Wisconsin Property Tax Consultants, Inc. v. Wisconsin Department of Revenue ( 2022 )

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