2018 WI 60
SUPREME COURT OF WISCONSIN
CASE NO.: 2017AP1595-CQ
COMPLETE TITLE: Winebow, Inc.,
Plaintiff-Appellee,
v.
Capitol-Husting Co., Inc. and L'Eft Bank Wine
Co. Limited,
Defendants-Appellants.
ON CERTIFIED QUESTION FROM THE UNITED STATES
COURT OF APPEALS FOR THE SEVENTH CIRCUIT
OPINION FILED: June 5, 2018
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: February 19, 2018
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED: BRADLEY, R. G., J. joined by ABRAHAMSON, J. and
KELLY, J. dissent (Opinion filed).
NOT PARTICIPATING:
ATTORNEYS:
For the defendants-appellants, there were briefs filed by
Thomas L. Shriner, Jr., Gregory N. Heinen, and Foley & Lardner
LLP, Milwaukee. There was an oral argument by Thomas L.
Shriner, Jr.
For the plaintiff-appellee, there was a brief filed by E.
King Poor (pro hac vice) and Quarles & Brady LLP, Chicago,
Illinois, with whom on the brief were Daniel M. Janssen, and
Quarles & Brady LLP, Milwaukee.
2018 WI 60
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2017AP1595-CQ
STATE OF WISCONSIN : IN SUPREME COURT
Winebow, Inc.,
Plaintiff-Appellee, FILED
v.
JUN 5, 2018
Capitol-Husting Co., Inc. and L'Eft Bank Wine
Co. Limited, Sheila T. Reiff
Clerk of Supreme Court
Defendants-Appellants.
CERTIFICATION of question of law from the United States
Court of Appeals for the Seventh Circuit. Certified question
answered in the negative and cause remanded.
¶1 ANN WALSH BRADLEY, J. This case is before the court
on a certified question from the United States Court of Appeals
for the Seventh Circuit. Winebow, Inc. v. Capitol-Husting Co.,
Inc., 867 F.3d 862 (7th Cir. 2017); see Wis. Stat. § 821.01
(2015-16).1 It certified the following question: "Does the
definition of a dealership contained in Wis. Stat.
1
All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.
No. 2017AP1595-CQ
§ 135.02(3)(b) include wine grantor-dealer relationships?"
Winebow, 867 F.3d at 871.
¶2 Our answer to this certified question will aid the
Seventh Circuit in determining whether Winebow, Inc.'s (Winebow)
attempt to end its business relationship with two wine
distributors is governed by the unilateral termination
limitations of the Wisconsin Fair Dealership Law (WFDL). See
Wis. Stat. § 135.03.
¶3 Winebow unilaterally terminated its relationship with
Capitol-Husting Co., Inc. and L'Eft Bank Wine Co. Limited (the
Distributors) after becoming dissatisfied. It argues that the
action was permissible because the parties' business
relationship is not an "intoxicating liquor" dealership entitled
to the protections of the WFDL. See §§ 135.02(3)(b), 135.066.
On the other hand, the Distributors contend that a wine grantor-
dealer relationship is a "dealership" entitled to such
protections and thus Winebow cannot unilaterally terminate its
relationship with the Distributors absent a showing of good
cause.
¶4 We conclude that a wine grantor-dealer relationship is
not included within the definition of a dealership in Wis. Stat.
§ 135.02(3)(b). Section 135.066(2) provides the operative
definition of "intoxicating liquor" for purposes of ch. 135, and
such definition explicitly excludes wine.
¶5 Accordingly, we answer the certified question in the
negative.
2
No. 2017AP1595-CQ
I
¶6 Winebow is engaged in the business of importing and
distributing wine to downstream wholesalers. Since 2004,
Winebow has used Capitol-Husting as a distributor of its wines,
and in 2009 it commenced a similar relationship with L'Eft Bank.
¶7 After becoming dissatisfied with the Distributors,
Winebow abruptly terminated its relationship with them in
February of 2015. The parties did not have any express written
agreement that would prevent Winebow from unilaterally
terminating their relationships.
¶8 The Distributors responded to Winebow's termination by
letter, indicating their belief that they are entitled to the
protections of the WFDL. Such protections would prevent Winebow
from terminating their relationships absent "good cause." See
Wis. Stat. § 135.03.
¶9 Winebow countered by filing a declaratory judgment
action in the United States District Court for the Eastern
District of Wisconsin. Winebow, Inc. v. Capitol-Husting Co.,
Inc., No. 15-CV-225, slip op. at *1 (E.D. Wis. June 18, 2015).
It sought a declaration that it has no continuing obligations to
the Distributors. Id.
¶10 The District Court ruled in Winebow's favor. It
determined that "[w]ine is not intoxicating liquor in the
context of the WFDL, and thus the [Distributors'] business
relationship with Winebow is not subject to the unilateral
termination limitations of Chapter 135." Id. at *4.
