Andrew Waity, Judy Ferwerda, Michael Jones and Sara Bringman, Plaintiffs-Respondents, v. Devin Lemahieu, in his official capacity and Robin Vos, in his official capacity, Defendants-Appellants-Petitioners.
2021AP802
SUPREME COURT OF WISCONSIN
January 27, 2022
2022 WI 6
Stephen E. Ehlke
ON PETITION TO BYPASS THE COURT OF APPEALS; SOURCE OF APPEAL: Circuit Court, Dane County; L.C. No. 2021CV589
JUSTICES:
ZIEGLER, C.J., delivered the majority opinion of the Court, in which ROGGENSACK, REBECCA GRASSL BRADLEY, and HAGEDORN, JJ., joined. DALLET, J., filed a dissenting opinion, in which ANN WALSH BRADLEY and KAROFSKY, JJ., joined. NOT PARTICIPATING:
ATTORNEYS:
For the defendants-appellants-petitioners, there were briefs filed by Misha Tseytlin, Kevin M. LeRoy and Troutman Pepper Hamilton Sanders, Chicago. There was an oral argument by Misha Tseytlin.
For the plaintiffs-respondents, there was a brief filed by Lester A. Pines, Tamara B. Packard, Aaron G. Dumas, Leslie A. Freehill, Beauregard W. Patterson and Pines Bach LLP, Madison. There was an oral argument by Lester A. Pines.
There was an amicus curiae brief filed on behalf of Wisconsin Democracy Campaign by Jeffrey A. Mandell, Douglas M. Poland and Stafford Rosenbaum LLP, Madison; and Mel Barnes and Law Forward, Inc.
NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports.
ZIEGLER, C.J., delivered the majority opinion of the Court, in which ROGGENSACK, REBECCA GRASSL BRADLEY, and HAGEDORN, JJ., joined. HAGEDORN, J., filed a concurring opinion. DALLET, J., filed a dissenting opinion, in which ANN WALSH BRADLEY and KAROFSKY, JJ., joined.
APPEAL from a judgment and an order of the Circuit Court for Dane County, Stephen E. Ehlke, Judge. Reversed and remanded.
¶2 Petitioners, on behalf of the legislature, entered into contracts for attorney services regarding the decennial redistricting process and resulting litigation. Respondents claim that Petitioners lacked authority to enter into the contracts, and they ask us to declare the agreements void ab initio. Because Petitioners had authority under
¶3 We reverse the circuit court‘s grant of summary judgment in Respondents’ favor, and instead, we remand this case to the circuit court with instructions to enter judgment in favor of Petitioners. In addition, we clarify the standard for granting a stay of an injunction pending appeal. The circuit court in this case incorrectly applied that standard and refused to stay its injunction pending appeal of its decision. Further explanation from this court is needed to ensure the standard for stays pending appeal is correctly followed in the future.
I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE
¶4 For decades, the Wisconsin Legislature has hired attorneys to provide competent legal advice on redistricting. Faced with the inherent challenges of drawing new political boundaries in the state, described both as a “thicket,” Jensen v. Wis. Elections Bd., 2002 WI 13, ¶11, 249 Wis. 2d 706, 639 N.W.2d 537, and “a critical . . . part of politics,” Rucho v. Common Cause, 588 U.S. ___, 139 S. Ct. 2484, 2498 (2019), the legislature has repeatedly consulted specialists to assist them in developing maps and to prepare for subsequent litigation. See Jensen, 249 Wis. 2d 706, ¶10 (“[R]edistricting is now almost always resolved through litigation rather than legislation . . . .“); see also, e.g., Wis. State AFL-CIO v. Elections Bd., 543 F. Supp. 630 (E.D. Wis. 1982) (redistricting litigation for the 1980 census); Prosser v. Elections Bd., 793 F. Supp. 859 (W.D. Wis. 1992) (litigation regarding redistricting after the 1990 census); Baumgart v. Wendelberger, Nos. 01-0121 & 02-C-0366, unpublished slip op. (E.D. Wis. May 30, 2002) (redistricting litigation surrounding the 2000 census); Baldus v. Members of Wis. Gov‘t Accountability Bd., 849 F. Supp. 2d 840 (E.D. Wis. 2012) (litigation challenging maps enacted by the Wisconsin Legislature and signed by the governor after the 2010 census); Johnson v. WEC, No. 2021AP1450-OA, unpublished order (Wis. Sept. 22, 2021, amend. Sept. 24, 2021) (granting petition for leave to commence an original action on redistricting for the 2020 census).
