2010 WI App 96
court of appeals of
published opinion
Case No.: |
2009AP2166 |
|
Complete Title of Case: |
†Petition for Review filed |
|
St. Croix Valley Home Builders Association, Inc., †Plaintiff-Appellant, v. Township of Oak Grove,
Defendant-Respondent. |
|
|
Opinion Filed: |
June 22, 2010 |
|
|
Oral Argument: |
June 1, 2010 |
|
|
JUDGES: |
|
|
|
|
|
|
|
Appellant |
|
ATTORNEYS: |
On behalf of the plaintiff-appellant, the cause was
submitted on the briefs of Timothy J. Hassett of Felhaber, Larson, Fenlon & Vogt, P.A. of St. Paul,
|
|
|
Respondent |
|
ATTORNEYS: |
On behalf of the defendant-respondent, the cause was
submitted on the brief of Mark J. Gherty of Gherty and Gherty, S.C. of A nonparty brief was filed by Thomas D. Larson of |
|
|
2010 WI App 96
COURT OF APPEALS DECISION DATED AND FILED June 22, 2010 David
R. Schanker Clerk of Court of Appeals |
|
NOTICE |
|
|
This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
|
Appeal No. |
|
|||
STATE OF |
IN COURT OF APPEALS |
|||
|
|
|||
|
|
|||
|
|
|||
St. Croix Valley Home Builders Association, Inc.,
Plaintiff-Appellant, v. Township of Oak Grove,
Defendant-Respondent. |
||||
|
|
|||
APPEAL
from a judgment of the circuit court for
Before
¶1 PETERSON, J.
BACKGROUND
¶2 In 2003, the Town of Oak Grove enacted an ordinance, pursuant
to Wis.
¶3 As required by the enabling statute, the Town prepared a needs assessment to identify costs it anticipated it would incur from development. Based on this needs assessment, the ordinance set the fee at $3,190. Paralleling the language of the enabling statute, the ordinance stipulated that fees collected under the ordinance:
(a) Shall bear a rational relationship to the need for new, expanded or improved public facilities that are required to serve land development.
(b) May not exceed the proportionate share of the capital costs that are required to serve land development as compared to existing land uses of land within the Town of Oak Grove.
(c) Shall be based upon actual capital costs or reasonable estimates of capital costs for new, expanded or improved facilities.
....
(f) May not include amounts necessary to address existing deficiencies in public facilities.
¶4 Also as required by the enabling statute, the ordinance contained an appeal process. That process permitted anyone who paid the fee to contest the amount and method of collecting the fee, or the purpose for which the Town expended the fee funds. The ordinance specified that any appeal had to be initiated within thirty days of the fee’s due date. Once the Town received a notice of appeal, it was required to compile a record of the management and expenditures of the contested fee, hold a public hearing, and evaluate the merits of the appeal. If the board concluded the appeal had merit, it could determine an appropriate remedy, including “reallocation of the proceeds of the challenged impact fee ..., refunding the impact fee in full or in part ..., or such other remedies as it deems appropriate in a particular case.”
¶5 The
¶6 In January 2008, the Town repealed the 2003 ordinance and enacted a new one after completing an updated needs assessment. The new ordinance shortened the time the Town had to use the fees and the time for filing an appeal. It retained the same total fee of $3,190 but reallocated the manner in which the fee was to be used. The ordinance remained the same as its predecessor in most other respects.
¶7 On March 7, 2008, the Association sued the Town, seeking a declaration that both the 2003 and 2008 ordinances were invalid and an order requiring the Town to refund fees collected under them. The Association alleged both ordinances were void because, contrary to the directives in the enabling statute, they levied a disproportionate share of the Town’s costs on development and improperly burdened developers with the cost of correcting the Town’s existing deficiences. It also alleged the ordinances were unconstitutional because they irrationally discriminated against development.[4]
¶8 The Town moved to dismiss the Association’s claims, arguing it
was precluded from seeking judicial relief because it failed to use the appeal
process provided by the ordinance. The
circuit court agreed the Association was required to exhaust administrative
remedies before bringing its claims in court and dismissed the suit.
DISCUSSION
¶9 The Association raises two issues on appeal: (1) whether it was required to exhaust administrative remedies before seeking judicial relief; and (2) whether filing a notice of claim with the Town satisfied any obligation to exhaust administrative remedies.
¶10 We have previously expressed uncertainty about the standard
appellate courts apply when reviewing a circuit court’s application of the
exhaustion doctrine.
1. Whether the Association was
required to exhaust administrative remedies
¶11 Wisconsin Stat. § 66.0617(10)
requires municipalities that enact impact fee ordinances to “by ordinance,
specify a procedure under which a developer upon whom an impact fee is imposed
has the right to contest the amount, collection or use of the impact fee to the
governing body of the municipality.”
“[W]here a statute sets forth a procedure for review of administrative
action and court review of the administrative decision, such remedy is
exclusive and must be employed before other remedies are used.” Nodell Inv. Corp. v. City of
¶12 However, a court “need not apply the exhaustion doctrine when a
good reason exists for making an exception.”
Trager, 118
[i]n exercising its discretion in deciding whether to apply the exhaustion doctrine, the court must look at the circumstances under which the doctrine arises and the reasons for the doctrine, and then balance the advantages and disadvantages of applying the doctrine in a particular case, including the litigant’s need for judicial review, the agency’s interest in precluding litigation, and the public’s interest in the sound administration of justice.