3
No. 2017AP1595-CQ
¶11 The Distributors appealed to the United States Court
of Appeals for the Seventh Circuit, contending that wine
dealerships are per se "intoxicating liquor" dealerships
entitled to the protections of the WFDL. Winebow, 867 F.3d at
867. The Seventh Circuit certified to this court the question
of whether the definition of "dealership" contained in Wis.
Stat. § 135.02(3)(b) includes wine grantor-dealer relationships.
Id. at 870-71.
II
¶12 Underlying this case are proposed statutory changes to
the WFDL and the governor's partial veto of some of these
changes. See 1999 Wis. Act 9, §§ 2166m, 2166s. We thus provide
brief background on the WFDL, the proposed changes to it, and
the partial veto.
¶13 The WFDL provides in part that a grantor of a
dealership may not terminate a dealership agreement without good
cause. Wis. Stat. § 135.03; see Ziegler Co., Inc. v. Rexnord,
Inc., 139 Wis. 2d 593, 594, 407 N.W.2d 873 (1987). Its
underlying purposes and policies include "[t]o promote the
compelling interest of the public in fair business relations
between dealers and grantors, and in the continuation of
dealerships on a fair basis." § 135.025(2)(a). Additionally,
it aims "[t]o protect dealers against unfair treatment by
grantors, who inherently have superior economic power and
superior bargaining power in the negotiation of dealerships[.]"
§ 135.025(2)(b).
4
No. 2017AP1595-CQ
¶14 A grantor who violates the WFDL may be subject to an
action for "damages sustained by the dealer as a consequence of
the grantor's violation, together with the actual costs of the
action, including reasonable attorney fees." Wis. Stat.
§ 135.06. Further, a "dealer also may be granted injunctive
relief against unlawful termination, cancellation, nonrenewal or
substantial change of competitive circumstances." Id.
¶15 However, the WFDL does not apply to all business
relationships, but only to those defined as "dealerships." In
1999, the legislature sought to broaden the WFDL's reach to
ensure that "intoxicating liquor" dealers were protected. See
1999 Wis. Act 9, §§ 2166m, 2166s.
¶16 It did so by making two significant changes. First,
it amended the definition of a "dealership" to include
distributors of "intoxicating liquors." 1999 Wis. Act 9,
§ 2166m. The new definition, codified at Wis. Stat.
§ 135.02(3)(b), included within a "dealership":
A contract or agreement, either expressed or implied,
whether oral or written, between 2 or more persons by
which a wholesaler, as defined in s. 125.02(21), is
granted the right to sell or distribute intoxicating
liquor or use a trade name, trademark, service mark,
logotype, advertising or other commercial symbol
related to intoxicating liquor. This paragraph does
not apply to dealerships described in s. 135.066(5)(a)
and (b).
1999 Wis. Act 9, § 2166m.
¶17 This revised "dealership" definition explicitly
incorporated the definition of "intoxicating liquor" found in
Wis. Stat. ch. 125, which regulates alcohol beverages. Pursuant
5
No. 2017AP1595-CQ
to Wis. Stat. § 125.02(8), "vinous liquors," or in other words
"wine," is expressly included under the umbrella of
"intoxicating liquor":
"Intoxicating liquor" means all ardent, spirituous,
distilled or vinous liquors, liquids or compounds,
whether medicated, proprietary, patented or not, and
by whatever name called, containing 0.5 percent or
more of alcohol by volume, which are beverages, but
does not include "fermented malt beverages."
§ 125.02(8).
¶18 Second, the legislature created Wis. Stat. § 135.066.
1999 Wis. Act 9, § 2166s. This new provision expressed the
legislature's desire for a competitive and stable wholesale
liquor market. See § 135.066(1). Like the legislature's
revised definition of "dealership," the newly enacted § 135.066
imported the definition of "intoxicating liquor" from
§ 125.02(8). § 135.066(2).
¶19 Both of these changes were included in the 1999 budget
bill. See 1999 Wis. Act 9. However, Governor Tommy Thompson
used his partial veto power to alter the revisions passed by the
legislature.2
2
The governor's partial veto power arises from Article V,
§ 10 of the Wisconsin Constitution, which sets forth,
"Appropriation bills may be approved in whole or in part by the
governor, and the part approved shall become law." Wis. Const.
art. V, § 10(1)(b). Pursuant to the partial veto power, the
governor may strike out language in an appropriation measure,
but may not add language. See State ex rel. Wisconsin Senate v.
Thompson, 144 Wis. 2d 429, 437, 424 N.W.2d 385 (1988); State ex
rel. Kleczka v. Conta, 82 Wis. 2d 679, 707-08, 264 N.W.2d 539
(1978).