¶5 For the 1980 and 1990 redistricting processes, the legislature hired attorneys to provide advice and represent its interests in litigation in federal and state court. Similarly, for the 2000 and 2010 processes, the Senate Committee on Organization authorized payments for attorney services for the Wisconsin Senate, while the Wisconsin Assembly obtained counsel for redistricting through separate agreements.
¶6 In line with historical precedent, the substantial legislative demands redistricting created, and the need for pre-litigation advice, both houses of the legislature retained legal counsel for the 2020 redistricting process. On December 23, 2020, Petitioners, on behalf of the senate and assembly, executed an attorney services contract to begin on January 1, 2021, with the law firm Consovoy McCarthy PLLC (“Consovoy“), in association with Attorney Adam Mortara. Consovoy and Mortara agreed to consult with the legislature on
¶7 On January 5, 2021, the Committee on Senate Organization issued authorization for purchase of attorney services. The committee voted to “authorize[] the senate . . . to retain and hire legal counsel” for redistricting. The authorization was to remain “in force the entire 2021-2022 legislative session,” and it provided Senator LeMahieu with the authority to “approve all financial costs and terms of representation.”
¶8 On January 6, 2021, Senator LeMahieu, acting on behalf of the senate, signed an engagement agreement with the law firm Bell Giftos St. John LLC (“BGSJ“). The firm agreed to advise the legislature on redistricting, including the “constitutional and statutory requirements,” “the validity of any draft redistricting legislation,” and for “judicial . . . proceedings relating to redistricting.”
¶9 On March 24, 2021, the Committee on Assembly Organization followed the lead of the senate committee and voted to authorize Speaker Vos to “hire . . . law firms, entities or counsel necessary related to . . . legislative redistricting.” In addition, the committee noted that Speaker Vos “has always [been] authorized” to contract for attorney services “beginning on January 1, 2021.”
¶10 To perform their contract obligations, the legislature followed the same procedure it follows for all billings and expenditures for the legislative branch. A bill or statement was provided to business managers at the senate and assembly. The managers entered the billing information into an online software program called PeopleSoft; the information in PeopleSoft was checked by the chief clerks, who then approved the purchases and transmitted the information to the Department of Administration (“DOA“). The DOA, as with all purchases made by the legislature, received details through the PeopleSoft software on the payments requested by the legislature. The agency received: (1) the names of the billing entities and individuals (here the law firms contracted to provide services); (2) invoice codes specific to the purchases at issue; (3) invoice dates; (4) total dollar amounts requested; and (5) a general accounting code that categorized the types of purchases requested, i.e., legal services. After receiving this information from the legislature, DOA approved the purchases and transferred the requested funds to the senate and assembly.
¶11 On March 10, 2021, Respondents filed this taxpayer lawsuit in Dane County circuit court. They sought a declaration that the two attorney services agreements the legislature entered into were void ab initio. The complaint alleged that no legal authority permitted the Petitioners to sign the contracts on behalf of the senate and assembly. Soon after filing the complaint, Respondents moved for a temporary injunction barring the legislature from issuing payment under the attorney services contracts and prohibiting Petitioners from seeking legal advice other than from the Wisconsin Department of Justice.
¶12 Petitioners moved to dismiss the complaint. After a hearing, the circuit court denied the request for a temporary injunction and converted Petitioners’ motion to dismiss into a motion for summary judgment.6 The circuit court ordered additional
¶13 On April 29, 2021, the circuit court issued a written decision agreeing with Respondents. The circuit court held that there was not statutory or constitutional authority by which Petitioners could enter into and perform on the attorney engagement agreements with Consovoy, Mortara, and BGSJ. Specifically, the court quoted
¶14 The day after the circuit court issued its opinion, Petitioners filed a notice of appeal and an emergency motion for a stay pending appeal. On May 10, 2021, the circuit court held a hearing and denied the request for a stay. In so doing, the circuit court reviewed the arguments the Petitioners advanced and noted that it “disagree[d] with their legal analysis.” The circuit court reiterated that it had considered the caselaw in support of Petitioners’ position and it “reaffirm[ed]” its conclusions of law. In its reasoning, the circuit court noted that Petitioners had “re-present[ed] . . . what was originally before [the circuit court].” The circuit court reasoned that it would “merely be repeating what [it] already set forth” in the April 29 opinion. Consequently, the circuit court held that Petitioners were unlikely to succeed on appeal. The circuit court continued, stating that Petitioners would not suffer irreparable harm because they could rely on institutions such as the Attorney General‘s office for legal advice, and Petitioners could hire private firms if redistricting litigation was initiated. Finally, according to the circuit court, because the contracts constituted unauthorized expenditure of public funds, harm would befall the general public, and a stay was not warranted.
