
No. 2015AP2019
constitution does not define what that term comprises, nor does
it explicitly describe how that power relates to the other
branches of government.27
¶43 Allowing an administrative agency to authoritatively
interpret the law raises the possibility that our deference
doctrine has allowed some part of the state's judicial power to
take up residence in the executive branch of government. To
discover whether it did, we must first get our bearings on the
nature and extent of judicial power. We had occasion to dwell
on this subject at some length just last term. See generally
Gabler v. Crime Victims Rights Bd., 2017 WI 67, 376 Wis. 2d 147,
897 N.W.2d 384. There is no need to recreate Gabler's thorough
analysis, so we will content ourselves with referencing only
those parts that illuminate our work here.
¶44 The "separation of powers" doctrine informs our
understanding of how the constitution allocates governmental
power amongst its constituent branches.28 This fundamental
principle of American constitutional government was "established
at the founding of our nation and enshrined in the structure of
27
"This court has recognized, however, that the
constitution does not define legislative, executive or judicial
power . . . ." State v. Holmes, 106 Wis. 2d 31, 42–43, 315
N.W.2d 703 (1982).
28
The executive and legislative branches have their own
explicit grants of power under our constitution. Wis. Const.
art. V, § 1 (providing that "[t]he executive power shall be
vested in a governor"); Wis. Const. art. IV, § 1 (stating that
"[t]he legislative power shall be vested in a senate and
assembly").
30
No. 2015AP2019
the United States Constitution," and "inform[s] our
understanding of the separation of powers under the Wisconsin
Constitution." Gabler, 376 Wis. 2d 147, ¶11; Flynn v. DOA, 216
Wis. 2d 521, 545, 576 N.W.2d 245 (1998) ("The doctrine of
separation of powers is implicitly found in the tripartite
division of government [among] the judicial, legislative and
executive branches."); Goodland v. Zimmerman, 243 Wis. 459, 466-
67, 10 N.W.2d 180 (1943) ("It must always be remembered that one
of the fundamental principles of the American constitutional
system is that governmental powers are divided among the three
departments of government, the legislative, the executive, and
judicial, and that each of these departments is separate and
independent from the others except as otherwise provided by the
constitution."); Rules of Court Case, 204 Wis. 501, 503, 236
N.W. 717 (1931) ("It is, of course, elementary that we are
committed by constitution to the doctrine of separation of
powers.").
¶45 We must be assiduous in patrolling the borders between
the branches. This is not just a practical matter of efficient
and effective government. We maintain this separation because
it provides structural protection against depredations on our
liberties. The Framers of the United States Constitution
understood that "[t]he accumulation of all powers legislative,
executive and judiciary in the same hands, whether of one, a few
or many, . . . may justly be pronounced the very definition of
tyranny." The Federalist No. 47, at 324 (James Madison) (Jacob
Cooke ed., 1961). Consequently, "[a]s Madison explained when
31
No. 2015AP2019
advocating for the Constitution's adoption, neither the
legislature nor the executive nor the judiciary 'ought to
possess, directly or indirectly, an overruling influence over
the others in the administration of their respective powers.'"
Gabler, 376 Wis. 2d 147, ¶4 (quoting The Federalist No. 48, at
305 (James Madison) (Clinton Rossiter ed., 1961)). "The purpose
of the separation and equilibration of powers in general," said
Justice Antonin Scalia, "was not merely to assure effective
government but to preserve individual freedom."29 Morrison v.
Olson, 487 U.S. 654, 727 (1988) (Scalia, J., dissenting). To
this day, "[a]fter more than two hundred years of constitutional
governance, th[is] tripartite separation of independent
governmental power remains the bedrock of the structure by which
we secure liberty in both Wisconsin and the United States."
Gabler, 376 Wis. 2d 147, ¶3. As United States Supreme Court
Justice Joseph Story said, "the three great powers of
government . . . should for ever be kept separate and distinct."
Id. (quoting 2 Joseph Story, Commentaries on the Constitution of
the United States § 519, at 2-3 (Boston: Hilliard, Gray, & Co.,
1833)).
29
See also Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S.
579, 635 (1952) (Jackson, J., concurring) (stating that "the
Constitution diffuses power the better to secure liberty").
Centuries earlier, the French writer Montesquieu said "there is
no liberty, if the judiciary power be not separated from the
legislative and executive." Charles de Secondat Montesquieu,
The Spirit of Laws bk. XI, at 152 (Thomas Nugent trans., The
Colonial Press rev. ed. 1900) (1748).
32
No. 2015AP2019
¶46 The constitution does not, however, hermetically seal
the branches from each other. The separation of powers doctrine
"envisions a system of separate branches sharing many powers
while jealously guarding certain others, a system of
'separateness but interdependence, autonomy but reciprocity.'"
State ex rel. Friedrich v. Circuit Court for Dane Cty., 192
Wis. 2d 1, 14, 531 N.W.2d 32 (1995) (quoting Youngstown Sheet &
Tube Co. v. Sawyer, 343 U.S. 579, 635 (1952) (Jackson, J.,
concurring)). "The constitutional powers of each branch of
government fall into two categories: exclusive powers and
shared powers." State v. Horn, 226 Wis. 2d 637, 643, 594
N.W.2d 772 (1999). "Shared powers lie at the intersections of
these exclusive core constitutional powers," and "[t]hese
'[g]reat borderlands of power' are not exclusive to any one
branch." Id. at 643-44 (quoting Friedrich, 192 Wis. 2d at 14);
see also State v. Holmes, 106 Wis. 2d 31, 42–43, 315 N.W.2d 703
(1982). Although the "branches may exercise [shared] power
within these borderlands," they "may [not] unduly burden or
substantially interfere with another branch." Horn, 226 Wis. 2d
at 644.
¶47 Core powers, however, are not for sharing. "Each
branch has exclusive core constitutional powers, into which the
other branches may not intrude." Flynn, 216 Wis. 2d at 545.
"For more than a century, this court has been called upon to
resist attempts by other branches of government to exercise
authority in an exclusively judicial area." In re Complaint
Against Grady, 118 Wis. 2d 762, 778, 348 N.W.2d 559 (1984).
33
No. 2015AP2019
These "[c]ore zones of authority are to be 'jealously guarded'
by each branch of government, . . . ." Gabler, 376 Wis. 2d 147,
¶31 (quoting Barland v. Eau Claire Cty., 216 Wis. 2d 560, 573,
575 N.W.2d 691 (1998)). The importance of constitutional
limitations, Chief Justice Marshall once said, is that they
compel restraint when restraint is not desired: "To what
purpose are powers limited, and to what purpose is that
limitation committed to writing, if these limits may, at any
time, be passed by those intended to be restrained?" Marbury v.
Madison, 5 U.S. (1 Cranch) 137, 176 (1803).
¶48 The separation of powers prevents us from abdicating
core power just as much as it protects the judiciary from
encroachment by other branches. "It is . . . fundamental and
undeniable that no one of the three branches of government can
effectively delegate any of the powers which peculiarly and
intrinsically belong to that branch." Rules of Court Case, 204
Wis. at 503; see also id. (stating that "any attempt to abdicate
[a core power] in any particular field, though valid in form,
must, necessarily, be held void" (internal quotation mark
omitted) (quoting State ex rel. Mueller v. Thompson, 149
Wis. 488, 491-92, 137 N.W. 20 (1912))). Even if we truly wished
to abandon some aspect of our core power, no other branch may
take it up and use it as its own. "As to these areas of
authority, . . . any exercise of authority by another branch of
government is unconstitutional." Gabler, 376 Wis. 2d 147, ¶31
(internal quotation mark omitted) (quoting State ex rel. Fiedler
v. Wis. Senate, 155 Wis. 2d 94, 100, 454 N.W.2d 770 (1990))
34
No. 2015AP2019
(emphasis in original); see also Town of Holland v. Vill. of
Cedar Grove, 230 Wis. 177, 190, 282 N.W. 111 (1938) ("This court
has repeatedly held that the judicial power vested by the
constitution in the courts cannot be exercised by administrative
or executive agencies.").
¶49 The propriety of our deference doctrine, therefore,
depends on whether it transfers to a coordinate branch of
government a quantum of our core powers. To make that
determination, we need to describe those powers well enough
that, if they are present in our deference doctrine, we will
recognize them.
¶50 From the earliest days of our country, we have
understood that the judiciary's first and irreducible
responsibility is to proclaim the law: "It is emphatically the
province and duty of the judicial department to say what the law
is." Marbury, 5 U.S. at 177. The process of interpreting the
law in a specific case is part of that central duty: "Those who
apply the rule to particular cases, must of necessity expound
and interpret that rule." Id. We agreed with Marbury just a
few years ago when we described our judicial power as "the
ultimate adjudicative authority of courts to finally decide
rights and responsibilities as between individuals." State v.
Williams, 2012 WI 59, ¶36, 341 Wis. 2d 191, 814 N.W.2d 460.
¶51 It is fair to say that exercising judgment in the
interpretation and application of the law in a particular case
is the very thing that distinguishes the judiciary from the
other branches:
35
No. 2015AP2019
The judiciary . . . has no influence over either the
sword or the purse, no direction either of the
strength or of the wealth of the society, and can take
no active resolution whatever. It may truly be said
to have neither Force nor Will, but merely judgment;
and must ultimately depend upon the aid of the
executive arm even for the efficacy of its judgments.
The Federalist No. 78, at 523 (Alexander Hamilton) (Jacob Cooke
ed., 1961). We, too, have said as much: "By vesting the
judicial power in a unified court system, the Wisconsin
Constitution entrusts the judiciary with the duty of
interpreting and applying laws made and enforced by coordinate
branches of state government." Gabler, 376 Wis. 2d 147, ¶37;
see also State v. Van Brocklin, 194 Wis. 441, 443, 217 N.W. 277
(1927) ("Judicial power is that power which adjudicates and
protects the rights and interests of individual citizens, and to
that end construes and applies the laws." (quoted source
omitted)).
¶52 Some would argue that the judiciary's law-declaring
and law-applying power lies not at the core of what it means to
be a court, but somewhere out on the periphery of our powers
where we share it with the executive branch. Some of our older
cases have spoken in terms that lend this proposition at least
some superficial plausibility. For example, in State ex rel.
Wisconsin Inspection Bureau v. Whitman we said:
Every executive officer in the execution of the law
must of necessity interpret it in order to find out
what it is he is required to do. While his
interpretation is not final, yet in the vast majority
of cases it is the only interpretation placed upon it,
and as long as it is acquiesced in it becomes the
official interpretation which the courts heed and in
36
No. 2015AP2019
which they oftentimes acquiesce as a practical
construction.
196 Wis. 472, 497, 220 N.W. 929 (1928); see also Rules of Court
Case, 204 Wis. at 504 (same) (quoting this portion of Whitman).
And even earlier, we had noted the quasi-judicial nature of some
administrative bodies:
We do not consider the Industrial Commission a court,
nor do we construe the act as vesting in the
Commission judicial powers within the meaning of the
constitution. It is an administrative body or arm of
the government which in the course of its
administration of a law is empowered to ascertain some
questions of fact and apply the existing law thereto,
and in so doing acts quasi-judicially, but it is not
thereby vested with judicial power in the
constitutional sense.
Borgnis v. Falk Co., 147 Wis. 327, 358, 133 N.W. 209 (1911)
(emphasis in original).
¶53 But these cases cannot bear the weight their
proponents assign them. The executive must certainly interpret
and apply the law; it would be impossible to perform his duties
if he did not. After all, he must determine for himself what
the law requires (interpretation) so that he may carry it into
effect (application). Our constitution not only does not forbid
this, it requires it. Wis. Const. art. V, § 1 ("The executive
power shall be vested in a governor, . . . ."); Perez v. Mortg.
Bankers Ass'n, 135 S. Ct. 1199, 1217 (2015) (Thomas, J.,
concurring) ("It is undoubtedly true that the other branches of
Government have the authority and obligation to interpret the
law, . . . ."). But this comprises interpretation and
application within the executive branch. We are here concerned
37
No. 2015AP2019
with the authoritative interpretation and application of the law
as applied to a particular case within the judicial branch.
"[O]nly the judicial interpretation [as opposed to
interpretations offered by the other branches] would be
considered authoritative in a judicial proceeding." Perez, 135
S. Ct. at 1217 (Thomas, J., concurring). Even Rules of Court
Case and Whitman recognize that the executive's understanding of
the law is provisional, and that it gains a measure of
permanence only through habit and inertia. See Rules of Court
Case, 204 Wis. at 504; Whitman, 196 Wis. at 497 ("While [the
executive's] interpretation is not final, yet in the vast
majority of cases it is the only interpretation placed upon
it, . . . in which [the courts] oftentimes acquiesce as a
practical construction."). We do not understand Borgnis to say
anything different. There, we recognized that the work of some
administrative agencies looks very similar to that of the
courts. We described the power they exercised as "quasi
judicial," but it was "quasi" rather than simply "judicial"
because they had no power to impose their understanding of the
law on the judiciary's resolution of a particular case.30
30
Justice Ann Walsh Bradley suggests we have committed
"legal error" and ignored "controlling precedent." Justice Ann
Walsh Bradley's concurrence, ¶¶111, 115. Presumably, she is
referring to the observation in Borgnis that "a board may
lawfully be endowed with very broad powers, and its conclusions
may be given great dignity and force, so that courts may not
reverse them unless the proof be clear and satisfactory that
they are wrong." See Borgnis v. Falk Co., 147 Wis. 327, 359,
133 N.W. 209 (1911). As an initial matter, it is not clear
whether Borgnis was here referring to findings of fact or
(continued)
38
No. 2015AP2019
¶54 When we distill our cases and two centuries of
constitutional history to their essence, the result is a
lodestar that leads us directly to the most central of our
powers: "No aspect of the judicial power is more fundamental
than the judiciary's exclusive responsibility to exercise
judgment in cases and controversies arising under the law."
Gabler, 376 Wis. 2d 147, ¶37; see also Operton, 375 Wis. 2d 1,
¶73 (R. Grassl Bradley, J., concurring) (indicating that "the
court's duty to say what the law is" constitutes a "core
judicial function"); In re Appointment of Revisor, 141 Wis. 592,
598, 124 N.W. 670 (1910) (stating that "it is the exclusive
function of the courts to expound the laws"). Judgment, of
course, encompasses interpreting and applying the law to the
case sub judice. Marbury, 5 U.S. at 177 ("Those who apply the
rule to particular cases, must of necessity expound and
interpret that rule."); The Federalist No. 78, at 525 (Alexander
Hamilton) (Jacob Cooke ed., 1961) ("The interpretation of the
laws is the proper and peculiar province of the courts.");
conclusions of law. If the former, this opinion does not tread
on those grounds. If the latter, then Borgnis would be counted
amongst those cases with which we treat today. If we choose to
overrule it we risk aspersions on our wisdom, but not legal
error. Nor would we be ignoring controlling precedent. The
doctrine the case espouses is our own, and is, therefore,
unquestionably within our remit to accept or reject without
committing legal error. And because the case itself is our own,
it is impossible for it to control our decision. Stare decisis
is a critical rule that promotes stability by ensuring we do not
abandon precedent for light or transient reasons. But it is not
a limitation on our authority.