(continued)
6
No. 2017AP1595-CQ
¶20 Specifically, the governor struck language proposed by
the legislature from both Wis. Stat. §§ 135.02(3)(b) and
135.066. With respect to § 135.02(3)(b), he deleted the cross-
reference to the existing definition of "intoxicating liquor"
found in ch. 125.3
¶21 Edits to Wis. Stat. § 135.066 were much more
extensive. The governor eliminated large portions of
The partial veto power was originally a very broad power,
but has been subsequently limited. Originally, the governor
could "veto individual words, letters and digits, and also may
reduce appropriations by striking digits, as long as what
remains after veto is a complete, entire, and workable law."
Wisconsin Senate, 144 Wis. 2d at 437.
A 1990 amendment slightly limited the power, dictating that
"the governor may not create a new word by rejecting individual
letters in the words of the enrolled bill." Wis. Const. art. V,
§ 10(1)(c) (1990). This was the version in effect when Governor
Thompson exercised the veto at issue in this case. A subsequent
revision in 2008 brought Article V, § 10 to its present form,
further limiting the partial veto power by stating that "the
governor may not create a new word by rejecting individual
letters in the words of the enrolled bill, and may not create a
new sentence by combining parts of 2 or more sentences of the
enrolled bill." Wis. Const. art. V, § 10(1)(c).
3
The governor's veto with respect to Wis. Stat.
§ 135.02(3)(b) was as follows:
A contract or agreement, either expressed or implied,
whether oral or written, between 2 or more persons by
which a wholesaler, as defined in s. 125.02(21), is
granted the right to sell or distribute intoxicating
liquor, as defined in s. 125.02(8), or use a trade
name, trademark, service mark, logotype, advertising
or other commercial symbol related to intoxicating
liquor. This paragraph does not apply to dealerships
described in s. 135.066(5)(a) and (b).
7
No. 2017AP1595-CQ
§ 135.066(2)-(4). What remained was the sole sentence,
"'Intoxicating liquor' has the same meaning given in s.
125.02(8) minus wine."4
4
Observe that the words "minus" in Wis. Stat.
§ 135.066(2)(a), formerly subsection (2)(b) in draft
legislation, and "wine" in former subsection (2)(d) are left
unscathed:
(2) DEFINITIONS. In this section:
(a) "Intoxicating liquor" has the same meaning
given in s. 125.02(8).
(b) "Net revenues" means the gross dollar amount
received from the sale of intoxicating liquor
minus adjustments for returns, discounts and
allowances.
(c) "Wholesaler" has the meaning given in s.
125.02(21).
(d) "Wine" has the meaning given in 125.02(22).
(3) LIABILITY OF TRANSFEREE OF INTOXICATING LIQUOR
GRANTOR.
(a) In this subsection:
1. "Goodwill" includes the use of a
trademark, trade name, logotype or other
commercial symbol, and the use of a
variation of a trademark, trade name,
logotype, advertisement or other commercial
symbol.
2. "Transferee" means a person who acquires
any asset or activity of a grantor's
intoxicating liquor business and who uses
the goodwill associated with the
intoxicating liquor of the grantor.
(b) A transferee shall be bound by each of the
grantor's dealerships with the grantor's
wholesalers and consequently shall be considered
(continued)
8
No. 2017AP1595-CQ
¶22 Legislative findings enumerated in Wis. Stat.
§ 135.066(1) and a severability provision in sub. (6) escaped
the veto pen, but the governor struck several references to wine
in sub. (5), a nonapplicability provision.5 The legislature did
not override the governor's veto.
a grantor for the purposes of, and shall comply
with, the requirements of this chapter.
(4) CHANGE IN OWNERSHIP.
(a) In this subsection, "successor wholesaler"
means a wholesaler who succeeds to the
management, ownership or control of a wholesaler
or wholesaler's business or any part of a
wholesaler's business by any means including by
stock purchase, sale of assets or transfer or
assignment of a brand of intoxicating liquor that
is the subject of a dealership agreement.
(b) A change in the management, ownership or
control of a wholesaler, a wholesaler's business
or any part of a wholesaler's business is not
good cause for a grantor to terminate, cancel,
fail to renew or substantially change the
competitive circumstances of its dealership with
a successor wholesaler if the successor
wholesaler meets the grantor's reasonable and
material qualifications for wholesaler applicants
in effect at the time of the change. If the
successor wholesaler meets the grantor's
reasonable and material qualifications for
wholesaler applicants in effect at the time of
the change, the successor wholesaler shall
succeed to the dealership rights of the
predecessor wholesaler and the grantor shall
continue to be bound by the dealership.
5
In this section, the partial veto was as follows:
(5) NONAPPLICABILITY. This section does not apply to
any of the following dealerships:
(continued)
9
No. 2017AP1595-CQ
III
¶23 This case requires us to interpret Wis. Stat.
§§ 135.02 and 135.066. Statutory interpretation presents a
question of law we review independently. Roberts v. T.H.E. Ins.
