Silver Lake Sanitary District v. Wisconsin Department of Natural Resources , 232 Wis. 2d 217 ( 1999 )

ROGGENSACK, J.

¶ 1. Silver Lake Sanitary District appeals from two orders of the circuit court detérmining that the Department of Natural Resources (DNR) had standing to challenge the constitutionality of §§ 30.2037 and 30.103, Stats., and also that these statutes were unconstitutional. Because we conclude that the DNR does not have standing to challenge the constitutionality of these statutes, we reverse both orders and remand with instructions to dismiss the DNR's counterclaims.

BACKGROUND

¶ 2. Silver Lake sought judicial review of the DNR's decision to set the Ordinary High Water Mark (OHWM) for Big Silver Lake at 868.9 feet above mean sea level. The OHWM of a lake is the point on the banks or the shore to which "the presence and action of water is so continuous as to have a distinct mark either by erosion, destruction of terrestrial vegetation or other easily recognized characteristics." WiS; Admin. Code § NR 320.03(4). The OHWM is an important boundary for riparian owners because it establishes the extent of state ownership in the lake, which impacts the public's right to use the lake as well as the riparian owners' rights in the land above it.

¶ 3. While Silver Lake's litigation was pending, the legislature enacted § 30.2037, Stats. This statute set the OHWM of Big Silver Lake at 867 feet above mean sea level.¹ As a result of the passage of this law, the DNR filed a counterclaim in Silver Lake's ch. 227 proceeding, where the DNR sought a declaratory judgment that § 30.2037 is unconstitutional. The DNR challenged § 30.2037 on the grounds that: (1) it is a local bill in a multiple subject bill and therefore invalid under Article IV, § 18 of the Wisconsin Constitution; (2) it violates the public trust doctrine; (3) it violates the equal protection clause; and (4) it unlawfully encroaches on the authority of the executive branch of state government. The circuit court granted the DNR's motion for a declaratory judgment, holding both that the DNR had standing to challenge the constitutionality of the law and that the law was unconstitutional as a local bill in a multiple subject bill.

¶ 4. Several months later, the legislature enacted § 30.103, Stats. This statute permits a sanitary district to set the OHWM of any lake that is wholly within its district, and it prohibits the DNR from setting a different level.² The DNR filed a second counterclaim in response to the legislature's enactment of § 30.103, seeking a declaratory judgment that § 30.103 is also unconstitutional. The circuit court agreed with the DNR again and held that § 30.103 is an unconstitutional violation of the public trust doctrine and the forever-free clause of the Wisconsin Constitution.

¶5. Silver Lake filed a petition for leave to appeal both orders of the circuit court, pursuant to § 808.03(2)(a) and (c), STATS., and we granted it leave to appeal.

DISCUSSION

Standard of Review.

¶ 6. Whether a plaintiff has standing to bring a particular issue before a court is a question of law, which we decide independently of a circuit court's decision. See Le Fevre v. Schrieber, 167 Wis. 2d 733, 736, 482 N.W.2d 904, 905-06 (1992).

Standing.

¶ 7. Silver Lake argues that the circuit court erred in concluding that the DNR had standing to challenge the constitutionality of §§ 30.2037 and 30.103, Stats., because a state agency cannot challenge the constitutionality of a statute. See Fulton Found, v. Department of Taxation, 13 Wis. 2d 1, 11, 108 N.W.2d 312, 317 (1961). The DNR concedes that generally, a state agency cannot attack a statute's constitutionality; however, it argues that, in limited circumstances, a state agency can challenge a statute's constitutionality if it presents an issue of great public concern. We conclude, however, that the great public concern exception applies only to cases where a private litigant and a creature of the state are involved, and not to suits limited to creatures of the state.

¶ 8. Agencies, municipal corporations and quasi-municipal corporations are all creatures of the state³ and their powers are only those ascribed to them by the state. They have no standing to challenge the actions of their creator, such as drawing into question the constitutionality of legislation the state has enacted. See Dane County v. Health & Soc. Servs. Dep't, 79 Wis. 2d 323, 330, 255 N.W.2d 539, 543 (1977) (citing City of Marshfield v. Cameron, 24 Wis. 2d 56, 63, 127 N.W.2d 809, 813 (1964)). However, this no-standing rule is not absolute, and may be modified, if a private litigant is part of the lawsuit and certain conditions are met. As the supreme court explained:

The no-standing rule is subject to certain exceptions which apply only to cases between private litigants and a municipality or state agency and not to suits between agencies of the state, or between an agency or municipal corporation and the state.

Dane County, 79 Wis. 2d at 331, 255 N.W.2d at 544 (citing City of Kenosha v. State, 35 Wis. 2d 317, 331, 151 N.W.2d 36, 43 (1967)); see also State ex rel. La Crosse v. Rothwell, 25 Wis. 2d 228, 233, 130 N.W.2d 806, 808-09 (1964). The exceptions to the no-standing rule which a circuit court may apply when a private litigant is a party are available: "(1) If it is the agency's official duty to [question the constitutionality of the statute], or the agency will be personally affected if it fails to do so and the statute is held invalid, and (2) if the issue is of'great public concern.'" Rothwell, 25 Wis. 2d at 233, 130 N.W.2d at 808-09 (citation omitted).