39
No. 2015AP2019
Roggensack, supra ¶18, at 547 (stating that "[d]eclaring what a
statute means is a core function of the courts"). We conclude
that only the judiciary may authoritatively interpret and apply
the law in cases before our courts. The executive may not
intrude on this duty, and the judiciary may not cede it. If our
deference doctrine allows either, we must reject it.
4. "Great Weight" Deference Considered
¶55 We see our core judicial powers lying at the heart of
"great weight" deference. When the doctrine's preconditions are
satisfied, that is, when an administrative agency meets the four
Harnischfeger criteria, we cede to the agency the power to
authoritatively interpret the law ("an agency's interpretation
must then merely be reasonable for it to be sustained,"
Harnischfeger, 196 Wis. 2d at 661), and apply the law to the
case before us ("the courts should not substitute their judgment
for the agency's application of a particular statute to the
found facts," Pabst, 19 Wis. 2d at 323-24 (emphasis added)).
Because Harnischfeger made this a structural piece of the
standard by which we review an agency's decision, we arrive at
the legal issues involved in the case with an a priori
commitment to letting the agency decide them. But Marbury and
Gabler say the power to interpret and apply the law in the case
at bar is an exclusively judicial power. Therefore, because
that power belongs to the judiciary——and the judiciary alone——we
may not allow an administrative agency to exercise it.
¶56 We provide guardrails for an administrative agency's
exercise of our power, to be sure, but they are minimal. Under
40
No. 2015AP2019
great weight deference, we simply require that the agency's
judgment on the law not overrule our precedents, violate the
constitution, contradict legislative history, or be
unreasonable.31 Within those expansive boundaries, however, the
agency is the master of statutory construction and application,
and it occupies the field to the exclusion of the judiciary.32
We reserve a sufficient quantum of judicial power to set the
guardrails, but that gives no good answer to the charge that
this doctrine cedes something that belongs exclusively to the
judiciary. We are concerned here with categories of power, not
quantity. Regardless of the circumscriptions we put in place,
when we defer we are allowing the agency to exercise what is
unmistakably core judicial power.
¶57 Chief Justice Roggensack has been particularly
incisive in describing the practical problems this deference
causes. She has observed that "[w]hat decision-avoidance
doctrines accomplish is to relieve the court of the real work of
judicial review, what has been described as the 'burden of
31
We will defer if "a rational basis exists in law for the
agency's interpretation and it does not conflict with the
statute's legislative history, prior decisions of this court, or
constitutional prohibitions." Bucyrus-Erie Co. v. DILHR, 90
Wis. 2d 408, 417, 280 N.W.2d 142 (1979) (quoting Pabst v. Wis.
Dep't of Taxation, 19 Wis. 2d 313, 324, 120 N.W.2d 77 (1963)).
32
When great weight deference applies, a reviewing court
must accept "an agency's reasonable statutory interpretation,
even if the court concludes that another interpretation is
equally reasonable, or even more reasonable, than that of the
agency." Racine Harley-Davidson, Inc. v. Wis. Div. of Hearings
& Appeals, 2006 WI 86, ¶17, 292 Wis. 2d 549, 717 N.W.2d 184.
41
No. 2015AP2019
reasoned decisionmaking.'" Roggensack, supra ¶18, at 546
(quoted source omitted). And it privileges unelected executive-
branch employees over those the people of Wisconsin elected to
resolve questions of law.
When the court employs judicially created doctrines
that limit the scope of its review instead of applying
the collective knowledge that the seven justices were
elected to exercise, it avoids the real work of
appellate decision making: explaining to the public
why the application of the law to the facts of the
case resulted in the court's decision and why that
result is fair under the law.
Roggensack, supra ¶18, at 560.
¶58 The abdication of core judicial power to the executive
is a concern not just of our court, but of the federal judiciary
as well. Wisconsin's separation of powers is a reflection of
that found in the United States Constitution, which provides (in
relevant part) that "[t]he judicial Power of the United States,
shall be vested in one supreme Court, and in such inferior
Courts as the Congress may from time to time ordain and
establish." U.S. Const. art. III, § 1.33 Whereas our decision
in Harnischfeger made us structurally deferential to
administrative agencies, Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc. accomplished something very
similar for the federal courts. 467 U.S. 837, 843 (1984). In
33
"The executive Power shall be vested in a President of
the United States of America." U.S. Const. art. II, § 1, cl. 1.
"All legislative Powers herein granted shall be vested in a
Congress of the United States, which shall consist of a Senate
and House of Representatives." U.S. Const. art. I, § 1.
42
No. 2015AP2019
reviewing an administrative agency's interpretation and
application of a statute, the Supreme Court said:
[T]he court does not simply impose its own
construction on the statute, as would be necessary in
the absence of an administrative interpretation.
Rather, if the statute is silent or ambiguous with
respect to the specific issue, the question for the
court is whether the agency's answer is based on a
permissible construction of the statute.
Id. (footnote omitted). The Court, it observed, "ha[s] long
recognized that considerable weight should be accorded to an
executive department's construction of a statutory scheme it is
entrusted to administer, and the principle of deference to
administrative interpretations has been consistently followed by
this Court . . . ." Id. at 844 (footnote omitted) (internal
mark and quoted source omitted).
¶59 Jurists in federal courts have expressed the same
concern with Chevron deference as we have with Harnischfeger
deference. Justice Clarence Thomas directly questioned the
constitutionality of deferring to an administrative agency's
interpretation of the law in Michigan v. Environmental
Protection Agency, 135 S. Ct. 2699, 2712 (2015) (Thomas, J.,
concurring). The EPA's request for deference, he said, "raises
serious questions about the constitutionality of our broader
practice of deferring to agency interpretations of federal
statutes." Id. He was concerned that this deference allowed
the judiciary to escape its responsibility to independently
resolve questions of law: "[T]he judicial power, as originally
understood, requires a court to exercise its independent
43
No. 2015AP2019
judgment in interpreting and expounding upon the laws." Id.
(quoting Perez, 135 S. Ct. at 1217 (Thomas, J., concurring))
(alteration in original). Yet, "Chevron deference precludes
judges from exercising that judgment, forcing them to abandon
what they believe is 'the best reading of an ambiguous statute'
in favor of an agency's construction." Michigan, 135 S. Ct. at
2712 (Thomas, J., concurring) (quoting Nat'l Cable & Telecomm.
Ass'n v. Brand X Internet Servs., 545 U.S. 967, 983 (2005)).
This "wrests from Courts the ultimate interpretative authority
to 'say what the law is,' Marbury v. Madison, 1 Cranch 137, 177,
2 L. Ed. 60 (1803), and hands it over to the Executive."
Michigan, 135 S. Ct. at 2712 (Thomas, J., concurring). Such a
transfer of power, he concluded, "is in tension with Article
III's Vesting Clause, which vests the judicial power exclusively
in Article III courts, not administrative agencies." Id.
(citing U.S. Const. art. III, § 1).
¶60 Justice Antonin Scalia was equally concerned with the
possible abandonment of judicial power to the executive branch.
Although he supported Chevron's imprimatur on the executive's
authority to adopt policy-making regulations to fill up
interstitial statutory silences, his approval did not extend to
an agency's authority to make binding pronouncements on the law:
I suppose it is harmless enough to speak about "giving
deference to the views of the Executive" concerning
the meaning of a statute, just as we speak of "giving
deference to the views of the Congress" concerning the
constitutionality of particular legislation——the
mealy-mouthed word "deference" not necessarily meaning
anything more than considering those views with
44
No. 2015AP2019
attentiveness and profound respect, before we reject
them. But to say that those views, if at least
reasonable, will ever be binding——that is, seemingly,
a striking abdication of judicial responsibility.
The Honorable Antonin Scalia, Judicial Deference to
Administrative Interpretations of Law, 1989 Duke L.J. 511, 513–
14 (1989). Chevron deference eventually spawned Auer deference,
which requires federal courts to prefer an agency's
interpretation of its regulations over the court's own
interpretation.34 This, Justice Scalia believed, was a mistake
because of its effect on a court's authority to decide questions
of law:
I would therefore restore the balance originally
struck by the APA with respect to an agency's
interpretation of its own regulations, not by
rewriting the Act in order to make up for Auer, but by
abandoning Auer and applying the Act as written. The
agency is free to interpret its own regulations with
or without notice and comment; but courts will decide—
—with no deference to the agency——whether that
interpretation is correct.
Perez, 135 S. Ct. at 1213 (Scalia, J., concurring). And he
understood that Chevron was what made it possible: "The problem
is bad enough, and perhaps insoluble if Chevron is not to be
uprooted, with respect to interpretive rules setting forth
agency interpretation of statutes." Perez, 135 S. Ct. at 1212.
¶61 Justice Neil Gorsuch, when he was on the Tenth Circuit
Court of Appeals, elegantly summarized how deference to
administrative agencies hollows out a court's judicial power:
34
See Auer v. Robbins, 519 U.S. 452 (1997).
45
No. 2015AP2019
Yet, rather than completing the task expressly
assigned to us, rather than
"interpret[ing] . . . statutory provisions," [5 U.S.C.
§ 706] declaring what the law is, and overturning
inconsistent agency action, Chevron step two tells us
we must allow an executive agency to resolve the
meaning of any ambiguous statutory provision. In this
way, Chevron seems no less than a judge-made doctrine
for the abdication of the judicial duty. Of course,
some role remains for judges even under Chevron. At
Chevron step one, judges decide whether the statute is
"ambiguous," and at step two they decide whether the
agency's view is "reasonable."
Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1151–52 (10th Cir.
2016) (Gorsuch, J., concurring) (brackets in original). What he
said of Chevron is equally true of Harnischfeger: "But where in
all this does a court interpret the law and say what it is?
When does a court independently decide what the statute means
and whether it has or has not vested a legal right in a person?
Where Chevron applies that job seems to have gone extinct."
Gutierrez-Brizuela, 834 F.3d at 1152 (Gorsuch, J., concurring).35
35
Justice Ann Walsh Bradley does not believe our deference
doctrine cedes our core judicial power to administrative
agencies: "[C]ontrary to the majority/lead opinion's assertion,
agency deference does not remove from the court its interpretive
role and cede it to the agency." Justice Ann Walsh Bradley's
concurrence, ¶119. She says we still must engage in the
exercise of statutory construction so that we may compare our
interpretation to the agency's because "[o]nly reasonable
interpretations are worthy of deference." See id. Yes, but
that says nothing about whose "reasonable interpretation"
controls the case. If we interpret a statute for ourselves, but
then set it aside in favor of the agency's interpretation, we
have ceded our authority. The point of the interpretive
exercise is not to see if we are as good at it as an
administrative agency; it is to apply the results of our efforts
to the case before us. If we fail to do that, then we have
failed to act as a court.
46
No. 2015AP2019
¶62 Indeed, it has. And that presents a related, and
equally serious problem.
*
¶63 Ceding judicial power to an administrative agency is,
from a separation of powers perspective, unacceptably
problematic; it is problematic along a different axis when that
agency appears in our courts as a party. The non-agency party
may reasonably ask whether our deference doctrine will deprive
him of an impartial decisionmaker's exercise of independent
judgment, and, thereby, the due process of law.36
¶64 The United States Supreme Court says that a "fair
trial in a fair tribunal is a basic requirement of due process."
In re Murchison, 349 U.S. 133, 136 (1955). We have remarked
that this proposition is so plain as to be axiomatic. State v.
Herrmann, 2015 WI 84, ¶25, 364 Wis. 2d 336, 867 N.W.2d 772. But
there cannot be a fair trial without a constitutionally
acceptable decisionmaker: "It is, of course, undisputable that
a minimal rudiment of due process is a fair and impartial
decisionmaker." Guthrie v. WERC, 111 Wis. 2d 447, 454, 331
N.W.2d 331 (1983). Our commitment to this principle is such
that we do not accept even the appearance of bias: "[W]hen
36
"Procedural due process under the Fourteenth Amendment to
the United States Constitution and Article I, Section 1 of the
Wisconsin Constitution protect against government actions that
deprive an individual of life, liberty, or property without due
process of the law." Adams v. Northland Equip. Co., 2014 WI 79,
¶64, 356 Wis. 2d 529, 850 N.W.2d 272.
47
No. 2015AP2019
determining whether a defendant's right to an objectively
impartial decisionmaker has been violated we consider the
appearance of bias in addition to actual bias. When the
appearance of bias reveals a great risk of actual bias, the
presumption of impartiality is rebutted, and a due process
violation occurs." Herrmann, 364 Wis. 2d 336, ¶46. Therefore,
a biased decisionmaker is "constitutionally unacceptable."
Withrow v. Larkin, 421 U.S. 35, 47 (1975).37
¶65 We have already concluded that our deference doctrine
cedes to administrative agencies some of our exclusive judicial
powers. It necessarily follows that when that agency comes to
us as a party in a case, it——not the court——controls some part
of the litigation. When questions of law arise, the court
serves as a gatekeeper to adjudge compliance with the
Harnischfeger prerequisites. But once the court completes that
task, it receives instruction from the governmental party on how
to interpret and apply the rule of decision.
¶66 When a court defers to the governmental party, simply
because it is the government, the opposing party is unlikely to
37
Our Code of Judicial Conduct reflects the foundational
importance of keeping core judicial power in the hands of an
independent judiciary: "Our legal system is based on the
principle that an independent, fair and competent judiciary will
interpret and apply the laws that govern us." SCR ch. 60,
Preamble. The comment to the first rule (SCR 60.02) says that
our institutional legitimacy depends on this principle.
"Deference to the judgments and rulings of courts depends upon
public confidence in the integrity and independence of the
judges." SCR 60.02 cmt.
48
No. 2015AP2019
be mollified with assurances that the court bears him no
personal animus as it does so.38 The injury arises not from the
reason the court favors one party over another, but from the
fact that the court has a favorite at all.39 As Professor
Phillip Hamburger observed, "when judges defer to the
executive's view of the law, they display systematic bias toward
one of the parties." Philip Hamburger, Chevron Bias, 84 Geo.
