A quick note on the agency deference briefs

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TetraTech v. DOR, Appeal No. 2015AP2019, DWD v. LIRC (Beres), Appeal No. 2016AP1365, and Wisconsin Bell, Inc. v. LIRC, Appeal No. 2016AP355, have attracted numerous briefs, including several amicus briefs (somewhat unusual for the Wisconsin Supreme Court). Some of the briefs are excellent; others contain outright laughers. Given the importance of these cases, some comment on the briefing on which Wisconsin administrative law may be revolutionized is vital.

TetraTech

The Department of Justice’s newly-created solicitor general’s office represents both the Department of Revenue and the Department of Workforce Development in these cases. For both clients, the solicitor general’s briefing is little more than a big, sloppy kiss to the three-justice concurrence in Operton that first challenged the status of agency-deference. Indeed, the Department of Revenue brief in TetraTech does little more than shadow-dance with the arguments and claims made in the Operton concurrence. In this brief, “great weight” deference is statutorily and constitutionally suspect, and only consideration of an agency’s technical, long-standing decisions that do not carry political or economic import is allowable. At one point, this brief even cites a federal court dissent to the denial of en banc review as support for claims that courts cannot defer at all to administrative agencies over economic or politically significant questions. See TetraTech’s Respondent’s Brief at 38-9. There is hardly any detailed discussion by the solicitor general of how the administrative deference case law has developed in Wisconsin or how these new claims against deference recall attacks against state agencies from a century before that were rejected at the time.

Instead, the solicitor general makes the unhistorical and inaccurate argument that court review was much broader and less deferential in bygone days and urges the court to return to this less deferential review.

NOTE: This argument is true to the extent that “review” of a century ago led judges to apply their own economic and policy preferences under Lochnerism, but the solicitor general leaves this legal history completely out of its briefing.

This argument runs counter to the conclusion of Kenneth K. Luce, “The Wisconsin Idea in Administrative Law,” 34 Marq. L. Rev. 1 (1950) about how Wisconsin’s then new administrative review law considerably expanded judicial review of administrative agencies:

The Administrative Procedure Act has broadened the scope of review beyond certiorari and other forms formerly available, and the Court has stated that “few if any statutes have come under our observation which prescribe broader or even as broad a scope of review as that prescribed by Ch. 227, Stats.” Clearly the circuit courts today have broader review powers in most cases than under previous statutes and decisions.

Luce, “The Wisconsin Idea in Administrative Law,” 34 Marq. L. Rev. at 14-15 (footnotes omitted). Where Luce is discussing much broader judicial review being put into place, the Department of Justice is positing that same review becoming narrow and more limited under ch.227 or ch.102/108. The hundreds of cases and issues in Luce’s short law review article simply do NOT appear with any detail in the Department of Justice briefs advocating that deference to state agencies statutorily and constitutionally runs afoul of independent court review.

NOTE: Also at issue in Luce’s law review examination is the replacement of limited certiorari review and mandamus actions with ch.227 review. Hence, there have been both major procedural as well as substantive expansions in court review of state agencies that appear haphazardly at best in the solicitor general’s briefing in these cases.

Beres

The Department of Justice repeats these claims in Beres, but the Justice Department also has to contend with some excellent points by the Commission in its brief about how many of the same questions over agency deference were previously argued and decided by the Wisconsin Supreme Court. For instance, the Commission explains that the constitutional questions of agency deference raised in Beres were previously decided in Borgnis v. Falk Co., 147 Wis. 327, 358-61, 133 N.W. 209, 219 (1911):

There are many such administrative bodies or commissions, and with the increasing complexity of modern government they seem likely to increase rather than diminish. Examples may be easily thought of. Town boards, boards of health, boards of review, boards of equalization, railroad rate commissions, and public utility commissions all come within this class. They perform very important duties in our scheme of government, but they are not Legislatures or courts. The legislative branch of the government by statute determines the rights, duties, and liabilities of persons and corporations under certain conditions of fact, and varying as the facts and conditions change. Manifestly the Legislature cannot remain in session and pass a new act upon every change of conditions; but it may and does commit to an administrative board the duty of ascertaining when the facts exist which call into activity certain provisions of the law, and when conditions have changed so as to call into activity other provisions. The law is made by the Legislature; the facts upon which its operation is dependent are ascertained by the administrative board. While acting within the scope of its duty, or its jurisdiction, as it is sometimes called, such a board may lawfully be endowed with very broad powers, and its conclusions may be given great dignity and force, so that courts may not reverse them unless the proof be clear and satisfactory that they are wrong.