¶ 9. The "great public concern" exception, which the DNR urges us to apply here, was first expressed in Fulton, where private litigants were parties. There, the Department of Taxation attempted to argue that a retroactive feature of the gift tax exemption was unconstitutional. See Fulton, 13 Wis. 2d at 9, 108 N.W.2d at 316. The circuit court determined that the department did not have standing to attack that statute's constitutionality and the department appealed. See id. at 10, 108 N.W.2d at 316. The supreme court agreed with the circuit court that generally, a state agency does not have standing. However, citing a case from Washington and one from Minnesota, the court noted that these states permitted a public officer to raise a constitutional issue where the question was one "affected with a public interest." See id. at 12, 108 N.W.2d at 318. Utilizing this concept, the court permitted the department to challenge the statute's constitutionality because it concluded the issue was one of great public concern. See id. at 13, 108 N.W.2d at 318.

¶ 10. In Columbia County v. Board of Trustees of the Wisconsin Retirement Fund, 17 Wis. 2d 310, 116 N.W.2d 142 (1962), the supreme court further elaborated on the great public concern exception and clarified that its application required the presence of private litigants whose rights were affected by the statute being challenged. There, eight counties, along with a taxpayer from Columbia County, sought a declaratory judgment that a statute, which required all counties to join the Wisconsin Retirement Fund, was unconstitutional. See id. at 320, 116 N.W.2d at 148. The supreme court stated that a county, as an arm of the state, had "no right to question the constitutionality of the acts of its superior and creator or of another arm or governmental agency of the state." See id. at 317, 116 N.W.2d at 146. The court explained that in only two limited circumstances had it previously allowed an arm of the state to challenge a statute's constitutionality; and it noted that those were "exceptional" cases involving issues of great public concern. See id. at 317-18, 116 N.W.2d at 146. In recognizing the great public concern exception, however, the court expressed the limited circumstances in which a circuit court could choose to apply it:

It will be noted in both these cases, neither the city nor the state agency was suing the state of Wisconsin or another state agency. We are not disposed to extend the exception to the general rule to cover suits between two agencies of the state government or between an arm of the government and the state itself.

Id. Applying that rule, the court held that the eight counties could not question the constitutionality of the statute, as against the Retirement Fund; however, the individual taxpayer whose interests were affected by the statute could do so. See id. at 319-20, 116 N.W.2d at 147.

¶ 11. Additionally, just two years later, the supreme court expressly declared that the great public concern exception applied only in cases where private litigants were parties. See Rothwell, 25 Wis. 2d at 233, 130 N.W.2d at 809. There, the City of La Crosse sued the superintendent of public instruction, alleging the unconstitutionality of a statute which mandated that all territory within the state be within school districts operating high schools. The superintendent argued that the City did not have standing to raise the issue. The City countered that the statute bore upon an issue of great public concern. See id. Citing Columbia County, the supreme court held that the great public concern exception applied "only to cases between private litigants and a municipality or state agency and not to suits between agencies of the state, or between an agency or municipal corporation and the state." Id. The supreme court then held that the City had no standing to raise the constitutionality of the statute in its suit against a state agency. See id.⁴

¶ 12. Despite the supreme court's rulings in Dane County, Rothwell and Columbia County, the DNR argued, and the circuit court concluded, that private litigants were not essential for an arm of the state to challenge the constitutionality of a statute. Both the DNR and the circuit court relied heavily on Unified School District Number 1 of Racine County v. WERC, 81 Wis. 2d 89, 259 N.W.2d 724 (1977), a case decided just four months after Dane County, to support that conclusion. In Unified School District, WERC determined that the school district had violated its collective bargaining contract by refusing to bargain with the union over the district's decision to subcontract its food service program. See id. at 90, 259 N.W.2d at 726. The district appealed and argued that the Municipal Employment Relations Act (MERA) was unconstitutional. Although stating that generally a municipality cannot question the constitutionality of a statute, the supreme court noted an exception for issues involving great public concern. See id. at 104, 259 N.W.2d at 732. The court failed, however, to analyze whether the exception required the involvement of private litigants, and, in fact, no private litigants were parties to the suit. The DNR argues that because the court considered the merits of the district's arguments, then by implication, the court must have determined that the district had standing. Therefore, it contends that the presence of private litigants is not necessary for it to challenge the constitutionality of §§ 30.2037 and 30.103, Stats. We disagree.