Wash. L. Rev. 1187, 1212 (2016). Harnischfeger deference, like
Chevron deference, "is an institutionally declared and thus
systematic precommitment in favor of the government." Cf.
Hamburger, supra ¶66, at 1211.
¶67 This systematic favor deprives the non-governmental
party of an independent and impartial tribunal. Justice David
Prosser sounded the alarm on this issue in Hilton ex rel. Pages
Homeowners' Association v. DNR, 2006 WI 84, ¶¶54-55, 293
Wis. 2d 1, 717 N.W.2d 166 (Prosser, J., concurring). When great
weight deference applies, he said, "[t]he supreme court and
other Wisconsin courts are expected to rationalize and
rubberstamp the agency's decision unless the agency's legal
38
"The danger to independent judgment arises whenever
judges relinquish their judgment in any degree, and the danger
of systematic bias arises whenever judges show greater respect
for the legal position of one party than that of the other."
Philip Hamburger, Chevron Bias, 84 Geo. Wash. L. Rev. 1187, 1202
(2016).
39
"Of course, the bias arises from institutional precedent
rather than individual prejudice, but this makes the bias
especially systematic and the Fifth Amendment due process
problem especially serious." Id. at 1189.
49
No. 2015AP2019
interpretation is plainly wrong. The result is that many
litigants have lost their right to a decision by an independent
judiciary." Id.; see also Gabler, 376 Wis. 2d 147, ¶39
(indicating that "[i]f the judiciary passively permits [the
executive] branch to arrogate judicial power unto itself,
however estimable the professed purpose for asserting this
prerogative, the people inevitably suffer" because they lose
"their independent arbiters of the law"); Roggensack, supra ¶18,
at 546 ("Indeed, some writers who have examined judicially
created decision-avoidance doctrines have stated that when 'the
scope of review is too limited, the right to review itself
becomes meaningless.'" (quoted source omitted)).
¶68 The situation appears no better when considered from
the agency's perspective. When an administrative agency
interprets and applies the law in a case to which it is a party,
it is to that extent acting as judge of its own cause. By the
time the Framers condemned such an arrangement, the rationale
had already been a part of our wisdom literature for centuries:
No man is allowed to be a judge in his own cause;
because his interest would certainly bias his
judgment, and, not improbably, corrupt his integrity.
With equal, nay with greater reason, a body of men,
are unfit to be both judges and parties, at the same
time; . . . .
50
No. 2015AP2019
The Federalist No. 10, at 59 (James Madison) (Jacob Cooke ed.,
1961).40 Echoing Madison, the United States Supreme Court said
that "no man can be a judge in his own case[,] and no man is
permitted to try cases where he has an interest in the outcome."
In re Murchison, 349 U.S. at 136.
¶69 An administrative agency has an obvious interest in
the outcome of a case to which it is a party. Yet, our
deference doctrine commits the rule of decision to its hands
anyway. It is entirely unrealistic to expect the agency to
function as a "fair and impartial decisionmaker" as it
authoritatively tells the court how to interpret and apply the
law that will decide its case. Because it cannot do so,
deference threatens the most elemental aspect of a fair trial.41
Guthrie, 111 Wis. 2d at 454 ("[A] minimal rudiment of due
process is a fair and impartial decisionmaker."). This is not
to question the agency's good faith, which we presume. It is
40
Sir Edward Coke said "it is a maxime in law, aliquis non
debet esse judex in propria causa." 1 Edward Coke, Institutes
of the Laws of England § 212 (James & Luke G. Hansard & Sons
19th ed. 1832) (1628). He said so in English, too: "[I]t is
against reason, that if wrong be done any man, that he thereof
should be his own judge." Id.; see also Dr. Bonham's Case, 77
Eng. Rep. 646, 652, 8 Co. Rep. 113 (1610) (in which Sir Coke
applied this maxim).
41
This is not to say an administrative agency cannot
satisfy the due process requirement of an impartial
decisionmaker as it decides contested cases within the executive
branch. And nothing in our opinion today should be understood
to question that.
51
No. 2015AP2019
merely to join with the ancients in recognizing that no one can
be impartial in his own cause.
*
¶70 As a postscript to this issue, it is worth recalling
that great weight deference is a creature of our own making——
that is, nothing in our statutes called it into being. If
anything, the relevant provision under which we normally review
agency decisions militates against it. Subsection 227.57(5)
says:
The court shall set aside or modify the agency action
if it finds that the agency has erroneously
interpreted a provision of law and a correct
interpretation compels a particular action, or it
shall remand the case to the agency for further action
under a correct interpretation of the provision of
law.
Wis. Stat. § 227.57(5). This says nothing about comparing our
interpretation of the law to that of the agency, or gatekeeping,
or reasonableness. Instead, the statute says the court is to
decide whether the agency has "erroneously interpreted a
provision of law." Id. And the court is to determine the
"correct interpretation of the provision of law." Id. This
formulation recognizes the proper residence of our core judicial
powers.
5. "Due Weight" Deference Considered
¶71 "Due weight," as a principle, entered our
jurisprudence through a statute, but over time our cases grafted
it into the administrative deference doctrine. The original
statutory foundation, however, is still there, and is just as
52
No. 2015AP2019
viable as it was before. Today, we restore the principle of
"due weight" to its original form by removing the patina of
"deference" with which our cases have covered it.
¶72 It is true that due weight deference presents a threat
to our core powers that is less extensive than that presented by
great weight deference. It has been said that "in most
situations, applying due weight deference will lead to the same
result as would applying no deference at all." MercyCare Ins.
Co. v. Wis. Comm'r of Ins., 2010 WI 87, ¶37, 328 Wis. 2d 110,
786 N.W.2d 785; see also Operton, 375 Wis. 2d 1, ¶22 ("We note
here that there is little difference between due weight
deference and no deference, since both situations require us to
construe the statute ourselves." (internal quotation mark
omitted) (quoting Cty. of Dane v. LIRC, 2009 WI 9, ¶19, 315
Wis. 2d 293, 759 N.W.2d 571)).
¶73 The threat presented by due weight deference is less,
however, only in the sense that the preconditions that justify
the agency's exercise of our exclusive power are fulfilled more
rarely. When the "due weight" preconditions are satisfied,42 we
must defer to the agency when our respective views of the law,
42
The preconditions are that: (1) "the statute is one that
the agency was charged with administering"; and (2) "the agency
has at least some expertise in the interpretation of the statute
in question." Operton, 375 Wis. 2d 1, ¶20 (quoting Racine
Harley-Davidson, Inc., 292 Wis. 2d 549, ¶107 (Roggensack, J.,
concurring) (internal quotation mark omitted)).
53
No. 2015AP2019
while different, are equally reasonable.43 When there is
equipoise, the court cedes its core judicial power just as
surely as if great weight deference had applied. Infrequency
does not make the cession appropriate.
¶74 Nor does cession become acceptable because the agency
has less latitude in exercising our power under due weight
deference than it does under great weight deference. In Racine
Harley-Davidson, Inc., 292 Wis. 2d 549, ¶¶14-15, we suggested
that granting deference did not abandon our judicial power
because we retained the authority to establish the guardrails
within which the agency exercised that power. See id.
(emphasizing that the court decides "whether deference is due,"
"what level of deference is due," and "the reasonableness of the
agency interpretation"). But providing the agency with even the
most exacting tutelage on how to exercise our power does not
change the fact that it is exercising our power. It is the fact
of cession, not its frequency or latitude, that implicates
separation of powers and due process concerns. The power within
the guardrails is part of our core, and so we may not parcel it
out in even the smallest of doses. Therefore, due weight
deference and great weight deference are structurally unsound
for the same reasons.
*
43
See UFE Inc., 201 Wis. 2d at 287 n.3 (stating that under
due weight deference, "an equally reasonable interpretation of a
statute should not be chosen over the agency's interpretation").
54
No. 2015AP2019
¶75 On the other hand, "due weight"——in its statutory
form——presents no such concerns. There are five provisions in
Wis. Stat. § 227.57 that address how we handle questions of law
in reviewing an agency's decision:
(3) The court shall separately treat disputed issues
of agency procedure, interpretations of law,
determinations of fact or policy within the agency's
exercise of delegated discretion.
. . . .
(5) The court shall set aside or modify the agency
action if it finds that the agency has erroneously
interpreted a provision of law and a correct
interpretation compels a particular action, or it
shall remand the case to the agency for further action
under a correct interpretation of the provision of
law.
. . . .
(8) The court shall reverse or remand the case to the
agency if it finds that the agency's exercise of
discretion is . . . in violation of a constitutional
or statutory provision; . . . .
. . . .
(10) Subject to sub. (11), 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.
(11) Upon review of an agency action or decision
affecting a property owner's use of the property
owner's property, the court shall accord no deference
to the agency's interpretation of law if the agency
action or decision restricts the property owner's free
use of the property owner's property.
Wis. Stat. § 227.57(3), (5), (8), (10)-(11).
55
No. 2015AP2019
¶76 None of these provisions direct us to defer to an
agency's interpretation or application of the law. To the
contrary, subsection (3) tells us to treat questions of law
separately from all other matters in the case (reminiscent of
the analytical approach mentioned in Pabst); subsection (5)
recognizes the court, not the agency, as the law-declaring body;
and subsection (8) calls for us to test an agency's exercise of
discretion against relevant constitutional and statutory
provisions (without any suggestion that the agency is to decide
what those provisions mean).
¶77 We find the legislature's commendation of
administrative agencies in subsection (10). There, we learn we
are to give "due weight" (subject to subsection (11)——more about
that later) to the "experience, technical competence, and
specialized knowledge of the agency involved." From our
earliest days we have recognized that the state's agencies
develop a valuable perspective, unique to them, as they
administer the laws within their portfolios. See Harrington, 28
Wis. at 69 (finding it significant that "the office of attorney
general ha[d] been filled by nine different individuals, all of
them gentlemen of learning and accomplishment in their
profession"); see also Motor Transp. Co. v. Pub. Serv. Comm'n,
263 Wis. 31, 43, 56 N.W.2d 548 (1953) (recognizing that "the
Public Service Commission possesses wide experience and much
technical knowledge in the field of regulation of motor-carrier
transportation of property"). It was, in fact, our appreciation
for that collected wisdom that originally led to our deference
56
No. 2015AP2019
doctrine. See Roggensack, supra ¶18, at 557 (referring to the
"oft-cited foundation for deferring to agency decisions,
administrative expertise").
¶78 Recognizing that administrative agencies can sometimes
bring unique insights to the matters for which they are
responsible, however, does not mean we should defer to them.
And there is nothing in Wis. Stat. § 227.57(10) that suggests we
should. We believe the Department accurately described the
meaning and effect of this provision. It acknowledged that
giving "due weight" to an agency's experience, technical
competence, and specialized knowledge will not "oust the court
as the ultimate authority or final arbiter" of the law.
Instead, it said, "due weight" means giving "respectful,
appropriate consideration to the agency's views" while the court
exercises its independent judgment in deciding questions of law.
We agree. "Due weight" is a matter of persuasion, not
deference.
¶79 But "due weight" is not a talisman that automatically
grants its bearer additional rhetorical power. If an agency
brings to court nothing but a rote recitation of its background
with the subject matter, it should not expect the statutory
directive to give its argument extra heft. The agency should be
prepared to explain how its experience, technical competence,
and specialized knowledge give its view of the law a
significance or perspective unique amongst the parties, and why
that background should make the agency's view of the law more
persuasive than others. As we assess the persuasiveness of the
57
No. 2015AP2019
agency's perspective, we will consider the same types of factors
that formerly informed our deference doctrine, to wit:
(1) whether the legislature made the agency responsible for
administering the statute in question; (2) the length of time
the administrative agency's interpretation has stood; (3) the
extent to which the agency used its expertise or specialized
knowledge in developing its position; and (4) whether the
agency's perspective would enhance uniformity and consistency of
the law.
¶80 Before concluding our "due weight" analysis, we must
still account for the effect of Wis. Stat. § 227.57(11). This
provision says that "[u]pon review of an agency action or
decision affecting a property owner's use of the property
owner's property, the court shall accord no deference to the
agency's interpretation of law if the agency action or decision
restricts the property owner's free use of the property owner's
property." § 227.57(11). The plain meaning of this subsection
is that the court should forswear deference to an agency's
interpretation of the law in the identified circumstances. The
legislature added this subsection in 2015, and simultaneously
made subsection (10) subject to its provisions. 2015 Wis.
Act 391, §§ 30, 31. By doing so, the legislature necessarily
implied that it understood subsection (10) as allowing the court
to defer to an agency's interpretation of law. Even though the
text of that subsection says nothing about deference, there was
good reason to understand it that way. By the time
subsection (11) entered the statutes, our treatment of both
58
No. 2015AP2019
"great weight" and "due weight" had long since matured into our
current deference doctrine. Adding subsection (11), therefore,
exempted the identified circumstances not from a statutory
command, but from the decision-avoidance effects of our
deference doctrine. Consequently, we understand subsection (11)
as a partial dismantling of our deference doctrine. Our
decision today completes the process.
¶81 By returning "due weight" to its statutory roots, and
ending our erstwhile deference, we honor the requirements of
Wis. Stat. § 227.57(10), the separation of powers, and the
parties' due process interests. We agree with now-Justice
Gorsuch's observations about the benefits of rejecting decision-
avoidance doctrines like ours:
[D]e novo judicial review of the law's meaning would
limit the ability of any agency to alter and amend
existing law. It would avoid the due process and
equal protection problems of the kind documented in
our decisions. It would promote reliance interests by
allowing citizens to organize their affairs with some
assurance that the rug will not be pulled from under
them tomorrow, the next day, or after the next
election.
Gutierrez-Brizuela, 834 F.3d at 1158 (Gorsuch, J., concurring).
6. Standard of Review
59
No. 2015AP2019
¶82 We are mindful that our decision today represents a
significant break with the way we have reviewed agency decisions
since at least Harnischfeger, and in some respects, since Pabst.
The principle of stare decisis counsels that we depart from our
precedents only when circumstances unavoidably superannuate our
commitment to them. Typically, that occurs when:
(1) [c]hanges or developments in the law have
undermined the rationale behind a decision; (2) there
is a need to make a decision correspond to newly
ascertained facts; (3) there is a showing that the
precedent has become detrimental to coherence and
consistency in the law; (4) the prior decision is
"unsound in principle;" or (5) the prior decision is
"unworkable in practice."
Bartholomew v. Wis. Patients Comp. Fund, 2006 WI 91, ¶33, 293
Wis. 2d 38, 717 N.W.2d 216 (quoted source omitted).
¶83 We are leaving our deference doctrine behind because
it is unsound in principle. It does not respect the separation
of powers, gives insufficient consideration to the parties' due
process interest in a neutral and independent judiciary, and
"risks perpetuating erroneous declarations of the law."