¶15 On May 12, 2021, Petitioners filed a motion for a stay pending appeal at the court of appeals. On June 29, 2021, two months after the circuit court enjoined enforcement of the attorney services contracts, the court of appeals issued a decision, declining Petitioners’ request for a stay. Waity v. LeMahieu, No. 2021AP802, unpublished order (Wis. Ct. App. June 29, 2021). The court of appeals explained that
¶16 On June 30, 2021, Petitioners filed with this court a petition to bypass the court of appeals and a motion to stay the circuit court‘s injunction pending appeal. On July 15, 2021, we granted the Petitioners’ request to bypass the court of appeals, and, in an unpublished order, granted the motion for stay. Waity v. LeMahieu, No. 2021AP802, unpublished order (Wis. July 15, 2021) (granting motion for relief pending appeal). In so doing, we analyzed the circuit court‘s stay analysis and concluded that the circuit court misapplied the relevant standard.
II. STANDARD OF REVIEW
¶17 In this case, we are asked to review motions for summary judgment.8 “Whether the circuit court properly granted summary judgment is a question of law that this court reviews de novo.” Racine County v. Oracular Milwaukee, Inc., 2010 WI 25, ¶24, 323 Wis. 2d 682, 781 N.W.2d 88 (quotations omitted). Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”
¶18 This case also presents questions of statutory interpretation. “Interpretation of a statute is a question of law that we review de novo, although we benefit from the analyses of the circuit court and the court of appeals.” Estate of Miller v. Storey, 2017 WI 99, ¶25, 378 Wis. 2d 358, 903 N.W.2d 759. “[S]tatutory interpretation begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry. Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning.” State ex rel. Kalal v. Cir. Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110 (citations and quotations omitted). In addition, “statutory language is interpreted in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results.” Id., ¶46.
III. ANALYSIS
¶19 The Respondents argue that Petitioners lacked any legal authority to enter into legal contracts with Consovoy, Mortara, and BGSJ. In response, Petitioners claim that, at a minimum,
¶20 We agree with the Petitioners. For the reasons provided below,
¶21 In addition, we address the circuit court‘s decision to deny a stay of its injunction pending appeal. The circuit court misapplied the standard for granting stays pending appeal. Although we reversed the circuit court‘s decision in an unpublished order on July 15, 2021, additional explanation of our prior decision is needed to ensure compliance with the law.
A. The Legislature‘s Authority To Enter Into Legal Services Contracts Under Wis. Stat. § 16.74 .
1. The circuit court decision
¶22
¶23 The circuit court misinterpreted
¶24 “Service” is defined as “[t]he action or fact of working or being employed in a particular capacity (irrespective of whom the work is done for).” Service, Oxford English Dictionary (2021); see also service, Black‘s Law Dictionary (11th ed. 2019) (“Labor performed in the interest or under the direction of others.“). The term “contractual services” includes the provision of work or labor to another in exchange for compensation, under an enforceable agreement. Unambiguously, this includes the provision of legal services under contract.
¶25 The circuit court‘s statutory interpretation appears to rely heavily on logic embodied in the noscitur a sociis canon. However, the canon does not alter our conclusion. Noscitur a sociis serves to read in context ambiguous terms that could be defined literally in a manner conflicting with the statute‘s plain meaning. Therefore, in the list “tacks, staples, nails, brads, screws, and fasteners,” the word “staples” should not be read to mean “reliable and customary food items.” Antonin Scalia & Bryan A Garner, Reading Law: The Interpretation of Legal Texts 196 (2012); see also Stroede v. Soc‘y Ins., 2021 WI 43, ¶¶1, 19, 397 Wis. 2d 17, 959 N.W.2d 305 (interpreting a list of “possessor[s] of real property,” which included “owner, lessee, tenant, or other lawful occupant of real property,” to not encompass a patron at a
¶26 The term “contractual services” under
¶27 Confirming the plain meaning and statutory definition of “contractual services,” the official legislative annotation of
¶28 The circuit court also held that the attorney services contracts at issue were not “required within the legislative branch” under
¶29 Furthermore, any distinction between the existence and nonexistence of a present lawsuit is largely unworkable. While the legislature may have authorization to purchase legal services under
¶30 The parties do not dispute that Petitioners, on behalf of the legislature, contracted with Consovoy and Mortara to provide advice and strategic direction on redistricting litigation. BGSJ was contracted to review “constitutional and statutory requirements” and the “validity of any draft redistricting legislation,” as well as to assist the legislature in redistricting-related legal proceedings.