Borgnis, 147 Wis. at 359, 133 N.W. at 219.

NOTE: Despite being squarely on point about the constitutionality of agency deference, Borgnis only appears in the solicitor general’s opening brief as a passing reference. According to the Justice Department, Borgnis concerns the limited court review of agency actions to determine whether the agency has acted in “excess of its powers.” Respondent’s Brief at 22-3 in Beres. Only in its reply brief does the solicitor general begin to deal with the central holding in Borgnis.

The solicitor general’s response is simply to exclaim that Borgnis only concerned the ability of a state agency to find facts and apply established law to those facts and did not deal in the least with the ability of an administrative agency to render its own legal interpretations. The above quotation belies that argument, however. The application of law to facts in Borgnis is framed in the same way that a court might apply the law to facts. Indeed, the solicitor general’s quotation from Borgnis in support of this claim for limited agency discretion is woefully incomplete.

The next important contention is that the law is unconstitutional because it vests judicial power in a body which is not a court and is not composed of men elected by the people, in violation of those clauses of the state Constitution which vest the judicial power in certain courts and provide for the election of judges by the people, as well as in violation of the constitutional guaranties of due process of law.

* * *

It is an administrative body or arm of the government, which in the course of its administration of a law is empowered to ascertain some questions of fact and apply the existing law thereto, and in so doing acts quasi judicially[.]

Borgnis, 133 N.W. at 218-19 (emphasis indicates the quoted language in the Solicitor General’s Reply Brief at 4 for Beres).

NOTE: The Commission’s brief is also worth reading for pointing out how the solicitor general’s crabbed view of executive, legislative, and judicial functions having to be isolated and distinct from each other does not match what the founding fathers believed, what federal courts historically have held, and what Wisconsin courts have maintained.

And, in regards to the substance of the absenteeism provision at issue in Beres, the Commission explains (1) the risk the Department’s position has for employers should the U.S. Department of Labor conclude that the state is no longer in compliance with federal requirements for how unemployment disqualifications should function and (2) how employers could use this expanded disqualification to not only cut off unemployment benefits to claimants but also deny employees their workers’ compensation benefits. The response of the solicitor general to these points, respectively: (1) No response; and (2) Agreed, because such harsh results on the unemployed and in favor of employers are what was intended by the new absenteeism disqualification.

Amicus briefs in TetraTech and Beres

Wisconsin Manufacturers & Commerce along with other industry groups has an amicus brief in TetraTech that presents some whoppers of legal argument. For instance:

When the government as a party is systematically given predisposed deference, the other litigants are systematically disadvantaged. It is invariably a zero-sum game to the detriment of Wisconsin Employers.

TetraTech WMC amicus Brief at 7. There is also:

If there has been an interpretation of a statute by the agency, any respectful consideration of such interpretation should consider both the agency bias and limited qualifications for agencies to interpret the law. Notably, and we are in complete agreement, the Solicitor General concludes “in every case, the court must ultimately interpret the law for itself.” Id. at 31 (Emphasis theirs).

TetraTech WMC amicus Brief at 13.

WMC has drawn nationwide attention for its cozy relationship with and support of some of the Wisconsin Supreme Court’s current justices. So, these claims about being discriminated against by state agencies is akin to a deer hunter bemoaning an unsuccessful hunt because the deer did not cooperate and demanding that the deer be rounded up and caged so as to make all future hunts “fair.”

This WMC brief also indicates some of the ideological goals of this attack on agency deference:

Even so, subject matter expertise is frequently not relevant when the court is charged, and is seeking assistance, with reading the law. Judges have relevant education, training, and most importantly, the experience to discern what the law is (underscoring their unique constitutional duty), whereas agency bureaucrats generally have no training on or knowledge of the legal methods of statutory interpretation.

TetraTech WMC amicus Brief at 10. In this framework, judicial reasoning bests the scientific or professional expertise of the administrative agency. Indeed, the more professional or technically competent the administrative agency, the more doubt a court should have for the agency’s proffered legal reasoning. Id. at 8-9 (citing Gorsuch concurrence in Guitierrez-Brizuela, 834 F.3d at 1158).