Operton, 375 Wis. 2d 1, ¶73 (R. Grassl Bradley, J., concurring).
Although persistency of our precedents normally protects the
rule of law, sometimes "[w]e do more damage to the rule of law
by obstinately refusing to admit errors, thereby perpetuating
injustice, than by overturning an erroneous decision." See
Johnson Controls, Inc. v. Emp'rs Ins. of Wausau, 2003 WI 108,
¶¶97, 100, 264 Wis. 2d 60, 665 N.W.2d 257.
60
No. 2015AP2019
¶84 Today, the core judicial power ceded by our deference
doctrine returns to its constitutionally-assigned residence.
Henceforth, we will review an administrative agency's
conclusions of law under the same standard we apply to a circuit
court's conclusions of law——de novo. See Mitchell Bank v.
Schanke, 2004 WI 13, ¶24, 268 Wis. 2d 571, 676 N.W.2d 849 ("We
review legal conclusions of the circuit court de novo."). As
with judicial opinions, we will benefit from the administrative
agency's analysis, particularly when they are supplemented by
the "due weight" considerations discussed above. Cf. Megal Dev.
Corp. v. Shadof, 2005 WI 151, ¶8, 286 Wis. 2d 105, 705
N.W.2d 645 ("While the review is de novo, this court benefits
from the analyses of the circuit court and the court of
appeals."). And, as always, we review the administrative
agency's decision, not that of the circuit court. Ho-Chunk
Nation v. DOR, 2009 WI 48, ¶12, 317 Wis. 2d 553, 766 N.W.2d 738
("In a case that involves a ruling by the Commission, we review
the Commission's decision rather than the decision of the
circuit court."). The facts in this case are undisputed, so we
address only questions of law. See Vogel v. Grant-Lafayette
Elec. Co-op., 201 Wis. 2d 416, 422, 548 N.W.2d 829 (1996)
("Whether the facts of a particular case fulfill a legal
standard is a question of law we review de novo.").
7. Discontinuing Deference for Administrative Reasons
¶85 We created our deference doctrine ex nihilo, and so it
is within our power to end it simply by declaring it at an end.
Some members of the court prefer that option——discard the
61
No. 2015AP2019
doctrine not because the constitutional problems require its
abandonment, but merely because we have chosen to drop it.
However, just because we can do this does not make it wise.
Indeed, stare decisis exists as a principle for the sole purpose
of counseling against that option.
¶86 Justice Gableman provided a thoughtful account of why
he would end the deference doctrine on non-constitutional
grounds. Ultimately, however, his rationale still depends on
the separation of powers——sotto voce, to be sure, but
undeniably. Thus, for example, he says our deference doctrine
is unsound in principle because "deference (especially great
weight deference), if correctly and honestly applied, leads to
the perverse outcome of courts often affirming inferior
interpretations of statutes." Justice Gableman's concurrence,
¶166. That is indubitably true. But it is true only if one
already subscribes to the proposition that our interpretation
enjoys pride of place over that of the administrative agency.
We should not be surprised to learn, however, that an
administrative agency might believe its own interpretation is
superior to ours. Indeed, we should expect no less from an
agency engaged in a good faith effort to do its job. From the
agency's perspective, therefore, our deference doctrine creates
no perversity at all; instead, it gives the statute the best
possible interpretation: Its own. So when Justice Gableman
says that "[i]n our role as court of last resort, we should
62
No. 2015AP2019
ensure that erroneous-but-reasonable legal conclusions are
corrected,"44 he is making a separation of powers assertion——to
wit, the court is the authoritative arbiter of the law in the
case before us, and our opinion must prevail over that of the
other branches. Without that constitutional impetus, there is
no fuel for his "unsound in principle" analysis.
¶87 Justice Gableman also says newly-ascertained facts
provide a non-constitutional basis for ending deference.45
Specifically, he notes that part of the justification for the
doctrine was the assumed subject-matter expertise of the agency
decision-makers. He questions whether they really do have such
expertise, and then concludes: "We may say that it is only a
matter of speculation that agency decision-makers possess less
expertise than courts when it comes to interpreting various
statutes. Importantly, it is equally a matter of speculation
that they possess more."46 So as Justice Gableman acknowledges,
these are not newly-ascertained facts, they are newly-
ascertained speculations. Our deference doctrine has defined
the relationship between administrative agencies and the
judiciary for over two decades now. Speculation about a hearing
44
Justice Gableman's concurrence, ¶166.
45
Id., ¶167.
46
Id.
63
No. 2015AP2019
examiner's expertise seems an especially diaphanous
justification for upending this settled history.47
¶88 The members of the court who would end our deference
doctrine for administrative reasons do so out of a desire to
avoid a constitutional analysis. But as Justice Gableman's
concurrence demonstrates, it is impossible to describe a
substantive reason for ending the doctrine without at least an
unspoken appeal to constitutional principles. We do no good
service by avoiding an analysis that so obviously demands our
attention.
*
¶89 Justice Ziegler would also prefer dispensing with our
deference doctrine for administrative reasons because she is
concerned about how our decision will affect the finality of
past cases. The source of her concern is not entirely clear——
this decision is incapable of reopening cases that have already
been decided.48 If they were final upon release of this opinion,
their finality will go on undisturbed by our decision today.
Relief from the judgment of a case is governed by Wis. Stat.
47
Justice Gableman also says our deference doctrine has not
delivered on promised gains in judicial efficiency. Id., ¶165.
But the court has not been made aware of any study performing a
differential analysis of litigative effort before and after
Harnischfeger. So this, too, is a matter of speculation.
48
Justice Ann Walsh Bradley shares Justice Ziegler's
concern about the effect of our decision on the finality of
previously decided cases. See Justice Ann Walsh Bradley's
concurrence, ¶131.
64
No. 2015AP2019
§ 806.07. Justice Ziegler thinks our rationale would allow a
party to successfully reopen a case for several of the reasons
mentioned in that statute, including "[m]istake" (para. (a)), or
because "[t]he judgment is void" (para. (d)), or because "[a]
prior judgment upon which the judgment is based has been
reversed" (para. (f)), or for "[a]ny other reasons justifying
relief from the operation of the judgment" (para. (h)). Justice
Ziegler's concurrence, ¶139 n.3. She cites no authority for
this proposition, nor could she.
¶90 Justice Ziegler's concern cannot be realized here for
the same reason it has never been realized when we overrule one
of our prior decisions. That has never occurred because
overruling a case does not expose to collateral attack any of
the intervening decisions that were based on the overruled case.
"To the contrary," Justice Ziegler says, "overruling one of our
prior decisions[] can quite obviously have significant impact on
other cases." Id. But for over twenty years the impossibility
of her concern has been black-letter law: "The statute
[§ 806.07] does not authorize relief from a judgment on the
ground that the law applied by the court in making its
adjudication has been subsequently overruled in an unrelated
proceeding." Schauer v. DeNeveu Homeowner's Ass'n, Inc., 194
Wis. 2d 62, 75, 533 N.W.2d 470 (1995).49 True, as Justice
Ziegler observed, Schauer specifically addressed the
49
By "black-letter law," we mean that Schauer appears in
the annotations for Wis. Stat. § 806.07.
65
No. 2015AP2019
circumstance in which "[a] prior judgment upon which the
judgment is based has been reversed." See Wis. Stat.
§ 806.07(1)(f); Justice Ziegler's concurrence, ¶139 n.3. But
that's why the case is so instructive. The whole point of
Schauer's analysis was that when a court enters judgment in
reliance on specific case precedent, the judgment's finality is
entirely unaffected if the precedent is subsequently reversed.
That's exactly the concern that Justice Ziegler expressed, and
Schauer says "don't worry."
¶91 The other provisions of Wis. Stat. § 806.07 provide no
cause for worry either. If a reversed precedent cannot stand in
for a prior reversed judgment, there is no logical process——no
matter how much it might resemble a Rube Goldberg machine——by
which it could stand in for a "void judgment" under
paragraph (d). And the catch-all "[a]ny other reasons
justifying relief" is not worry-inducing because "[t]he general
rule is that 'a change in the judicial view of an established
rule of law is not an extraordinary circumstance which justifies
relief from a final judgment under [Wis. Stat.
§ 806.07(1)(h)].'" Allstate Ins. Co. v. Brunswick Corp., 2007
WI App 221, ¶7, 305 Wis. 2d 400, 740 N.W.2d 888 (alteration in
original) (quoted source omitted) (capitalization omitted);
accord Schwochert v. Am. Family Mut. Ins. Co., 166 Wis. 2d 97,
103, 479 N.W.2d 190 (Ct. App. 1991), aff'd, 172 Wis. 2d 628, 494
N.W.2d 201 (1993) (same). Finally, the "[m]istake" provision of
§ 806.07(1)(a) can raise no alarm because it is never a mistake
(within the meaning of this statute) for a court to rely on our
66
No. 2015AP2019
precedent. Subsequently overruling the precedent cannot, to a
metaphysical certainty, make an intervening court's reliance on
the precedent a "mistake"——unless, that is, we are to presume
the intervening court's ability to look forward in time to espy
our change before we make it.
¶92 Justice Ziegler's concern is unknown to the law. And
she has identified no mechanism by which this unrealizable fear
could possibly come to pass.
¶93 Justice Ann Walsh Bradley and Justice Ziegler are also
concerned about whether our decision will adversely affect the
precedential authority of cases decided pursuant to our now-
discarded deference doctrine. To the extent a court favored an
agency's conclusion of law over its own, that conclusion is now
part of the judgment of the case and an inextricable part of the
opinion. Consequently, its precedential and controlling effect
will be the same as if the court had based the decision on its
own interpretation. The only future effect of our decision is
that courts, rather than administrative agencies, will decide
questions of law. If that prospect is sufficient to raise an
alarm against impending "tumult" (see Justice Ann Walsh
Bradley's concurrence, ¶120), then we have more to worry about
than a deference doctrine.
67
No. 2015AP2019
B. "Processing" River Sediments
¶94 Now that we have identified the proper standard of
review, we can address the petitioners' argument that they are
not subject to the tax imposed by Wis. Stat. § 77.52(2). This
statute provides that:
For the privilege of selling, performing or furnishing
the services described under par. (a) at retail in
this state to consumers or users, a tax is imposed
upon all persons selling, performing or furnishing the
services at the rate of 5% of the gross receipts from
the sale, performance or furnishing of the services.
§ 77.52(2). The services to which this provision refers include
the following:
The producing, fabricating, processing, printing or
imprinting of tangible personal property for a
consideration for consumers who furnish directly or
indirectly the materials used in the producing,
fabricating, processing, printing or imprinting. This
subdivision does not apply to the printing or
imprinting of tangible personal property that results
in printed material, catalogs, or envelopes that are
exempt under s. 77.54(25) or (25m).
§ 77.52(2)(a)11.
¶95 The parties agree that, in this case, the petitioners
are liable for the tax imposed by the Department only if
Stuyvesant Dredging received compensation for "processing"
tangible personal property it received (directly or indirectly)
from the petitioners. The parties also agree that the river
sediment comprised tangible personal property, that Stuyvesant
Dredging received compensation for the work it performed on the
river sediment, and that the river sediment was furnished by the
68
No. 2015AP2019
petitioners.50 Therefore, the only question is whether
Stuyvesant Dredging's work constituted "processing."
¶96 Because this case turns on the meaning of the term
"processing" in Wis. Stat. § 77.52(2)(a)11., our task involves
discerning the meaning of statutory text. We discover a
statute's meaning in its text, context, and structure.
"[S]tatutory interpretation begins with the language of the
statute," and we give that language its "common, ordinary, and
accepted meaning." State ex rel. Kalal v. Circuit Court for
Dane Cty., 2004 WI 58, ¶¶45-46, 271 Wis. 2d 633, 681 N.W.2d 110
(internal mark and quoted source omitted) ("Context is important
to meaning. So, too, is the structure of the statute in which
the operative language appears. Therefore, statutory language
is interpreted in the context in which it is used; not in
isolation but as part of a whole; in relation to the language of
surrounding or closely-related statutes; . . . ."). In
performing this analysis, we carefully avoid ascribing an
unreasonable meaning to the text. See id., ¶46 ("[S]tatutory
language is interpreted . . . reasonably, to avoid absurd or
unreasonable results."). If we determine the statute's plain
meaning through this methodology, we go no further. Id., ¶¶45-
46 ("If the meaning of the statute is plain, we ordinarily stop
the inquiry." (internal mark and quoted source omitted)). See
50
Tetra Tech engaged J.F. Brennan Co., Inc. to dredge the
contaminated sediments and deliver them to Stuyvesant Dredging
for separation.
69
No. 2015AP2019
generally Daniel R. Suhr, Interpreting Wisconsin Statutes, 100
Marq. L. Rev. 969 (2017).
¶97 Our statutes do not define the term "processing."
Consequently, the Commission turned to a dictionary to assist
its analysis, stating "[t]he dictionary definition of
'processing' is 'to put through the steps of a prescribed
procedure; or, to prepare, treat, or convert by subjecting to a
special process.'" The petitioners reject this definition,
arguing that it is so broad it transforms a narrow and selective
tax statute into a general tax on all services related to
tangible personal property. They would instead have us find the
term's meaning in the Administrative Code. Specifically, they
propose Wis. Admin. Code § Tax 11.38(2) (June 1993), which
provides:
Fabricating and processing services, where materials
are furnished directly or indirectly by the customer,
that are subject to Wisconsin sales or use tax
include, except as provided in sub. (1)(a) through
(c):
(a) Application of coating to pipe.
(b) Assembling kits to produce a completed product.
(c) Bending glass tubing into neon signs.
(d) Bookbinding.
(e) Caterer's preparation of food for consumption on
or off the caterer's premises.
(f) Cleaning used oil.
(g) Cutting lumber to specifications and producing
cabinets, counter tops or other items from lumber for
customers, often called "millending."
70
No. 2015AP2019
(h) Cutting or crushing stones, gravel or other
construction materials.
(i) Drying, planing or ripping lumber.
(j) Dyeing or fireproofing fabric.
(k) Fabricating steel which may involve cutting the
steel to length and size, bending and drilling holes
in the steel to specifications of a particular
construction job.
(L) Firing of ceramics or china.
(m) Heat treating or plating.
(n) Laminating identification cards.
(o) Making a fur coat from pelts, gloves or a jacket
from a hide.
(p) Making curtains, drapes, slip covers or other
household furnishings.
(q) Production of a sound recording or motion picture.
(r) Retreading tires.
(s) Tailoring a suit.
(t) Threading pipe or welding pipe.