Co., 2016 WI 20, ¶19, 367 Wis. 2d 386, 879 N.W.2d 492. We are
not bound by the federal district court's interpretation, but it
may aid in our analysis. Baldewein Co. v. Tri-Clover, Inc.,
2000 WI 20, ¶10, 233 Wis. 2d 57, 606 N.W.2d 145 (citing Daanen &
Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 400, 573
N.W.2d 842 (1998)).
IV
¶24 With the preceding context and standard of review in
hand, we examine next the specific question certified by the
Seventh Circuit: whether the definition of a dealership
(a) Dealerships in which a grantor, including any
affiliate, division or subsidiary of the grantor,
has never produced more than 200,000 gallons of
intoxicating liquor in any year.
(b) Dealerships in which the dealer's net
revenues from the sale of all of the grantor's
brands of intoxicating liquor, except wine,
constitute less than 5% of the dealer's total net
revenues from the sale of intoxicating liquor,
except wine, during the dealer's most recent
fiscal year preceding a grantor's cancellation or
alteration of a dealership and the dealer's net
revenues from the sale of all of the grantor's
brands of wine constitute less than 5% of the
dealer's total net revenues from the sale of wine
during the dealer's most recent fiscal year
preceding a grantor's cancellation or alteration
of a dealership.
10
No. 2017AP1595-CQ
contained in Wis. Stat. § 135.02(3)(b) includes wine grantor-
dealer relationships.
¶25 Winebow asserts that the "minus wine" definition of
"intoxicating liquor" in Wis. Stat. § 135.066 applies to the
entirety of ch. 135, and that consequently we should answer the
certified question in the negative. Conversely, the
Distributors contend that the definition of "dealership" in
§ 135.02(3)(b) incorporates the definition of "intoxicating
liquor" from ch. 125, a definition that expressly includes wine.
¶26 Statutory interpretation begins with the language of
the statute. State ex rel. Kalal v. Circuit Court for Dane
Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. If the
meaning of the statute is plain, we need not further the
inquiry. Id.
¶27 Wisconsin Stat. § 135.066(2) defines "intoxicating
liquor" as having "the meaning given in s. 125.02(8) minus
wine." Winebow suggests that the language of the statute
plainly and unambiguously excludes wine from the definition of
"intoxicating liquor" for chapter 135.
¶28 We agree with Winebow. Its interpretation of Wis.
Stat. § 135.066(2) is supported by several considerations.
First, contrary to the Distributors' argument, the fact that the
definition is not located in the "definitions" section of the
statute is not dispositive. Neither the Distributors nor the
dissent cite any case law that exclusively tethers definitions
to a correspondingly labeled section of the statutes.
11
No. 2017AP1595-CQ
¶29 Wisconsin Stat. § 135.066(2) provides the sole
definition of "intoxicating liquor" in ch. 135, and it excludes
wine. The term "intoxicating liquor" is used eleven times in
chapter 135, but defined only once. We aim for uniformity of
definitions within a statutory chapter, not diversity of
definitions. See Bank Mut. v. S.J. Boyer Const., Inc., 2010 WI
74, ¶31, 326 Wis. 2d 521, 785 N.W.2d 462. "When the same term
is used throughout a chapter of the statutes, it is a reasonable
deduction that the legislature intended that the term possess an
identical meaning each time it appears." Id. For one
definition of "intoxicating liquor" to control § 135.066 and
another to control the rest of the chapter would run afoul of
this maxim.
¶30 Rather, "[s]ections of statutes relating to the same
subject matter must be construed in pari materia."6 State v.
Clausen, 105 Wis. 2d 231, 244, 313 N.W.2d 819 (1982). Applying
this canon on interpretation here, we arrive at the conclusion
that the single "intoxicating liquor" definition supplied in ch.
135 should apply to the entirety of the chapter.
¶31 Further, the Wis. Stat. § 135.066(2) "minus wine"
definition would serve no purpose if limited in its application
6
"In pari materia" refers to statutes and regulations
relating to the same subject matter or having a common purpose.
In re Jeremiah C., 2003 WI App 40, ¶17, 260 Wis. 2d 359, 659
N.W.2d 193. The statutory construction doctrine of in pari
materia requires a court to read, apply, and construe statutes
relating to the same subject matter together. Id.
12
No. 2017AP1595-CQ
to § 135.066 but not the remainder of ch. 135. Outside of the
"minus wine" definition, § 135.066 contains legislative
findings, a nonapplicability provision, and a severability
provision. The "minus wine" language does not affect any of
these remaining provisions.7 Limiting the application of the
"minus wine" definition to § 135.066 would render the language a
nullity.8
¶32 Additionally, treatises on both the WFDL and alcohol
regulation uniformly support our application of the "minus wine"
definition provided by Wis. Stat. § 135.066(2). As one treatise
on the WFDL advises, "intoxicating liquor refers to spirits, not
wine or beer." Michael A. Bowen et al., The Wisconsin Fair
7
The dissent asserts that "[t]he definition of intoxicating
liquor in § 135.066 retains a function even if limited to its
specific section of ch. 135." Dissent, ¶50. According to the
dissent, "[i]t applies to the legislative findings of sub. (1),
the non-applicability provisions of sub. (5), and the
severability part of sub. (6). Id. But if the "minus wine"
definition applies within § 135.066 only, what is its actual
effect? The legislative findings are mere background and define
no substantive rights. Further, as the Seventh Circuit
correctly recognized in its certification, none of the other
provisions of § 135.066 is affected by the "minus wine" language
of sub. (2). See Winebow, Inc. v. Capitol-Husting Co., Inc.,
867 F.3d 862, 868 (7th Cir. 2017). The dissent's interpretation
thus renders the "minus wine" language superfluous.