¶31 It strains credulity to conclude that the need for legal advice in this area was fictitious or somehow disconnected from legitimate legislative activities. Every ten years, the legislature is constitutionally responsible for drawing district boundaries in this state. See Jensen, 249 Wis. 2d 706, ¶6 (noting that the Wisconsin Constitution gives “the state legislature the authority and responsibility” to draw district boundaries);
¶32 The undisputed facts show that, in line with decades of bipartisan precedent, the Senate and Assembly Committees on Organization determined that the hiring of legal counsel to assist with redistricting was needed. By taking these votes, the legislature rationally took steps to make more informed decisions in drawing maps, navigate extraordinarily complex . . .
legal issues, and prepare for related litigation. As a matter of law, there is no genuine dispute of fact that the attorney services contracts were “required within the legislative branch” under
2. The Respondents’ arguments
¶33 The Respondents’ arguments on appeal move away from the circuit court‘s legal reasoning. Instead, they claim that
¶34
¶35 In other words, for the plain text of
¶36 When interpreting
¶37 The context of
¶38 Putting aside the question of purchasing authority under
¶39 Here, there is no statutory conflict that bars the use of
¶40 In addition, Respondents claim that, even if
¶41 Here, the undisputed facts show that the Senate and Assembly Committees on Organization, who were designated by their respective houses to review and complete purchases for attorney services, vested the Petitioners with authority to enter into the contracts with Consovoy, Mortara, and BGSJ. On January 5, 2021, the Committee on Senate Organization approved the hiring of attorneys for redistricting and explicitly granted Senator LeMahieu authority to enter into contracts. Further, on March 24, 2021, the Committee on Assembly Organization vested Speaker Vos with the authority to hire counsel for redistricting, noting that Speaker Vos had “always [been] authorized” to contract for attorney services.
¶42 Respondents note that the agreement with Consovoy and Mortara was signed on December 23, 2020, and the Senate and Assembly Committees on Organization approved the hiring of counsel after that date, on January 5 and March 24, 2021, respectively. Therefore, the legislature indisputably approved the attorney agreements signed by Petitioners in January and March 2021. It is well established that a contract is valid, even if originally signed by an agent without authority, when the principal subsequently ratifies the agreement and agrees to be bound by its terms. See M&I Bank v. First Am. Nat‘l Bank, 75 Wis. 2d 168, 176, 248 N.W.2d 475 (1977) (explaining that “[r]atification is the manifestation of intent to become party to a transaction purportedly done on the ratifier‘s account“); Restatement (Second) of Contracts §380 cmt. a (1981) (“A party who has the power of avoidance may lose it by action that manifests a willingness to go on with the contract.“); see, e.g., Milwaukee J. Sentinel v. DOA, 2009 WI 79, 319 Wis. 2d 439, 768 N.W.2d 700 (reviewing a public records law challenge to a statute enacted by the legislature to ratify a previously negotiated collective bargaining agreement). The legislature adopted the contracts at issue, even given the fact that it did so after the agreements were signed. The agreements are valid and enforceable.
¶43 Respondents also claim that the contracts are void because the legislature
¶44 It is undisputed that the legislature submitted information on bills from the relevant attorney services contracts to the DOA. Petitioners submitted undisputed evidence that, as with all purchases for the legislature, including attorney services, information from the bills was inputted into a software program, PeopleSoft. A business manager submitted basic accounting details, such as the name of the billing entities, transaction-specific invoice codes, invoice dates, the amount of funds needed, and the general accounting code describing the subject matter of the transaction, i.e., legal services. The information was reviewed by at least two employees at the legislature, including the chief clerks, and was then transferred to the DOA for review. The DOA received the information and issued payments. The uncontested facts show that the legislature properly allowed the DOA to audit and review “bills and statements” for the attorney services at issue.
¶45 Respondents cite a response to a public records request provided by DOA‘s Chief Legal Counsel, Ann Hanson, which stated that the DOA did not have access to bills and statements that originated from Consovoy and BGSJ. However, DOA‘s response also indicated that the DOA was given payment requests and, in fact, issued payments. Clearly, at the time of the payments, DOA believed the legislature had provided sufficient information to review the requests and comply with
¶46 To the extent that DOA failed to perform a proper audit under
B. The Standard For Stays Pending Appeal
¶48 After awarding summary judgment in Respondents’ favor, the circuit court in this case enjoined Petitioners from performing the attorney-services contracts signed with Consovoy, Mortara, and BGSJ. In addition, the circuit court declined to issue a stay of the injunction pending appeal. In July 2021, we reversed that decision in an unpublished order. See Waity v. LeMahieu, No. 2021AP802, unpublished order (Wis. July 15, 2021) (granting motion for relief pending appeal). We now take the opportunity to explain our decision.
¶49 Courts must consider four factors when reviewing a request to stay an order pending appeal:
(1) whether the movant makes a strong showing that it is likely to succeed on the merits of the appeal;
(2) whether the movant shows that, unless a stay is granted, it will suffer irreparable injury;
(3) whether the movant shows that no substantial harm will come to other interested parties; and
(4) whether the movant shows that a stay will do no harm to the public interest.