Wis. Admin. Code § Tax 11.38(2)(a)-(t).
¶98 Although we conclude that Stuyvesant Dredging
"processed" the river sediment into its constituent parts, we do
not believe either party provided a satisfactory definition of
the term. The petitioners rely on Wis. Admin. Code § Tax
11.38(2) as an exhaustive recitation of "processing" services
subject to Wisconsin's sales and use tax. Because the
separation of river sediment does not appear in this list, they
conclude that the principle expressio unius est exclusio
alterius excludes Stuyvesant Dredging's services from the
71
No. 2015AP2019
statute's reach. This canon of statutory construction would be
helpful if the list of services were meant to be exhaustive,
rather than illustrative. But this is a tool of elucidation
only——it has no power to contradict the code's text. And by its
own terms, § Tax 11.38(2) contains an illustrative list, not a
comprehensive one. The operative language says: "Fabricating
and processing services, . . . that are subject to Wisconsin
sales or use tax include, . . . ." Id. (emphasis added). The
term "include" tells us that what follows is not exhaustive.
See State v. James P., 2005 WI 80, ¶26, 281 Wis. 2d 685, 698
N.W.2d 95 ("[G]enerally, the word 'includes' is to be given an
expansive meaning, indicating that which follows is but a part
of the whole." (quoting Wis. Citizens Concerned for Cranes &
Doves v. DNR, 2004 WI 40, ¶17 n.11, 270 Wis. 2d 318, 677
N.W.2d 612)). Further, even if it wished to, it is doubtful
that the Department could restrict the scope of Wis. Stat.
§ 77.52(2) through the promulgation of § Tax 11.38(2). The
petitioners identify no authority giving the Department power to
either broaden or constrict the types of services subject to
sales and use taxes. So it does not appear there is any way in
which we could read § Tax 11.38(2) as a complete definition of
"processing."
¶99 As an illustrative list, Wis. Admin. Code § Tax
11.38(2) is similarly unhelpful to the petitioners' cause. The
petitioners say they purchased services that involved nothing
more than "separating" tangible personal property into its
components. But this could be said of cleaning used oil, too,
72
No. 2015AP2019
which presumably involves separating contaminants from the oil.
See § Tax 11.38(2)(f). The petitioners also say that Stuyvesant
Dredging's work cannot be understood as "processing" because it
neither added nor subtracted anything from the personal property
on which it performed its services. This could be said with
equal accuracy of those who crush stones, and yet that service
is part of the Department's illustrative list. See § Tax
11.38(2)(h). So § Tax 11.38(2) does not advance the
petitioners' argument because it is not an exclusive list of
"processing" activities, and because, as an illustrative list,
it describes activity analogous to Stuyvesant Dredging's work.
¶100 But the petitioners have a legitimate concern about
the breadth of the Commission's definition of "processing."
That term stands cheek by jowl with "producing," "fabricating,"
"printing," and "imprinting" in Wis. Stat. § 77.52(2)(a)11. If
"processing" really comprehends everything that puts tangible
physical property "through the steps of a prescribed procedure,"
or applies a "special process" to "prepare, treat, or convert"
it, then the term swallows all of its sentence-mates. For
example, "producing" means "to make or manufacture (a product or
commodity) from components or raw materials." Producing, The
Oxford English Dictionary (2d ed. 1989) (definition 3.e.).
Manufacturing something would certainly involve putting tangible
property through the steps of a prescribed procedure.
Similarly, "fabricating" means "[t]o make anything that requires
skill; to construct, manufacture." Fabricating, The Oxford
English Dictionary (2d ed. 1989) (definition 1.a.).
73
No. 2015AP2019
Fabricating, like producing, puts property through a prescribed
procedure. And "printing" means "[t]o make or produce (text, a
book, a picture, etc.) by a mechanical process involving the
transfer of characters or designs on to paper, vellum, etc."
Printing, The Oxford English Dictionary (2d ed. 1989)
(definition II.8.a.). And finally, "imprinting" means "[t]o
mark by pressure; to impress, stamp," "[t]o impress (letters or
characters) on paper or the like by means of type," and "[t]o
make an impression or impressed figure upon; to stamp or impress
(something) with a figure, etc." Imprinting, The Oxford English
Dictionary (2d ed. 1989) (definitions 1.a., 2., and 4.a.,
respectively). Each of these companion terms could fairly be
understood as specific examples of the Commission's definition
of "processing." But ascribing such a broad meaning to that
word would make surplusage of all the companion terms. Whenever
possible, we avoid reading statutory language in a fashion that
leaves some of it with no work to do. Kalal, 271 Wis. 2d 633,
¶46 ("Statutory language is read where possible to give
reasonable effect to every word, in order to avoid
surplusage.").
¶101 Therefore, we must understand "processing" to bear a
meaning that does not displace all of the other descriptors in
Wis. Stat. § 77.52(2)(a)11. We begin with the purpose of
subdivision 11., which is to identify categories of services
performed on tangible personal property that are subject to
Wisconsin's sales and use tax. As we pursue the proper meaning
of "processing," its companion terms provide invaluable
74
No. 2015AP2019
assistance. The noscitur a sociis canon of construction
(literally, "it is known from its associates") instructs that
"[w]hen two or more words or phrases are listed together, the
general terms . . . may be defined by the other words and
understood in the same general sense." Schill v. Wis. Rapids
Sch. Dist., 2010 WI 86, ¶66, 327 Wis. 2d 572, 786 N.W.2d 177;
accord State v. Quintana, 2008 WI 33, ¶35, 308 Wis. 2d 615, 748
N.W.2d 447 ("[A]n unclear statutory term should be understood in
the same sense as the words immediately surrounding or coupled
with it." (quoted source omitted)). Because the structure of
the text indicates that the terms are of equal dignity, we will
not read any one of them to swallow the others. Although the
types of services may share some (and even many) common
characteristics, each will retain an independent meaning so long
as it has at least one attribute distinct from the others. With
these principles in mind, we can discern a meaning for
"processing" that is informed by, and consistent with, its
associates.
¶102 Based on the definitions above, we see that
"fabricating" is distinct from its associates in that it
requires skill in the construction or manufacture of a final
product. "Producing" contemplates the creation of a final
product from the combination of components or raw materials, a
characteristic that is not necessarily encompassed by
"fabricating," which could describe the manufacture of a product
out of a single resource. "Printing" differs from the other
categories in that it involves "the transfer of characters or
75
No. 2015AP2019
designs" onto a medium. And finally, "imprinting" is unique
even from "printing" in that characters or designs are impressed
on a medium through pressure (as, for example, metal stamping in
which the medium is deformed to depict the character or
design).51
51
Justice Ziegler's concurrence, to the extent it addresses
whether "processing" encompasses the activity at issue here, is
based in large part on a mistaken impression that the
legislature defined "printing" and "imprinting." It did not.
She refers to Wis. Stat. § 77.51(11), which says (in full):
"'Printing' and 'imprinting' include lithography,
photolithography, rotogravure, gravure, letterpress, silk screen
printing, multilithing, multigraphing, mimeographing,
photostating, steel die engraving and similar processes." This
is not a definition. It is an incomplete list of examples. It
is not a definition for the same reason we do not consider Wis.
Admin. Code § Tax 11.38(2) a definition of "processing," which
similarly contains an incomplete list of examples.
Nonetheless, Justice Ziegler finds significance in the
title of section 77.51, "Definitions." But this means, quite
literally, nothing: "The titles to subchapters, sections,
subsections, paragraphs and subdivisions of the statutes and
history notes are not part of the statutes." Wis. Stat.
§ 990.001(6).
And the fact that the legislature did not feel the need to
say which category encompasses which activities does not mean
printing and imprinting are the same thing (as Justice Ziegler
suggests). See Justice Ziegler's, concurrence, ¶143. It means
the legislature did not care to separate them into their proper
categories, a fact from which no useful information can be
drawn. It is theoretically possible to use this illustrative
list to develop a definition of "printing" or "imprinting." But
that would involve first defining each of the listed activities,
and then extrapolating the constituent elements into a
definition for the two terms. Even at that, the result would be
uncertain because there is no way to identify the category to
which each listed activity belongs. Consequently, recourse to
Wis. Stat. § 77.51(11) simply isn't helpful in discovering a
definition for "printing" or "imprinting."
76
No. 2015AP2019
¶103 Turning now to the proper meaning of "processing," we
know it must contain at least one attribute that is distinct
from those described above if it is not to displace its
neighbors. The Oxford English Dictionary says "processing"
means, in pertinent part, "[t]o subject to or treat by a special
process; to operate on mechanically or chemically." Processing,
The Oxford English Dictionary (2d ed. 1989) (definition 3.a.).
It is poor form to use the defined word in its own definition,
mostly because such a construct provides little to no
information. Here, this infraction means the first clause tells
us nothing but that processing is "special," which is entirely
unhelpful. The second clause, however, is instructive.
Applying that material to the term "processing" as it appears in
Wis. Stat. § 77.52(2)(a)11. yields a meaning with a
characteristic distinct from its companions. We conclude that
"processing" encompasses the performance of a mechanical or
chemical operation on tangible personal property, a task that
can be completed without transforming the property into a new
product, or adding anything to it that was not already there.52
"Fabricating" and "producing" both necessarily contemplate the
creation of a new product, which makes them distinct from
52
Our opinion should not be interpreted as an attempt to
comprehensively define "processing," "fabricating," "producing,"
"printing," or "imprinting." With respect to "processing," we
conclude the term is at least as broad as we have described.
Whether it is more extensive than this is a question we need not
answer to resolve this case.
77
No. 2015AP2019
"processing." And both "printing" and "imprinting" require the
addition of something to the property that was not there before,
which is not a requirement of "processing." Therefore, because
we are able to identify a characteristic of "processing" that is
distinct from its companions, we have confirmed that it is
capable of carrying a meaning that cannot subsume or be subsumed
by the others.53
¶104 Understood in this fashion, "processing" encompasses
Stuyvesant Dredging's separation of river sediment into its
component parts. The Commission's Ruling and Order described
how this was accomplished. After going through scalping
screens, slurry holding tanks, and slurry thickener tanks, the
53
Justice Ziegler would adopt a definition of "processing"
without reference to the other terms in the statute, and
apparently without much concern for whether this creates
surplusage or results in an extraordinarily broad definition.
See Justice Ziegler's concurrence, ¶¶146-53. This loose
approach to statutory construction might be acceptable in other
contexts, but it is entirely inappropriate when addressing a tax
statute, especially this one. Section 77.52 of our statutes
covers the sale of both goods and services. See Wis. Stat.
§ 77.52(1) (goods), (2) (services). With respect to the former,
the statute is all-encompassing; in contrast, this statute taxes
services only if they are listed. Compare § 77.52(1), with
§ 77.52(2)(a) ("The tax imposed herein applies to the following
types of services: . . . ."). We must make our best effort at
determining the specific meaning of the listed types of service
because, as we have said before, "a tax cannot be imposed
without clear and express language for that purpose, . . . ."
DOR v. Milwaukee Ref. Corp., 80 Wis. 2d 44, 48, 257 N.W.2d 855
(1977). Justice Ziegler dispenses with those restrictions and
safeguards by accepting any definition that might encompass
Tetra Tech's activities. Perhaps the legislature will one day
adopt that approach, but this is not that day.
78
No. 2015AP2019
sediment enters the coarse and fine sand separation operations.
The coarse separation operation physically separates, washes,
and dewaters sand particles larger than 150 microns from the
sludge. The fine sand separation operation does the same for
sand particles between 63 and 150 microns. The petitioners
confirm that everything Stuyvesant Dredging receives from them
is returned. The only difference is that the property is
separated into its components. No new product has been created;
no chemical transformation has occurred; and the property is
still just as contaminated as when Stuyvesant Dredging received
it. The work described by the Commission reflects the
performance of a mechanical operation on the river sediments.
Therefore, petitioners are subject to the sales and use tax of
Wis. Stat. § 77.52(2) because Stuyvesant Dredging received
compensation for "processing" river sediment received from the
petitioners.
¶105 It is unlikely that our definition of "processing"
will upset the petitioners' reasonable expectations. The
Commission said that Tetra Tech's vice-president of project
engineering testified that Stuyvesant Dredging "processed" the
river sediment. Similarly, an operations manager who oversaw
LFR Remediation's work on the Fox River testified that
Stuyvesant Dredging "processed" the river sediment. And the
Commission observed that, "[a]t various points in the affidavits
and depositions of Petitioner's general manager and experts,
they refer to what SDI [Stuyvesant Dredging] does as a 'process'
or as 'processing.' That language is also used in many of the
79
No. 2015AP2019
contracts between Tetra Tech and SDI." Although we do not
derive the meaning of a statutory term from a party's subjective
understanding, we recount this history as confirmation that our
analysis has not ventured outside the realm of what those
subject to the statute might reasonably anticipate.
¶106 As is apparent from this analysis, we gave little
weight to the Commission's understanding of the term
"processing." We recognize the legislature charged the
Commission with the duty to decide contested cases involving the
application of Wis. Stat. § 77.52(2). However, there is no
indication the Commission has a long-standing interpretation of
what "processing" means for purposes of § 77.52(2)(a)11. Nor
does the record intimate that it used any particular experience,
technical competence, or specialized knowledge to develop an
understanding of that term——it relied on a dictionary. It
necessarily follows that the Commission did not bring a unique
perspective or significance to the meaning of "processing."
Consequently, the "due weight" calculus of Wis. Stat.
§ 227.57(10) did not increase the persuasiveness of the
Commission's conclusion of law.
80
No. 2015AP2019
III. Conclusion
¶107 The petitioners paid Stuyvesant Dredging to process
river sediment within the meaning of Wis. Stat.
§ 77.52(2)(a)11., so they are liable for the sales and use tax
imposed by § 77.52(2). Therefore, we affirm the court of
appeals.
¶108 We have also decided to end our practice of deferring
to administrative agencies' conclusions of law. However,
pursuant to Wis. Stat. § 227.57(10), we will give "due weight"
to the experience, technical competence, and specialized
knowledge of an administrative agency as we consider its
arguments.
By the Court.—The decision of the court of appeals is
affirmed.