8
Stated differently, to read the statute to include wine
would render "minus wine" mere surplusage, a result that must be
avoided. See Milwaukee Cty. v. Dep't of Indus., Labor and Human
Relations Comm'n, 80 Wis. 2d 445, 452-53, 259 N.W.2d 118 (1977)
(quoting Cook v. Indus. Comm'n, 31 Wis. 2d 232, 239-40, 142
N.W.2d 827 (1966) ("[S]tatutes should be so construed that no
word or clause shall be rendered surplusage.")).
13
No. 2017AP1595-CQ
Dealership Law § 4.34A at 61 (4th ed. 2012); see also id.
(explaining that "the governor's partial vetoes of the 1999
amendment make it clear that he intended (3)(b) to be
inapplicable to wine wholesalers.").9
¶33 Similarly, a treatise on Wisconsin alcohol beverages
regulation opines that "the applicable definition of
intoxicating liquor in Wis. Stat. ch. 135 excludes wine, such
that [ch. 135's] special WFDL provisions apply only to
distilled-spirits distribution agreements." Aaron R. Gary,
Alcohol Beverages Regulation in Wisconsin § 4.66 (2nd ed. 2016).
¶34 In the over eighteen years since the enactment of the
"minus wine" provision, the legislature certainly could have
acted to amend the law if it thought the commentators'
understanding was incorrect. However, it did not override the
governor's veto in 1999, and it has remained silent in the
intervening years.
¶35 As the Seventh Circuit aptly observed in its
certification, there is "no express statutory language"
supporting the Distributors' position. See Winebow, 867 F.3d at
9
In his veto message, Governor Thompson was explicit
regarding the reasons for his partial veto: "I am partially
vetoing these provisions so that wine will be excluded from
treatment under these changes to the Wisconsin Fair Dealership
Law because I object to wine being treated the same as
intoxicating liquor." Governor's Veto Message, Act 9, at § F.4
(Oct. 27, 1999); see State ex rel. Kalal v. Circuit Court for
Dane Cty., 2004 WI 58, ¶51, 271 Wis. 2d 633, 681 N.W.2d 110
("legislative history is sometimes consulted to confirm or
verify a plain-meaning interpretation").
14
No. 2017AP1595-CQ
869. Cross references to their preferred definition were
removed from Wis. Stat. § 135.066 by Governor Thompson's partial
veto. Following that veto, what remains is unambiguous in its
effect to exclude wine from the definition of "intoxicating
liquor."
¶36 Instead of giving effect to ch. 135's single
definition of "intoxicating liquor," the Distributors would have
the court follow a path through ch. 125 to arrive at their
preferred definition. The Distributors' circuitous route begins
at Wis. Stat. § 135.02(3)(b), which references the definition of
"wholesaler" from § 125.02(21). Pursuant to § 125.02(21),
"'[w]holesaler' means a person, other than a brewer, brewpub,
manufacturer, or rectifier, who sells alcohol beverages to a
licensed retailer or to another person who holds a permit to
sell alcohol beverages at wholesale." We are then directed to
§ 125.02(1), which defines "alcohol beverages" as "fermented
malt beverages and intoxicating liquor." Finally, moving to
§ 125.02(8), we arrive at the definition of "intoxicating
liquor" as including "vinous liquors," more commonly known as
wine.
¶37 Our interpretation gives effect to the sole definition
of "intoxicating liquor" located in ch. 135, one which is
located in a statutory section beneath the heading,
"Intoxicating liquor dealerships." If the court here were to
decide that it is acceptable to effectuate a definition from ch.
125 that is not referenced within ch. 135, there would be no
clear stopping point to such a practice.
15
No. 2017AP1595-CQ
¶38 In sum, we conclude that a wine grantor-dealer
relationship is not included within the definition of a
dealership in Wis. Stat. § 135.02(3)(b). Wisconsin Stat.
§ 135.066(2) provides the operative definition of "intoxicating
liquor" for purposes of Wis. Stat. ch. 135, and such definition
explicitly excludes wine.
¶39 Accordingly, we answer the certified question in the
negative and remand the cause to the United States Court of
Appeals for the Seventh Circuit.