¶ 13. First, it does not appear from the opinion in Unified School District that WERC contested whether the great public concern exception could be applied to the suit. It is blackletter law that an opinion does not establish binding precedent for an issue if that issue was neither contested nor decided. See Fulton, 13 Wis. 2d at 10, 108 N.W.2d at 316-17 (the supreme court stated that despite previous cases in which a state agency challenged a statute's constitutionality, those cases had no efficacy as precedent because the right of the state agency to do so was not challenged and therefore, not decided). Second, the court in Unified School District was quick to dismiss the school district's argument on the merits, noting that accepting the district's contention would require it to reverse countless cases in which it had previously rejected the same argument. See Unified Sch. Dist., 81 Wis. 2d at 104-05, 259 N.W.2d at 733. Given that the proposition asserted by the school district had been previously rejected in countless cases, and that it is unclear from the opinion whether the court's authority to consider whether to apply the great public concern exception was even contested by WERC, we decline to read Unified School District as changing the law so as to permit a state agency to challenge a statute's constitutionality when no private litigant is present in the lawsuit. We also note that to conclude otherwise would require us to ignore a rule of law expressed in several supreme court cases,⁵ including Dane County, which re-affirmed the no-standing rule just four months before its decision was released in Unified School District. Given the short length of time between Dane County and Unified School District, it is extremely unlikely that the court in Unified School District overruled, sub silentio, a decision made by the same court just four months earlier.

¶ 14. Finally, we note that in our most recent opinion on the no-standing rule, we confirmed that the great public concern exception applies only to cases with private litigants. See S.C. Johnson & Son, Inc. v. Town of Caledonia, 206 Wis. 2d 292, 303, 557 N.W.2d 412, 416 (Ct. App. 1996). In S.C. Johnson, we examined whether a town had standing to challenge the constitutionality of a property owner's commencement of a de novo proceeding to contest a real estate property assessment. See id. at 295, 557 N.W.2d at 413-14. The circuit court concluded that the Town, as a creature of the legislature, did not have standing to argue that a statute was unconstitutional. See id. We agreed, stating:

The "no standing" rule is absolute in cases between an agency or a municipality and the state. The rule also applies in cases between a municipality and a private citizen, but is subject to two exceptions. The rule does not apply: (1) when the governmental agency has a duty to raise the issue .. .; and (2) if the issue is of "great public concern."

Id. at 303, 557 N.W.2d at 416 (citation omitted). We then affirmed the circuit court's ruling that the Town lacked standing to raise the constitutional claim. See id. at 304, 557 N.W.2d at 417.

¶ 15. Because the supreme court has expressly stated that private litigants are an essential element of a lawsuit where an arm of the state contests a statute's constitutionality under the great public concern exception, we conclude that the great public concern exception cannot apply in a suit limited to two creatures of the state. Accordingly, because there are no private litigants in this suit, we conclude that the DNR does not have standing to contest the constitutionality of §§ 30.2037 and 30.103, Stats. Accordingly, we reverse the orders of the circuit court.⁶

CONCLUSION

¶ 16. We conclude that the DNR does not have standing to challenge the constitutionality of §§30.2037 and 30.103, Stats., and therefore, we reverse both orders of the circuit court and remand with instructions to dismiss the DNR's counterclaims.

By the Court. — Orders reversed and cause remanded with directions.

1 Specifically, § 30.2037, Stats., provides "[t]he ordinary high-water mark of Big Silver Lake in the town of Marion in Waushara County shall be set by the department at 867 feet above mean sea level as determined under U.S. geological survey standards."

2 Section 30.103, Stats., provides:

A town sanitary district may identify the ordinary high-water mark of a lake that lies wholly within unincorporated territory and wholly within the town sanitary district. The department may not identify an ordinary high-water mark of a lake that is different than the ordinary high-water mark identified by a town sanitary district under this section.

3 It was undisputed in the court below that Silver Lake is a municipal corporation and the DNR is a state agency; indeed, neither party has contended otherwise on appeal.

4 In Village of West Milwaukee v. Area Board of Vocational, Technical & Adult Education, 51 Wis. 2d 356, 365, 187 N.W.2d 387, 390 (1971), the supreme court also reiterated that a private litigant was a necessary condition before the great public concern exception could be considered. There, the Village challenged the constitutionality of a statute which provided for Wisconsin's system of area vocational education districts. See id. at 360-61, 187 N.W.2d at 387-88. The supreme court held that the corporate municipal plaintiffs did not have standing to raise the constitutional issues; however, because of the individual litigants involved in the suit, it would consider the statute's constitutionality as though it had been raised by these individuals. See id. at 366, 187 N.W.2d at 390.

5 Other cases cited by the State to support its contention that private litigants are not needed for the court to apply the great public concern exception include Milwaukee County v. Milwaukee District Council 48, 109 Wis. 2d 14, 325 N.W.2d 350 (Ct. App. 1982), and City of Madison v. Ayers, 85 Wis. 2d 540, 271 N.W.2d 101 (1978). It is true that in those cases the court did not explicitly state that the great public concern exception applied only to cases where a private litigant is involved. However, in both cases, the litigation had private litigants as parties; and therefore, it was not an issue for the court to address.

6 Because of our decision in regard to standing, we do not reach the merits of the other issues raised by the parties.