81
No. 2015AP2019.awb
¶109 ANN WALSH BRADLEY, J. (concurring). I concur in the
mandate of the court because I agree that the term "processing"
as used in Wis. Stat. § 77.52(2)(a)11. encompasses the
separation of river sediment into its component parts. See
majority/lead op., ¶3.1 Such a result is compelled whether we
1
I refer to Justice Kelly's opinion as a "majority/lead"
opinion to assist litigants and courts in understanding its
precedential value. Justice Kelly's opinion is a majority
opinion with regard to the statutory analysis of the term
"processing" presented in Section II.B of the majority/lead
opinion and the conclusions presented in Section III. See State
v. Elam, 195 Wis. 2d 683, 685, 538 N.W.2d 249 (1995) (explaining
that "a majority of the participating judges must have agreed on
a particular point for it to be considered the opinion of the
court."). As set forth in footnote 4 of the majority/lead
opinion, it also constitutes a majority in:
 Section I, setting forth the facts (which are not in
issue),
 Section II.A.1., providing a review of the current standard
for review of agency decisions (which is not subject to
reasonable dispute), and
 Section II.A.2., going through the history of the deference
doctrine (which is, again, not in issue).
In contrast, "a lead opinion is one that states (and agrees
with) the mandate of a majority of the justices, but represents
the reasoning of less than a majority of the participating
justices." State v. Lynch, 2016 WI 66, ¶143, 371 Wis. 2d 1, 885
N.W.2d 89 (Abrahamson & Ann Walsh Bradley, J.J., concurring in
part, dissenting in part) (citing Hoffer Props., LLC v. State,
Dep't of Transp., 2016 WI 5, 366 Wis. 2d 372, 874 N.W.2d 553);
In re Disciplinary Proceedings Against Riley, 2016 WI 70, ¶¶92-
95, 371 Wis. 2d 311, 882 N.W.2d 820 (Abrahamson, J.,
concurring).
(continued)
1
No. 2015AP2019.awb
give the agency's interpretation great weight, due weight, or no
weight at all.
¶110 Further, I agree with the concurrences of Justices
Ziegler and Gableman that, consistent with our doctrine of
constitutional avoidance, the court need not reach the issue of
whether our deference framework violates the Wisconsin
Constitution.
¶111 I write separately, however, for two reasons. First,
the majority/lead opinion ignores controlling precedent to reach
a result that upends decades of administrative law
jurisprudence. Similarly, the concurrences of Justices Ziegler
and Gableman, while not reaching the constitutional issue, would
toss away a framework that has served courts well for decades.
Second, the court's misguided wholesale changes create possible
unintended consequences and a great deal of uncertainty.
¶112 The court should not so cavalierly discard our past
practice. Additionally, its apparent lack of concern for what
will become of the jurisprudence that has arisen through
deference gives rise to more questions than it answers. Are
cases in which courts afforded deference to an agency
interpretation still good law? Or do some of these issues need
to be relitigated under the new standard of review the court
A majority of justices do not embrace the reasoning or
constitutional analysis set forth in Sections II.A.3 through
II.A.6 of the majority/lead opinion. See majority/lead op., ¶3
n.4. The reasoning the majority/lead opinion presents for
dispatching with our deference doctrine represents the reasoning
of Justices Rebecca Grassl Bradley and Daniel Kelly only.
2
No. 2015AP2019.awb
announces today? The majority/lead opinion's assurances are of
little comfort. See Justice Ziegler's concurrence, ¶139 n.3.
¶113 Because I would not jettison a past practice that has
served us well, I respectfully concur.
I
¶114 At the outset, I observe that the impetus for
dismantling years of administrative law jurisprudence did not
come from any party, but from this court. The issue of whether
our agency deference doctrine violates the Wisconsin
Constitution was not raised by any party to this case before the
circuit court, court of appeals, or in the petition for review
here. It was this court, sua sponte, that asked that the issue
be addressed in the first instance.
¶115 Having raised the issue, the majority/lead opinion
fails to follow established precedent when addressing it. Had
the majority/lead opinion adhered to our precedent, it would not
have arrived at a result that creates such uncertainty. To the
contrary, it would have reached the conclusion that our
deference doctrine comports with the Wisconsin Constitution. By
concluding that our deference doctrine removes the interpretive
role of the judiciary, the majority/lead opinion commits legal
error.
¶116 Indeed, this court previously examined a very similar
question. In Borgnis v. Falk Co., 147 Wis. 327, 358, 133
N.W. 209 (1911), the court addressed an argument that the
workers' compensation law "is unconstitutional because it vests
judicial power in a body which is not a court and is not
3
No. 2015AP2019.awb
composed of men elected by the people, in violation of those
clauses of the state Constitution which vest the judicial power
in certain courts and provide for the election of judges by the
people . . . ."
¶117 Rejecting the argument, the Borgnis court stated that
the commission is "an administrative body or arm of the
government which in the course of its administration of a law is
empowered to ascertain some questions of fact and apply the
existing law thereto, and in so doing acts quasi-judicially, but
it is not thereby vested with judicial power in the
constitutional sense." Id. (second emphasis added). The court
added:
While acting within the scope of its duty, or its
jurisdiction, as it is sometimes called, such a board
may lawfully be endowed with very broad powers, and
its conclusions may be given great dignity and force,
so that courts may not reverse them unless the proof
be clear and satisfactory that they are wrong.
Id. at 359.
¶118 Borgnis is on point here. In response to the argument
made over a century ago, the Borgnis court suggested that only
clear violations of law, i.e. unreasonable interpretations, are
outside the jurisdiction of an agency. This is the same
foundation underlying our deference framework. Although Borgnis
addressed certiorari review, the same principle would apply to
review of any administrative decision.
¶119 Further, contrary to the majority/lead opinion's
assertion, agency deference does not remove from the court its
interpretive role and cede it to the agency. In its
4
No. 2015AP2019.awb
application, deference does not mean accepting an agency's
interpretation without a critical eye. Racine Harley-Davidson,
Inc. v. State, Div. of Hearings and Appeals, 2006 WI 86, ¶15,
292 Wis. 2d 549, 717 N.W.2d 184. Rather, "[t]he court itself
must always interpret the statute to determine the
reasonableness of the agency interpretation." Id. Only
reasonable interpretations are worthy of deference. Id.
¶120 Not only does the majority/lead opinion throw tumult
into a previously well-settled area of the law, but it does so
based on a legal error. I would not upset the finality and
consistency of our past decisions.
II
¶121 I write next to call attention to the unknown
consequences of the court's decision. The court's result
represents a tectonic shift in the administrative law landscape.
See Operton v. LIRC, 2017 WI 46, ¶71, 375 Wis. 2d 1, 894
N.W.2d 426 (Ziegler, J., concurring) ("There is little doubt
that ending the court's practice of according deference to
agency interpretations of statutes would constitute a sea change
in Wisconsin law[.]"). But on the topic of what this vast and
sweeping change means for our prior cases, the majority/lead
opinion provides precious little guidance.
¶122 Compounding its error, the majority/lead opinion
unwinds our three-tiered system of deference by declaring it
unconstitutional where, as Justices Ziegler and Gableman aptly
observe, the use of the court's administrative powers would
suffice. In doing so, the majority/lead opinion ignores our
5
No. 2015AP2019.awb
usual practice of constitutional avoidance. See State v. Hale,
2005 WI 7, ¶42, 277 Wis. 2d 593, 691 N.W.2d 637 ("Normally this
court will not address a constitutional issue if the case can be
disposed of on other grounds."). Again, the majority/lead
opinion is silent as to the ramifications of constitutionalizing
the question. However, even making a decision on administrative
grounds, we must consider the ramifications of such a decision.
¶123 The principle of stare decisis militates against the
court's conclusion. Stare decisis is based in part on "the
desirability that the law furnish a clear guide for conduct of
individuals, to enable them to plan their affairs with assurance
against untoward surprise[.]" Johnson Controls, Inc. v.
Employers Ins. of Wausau, 2003 WI 108, ¶95, 264 Wis. 2d 60, 665
N.W.2d 257 (quoting Moragne v. States Marine Lines, Inc., 398
U.S. 375, 403 (1970)). Parties appearing before agencies and
those appealing agency decisions now enter uncharted waters.
With no guide, they could be subject to conflicting statutory
interpretations that will make it nearly impossible to plan
their affairs with any certainty.
¶124 This court, the court of appeals, and circuit courts
throughout the state have applied great weight deference and due
weight deference going back decades. What is the precedential
value of these cases now? Are the principles they divine still
good law even though they were reached through the application
of a deference doctrine the court eschews today?
¶125 As an example, let's examine a case involving a
question of statutory interpretation similar to that at issue
6
No. 2015AP2019.awb
here. In Zip Sort, Inc. v. Wis. DOR, 2001 WI App 185, ¶1, 247
Wis. 2d 295, 634 N.W.2d 99, the court of appeals addressed an
agency interpretation of the term "manufacturing property" as
used in Wis. Stat. § 70.995.2
2
Wis. Stat. § 70.995 (1993-94) provides in relevant part:
(1) APPLICABILITY. (a) In this section
"manufacturing property" includes all lands,
buildings, structures and other real property
used in manufacturing, assembling, processing,
fabricating, making or milling tangible personal
property for profit . . .
. . .
(d) Except for the activities under sub.
(2), activities not classified as
manufacturing in the standard industrial
classification manual, 1987 edition,
published by the U.S. office of management
and budget are not manufacturing for this
section.
(2) FURTHER CLASSIFICATION. In addition to the
criteria set forth in sub. (1), property shall be
deemed prima facie manufacturing property and
eligible for assessment under this section if it
is included in one of the following major group
classifications set forth in the standard
industrial classification manual, 1987 edition,
published by the U.S. office of management and
budget. . . . :
. . .
j) 27—Printing, publishing and allied
industries.
. . .
(v) 39—Miscellaneous manufacturing industries.
7
No. 2015AP2019.awb
¶126 The question presented was whether Zip Sort's
activities entitled it to a "manufacturing property" designation
for tax purposes. Zip Sort's primary business was to make mail
machine-sortable through the addition of a bar code. Id., ¶3.
¶127 The Department of Revenue determined that such
activity did not entitle Zip Sort to a manufacturing
classification for its property, and the Tax Appeals Commission
agreed. Id., ¶10. In examining this determination, the court
of appeals initially set about to determine the proper level of
deference to accord to the Department's interpretation of the
term "manufacturing property." Id., ¶¶11-22. The court
declined to "determine whether the proper standard of review is
due weight deference or great weight deference because [it]
conclude[d] that the commission's conclusions under § 70.995 at
least met the due weight deference standard." Id., ¶22.
¶128 Pursuant to such a standard, the court of appeals
determined that the commission's interpretation was reasonable,
and that Zip Sort's interpretation was "no more reasonable."
Id., ¶34. Accordingly, it affirmed the commission's decision.
Id. Whether the commission's interpretation was correct did not
enter the analysis.
¶129 If it applied a de novo standard of review, would the
Zip Sort court reach the same result? I do not know. However,
the Zip Sort decision was reached through the methodology that a
majority of this court now disowns (and that several members
suggest is contrary to the Wisconsin Constitution). Is what was
a settled point of law since 2001 now unsettled? Can businesses
8
No. 2015AP2019.awb
and agencies rely on our past decisions in planning their future
activities? The majority/lead opinion's assurances that they
can provide little comfort and are thinly supported. See
Justice Ziegler's concurrence, ¶139 n.3.
¶130 Zip Sort is not the only case where an appellate court
has applied our three-tiered deference methodology. It serves
as but one example of the myriad cases where courts have
faithfully applied the deference jurisprudence as set forth by
this court.
¶131 The court has significantly upset the finality of our
past cases. "[F]requent and careless departure from prior case
precedent undermines confidence in the reliability of court
decisions." Johnson Controls, 264 Wis. 2d 60, ¶95. "When legal
standards 'are open to revision in every case, deciding cases
becomes a mere exercise of judicial will, with arbitrary and
unpredictable results.'" State v. City of Oak Creek, 2000 WI 9,
¶55 n.27, 232 Wis. 2d 612, 605 N.W.2d 526 (citations omitted).
¶132 Our three-tiered deference scheme has suited us well
over the past decades. In unnecessarily disowning our well-
developed jurisprudence, the court should at least provide
guidance for the future. Litigants, circuit courts and the
court of appeals should not be left adrift to redefine what has
previously been well-settled.
¶133 For the above stated reasons, I respectfully concur.
¶134 I am authorized to state that Justice SHIRLEY S.
ABRAHAMSON joins this concurrence.
9
No. 2015AP2019.akz
¶135 ANNETTE KINGSLAND ZIEGLER, J. (concurring). I agree
with the result the court reaches. I concur and write
separately because the analysis that the lead opinion employs to
reach its conclusions is concerning. First, in my view, it is
both unnecessary and inadvisable to rely on constitutional
grounds for ending our practice of deferring to administrative
agencies' conclusions of law. Deference to administrative
agencies was a court-created doctrine and, thus, is one that can
be court eliminated. We need not reach for the constitution to
so act.
¶136 Second, in interpreting the statute here, the court1
relies on ordinary meaning to define all of five terms, even
though two of them have statutory definitions. Additionally,
the court relies on the surplusage canon as grounds for
selectively defining necessarily broad terms, even though the
complete overlap between the two statutorily-defined terms
indicates that the legislature may well have intended for
overlap among the undefined terms as well.
¶137 Nevertheless, I agree that "'processing' encompasses
Stuyvesant Dredging's separation of river sediment into its
component parts." Majority op., ¶104. Accordingly, I
respectfully concur.
1
We refer to the opinion as a lead opinion in Part I
because its constitutional analysis has not garnered the support
of a majority of the court. We refer to the opinion as that of
"the court" or as the "majority opinion" in Part II because its
statutory analysis does have the support of a majority of the
court.
1
No. 2015AP2019.akz
I. INTERPRETING AND APPLYING THE LAW
¶138 The lead opinion reaches for the constitution
unnecessarily. It states as follows:
As the deference doctrine developed . . . [we did
not] determine whether this was consistent with the
allocation of governmental power amongst the three
branches. So, as a matter of first impression, we
consider whether our deference doctrine is compatible
with our constitution's grant of power to the
judiciary . . . .
Lead op., ¶42. As the lead opinion acknowledges, our deference
doctrine was a policy of judicial administration,2 and, as such,
it is not essential to draw on constitutional principles to
overturn it. See State v. Castillo, 213 Wis. 2d 488, 492, 570
N.W.2d 44 (1997) ("An appellate court should decide cases on the
narrowest possible grounds."); Gabler v. Crime Victims Rights
Bd., 2017 WI 67, ¶¶51-53, 376 Wis. 2d 147, 897 N.W.2d 384 ("This
court does not normally decide constitutional questions if the
case can be resolved on other grounds."). I depart with the
lead opinion because the doctrine of constitutional avoidance
requires that we act with restraint. In accordance with this
principle, I would not rely on the constitution to overturn our
judicially-created administrative deference doctrine.