By the Court.—Certified question answered in the negative
and cause remanded to the United States Court of Appeals for the
Seventh Circuit.
16
No. 2017AP1595-CQ.rgb
¶40 REBECCA GRASSL BRADLEY, J. (dissenting). The
legislature unquestionably intended to include wine distributors
as dealers under Wis. Stat. ch. 135 and then-Governor Tommy
Thompson1 obviously intended to exclude them. But legislative
intent behind enactment of a law——or executive intent motivating
the exercise of a veto——cannot govern statutory interpretation.
Rather, our analysis must focus on the statutory language itself
and "[i]f the meaning of the statute is plain, we ordinarily
stop the inquiry." State ex rel. Kalal v. Circuit Court for
Dane Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. A
plain meaning interpretation of ch. 135, giving effect to every
word, requires answering the certified question from the Seventh
Circuit Court of Appeals in the affirmative: The definition of
a "[d]ealership" contained in Wis. Stat. § 135.02(3)(b) includes
wine grantor-dealer relationships. The isolated definition in
Wis. Stat. § 135.066(2)(a), on which the majority relies to
reach the opposite conclusion, applies only in § 135.066.
Because the majority's interpretation is wrong, I respectfully
dissent.
I
¶41 Wisconsin Stat. ch. 135, also known as the Wisconsin
Fair Dealership Law, governs grantor-dealer relationships and
"shall be liberally construed and applied to promote" the
purposes set forth in Wis. Stat. § 135.025(2), which include,
for example, (1) fairness in business relationships between
1
Then-Governor Tommy Thompson will subsequently be referred
to as "Governor."
1
No. 2017AP1595-CQ.rgb
dealers and grantors and in their continuation; (2) protection
of dealers from grantors who "have superior economic power and
superior bargaining power"; and (3) statutory rights and
remedies for dealers.2
¶42 The question before the court is whether the two wine
distributors in this case are "[d]ealers" protected by ch. 135.
The wine distributors claim dealership status, while Winebow
insists ch. 135 does not apply to wine distributors at all. A
textual interpretation of ch. 135 provides a clear answer: the
wine distributors are "[d]ealers."
¶43 The analysis necessarily starts in Wis. Stat.
§ 135.02, which supplies the definitions to be used throughout
2
Wisconsin Stat. ch. 135 comprises eleven subsections.
Wisconsin Stat. § 135.01 gives the title of chapter 135.
Section 135.02 furnishes the definitions that apply throughout
the entirety of ch. 135. Section 135.025 details the purposes
of the chapter, requires liberal application to meet those
purposes, and prohibits parties from contracting away ch. 135's
protections. Section 135.03 explains that dealerships may not
be altered or terminated without a showing of good cause.
Section 135.04 imposes rules and notice deadlines for
termination or changes in a dealership. Section 135.045 governs
the repurchase of inventory upon termination of a dealership by
the grantor. Section 135.05 discusses the applicability of
arbitration agreements in ch. 135. Section 135.06 affords
dealers the right to recover attorney fees and obtain injunctive
relief in actions against grantors for violating ch. 135.
Section 135.065 deems any violation of the chapter by a grantor
an irreparable injury for purposes of seeking a temporary
injunction. Section 135.066 contains legislative findings
specific to intoxicating liquor dealers, defines "[i]ntoxicating
liquor," renders this section inapplicable to two types of
dealerships, and makes the provisions in this section severable.
Section 135.07 declares ch. 135 inapplicable to motor vehicle
dealers, insurance businesses, and door-to-door sales of goods
or services.
2
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ch. 135. Section 135.02 defines both "Dealer" and "Dealership."
Section 135.02 provides, as material:
In this chapter:
(2) "Dealer" means a person who is a grantee of a
dealership situated in this state.
(3) "Dealership" means any of the following:
. . . .
(b) A contract or agreement, either expressed or
implied, whether oral or written, between 2 or more
persons by which a wholesaler, as defined in s.
125.02(21), is granted the right to sell or distribute
intoxicating liquor or use a trade name, trademark,
service mark, logotype, advertising or other
commercial symbol related to intoxicating liquor.
This paragraph does not apply to dealerships described
in s. 135.066(5)(a) and (b).
(Emphasis added.) To determine whether a "[d]ealership" exists
between Winebow and the two wine distributors, we need to know
whether the wine distributors are "wholesaler[s]."
¶44 The language of Wis. Stat. § 135.02(3)(b) directs us
to the definition of "wholesaler" under Wis. Stat. § 125.02(21).3
Section 125.02(21) defines "[w]holesaler" as "a person, other
than a brewer, brewpub, manufacturer, or rectifier, who sells
alcohol beverages to a licensed retailer or to another person
who holds a permit to sell alcohol beverages at wholesale." The
dispute in this case revolves around whether wine is an "alcohol
beverage" as referenced in the "wholesaler" definition.