Mentek, 242
¶13 The Association argues this case presents one of those
instances in which the exhaustion doctrine should not be applied. Citing Nodell, 78
¶14 Challenges to statutes or ordinances are not exempt from the
exhaustion of administrative remedies doctrine simply because they allege a
statute or ordinance is invalid or unconstitutional as applied to a particular
factual scenario. See id. at 426-27. Rather,
“even when the claim is phrased in constitutional terms ... if the agency has
the authority to provide the relief requested without invalidating the
ordinance, the constitutional basis for the claims does not in itself support
an exception to the exhaustion rule.”
¶15 The Association argues this is not correct. It contends it has presented a facial challenge to the ordinance because it is not attacking the ordinance’s application to any particular person, but alleging the ordinance is illegal with respect to everyone to whom it might be applied. This argument misapprehends the distinction between facial and as-applied challenges.
¶16 A party challenging the facial validity of an ordinance must
show that the law as written “cannot be enforced ‘under any
circumstances.’” See State v. Wood, 2010 WI 17, ¶13, 323
¶17 In order to prove its claim, the Association has cited evidence that goes way beyond the face of the ordinance. For example, its appellate brief contains extensive citations to the Town’s needs assessments, comprehensive plan, population growth estimate, and testimony of its engineers and supervisors. The Association also cites the testimony of its own experts and population growth estimates from other governmental agencies. This is precisely the kind of evidence relevant to an as-applied challenge.
¶18 But whether the Association’s challenge is characterized as
facial or as-applied, we agree with the circuit court there were nevertheless
good reasons to apply the exhaustion doctrine.
The Association’s claims contest the amount of the fee and the ways in
which the fee is spent. These issues lie
squarely within the ordinance’s appeal process.
They also present claims the Town had the authority to remedy—it could
have refunded the fees in whole or part, or revised the ordinance to correct
any errors. Because the Association’s
claims could have been resolved administratively, requiring it to use the
ordinance’s appeal process promotes judicial efficiency. See Mentek, 242
¶19 Further, as pointed out above, the Association’s claims rely on
a great deal of evidence, the development of which is crucial to the resolution
of its claims. An administrative appeal
would have provided the opportunity for those most intimately involved in the
matter to develop this evidence and clarify the issues for any judicial
appeal.
¶20 Here, the circuit court concluded the Association not only could have, but should have used the ordinance’s administrative appeal process. It observed that the legislature created an administrative remedy procedure precisely so “every one of these cases would [not] be directly put into the court,” and that in fact-intensive cases such as this one, it is best to “give [the administrative bodies] a first chance. Because that’s why they’re there ... the courts have limited resources. These matters should be put before the bodies that are most intimately and closely connected to the facts involved in the case.”
¶21 The circuit court’s decision to apply the exhaustion doctrine
was not erroneous.[8] Indeed, the case the Association relies on
holds that the exhaustion rule should be applied when, as here, “the
administrative remedy (1) is available to the party on his initiative, (2)
relatively rapidly, and (3) will protect the party’s claim of right.” See
Nodell,
78
2. Whether the notice of claim
satisfied the Association’s obligation
¶22 The Association also argues it satisfied any obligation to
exhaust administrative remedies by filing a notice of claim with the Town. The notice of claim statute requires parties
who intend to sue governmental units to give written notice before filing the
suit. This allows the governmental unit
an opportunity to investigate and evaluate the claim, effect compromise without
suit, and budget for settlement or litigation.
Griffin v. Milwaukee Transp. Servs., Inc., 2001 WI App 125,
¶14, 246
¶23 Accepting the Association’s argument would eviscerate the
exhaustion of administrative remedies doctrine.
Contrary to the Association’s assertions, the notice of claim
requirement and administrative appeal process do not serve the same
function. The notice of claim statute
requires a plaintiff to notify a governmental unit of the circumstances of its
claim and relief sought, which the governmental unit may then either deny or
allow. The ordinance’s administrative
appeal process, however, provides a specific framework for resolving
disagreements about fees imposed under the ordinance.
CONCLUSION
¶24 The general rule is “that judicial relief will be denied until
the parties have exhausted their administrative remedies; the parties must
complete the administrative proceedings before they come to court.” Nodell, 78
By the Court.—Judgment affirmed.
[1]
The pleadings refer to Oak Grove as a township.
In
[2] References to the Wisconsin Statutes are to the 2007-08 version.
[3] The Association attached to its notice of claim a copy of its proposed complaint detailing its position.
[4] The Town’s appellate argument makes little distinction between the alleged infirmities of the 2008 ordinance and those of its predecessor. Therefore, for simplicity’s sake, we refer to the ordinances together in the singular for the remainder of the opinion.
[5]
In Metz
v. Veterinary Examining Board, 2007 WI App 220, 305 Wis. 2d 788, 741
N.W.2d 244, we stated that while our supreme court has described a court’s
decision to apply the exhaustion as “exercising its discretion,” it also
appears to undertake “a de novo analysis of the issue rather than reviewing
with deference the circuit court’s decision ....”
[6]
The Association’s discussion of these exceptions is based on a footnote in Nodell
Investment Corp. v. City of Glendale, 78
commentators have classified the reasons for excusing exhaustion of administrative remedies as follows: (1) The agency has no jurisdiction to act in the matter. (2) The administrative action is fatally void. (3) A question of law is involved in which the administrative agency’s expertise is not an important factor. (4) A substantial constitutional question is involved. (5) The administrative remedy is inadequate to avoid irreparable harm. (6) Recourse to the administrative agency would be a futile or useless act.
[7] The Association also argues it was not required to exhaust administrative remedies because the 2003 ordinance was repealed, and therefore its administrative appeal process no longer exists. This argument ignores the ordinance’s requirement that appeals be brought within a specified time period, which none of the developers did.
[8] Although we reviewed the circuit court’s decision to apply the exhaustion doctrine for the erroneous exercise of discretion, we note that we would have reached the same conclusion under any standard of review.