2
See, e.g., lead op., ¶34 ("[Great weight deference]
developed as a home-grown doctrine within the
judiciary . . . ."); id., ¶70 ("[G]reat weight deference is a
creature of our own making . . . ."); id., ¶40 ("[J]ust like
'great weight' deference, 'due weight' deference has become an
integral, and therefore unavoidable, part of the framework
within which we review an administrative agency's conclusions of
law."); id., ¶3 ("We have [] decided to end our practice of
deferring to administrative agencies' conclusions of law.").
2
No. 2015AP2019.akz
¶139 Moreover, departing from deference on the basis of
judicial administration would not call into question the
continuing validity of the decades of cases that have relied on
the deference doctrine. In this regard, I disagree with the
lead opinion's assertions that "[i]f [a decision] [was] final
upon release of this opinion, [its] finality will go on
undisturbed by our decision today";3 and that "[c]onsequently
3
The lead opinion cites Wis. Stat. § 806.07 in support of
this assertion, concluding that no paragraph of that statute
would allow a party to reopen a final judgment based on this
decision. Lead op., ¶¶89-91. To the contrary, the lead
opinion's conclusion that deference is unconstitutional could
support an argument for relief from a final judgment under
§ 806.07(1)(a), on the basis of "mistake"; under para. (1)(d),
on the basis that "[t]he judgment is void"; under para. (1)(f),
on the basis that "[a] prior judgment upon which the judgment is
based has been reversed"; or under para. (1)(h), on the basis
that "[a]ny other reasons justifying relief from the operation
of the judgment." § 806.07(1)(a), (d), (f), (h).
The lead opinion attempts to bolster its interpretation of
§ 806.07 by quoting Schauer v. DeNeveu Homeowners Ass'n, Inc.,
194 Wis. 2d 62, 75, 533 N.W.2d 470 (1995), for the proposition
that "'[§ 806.07] does not authorize relief from a judgment on
the ground that the law applied by the court in making its
adjudication has been subsequently overruled in an unrelated
proceeding.'" Lead op., ¶90 (alteration in original). To the
contrary, the court in Schauer concluded that "sec. 806.07(1)(f)
does not authorize relief from a judgment on the ground that the
law applied by the court in making its adjudication has been
subsequently overruled in an unrelated proceeding." Schauer,
194 Wis. 2d at 66. Thus, the lead opinion's implication-by-
alteration that this case interpreted § 806.07 broadly is error.
Moreover, Schauer was a case where the parties had reached a
settlement regarding the scope of an easement wherein they
allegedly relied on later-overruled case law in reaching the
settlement. Thus, while arguably Schauer decided the
application of § 806.07(1)(f) under those circumstances, it does
not address other subsections of the statute, nor does it
address every possible application of § 806.07(1)(f).
(continued)
3
No. 2015AP2019.akz
[the] precedential and controlling effect [of past cases] will
be the same as if the court had based the decision on its own
interpretation." Lead op., ¶¶89, 93. The lead opinion provides
no support for these assertions and the constitutional tenor of
its analysis suggests exactly the opposite. Accordingly, I
agree with Justice Ann Walsh Bradley's concurrence that the lead
opinion fails to adequately account for the effect its analysis
will have on prior decisions.
¶140 Additionally, it is inadvisable to turn to the
constitution and address the "core powers" of the judiciary in
this case. The lead opinion's "core powers" analysis proceeds
as follows: judicial power is vested in the judiciary;4 the
doctrine of separation of powers is fundamental to government;5
the powers of each branch of government fall into one of two
categories——shared powers or exclusive/core powers;6 the
judiciary has the "'exclusive responsibility to exercise
judgment in cases and controversies arising under the law'";7
Additionally, the lead opinion's assertion that "overruling
a case does not expose to collateral attack any of the
intervening decisions that were based on the overruled case" is
subject to question. Lead op., ¶90. To the contrary,
overruling one of our prior decisions, can quite obviously have
significant impact on other cases.
4
See lead op., ¶42 (citing Wis. Const. art. VII, § 2).
5
See lead op., ¶44 (citing Gabler v. Crime Victims Rights
Bd., 2017 WI 67, ¶11, 376 Wis. 2d 147, 897 N.W.2d 384).
6
See lead op., ¶46 (citing State v. Horn, 226 Wis. 2d 637,
643, 594 N.W.2d 772 (1999)).
7
Lead op., ¶54 (quoting Gabler, 376 Wis. 2d 147, ¶37).
4
No. 2015AP2019.akz
exercising judgment "encompasses interpreting and applying the
law to the case . . . ";8 therefore, "only the judiciary may
authoritatively interpret and apply the law in cases before our
courts."9 In other words, the judiciary has constitutionally-
conveyed jurisdiction to interpret and apply the law in cases
and controversies before the courts.
¶141 This conclusion is either quite remarkable or quite
unremarkable; that is, if the lead opinion is breaking new
ground in defining the power of the judiciary, that is
remarkable, but if it is not, there is no need to remark on the
court's role here because it is not disputed. Given that the
lead opinion feels the need to so-remark, however, I feel
compelled to caution that its comments should not be read more
broadly for the proposition that the judiciary possesses
exclusive authority to interpret and apply the law generally in
all arenas. Although the lead opinion appears to agree that the
power to interpret and apply the law more generally is shared
among the branches,10 its definition of the judiciary's "core
8
Lead op., ¶54.
9
Id.
10
For example, the lead opinion states as follows:
The executive must certainly interpret and apply the
law; it would be impossible to perform his duties if
he did not. After all, he must determine for himself
what the law requires (interpretation) so that he may
carry it into effect (application). Our constitution
not only does not forbid this, it requires it. Wis.
Const. art. V, § 1 ("The executive power shall be
vested in a governor . . . ."); Perez v. Mortg.
Bankers Ass'n, 135 S. Ct. 1199, 1217 (2015) (Thomas,
(continued)
5
No. 2015AP2019.akz
power," see supra ¶140, is applied more broadly at times such
that it could be read to abrogate the shared nature of the power
to interpret and apply the law.11 This lead opinion is not to be
read so broadly.
¶142 In sum, I would not reach the constitutional issue
because reversal on judicial administration grounds is more
appropriate: that which the court administratively gives, the
court can administratively take away, and doing so on the basis
of judicial administration would not require undermining the
decades of cases that did rely on the deference doctrine
because, at the time, it was our policy to do so. Additionally,
the lead opinion's conclusions on constitutional grounds——
regarding the judiciary's core powers——should be read as limited
to the unremarkable reiteration of our responsibility to
interpret and apply the law in cases and controversies before
the courts.
J., concurring) ("It is undoubtedly true that the
other branches of Government have the authority and
obligation to interpret the law . . . .").
Lead op., ¶53.
11
See, e.g., lead op., ¶54 (citing Operton v. LIRC, 2017 WI
46, ¶73, 375 Wis. 2d 1, 894 N.W.2d 426 (R. Grassl Bradley, J.,
concurring)) ("'[T]he court's duty to say what the law is'
constitutes a 'core judicial function.'"); id., ¶70 (citing Wis.
Stat. § 227.57(5)) ("[T]he statute says the court is to decide
whether the agency has 'erroneously interpreted a provision of
law.' And the court is to determine the 'correct interpretation
of the provision of law.' This formulation recognizes the
proper residence of our core judicial powers."); id., ¶¶73-74
(implying that an agency's interpretation and application of the
law is an exercise of "our power.").
6
No. 2015AP2019.akz
II. INTERPRETING AND APPLYING WIS. STAT. § 77.52(2)(a)11.
¶143 I also write because I do not agree with the court's
redefining terms that the legislature has statutorily defined.
Specifically, the legislature defines "printing" and
"imprinting." See Wis. Stat. § 77.51(11). Without
acknowledging or attempting to incorporate these two
statutorily-defined terms into its analysis, the court first
turns to ordinary meaning (i.e., dictionaries) in interpreting
and applying Wis. Stat. § 77.52(2)(a)11. While it is not
improper for the court to turn to the dictionary for the
undefined terms, I take issue with the court turning to the
dictionary to redefine "printing" and "imprinting"——the two
statutory terms. In so doing, the court also overstates the
necessity of avoiding surplusage because the legislature here
has defined at least some terms——printing and imprinting——to
entirely overlap. In the end, this is a taxation statute; it
could very well be that the legislature wanted to leave little
room for exclusion from taxation.
A. Specially-Defined Terms: Printing and Imprinting
¶144 The legislature provided definitions for two of the
five terms at issue——printing and imprinting——and those two
7
No. 2015AP2019.akz
statutorily-defined terms completely overlap.12 However, in an
effort to ensure that each term "retain[s] an independent
meaning," that is, "has at least one attribute distinct from the
others," majority op., ¶101, the court makes no mention of the
legislatively-provided definitions, but instead selects
dictionary definitions that support its analysis. Majority op.,
¶100. I find that to be contrary to our prescribed method of
statutory interpretation.
¶145 To start, Wis. Stat. § 990.01(1) provides: "All words
and phrases shall be construed according to common and approved
usage; but technical words and phrases and others that have a
peculiar meaning in the law shall be construed according to such
meaning." Similarly, State ex rel. Kalal v. Circuit Court for
Dane County states: "Statutory language is given its common,
ordinary, and accepted meaning, except that technical or
specially-defined words or phrases are given their technical or
special definitional meaning." 2004 WI 58, ¶45, 271
Wis. 2d 633, 681 N.W.2d 110; see also Antonin Scalia & Bryan A.
12
The five terms at issue are "processing," "producing,"
"fabricating," "printing," and "imprinting." "Printing" and
"imprinting" are defined by statute, see Wis. Stat. § 77.51(11);
"processing," "producing," and "fabricating" are not. The court
argues that § 77.51(11), despite being a subsection of the
"Definitions" section of the statute, does not provide a
definition because it provides no "useful information."
Majority op., ¶102 n.51. As noted below, see infra ¶145, note
14, the fact that the court finds the statutory definition
unhelpful in conducting its preferred analysis is not a reason
to ignore it. Moreover, to the contrary, § 77.51(11) does
provide useful information, namely, a measure of the
legislature's comfort with overlap. See infra ¶149.
8
No. 2015AP2019.akz
Garner, Reading Law: The Interpretation of Legal Texts 69-77
(2012) ("Ordinary-Meaning Canon") ("Words are to be understood
in their ordinary, everyday meanings——unless the context
indicates that they bear a technical sense.").
¶146 Under the statute, "printing" and "imprinting" are
specially defined: "'Printing' and 'imprinting' include
lithography, photo-lithography, rotogravure, gravure,
letterpress, silk screen printing, multilithing, multigraphing,
mimeographing, photostating, steel die engraving and similar
processes." Wis. Stat. 77.51(11) (2007-08).13 Nevertheless, the
court states as follows:
"[P]rinting" means "[t]o make or produce (text, a
book, a picture, etc.) by a mechanical process
involving the transfer of characters or designs on to
paper, vellum, etc." Printing, The Oxford English
Dictionary (2d ed. 1989) (definition
II.8.a.). . . . "[I]mprinting" means "[t]o mark by
pressure; to impress, stamp," "[t]o impress (letters
or characters) on paper or the like by means of type,"
and "[t]o make an impression or impressed figure upon;
to stamp or impress (something) with a figure, etc."
Imprinting, The Oxford English Dictionary (2d ed.
1989) (definitions 1.a., 2., and 4.a., respectively).
Majority op., ¶100. This reliance on ordinary meaning (i.e.,
dictionaries) is contrary to statute and to the common law
because "printing" and "imprinting" are specially defined. See
Wis. Stat. § 990.01(1); Kalal, 271 Wis. 2d 633, ¶45. But,
despite the clarity of the law in this area, the court gives no
consideration to the synonymous, statutory definition and
13
"Printing" and "imprinting" are also specially defined in
this manner in the 2005-06 version of the statute. See majority
op., ¶2 n.2.
9
No. 2015AP2019.akz
instead favors dual dictionary definitions. Doing so does aid
its analysis in at least two ways,14 but the legislatively
defined terms cannot be ignored for the sake of convenience.
Moreover, further analysis reveals that relying on the
synonymous statutory definitions is not fatal to the court's
result because such overlap is likely what the legislature
intended.
B. Surplusage
¶147 The court understandably struggles with distinguishing
"processing," "producing," and "fabricating." As an initial
matter, these terms are not statutorily defined. And, although
normally this would not present great difficulty——as resort to
dictionaries for ordinary meaning is appropriate where terms are
not statutorily defined——here, even the dictionary definitions
have significant overlap. (How would one produce or fabricate
something without putting it through a process?) But instead of
acknowledging this overlap, the court reaches to distinguish
these terms in order to avoid surplusage. Such artifice is
unnecessary in my view. First, surplusage need not be avoided
14
First, the statutory definition is illustrative rather
than descriptive. Thus, reliance on the statutory definition
would impair the court's analysis because it would not provide a
useful comparison to the court's descriptive dictionary
definitions of "producing" and "fabricating." See majority op.,
¶100. Second, the statute defines "printing" and "imprinting"
as synonyms, that is, their statutory definition overlaps in its
entirety. Thus, reliance on the statutory definition would
impair the court's analysis because it would contravene the
court's conclusion that each term "retain[s] an independent
meaning" because "it has at least one attribute distinct from
the others." Majority op., ¶101.
10
No. 2015AP2019.akz
at all costs. Second, not all overlap is surplusage,
particularly where, as here, the plain meaning of the terms and
the synonymous nature of coordinate, legislatively-defined terms
invites overlapping interpretations. Third, regardless of the
amount of overlap, Stuyvesant Dredging's actions fall within the
definition of "processing." Again, in a taxation statute, where
generally the legislature is trying to include, not exclude,
those who will be subject to taxation, such a broad sweep is
unsurprising.
¶148 While avoiding surplusage is generally favored,
surplusage need not be avoided at all costs. Kalal states:
"Statutory language is read where possible to give reasonable
effect to every word, in order to avoid surplusage." 271
Wis. 2d 633, ¶46 (emphasis added); see also Scalia & Garner,
supra ¶144 at 174-79 ("Surplusage Canon") ("If possible, every
word and every provision is to be given effect . . . .")
(emphasis added). Thus, it is not true that "we must understand
'processing' to bear a meaning that does not displace all of the
other descriptors . . . ." Majority op., ¶101 (emphasis
added).15
¶149 Additionally, in my view, it may not be possible to
avoid complete overlap among "processing," "producing," and
15
In this regard, I do not disagree that "[w]e must make
our best effort at determining the specific meaning," majority
op., ¶103 n.51 (emphasis added); rather, in my view, no effort——
other than one to rewrite the statute——can overcome the plain
and broad meaning of the terms used by the legislature here.
See infra ¶¶148, 150-153.