See State v. Scott, 2018 WI 74, ¶46, 382 Wis. 2d 476, 914 N.W.2d 141. At times, this court has also noted that “[t]emporary injunctions are to be issued only when necessary to preserve the status quo.” Werner v. A.L. Grootemaat & Sons, Inc., 80 Wis. 2d 513, 520, 259 N.W.2d 310 (1977). The relevant factors “are not prerequisites but rather are interrelated considerations that must be balanced together.” State v. Gudenschwager, 191 Wis. 2d 431, 440, 529 N.W.2d 225 (1995).
¶50 On appeal, a circuit court‘s decision to grant or deny a motion to stay is reviewed under the erroneous exercise of discretion standard. Id. at 439. The circuit court‘s decision must be affirmed if it “examined the relevant facts, applied a proper standard of law, and using a demonstrative rational process, reached a conclusion that a reasonable judge could reach.” Lane v. Sharp Packaging Sys., Inc., 2002 WI 28, ¶19, 251 Wis. 2d 68, 640 N.W.2d 788. In this case, the circuit court erroneously exercised its discretion by applying an incorrect legal standard.
¶51 First, in reviewing whether Petitioners made “a strong showing that [they were] likely to succeed on the merits of the appeal,” the circuit court repeatedly referred to its own legal reasoning employed when it granted summary judgment and issued an injunction in favor of Respondents. The circuit court noted that it “disagree[d] with [Petitioners‘] legal analysis.” It stated it reviewed the caselaw cited by Petitioners and “reaffirm[ed]” its conclusions of law. In the circuit court‘s view, Petitioners had, in their motion for a stay, “re-present[ed] . . . what was originally before [the circuit court],” and the circuit court would “merely be repeating what [it] already set forth” in its decision to award summary judgment and enjoin enforcement of the relevant contracts.
¶52 The circuit court‘s analysis was flawed. When reviewing a motion for a stay, a circuit court cannot simply input its own judgment on the merits of the case and conclude that a stay is not warranted. The relevant inquiry is whether the movant made a strong showing of success on appeal. Gudenschwager, 191 Wis. 2d at 440. Of course, whenever a party is seeking a stay, there has already been a determination at the trial level adverse to the moving party. If the circuit court were asked to merely repeat and reapply legal conclusions already made, the first factor would rarely if ever side in favor of the movant. As we explained in our July 15, 2021, order, “very few stays pending appeal would ever be entered because almost no circuit court judge would admit on the record that he [or] she could have reached a wrong interpretation of the law.” Waity, No. 2021AP802, unpublished order, at 9.
¶53 When reviewing the likelihood of success on appeal, circuit courts must consider the standard of review, along with the possibility that appellate courts may reasonably disagree with its legal analysis. For questions of statutory interpretation, as are presented in this case, appellate courts consider the issues de novo. See Estate of Miller, 378 Wis. 2d 358, ¶25. Here, the circuit court relied on its own interpretation of statutes such as
¶54 When reviewing the likelihood of success on appeal, “the probability of success that must be demonstrated is inversely proportional to the amount of irreparable injury the plaintiff will suffer absent the stay.” Gudenschwager, 191 Wis. 2d at 441. Thus, the greater the potential injury, the less a movant must prove in terms of success on appeal. However, “the movant is always required to demonstrate more than the mere possibility of success on the merits.” Id. (quotations omitted).
¶55 In this case, the risk of harm to Petitioners absent a stay was substantial and irreparable. The circuit court concluded that the legislature did not suffer harm because they could obtain advice on redistricting from other government actors such as the Attorney General. However, as explained above, redistricting presents extraordinarily complex questions of state and federal law. It is a process that takes place only every ten years; it can have a substantial effect on elections and the right to vote; and it is almost inevitable that redistricting will be litigated. Contrary to the circuit court‘s belief, the legislature‘s determination that it needed assistance from qualified specialists, outside the Attorney General‘s office, was abundantly reasonable.
¶56 The circuit court also mentioned in its harm analysis that litigation surrounding redistricting had not yet begun. As thoroughly discussed above, pre-litigation counsel can be indispensable when potential legislation implicates significant legal questions and litigation is highly likely.