3
Wisconsin Stat. ch. 125 specifically governs the sale of
alcohol beverages in the State of Wisconsin and addresses the
importance of the three-tier system of "production,
distribution, and sale." See Wis. Stat. § 125.01.
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Section 125.02(1) defines "alcohol beverage" as "fermented malt
beverages and intoxicating liquor" and § 125.02(8) defines
"[i]ntoxicating liquor" as:
[A]ll ardent, spirituous, distilled or vinous liquors,
liquids or compounds, whether medicated, proprietary,
patented or not, and by whatever name called,
containing 0.5 percent or more of alcohol by volume,
which are beverages, but does not include "fermented
malt beverages".
(Emphasis added.) Everyone agrees that vinous liquors include
wine. Construing the text of these statutes leads to the
inexorable conclusion that the wine distributors are wholesalers
whose agreements with Winebow create dealerships protected by
ch. 135.
¶45 The majority decries this interpretive exercise as a
"practice" with "no clear stopping point." Majority op., ¶37.
While our judicial duty of declaring what a statute says would
be easier if each statutory chapter confined its subject matter
to that particular chapter, legislative enactments are rarely so
linear. On the scale of interpretive complexity, our task falls
on the easy end. Inexplicably, the majority maintains the key
definition from Wis. Stat. ch. 125 is not referenced within
ch. 135, see majority op., ¶37; this is of course inaccurate
because Wis. Stat. § 135.02(3)(b) explicitly references Wis.
Stat. § 125.02(21), which provides the definition of
"[w]holesaler." This cross-reference to ch. 125 (governing
alcohol beverages) within the rather brief ch. 135 requires no
more than reading three definitions within the same section of
ch. 125 (i.e., § 125.02), each of which is explicitly connected.
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Far from lacking a clear stopping point, the analysis requires
us to start with ch. 135 and end in one section of ch. 125. The
majority criticizes this statutory construction as "circuitous."
Majority op., ¶36. Following a single cross-reference to find
the meaning of a defined term is hardly circuitous; regardless
of how it is characterized, it is nonetheless the only correct
interpretation.
II
¶46 Although the text clearly leads to the conclusion that
ch. 135 applies to wine grantor-dealer relationships, the
Seventh Circuit certified the question because Wis. Stat.
§ 135.066(2)(a) provides a seemingly contradictory definition of
"[i]ntoxicating liquor."4 This conflicting definition, however,
does not override the definition of "[i]ntoxicating liquor"
within Wis. Stat. § 125.02(8).
¶47 First, the definition of intoxicating liquor in Wis.
Stat. § 135.066 contains no language suggesting that its
definition applies throughout ch. 135. In contrast, the
definition of "intoxicating liquor" embedded within
§ 135.02(3)(b) resides in the "definitions" section of ch. 135,
which specifically says that the definitions apply "in this
chapter"——that is, ch. 135. Because the definition of
intoxicating liquor that includes wine——which is rooted in Wis.
Stat. § 135.02(3)(b)——applies across the chapter, it is
4
Wisconsin Stat. § 135.066(2)(a) provides: "'Intoxicating
liquor' has the meaning given in s. 125.02(8) minus wine."
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textually insupportable to apply § 135.066's definition of
"intoxicating liquor" beyond the section it inhabits.
¶48 Second, in order to give effect to all the words used
within ch. 135, Wis. Stat. § 135.066's definition must be
limited to that particular section where it appears. Allowing
§ 135.066's definition to apply anywhere else would render the
"[i]n this chapter" language of Wis. Stat. § 135.02 superfluous.
If definitions outside of § 135.02 also applied throughout the
chapter, despite the absence of express language so directing,
§ 135.02's language rendering its definitions applicable "in
this chapter" would amount to a bootstrap provision at best,
merely emphasizing, but not controlling, the operation of
ch. 135's definitions. Because basic tenets of statutory
construction dictate avoiding surplusage, the majority errs in
its interpretation by creating overlapping definitions. See
Kelley Co. v. Marquardt, 172 Wis. 2d 234, 250, 493 N.W.2d 68
(1992) (we are to construe a statute, where possible, so that no
part of it is rendered superfluous); see also Antonin Scalia &
Bryan A. Garner, Reading Law: The Interpretation of Legal Texts
174 (2012) ("If possible, every word and every provision is to
be given effect (verba cum effectu sunt accipienda[ ]). None
should be ignored. None should needlessly be given an
interpretation that causes it to duplicate another provision or
to have no consequence."). The majority's creation of
overlapping but contradictory definitions requires it to select
one and ignore the other. This consequence is objectionable but
avoidable by giving effect to both definitions, as the text
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directs us: one applies throughout the chapter and the other
applies only within its own section.
¶49 Third, it is Wis. Stat. § 135.02(3) that defines
whether a relationship between a grantor and a dealer is a
"[d]ealership." Wisconsin Stat. § 135.066 does not.