11
No. 2015AP2019.akz
"fabricating," because the ordinary meaning of "processing" is
so broad.16 But the fact that an abstract definition of
"processing" could encompass the abstract definitions of the
other statutory terms does not necessarily displace them, as
their use might be more appropriate in certain contexts. For
example, on the one hand, we think of films as being "produced"
and some stories as being "fabricated," even though no one would
dispute that making a film or making up a story is a process.
On the other hand, we think of some foods——American cheese
slices, for example——as being "processed."
¶150 In other words, surplusage is not to be assumed merely
because the legislature has used a broad term. See Pawlowski v.
Am. Family Mut. Ins. Co., 2009 WI 105, ¶22, 322 Wis. 2d 21, 777
N.W.2d 67 ("The use of different words joined by the disjunctive
connector 'or' normally broadens the coverage of the statute to
reach distinct, although potentially overlapping sets.") This
is perhaps particularly true where, as here, the legislature has
invited such overlapping interpretations by specifically
defining two of the terms as synonyms. See Georgina G. v. Terry
M., 184 Wis. 2d 492, 540, 516 N.W.2d 678 (1994) (Bablitch, J.,
dissenting) ("The legislature at times, as here, deliberately
16
In this regard, I note that the court's conclusion that
"processing" is "a task that can be completed without
transforming the property into a new product, or adding anything
to it that was not already there" does not avoid displacing
"producing" and "fabricating." Majority op., ¶103. Just
because "processing" encompasses tasks that are not "producing"
or "fabricating" does not mean that "producing" and
"fabricating" are not subordinate forms of "processing."
12
No. 2015AP2019.akz
paints with a very broad . . . brush."); see also Scalia &
Garner, supra ¶144 at 174 ("[I]t is no more the court's function
to revise by subtraction than by addition.").
¶151 Regardless of the amount of overlap, under a plain
meaning analysis Stuyvesant Dredging's work constituted
"processing," as that term is used in Wis. Stat.
§ 77.52(2)(a)11. We begin with the language of the statute.
Kalal, 271 Wis. 2d 633, ¶45. The statute states in relevant
part as follows:
(2) For the privilege of selling, performing or
furnishing the services described under par. (a) at
retail in this state to consumers or users, a tax is
imposed upon all persons selling, performing or
furnishing the services at the rate of 5% of the gross
receipts from the sale, performance or furnishing of
the services.
(a) The tax imposed herein applies to the
following types of services: . . .
11. The producing, fabricating, processing,
printing or imprinting of tangible personal property
for a consideration for consumers who furnish directly
or indirectly the materials used in the producing,
fabricating, processing, printing or imprinting. This
subdivision does not apply to the printing or
imprinting of tangible personal property that results
in printed material, catalogs, or envelopes that are
exempt under s. 77.54 (25) or (25m).
§ 77.52(2)(a)11.
¶152 "Processing" is not defined in the statute, thus,
resort to dictionary definitions is not inappropriate. See
Kalal, 271 Wis. 2d 633, ¶45 ("Statutory language is given its
common, ordinary, and accepted meaning . . . ."). "Processing"
is defined in dictionaries as follows: (1) "to subject to a
special process or treatment"; "to subject to or handle through
13
No. 2015AP2019.akz
and established usually routine set of procedures";17 (2) "to put
through the steps of a prescribed procedure"; "to prepare,
treat, or convert by subjecting to a special process";18 (3)
"[t]o subject to or treat by a special process; to operate on
mechanically or chemically."19
¶153 In my view, Stuyvesant Dredging's separation of
dredged materials plainly falls under any of these definitions
of "processing." "If the meaning of the statute is plain, we
ordinarily stop the inquiry." Kalal, 271 Wis. 2d 633, ¶45. And
I would reiterate that the fact that the definition of
"processing" is broad does not mean that it is ambiguous, nor
does it render the statute meaningless. See Kernz v. J. L.
French Corp., 2003 WI App 140, ¶16, 266 Wis. 2d 124, 667
N.W.2d 751 ("[A] phrase is not ambiguous simply because it is
general or broad."); see also Zarnstorff v. Neenah Creek Custom
Trucking, 2010 WI App 147, ¶21, 330 Wis. 2d 174, 792 N.W.2d 594
(quoting Lawver v. Boling, 71 Wis. 2d 408, 422, 238 N.W.2d 514
(1976)) ("[A]n otherwise unambiguous provision is not rendered
ambiguous simply because it is difficult to apply to the facts
of a particular case.").
17
Process merriam-webster.com, (search "processing") (verb)
(last visited May 11, 2018).
18
Process ahdictionary.com, (search "processing") (tr. v.)
(last visited May 11, 2018).
19
Majority op., ¶103 (quoting Processing The Oxford English
Dictionary (2d ed. 1989) (definition 3.a.)).
14
No. 2015AP2019.akz
¶154 In sum, the plain language of the statute compels the
conclusion that, in the Venn diagram of definitions,
"processing" is the paper on which overlapping circles for
"producing" and "fabricating" are drawn. This, however, does
not mean that Stuyvesant Dredging's work cannot be understood as
falling within the plain meaning of "processing."
IV. CONCLUSION
¶155 I agree with the result the court reaches. I concur
and write separately because the analysis that the lead opinion
employs to reach its conclusions is concerning. First, in my
view, it is both unnecessary and inadvisable to rely on
constitutional grounds for ending our practice of deferring to
administrative agencies' conclusions of law. Deference to
administrative agencies was a court-created doctrine and, thus,
is one that can be court eliminated. We need not reach for the
constitution to so act.
¶156 Second, in interpreting the statute here, the court
relies on ordinary meaning to define all of five terms, even
though two of them have statutory definitions. Additionally,
the court relies on the surplusage canon as grounds for
selectively defining necessarily broad terms, even though the
complete overlap between the two statutorily-defined terms
indicates that the legislature may well have intended for
overlap among the undefined terms as well.
¶157 Nevertheless, I agree that "'processing' encompasses
Stuyvesant Dredging's separation of river sediment into its
15
No. 2015AP2019.akz
component parts." Majority op., ¶104. Accordingly, I
respectfully concur.
¶158 I am authorized to state that Chief Justice PATIENCE
DRAKE ROGGENSACK joins Part I of this concurrence.
16
No. 2015AP2019.mjg
¶159 MICHAEL J. GABLEMAN, J. (concurring). I agree that
we should no longer give deference to administrative agency
conclusions of law and that the services provided by Stuyvesant
Dredging constitute "processing" under Wis. Stat. § 77.52(2).
However, unlike the lead opinion, I would apply the doctrine of
constitutional avoidance and eliminate deference by withdrawing
the language in Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650,
539 N.W.2d 98 (1995), that indicated deference is mandatory.
Specifically, I would withdraw the following two sentences: (1)
"courts should defer to an administrative agency's
interpretation of a statute in certain situations," id. at 660;
and (2) "[o]nce it is determined under Lisney that great weight
deference is appropriate, we have repeatedly held that an
agency's interpretation must then merely be reasonable for it to
be sustained," id. at 661.1 I would withdraw this language
because the Harnischfeger court's use of the word "should" in
the first sentence did not expose the mandatory nature of
deference, which does not appear until the second sentence with
its use of the word "must." In so doing, I would thereby avoid
addressing the issue on constitutional grounds.2
1
By implication, which I now make express, my analysis and
conclusion apply just as strongly to due weight deference.
2
Accordingly, I join the following parts of the majority
opinion: ¶¶1-3, I, II (intro), II.A. (intro), II.A.1., II.A.2.,
II.A.6., II.B., III, and the mandate. To the extent the first
sentence of ¶84 implies a holding on constitutional grounds, I
do not join it.
1
No. 2015AP2019.mjg
¶160 Constitutional avoidance is a subset of the axiom that
"[a]n appellate court should decide cases on the narrowest
possible grounds." State v. Castillo, 213 Wis. 2d 488, 492, 570
N.W.2d 44 (1997). "Consistent with this rule is the recognition
that a court will not reach constitutional issues where the
resolution of other issues disposes of an appeal." Id. In the
present case, we need not determine whether our constitution
prohibits deference because deference is nothing more than a
judicial construct based on our misreading of Wis. Stat.
§ 227.57(10). See lead op., ¶¶27-32.
¶161 As the lead opinion aptly explains, the deference
doctrine is a beast of our creation——neither the legislature nor
executive purported to require that we apply deference. See
lead op., ¶¶18-33. Therefore, we are free to dispense with
deference as simply as we adopted it. See Holytz v. Milwaukee,
17 Wis. 2d 26, 37, 115 N.W.2d 618 (1962), superseded by statute,
Wis. Stat. § 893.80.
¶162 We created deference through a continued misreading of
Wis. Stat. § 227.57(10), which culminated in our holding in
Harnischfeger, 196 Wis. 2d at 661, that deference is required,
not merely an aid in statutory interpretation. See lead op.,
¶¶27-33. We can (and therefore should) remedy this misreading
without invoking the constitution. Johnson Controls, Inc. v.
Emplrs. Ins., 2003 WI 108, ¶99, 264 Wis. 2d 60, 665 N.W.2d 257;
see also lead op., ¶¶82-83.
¶163 The lead opinion briefly states the five traditional
factors we use when deciding whether to overrule one of our
2
No. 2015AP2019.mjg
prior decisions, lead op., ¶82, and then just as briefly
concludes that our prior decisions regarding deference must be
overruled based solely on their unconstitutional holdings, id.,
¶83. Our authority to withdraw language from our prior
decisions alone is sufficient to the task and the lead opinion's
invocation of the constitution in this context is an unnecessary
and imprudent addition to its substantive analysis.
I. THE TRADITIONAL FIVE CIRCUMSTANCES FOR OVERTURNING PRECEDENT
¶164 We are "more likely to overturn a prior decision when
one or more of the following circumstances is present":
(1) Changes or developments in the law have undermined
the rationale behind a decision;
(2) There is a need to make a decision correspond to
newly ascertained facts;
(3) There is a showing that the precedent has become
detrimental to coherence and consistency in the law;
(4) The prior decision is "unsound in principle;" or
(5) The prior decision is "unworkable in practice."
Bartholomew v. Wis. Patients Comp. Fund, 2006 WI 91, ¶33, 293
Wis. 2d 38, 717 N.W.2d 216 (quoting Johnson Controls, 264
Wis. 2d 60, ¶¶98-99). I discuss these five "circumstances" in
order of how strongly they apply to deference.
A. The Prior Decision is "Unsound in Principle"
¶165 The fourth circumstance is especially present with
regard to deference and strongly supports our decision to
eliminate it. Deference is simply unsound in principle. In
theory, deference should make courts' decision-making easier and
more efficient. See The Honorable Patience Drake Roggensack,
3
No. 2015AP2019.mjg
Elected to Decide: Is the Decision-Avoidance Doctrine of Great
Weight Deference Appropriate in This Court of Last Resort?, 89
Marq. L. Rev. 541, 544 (2006). In practice, however, deference
does not save significant court resources. Because the level of
deference afforded is often outcome-determinative, id. at 559,
parties and courts often expend just as much effort arguing and
deciding the proper level of deference as they would the merits,
see, e.g., Emmpak Foods, Inc. v. LIRC, 2007 WI App 164, ¶¶3-8,
303 Wis. 2d 771, 737 N.W.2d 60. Thus, deference often hinders
rather than helps meaningful judicial review while providing no
corresponding benefit. See generally Brown v. LIRC, 2003 WI
142, ¶¶10-19, 267 Wis. 2d 31, 671 N.W.2d 279 ("Our analysis in
this case centers around the standard of review.").
¶166 Importantly, deference (especially great weight
deference), if correctly and honestly applied, leads to the
perverse outcome of courts often affirming inferior
interpretations of statutes. See, e.g., id., ¶44 ("Were this
court reviewing the order of LIRC de novo, the result might very
well be different."). In our role as court of last resort, we
should ensure that erroneous-but-reasonable legal conclusions
are corrected. See Hilton v. DNR, 2006 WI 84, ¶54, 293
Wis. 2d 1, 717 N.W.2d 166 (Prosser, J., concurring). Any
doctrine that allows erroneous legal conclusions to survive
unscathed is unsound in principle.
B. The Need to Make a Decision Correspond to Newly Ascertained
Facts
¶167 The second circumstance also applies in this case,
though to a lesser extent. Deference is based on the theory
4
No. 2015AP2019.mjg
that administrative agencies develop expertise in their realm.
Barron Elec. Coop. v. PSC, 212 Wis. 2d 752, 759, 569 N.W.2d 726
(Ct. App. 1997) ("[A]n . . . important principle of
administrative law is that, in recognition of the expertise and
experience possessed by agencies, courts will defer to their
interpretation of statutes in certain situations."); see also
DOR v. Menasha Corp., 2008 WI 8, ¶¶48-50, 311 Wis. 2d 579, 754
N.W.2d 95. However, we do not scrutinize whether agency
decision-makers actually possess any expertise. For example,
some agency decisions are made by a single hearing examiner——of
unknown expertise or experience. Roggensack, supra ¶7, at 557.
Further, under the erstwhile deference construct, it is possible
for multi-member agency review boards to lack substantial
experience or expertise. Id. at 558 (questioning whether LIRC
commissioners who served, on average, 3.7 years each between
1979 and 2004 possessed more expertise in interpreting statutes
than courts). We may say that it is only a matter of
speculation that agency decision-makers possess less expertise
than courts when it comes to interpreting various statutes.
Importantly, it is equally a matter of speculation that they
possess more. Such is not the kind of foundation upon which
sound judicial doctrines are built.
C. The Other Circumstances
¶168 The first, third, and fifth circumstances do not
substantially apply in this case. Though, for purposes of the
first circumstance, we may be able to infer that the legislature
disapproves of deference based on its enactment of Wis. Stat.
5
No. 2015AP2019.mjg
§ 227.57(11), such an inference is too weak to support
overruling decades of prior decisions. As to the third
circumstance, deference is intended to maintain consistency in
the law, though it is a matter of reasonable debate as to
whether it achieves that goal. Hilton, 293 Wis. 2d 1, ¶¶64-65
(Prosser, J., concurring). Finally, despite its many flaws,
deference is certainly workable in practice for purposes of the
fifth circumstance.
II. CONCLUSION
¶169 Clearly, "one or more of the [listed] circumstances is
present" such that we can and should end our practice of
deferring to administrative agency conclusions of law without
invoking the constitution. Bartholomew, 293 Wis. 2d 38, ¶33. I
would, therefore, follow the law and apply the doctrine of
constitutional avoidance in order to decide this case on the
narrowest possible grounds. For the foregoing reasons, I
respectfully concur.
¶170 I am authorized to state that Chief Justice PATIENCE
DRAKE ROGGENSACK joins this concurrence.
6
No. 2015AP2019.mjg
1