¶57 When considering potential harm, circuit courts must consider whether the harm can be undone if, on appeal, the circuit court‘s decision is reversed. If the harm cannot be “mitigated or remedied upon conclusion of the appeal,” that fact must weigh in favor of the movant. Waity, No. 2021AP802, unpublished order, at 11 (quoting Serv. Empls. Int‘l Union v. Vos, No. 2019AP622, unpublished order, at 6-7 (Wis. June 11, 2019)). Here, due to the circuit court‘s order, the legislature was deprived of counsel of its choice for two and a half months. In the meantime, the demands of redistricting continued as the legislature prepared to draw new maps and the risk of litigation materialized. The circuit court failed to consider that, if its order were overturned, the legislature could not get legal advice “back” for this critical time in which an injunction was in effect. Because the harm the legislature would experience absent a stay was significant, Petitioners were required to show only “more than the mere possibility of success on the merits.” Gudenschwager, 191 Wis. 2d at 441 (quotations omitted). The Petitioners clearly met that standard.
¶58 By comparison, the harm to Respondents was minimal. In conducting a stay analysis, courts consider whether the movant “shows that no substantial
¶59 Here, the circuit court reasoned that Respondents were substantially harmed because “[t]ens, if not hundreds of thousands of [taxpayer] dollars . . . will be spent” under the contracts at issue. First, in making this finding, the circuit court failed to specify or tailor its cost estimates to expenses that would have been incurred while the case was on appeal, as opposed to over the course of the entire life of the contracts, e.g., until redistricting disputes are settled. Second, the harm alleged by Respondents in this case was the loss of taxpayer money. As three individuals out of a state population of 5.8 million, Respondents’ harm as taxpayers was orders of magnitude less than any final dollar amount Petitioners may have improperly spent. The circuit court failed to consider this basic fiscal reality, which substantially reduced any potential harm to the Respondents. Furthermore, the circuit court failed to consider whether any financial losses to Respondents, to the extent they existed, could be recovered through a disgorgement remedy.
¶60 Finally, when reviewing the fourth factor, harm to the public interest, the circuit court reiterated that the contracts at issue would wrongfully expend public monies. The potential for unauthorized expenditures of public funds was a valid consideration of the circuit court. However, the circuit court failed also to address the public interest served in allowing the legislature to obtain needed legal advice for redistricting. The legislature has the constitutional responsibility to set district boundaries, and the process can have a material effect on the rights of Wisconsin voters. See
¶61 In all, the circuit court erroneously exercised its discretion by refusing to stay its injunction pending appeal. See Lane, 251 Wis. 2d 68, ¶19.
IV. CONCLUSION
¶62 Petitioners, on behalf of the legislature, entered into contracts for legal advice regarding the decennial redistricting process and any resulting litigation. Respondents claim that Petitioners lacked authority to enter into the contracts, and they ask us to declare the agreements void ab initio. Because Petitioners had authority under
By the Court.—The judgment and the order of the circuit court are reversed, and the cause is remanded with instructions.
¶64 BRIAN HAGEDORN, J. (concurring). I join the majority opinion. I write separately, however, to respond to the dissent‘s misinterpretation of the majority opinion‘s stay analysis. In a number of cases that have crossed our desks, circuit courts rule against a party, and then, pro forma, conclude their ruling means there is little to no likelihood of success on appeal and deny a stay. That is what happened here, and this improper understanding of the law is why we reversed the circuit court‘s stay decision. The dissent misreads the court‘s discussion of this problem as if the majority is setting forth a new standard. It is not.
¶65 We adopted the Gudenschwager test to guide the determination of whether to grant a stay pending appeal.1 The relevant factors——which encompass the likelihood of success on the merits of the appeal, the anticipated harms to the parties, and harm to the public——“are not prerequisites.”2 Rather, the factors constitute a balancing test of “interrelated considerations” that call for the court‘s considered judgment.3 Of particular relevance here, the likelihood of success on appeal a movant must show “is inversely proportional to the amount of irreparable injury the [movant] will suffer absent the stay“——i.e., a sliding scale.4 A high degree of harm paired with a lower likelihood of success on appeal may be sufficient to grant a stay.5 And the higher the likelihood of success on appeal, the less pertinent the harm to the movant becomes.6
¶66 The dissent suggests that under the majority‘s logic, a stay must always be granted when it is possible an appellate court might disagree on a novel question of law. Incorrect. All the majority says on this point is that the circuit court‘s stay analysis should account for the standard of review on appeal. The dissent, in contrast, seems to think that if a court disagrees with a party‘s legal argument, a stay will rarely be appropriate. But that is not the law.
¶67 This case is a classic example of when the circuit court should have granted a stay pending appeal despite its conclusion on the merits. Denying a stay deprived the legislature of the attorneys of its choice during a time it concluded legal representation was necessary. This was a substantial harm. Attorneys are not fungible. The attorney-client relationship is based on trust, and the loss of timely counsel from a trusted attorney is a real deprivation. The harm to the Respondents and the public, on the other hand, was rooted entirely in dollars and cents——allegedly
¶68 More importantly, the message to courts moving forward is that the likelihood of success on appeal is a flexible, sliding-scale factor to be balanced against the relevant harms.9 Rather than conduct this analysis, the circuit court here treated the likelihood of success on appeal as shorthand for its own prior merits decision. Applying the test correctly, it should not be uncommon, particularly when faced with a difficult legal question of first impression, to rule against a party but nonetheless stay the ruling.
