Declaratory Judgment

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WI Court of Appeals – District III

Case Name: Voters With Facts, et al v. City of Eau Claire, et al

Case No.: 2015AP1858

Officials: Hruz, Seidl and Reilly, JJ.

Focus: Declaratory Judgment

In this tax incremental financing (TIF) dispute, Voters with Facts, four limited liability companies, and fourteen individual plaintiffs (collectively, “Voters”) appeal a dismissal on the pleadings granted in favor of the City of Eau Claire (the “City”) and the City of Eau Claire Joint Review Board (the “Review Board”). Voters sought a judgment declaring unlawful and void two resolutions that amended and created Tax Incremental Districts (TID) Nos. 8 and 10, respectively. The circuit court dismissed these claims for a variety of reasons, including that Voters lacked standing and that Voters’ constitutional challenges were precluded by Sigma Tau Gamma Fraternity House Corp. v. City of Menomonie, 93 Wis. 2d 392, 288 N.W.2d 85 (1980).

We agree with the circuit court that Voters lacks taxpayer standing to seek a declaratory judgment that Eau Claire acted unlawfully, either under its statutory authority or from a constitutional standpoint, in amending TID No. 8 and creating TID No. 10. Voters’ complaint demonstrates Eau Claire made the required statutory findings when taking those actions, and the complaint therefore fails to allege noncompliance with any statutory directives. Meanwhile, Voters’ fear that City payments to a developer might be improperly diverted to reimburse the developer for the demolition of historic buildings is based on speculation, and that claim therefore fails to allege a concrete harm. Finally, Voters’ complaint fails to sufficiently allege a violation of the Wisconsin Constitution, on the basis of either uniformity clause principles or the public purpose doctrine. Because Voters’ complaint fails to adequately allege Eau Claire acted “unlawfully” in any way, Voters lacks taxpayer standing to challenge the relevant municipal acts

through a declaratory judgment action. We therefore affirm the dismissal of Voters’ declaratory judgment claims.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.