¶50 The majority concludes that Wis. Stat. § 135.066's
definition of "[i]ntoxicating liquor" must apply across the
chapter, thereby removing ch. 135's protections from the two
wine distributors in this case, in order to give the definition
meaning. I disagree. The definition of "[i]ntoxicating liquor"
in § 135.066 retains a function even if limited to its specific
section of ch. 135. It applies to the legislative findings of
sub. (1), the non-applicability provisions of sub. (5), and the
severability part of sub. (6).
¶51 The effect of confining the Wis. Stat. § 135.066(2)(a)
definition of "[i]ntoxicating liquor" to § 135.066 may
contravene the Governor's intention in excising wine from that
definition. Regardless of what he intended in exercising his
partial veto power, this is what the Governor wrote. We give
effect to the text, not the intentions of its drafters. As a
result, under sub. (1), the legislative findings regarding the
three-tier system for distributing intoxicating liquor do not
apply to wine dealerships. Subsection (5) renders § 135.066
inapplicable to certain "intoxicating liquor" dealerships whose
production of "intoxicating liquor" does not exceed certain
thresholds in gallons or revenue. Because wine was struck from
the "intoxicating liquor" definition in § 135.066(2)(a), the
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non-applicability provision in sub. (5) does not apply to wine
dealerships. Finally, sub. (6) makes the provisions of
§ 135.066 severable; under Wis. Stat. § 990.001(11), this means
that if one section is declared invalid, the remaining sections
shall stand unaffected. Restricting the application of the
§ 135.066(2)(a) definition of "intoxicating liquor" to § 135.066
may not be what the Governor intended, but it is what he left of
the legislation in exercising his partial veto power. And it is
the text, not intentions, that reigns supreme. State ex rel.
Kalal, 271 Wis. 2d 633, ¶41 ("a 'policy favoring conventional
meanings and general understandings over obscurely
evidenced intention of the legislators is supported in the oft-
repeated premise that intention must be determined primarily
from the language of the statute itself'" (quoting 2A Norman J.
Singer, Sutherland Statutory Construction § 45.08, at 40 (6th
ed. 2000))); Scalia & Garner, supra ¶9, at 56 ("The words of a
governing text are of paramount concern, and what they convey,
in their context, is what the text means.").
¶52 The majority emphasizes the history of these statutes
before enactment by including the full text proposed by the
legislature, the strikethroughs made by the Governor's veto pen,
and the Governor's letter explaining the basis for his
substantial edits. Placing the focus on these non-textual
considerations improperly influenced the majority's statutory
construction. "It is always perilous to derive the meaning of
an adopted provision from another provision deleted in the
drafting process." District of Columbia v. Heller, 554 U.S.
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570, 590 (2008). This caution applies no less to provisions
deleted by the Governor exercising his veto power.
¶53 The majority underscores the legislature's ability to
amend the law if it in fact disagreed with certain treatises'
take on the effect of the Governor's partial vetoes to remove
wine wholesalers from the fair dealership law. This court has
explained that legislative acquiescence is a slim reed upon
which to support a judicial construction of a statute because
"[n]umerous variables, unrelated to conscious endorsement of a
statutory interpretation, may explain or cause legislative
inaction." Wenke v. Gehl Co., 2004 WI 103, ¶33, 274
Wis. 2d 220, 682 N.W.2d 405; see also Johnson v. Transp. Agency,
480 U.S. 616, 672 (1987) (Scalia, J., dissenting) ("[I]t [is]
impossible to assert with any degree of assurance that
congressional failure to act represents (1) approval of the
status quo, as opposed to (2) inability to agree upon how to
alter the status quo, (3) unawareness of the status quo, (4)
indifference to the status quo, or even (5) political
cowardice."). Our judicial duty is to say what the law is, not
to surmise meaning from legislative quiescence. Legislative
inaction cannot support an interpretation of the statute that is
contrary to the plain meaning of the language used in the
statute.
III
¶54 Applying a textual analysis of the language in ch. 135
leads to but one conclusion: wine distributors are wholesalers
as that term is defined in Wis. Stat. § 135.02. The majority
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fixates on what the Governor struck from the legislation rather
than what remained, thereby giving effect to what the Governor
intended rather than what he actually signed into law. Reading
the pertinent provisions of ch. 135 without the obfuscating
portions that did not survive the Governor's veto dissolves any
ambiguity. The majority adopts a statutory construction that
rewrites ch. 135 by subtracting language from it, rather than
giving effect to every word. The majority errs. I would answer
the certified question affirmatively, and therefore,
respectfully dissent.
¶55 I am authorized to state that Justices SHIRLEY S.
ABRAHAMSON and DANIEL KELLY join this dissent.
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1
Winebow, Inc. v. Capitol-Husting Co., Inc.
Court: Wisconsin Supreme Court
Date filed: 2018-06-05
Citations: 914 N.W.2d 631, 2018 WI 60, 381 Wis. 2d 732
Copy CitationsCombined Opinion