¶69 REBECCA FRANK DALLET, J. (dissenting). As leaders of the legislature, Petitioners have a say in what the law is, but they are, like everyone else, bound by the laws the legislature enacts. Thus, Petitioners are bound by
I
¶71 Petitioners raise four possible sources of authority for the legal-services contracts they entered into with outside counsel: the Wisconsin Constitution,
A
¶72
¶73 I agree with the majority opinion that legal services are “contractual services,” as that term is defined broadly in
¶74 A careful review of the record reveals that they were not. The record contains no action by the JCLO, the senate, or the assembly to purchase these services. A review of the legislature‘s journals reveals the same. See, e.g., Medlock v. Schmidt, 29 Wis. 2d 114, 121, 138 N.W.2d 248 (1965) (the legislature‘s records are “properly the subject of judicial notice“). They contain no legislative act from the JCLO, the senate, or the assembly approving the legal-services contracts.4 Without such evidence, there is no factual basis for the majority opinion‘s conclusion that these contracts are valid under
¶75 To be sure, the senate and the assembly‘s separate committees on organization purported to approve the contracts, but those committees have no authorization under
¶76
¶77 Second, there is no statutory basis for the majority‘s assertion that the senate and assembly organization committees were “designated by their respective houses” to contract with outside counsel, or that those committees “vested” Petitioners with the authority to enter into the contracts. See majority op., ¶41. Nowhere does
¶78 For similar reasons, the majority‘s assertion that the “legislature” ratified the contracts also fails. The majority claims that,
¶79 There is therefore no basis for the majority opinion‘s conclusion that the contracts are valid under
B
¶80 Petitioners offer three alternative sources of authority for the contracts. The first two——the Wisconsin Constitution and
¶81 The other statute,
¶82 Petitioners counter that the court should read “any action” as including any “imminent” action, pointing to is will be a party or in which the interests of the assembly are will be affected.” That construction, however, just allows the house leaders to retain outside counsel if they believe their house will eventually become involved in an already pending action. It doesn‘t change the fact that a currently pending action is still required by the statute‘s plain text. Since there was none here,
¶83 Petitioners’ alternatives, therefore, cannot save these contracts from the fact that they were not properly authorized under
II
¶84 While the majority‘s statutory analysis is wrong, at least its effects are likely to be limited. The same cannot be said for the majority‘s discussion about the standard for stays pending appeal. Despite its claim that it is merely “explain[ing]” an earlier unpublished order, majority op., ¶48, the majority unsettles what was a well-established, long-standing test for stays, applying the Gudenschwager factors in a novel and unworkable way.
¶85 As we have explained time and again, appellate courts are required to give a high degree of deference to a circuit court‘s decision to grant or deny a stay pending appeal, reviewing the decision only for an erroneous exercise of discretion. See, e.g., State v. Gudenschwager, 191 Wis. 2d 431, 439–40, 529 N.W.2d 225 (1995). Accordingly, appellate courts must “search the record for reasons to sustain” the circuit court‘s decision, not manufacture reasons to reverse it. E.g., State v. Dobbs, 2020 WI 64, ¶48, 392 Wis. 2d 505, 945 N.W.2d 609; Gudenschwager, 191 Wis. 2d at 439–40. So long as the circuit court “demonstrated a rational process[] and reached a decision that a reasonable judge could make,” an appellate court must affirm, even if it would have reached a different conclusion. Weber v. White, 2004 WI 63, ¶40, 272 Wis. 2d 121, 681 N.W.2d 137. An appellate court may reverse the circuit court‘s stay decision only if the circuit court applied the wrong legal standard or reached a conclusion not reasonably supported by the facts. See Gudenschwager, 191 Wis. 2d at 440; State v. Jendusa, 2021 WI 24, ¶16, 396 Wis. 2d 34, 955 N.W.2d 777.
¶86 The correct legal standard for deciding whether to grant a stay pending appeal is a four-factor balancing test that has been used by the federal courts for at least 60 years. See, e.g., Gudenschwager, 191 Wis. 2d at 439–40; Va. Petroleum Jobbers Ass‘n v. Fed. Power Comm‘n, 259 F.2d 921, 925 (D.C. Cir. 1958). We expressly adopted it over 25 years ago in Gudenschwager:
A stay pending appeal is appropriate where the moving party: (1) makes a strong showing that it is likely to succeed on the merits of the appeal; (2) shows that, unless a stay is granted, it will suffer irreparable injury; (3) shows that no substantial harm will come to other interested parties; and (4) shows that a stay will do no harm to the public interest.