The Wisconsin Institute for Law & Liberty filed amicus briefs in both TetraTech and Beres. Both briefs emphasize the importance of judicial authority over the executive authority of administrative agencies and how the separation of powers preserves and protects the liberty interests of Wisconsin citizens. As such, these briefs demonstrate the connection this attack on agency deference has to the liberty interests that fueled the Lochnerism of old.

Finally, the Wisconsin Utilities Association has an amicus brief in TetraTech in favor of agency deference. The utilities association explains:

when a plaintiff challenges a utility rate as “unreasonable,” this implicates “statutory interpretation” by the agency only in the loosest sense of the term. What is really at issue is reasonableness, and courts understand the Commission is best able to balance the multitude of technical, equitable and policy considerations that underlie a “reasonable” rate.

Moreover, WUA’s members have come to rely on this level of deference to the Commission’s rate-setting decisions. It deters what would otherwise be prolonged legal challenges to new rates, terms and conditions of public utility service, while at the same time guaranteeing any challenges that do arise do not devolve into judicial scrutiny of highly technical policy choices by an expert agency. In a world without great weight deference, it is difficult to see what would prevent a reviewing court from substituting its own view of how utility costs should be apportioned among various customer classes or what level of carrying costs should be authorized on a particular escrow account-all because, on some level, these issues go to the Commission’s “interpretation” of the statutory directive to set “reasonable” rates.

WUA amicus Brief at 10 in TetraTech (emphasis in original). This brief states exactly what is at stake in these cases: whether judges will substitute their preferences about the scope and impact of regulations for the judgments of the state agency by subjecting the decisions of those agencies to heightened scrutiny.

Wisconsin Bell

The briefing in this case was done on a tight time frame, as the court granted the petition for review on Sept. 12th and then set oral argument for December 1st.

Like the solicitor general, Wisconsin Bell contends that the viewpoint of an agency be simply a factor for consideration by a reviewing court and that any weight given to that factor depends on the agency’s specifically demonstrated expertise, technical competence, and specialized knowledge. Wisconsin Bell Brief at 21.

As to the substance of the alleged discrimination, Wisconsin Bell contends that the Commission is essentially making itself into the personnel office of the employer. This usurping of the employer’s own prerogatives over its employees, according to Wisconsin Bell, is legally suspect.

The Commission’s and the employee’s briefs dispute these claims, showing how the employer’s arguments do not apply to the facts of this case and why prior court and Commission precedent support the employee’s claim of discrimination.

As these briefs demonstrate, the dispute with Wisconsin Bell essentially turns on whether the employer had a reasonable basis for concluding the employee’s disability claims were illegitimate in some way.

Three amicus briefs were filed in this matter. The WMC amicus brief presents additional argument for why the employer’s decision to discharge the employee should be considered to be non-discriminatory. Amicus briefs from the Wisconsin Employment Lawyers Association and from Disability Rights Wisconsin and Survival Coalition Wisconsin, on the other hand, aver that: (1) the current system of agency deference is constitutional and promotes efficiency and predictability in the judicial system, (2) the legal issues in this case involve long-accepted methods of establishing disability discrimination, and (3) there is little to anything that is controversial in the Commission’s reasoning and conclusions that Wisconsin Bell had discriminated against one of its employees because of his disability.

NOTE: I drafted an amicus brief for the Wisconsin Employment Lawyers Association in the unemployment case, Operton v. LIRC.

The briefing in this case describes exclusive world views of the law. The briefs in support of the employer contend that the Commission’s legal reasoning is highly suspect and lacking factual support. For such a misapplication of the law, these parties argue that no deference is due the Commission. In contrast, the parties supporting the Commission and the employee find nothing unusual or suspect in the Commission’s legal reasoning, question mightily leaps in logic in the opposing briefs, and point to copious examples in the record that support the Commission’s contentions and findings.

Given these differences, one side of this dispute is far afield in its claims, and the employer side seems to be the one that lacks a solid foundation. Wisconsin Bell is basically asserting that it should be believed even though it never presented much evidence to substantiate its alleged doubts about the employee’s disability claims. For the employer, its decision to discharge an employee should be presumed correct unless the employee can reveal an admission of some kind by the employer revealing its illicit motive. Such a requirement upends discrimination law in this state and allow all but the most obvious and crude discrimination to go unchecked. At a time when the nation is finally waking up to the widespread nature of sexual harassment, no court should pretend that workplace discrimination is no longer a problem and assert that employers are as innocent as new-born babes.

All the posts in this series