State high court reverses appeal’s decision in ‘Girls Gone Wild’ case

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The city of Wausau’s decision not to renew a liquor license for local bar IC Willy’s after it hosted a “Girls Gone Wild” event did not require de novo review, the Wisconsin Supreme Court recently ruled.

The Nov. 6 decision in Nowell v. City of Wausau, 2011 AP 1045, reversed a Court of Appeals reversal of Marathon County Circuit Judge Gregory Grau’s decision that certiorari review was proper.

The justices found that the appellate court misinterpreted legislative intent, misapplied appellate and Supreme Court caselaw, and failed to underscore the important public policy of local municipality control over liquor license non-renewal decisions.

The authority of Wausau and other municipalities to review and possibly deny renewal of an alcohol license is a critical and ongoing element of their inherent police powers, which “[rests] on the fundamental principle that society has an inherent right to protect itself,” said the court, citing its own 2008 decision in Eichenseer v. Madison-Dane County Tavern League.

Cities such as Wausau, Racine and Milwaukee are in a much better position, according to an Amicus brief filed on behalf of the three Wisconsin cities, to make these decisions themselves.

As stated in the brief: “They possess the institutional knowledge, the history and judgment” necessary to locally assess complaints, responses and appropriate sanctions.

Counsel for IC Willy’s had pointed to specific language in Wis. Stat. 125.12(2)(d) that supported a de novo review, including statutory references to filing a summons and complaint, issuing subpoenas, and the lack of any mention of a timetable for the case record to be returned.

These provisions, attorney Ryan Lister wrote in his appellate brief, “indicate that the legislature did not intend for parties to use common-law certiorari.”

Case history

In October 2009, Thomas and Suporn Nowell were granted a Class B liquor license for IC Willy’s at 110 Kent St. in Wausau.

During the next seven months, according to the city, IC Willy’s racked up 51 police service calls, including 14 noise complaints. The bar in 2010 failed several compliance checks, which indicated liquor was being served to underage patrons.

IC Willy’s also was criticized for letting a “Girls Gone Wild” event get out of control, and then failing to fulfill their own 16-point recommendations after a 15-day license suspension was issued for the violation.

The bar was served with a notice of nonrenewal on May 25, 2010. Less than five weeks later, Wausau’s Public Health and Safety Committee heard testimony from 18 witnesses, with 42 exhibits presented during 14 hours, and recommended that the city not renew Willy’s liquor license.

Counsel for IC Willy asked the circuit court to review the earlier decision de novo, but Grau applied certiorari review principles of review in finding that he would uphold license nonrenewal.

In reversing the circuit court decision, the appellate court found that the lower court had “erroneously interpreted Wis. Stat. 125.12(2)(d)” in its decision to restrict review by certiorari.

The Court of Appeals said the circuit court “denied IC Willy’s the opportunity to raise matters and present evidence beyond the scope of certiorari,” which gave the decision by the Health and Public Safety Commission an inappropriate “presumption of correctness.”

The justices weigh in

The state Supreme Court opinion acknowledged that Wis. Stat. 125.12(2)(d) did not specify whether certiorari or de novo review should be the standard of review when a liquor license is not renewed. However, it said, rules of statutory construction, legislative history, prior caselaw and public policy all strongly supported certiorari review.

When applying rules of statutory construction, the court emphasized that it needed to examine the statute in question “as part of a whole,” looking at the language of associated or “closely-related statutes.”

Such an application finds that there are several Wisconsin statutes which call for certiorari review where civil action procedures are used, as well as caselaw which specifically references and approves of certiorari review of municipal licensing decisions, including State ex. rel. Dept. of Natural Resources v. Walworth County Board of Adjustments, 170 Wis. 2d 406 (1992).

The high court criticized the appellate court’s reliance on two cases in particular, Mercer v. Village of Germantown (218 Wis. 2d 572 (1998) and State ex. Rel Casper v. Board of Trustees, 30 Wis. 2d (1966).

Specifically, the Mercer case was not on point because it was applicable only to cases started by a writ. The 1966 Casper case was not persuasive, either, the court wrote, because it was decided before 1981 legislation allowing certiorari review to be initiated through summons and complaint.

The justices also pointed out that the appellate court reached conclusions about the legislative history surrounding certiorari or de novo review of liquor license renewals which just as easily could have been interpreted the other way.

Wis. Stat. 125.12(2)(d)’s short timetable for review could be interpreted to create an expedited review mechanism that removes such decision making from potentially politically charged or biased local influence, as suggested by the appellate court. However, the short review process stated in Wis. Stat. 125.12(d)(2) could similarly be viewed as a “truncated” proceeding entirely consistent with a more abbreviated certiorari review, as opposed to the frequently longer de novo review process.

Such an interpretation of legislative intent also would be consistent with the very strong public policy of keeping decisions about liquor license approvals and renewals in the hands of local municipalities.

“Historically,” said the court, “regulation of sale of alcohol has been viewed as a matter of local concern,” and a city such as Wausau was given some deference in how it exercised its police powers.

Such deference to the decisions of local municipalities through the more limited certiorari review has been recognized by both the Wisconsin Supreme Court and appellate courts in cases such as Park G LLC v. City of Racine and the more recently decided Wisconsin Dolls, LLC v. Town of Dell Prairie, both of which involved certiorari review of municipal licensing decisions.