191 Wis. 2d at 440. Although not identical, the test is similar to that for temporary and preliminary injunctions. See, e.g., Werner v. A.L. Grootemaat & Sons, Inc., 80 Wis. 2d 513, 520, 259 N.W.2d 310 (1977) (unlike with stays pending appeal, a factor for courts to consider regarding injunctions is whether an injunction is “necessary to preserve the status quo“).
¶87 Here, the circuit court clearly applied all four Gudenschwager factors. On the first factor, it concluded that Petitioners had presented “nothing” to suggest “they [we]re likely to succeed on appeal on [the statutory] issues” and that it was “unlikely [its] decision will be reversed on appeal.” The court then addressed the second factor, concluding that Petitioners had failed to “meet their burden” of showing that they were “likely to suffer irreparable harm.” Finally, the circuit court determined that the “third and fourth factors also weigh against granting a stay” because allowing Petitioners to improperly spend taxpayer money would harm both these plaintiffs and the general public. The court of appeals then affirmed the circuit court——twice. Given that the circuit court weighed each Gudenschwager factor, there is no question that it applied the correct legal standard.5 So when the majority and the concurrence claim that the circuit court applied the wrong legal standard, what they really mean is that they disagree with the circuit court‘s conclusion. But that disagreement is an insufficient reason to hold that the circuit court erroneously exercised its discretion. See McCleary v. State, 49 Wis. 2d 263, 281, 181 N.W.2d 512 (1971) (“An appellate court should not supplant the predilections of a trial judge with its own.“); Gudenschwager, 191 Wis. 2d at 440.
¶88 Instead of applying the Gudenschwager test as it‘s been traditionally understood, the majority and the concurrence appear to craft a new approach, seemingly
¶89 The majority and the concurrence stumble right out of the gate, failing to apply the first Gudenschwager factor. Gudenschwager requires the moving party to make a “strong showing that it is likely to succeed on the merits,” adding that “more than the mere possibility” of success on appeal is “always required.” 191 Wis. 2d at 440–41. Both the majority and the concurrence pay lip service to that standard, yet neither explains how Petitioners met it. The concurrence suggests that a stay was warranted in part because likelihood of success is a “sliding-scale factor” and Petitioners had a “nontrivial” and “reasonable” chance of succeeding. See concurrence, ¶¶67–68. Of course, it is black-letter law that in any multi-factor balancing test, all factors exist on a sliding scale in that each must be weighed against the others. See, e.g., Gudenschwager, 191 Wis. 2d at 440. But that still doesn‘t explain why Petitioners had made a strong showing they were likely to succeed on the merits, or whether “nontrivial” and “reasonable” chances of success are somehow synonymous with “more than a mere possibility of success.”
¶90 The majority next errs by falsely equating a “strong showing” of likely success on appeal with the fact that the court of appeals reviews questions of law de novo. It provides no explanation for how the de novo standard of review, on its own, gives the moving party more than a mere possibility of success on appeal. To be sure, de novo review gives an appellant a better chance of winning on appeal than a more deferential standard of review——but it “does not make the merits of a party‘s arguments any stronger.” League of Women Voters v. Evers, No. 2019AP559, unpublished order, at 11 (Wis. Apr. 30, 2019) (Ann Walsh Bradley, J., dissenting). There is therefore no reason to believe that a party who lost on the merits at summary judgment has any more than a mere possibility of winning on appeal under a de novo review.
¶91 The majority is unfazed by that logic, perhaps because its position makes the merits irrelevant. Under the majority‘s view, when the circuit court interprets statutory language for the first time, it must always grant a stay because it‘s possible another court may disagree with the circuit court‘s analysis on appeal. That is, the moving party has somehow made a “strong showing” it will win on appeal because it lost on the merits in the circuit court. That “reasoning” is nonsensical on its face. Plus, the fact that a party lost on a novel statutory-interpretation question is a strong reason for a circuit court to deny a stay: If an appellate court has yet to interpret the statutory language at issue, the circuit court has no reason to think that another court is likely to interpret the statute differently. Even if it does, that does not necessarily mean the moving party will win, because different interpretations do not necessarily lead to different outcomes. The bottom line is that de novo appellate review, on its own, says nothing about whether a party has “more than a mere possibility of success” on appeal——a bar that the majority and the concurrence acknowledge that the moving party must “always” clear. See Gudenschwager, 191 Wis. 2d at 441.
¶92 It is therefore hard to make sense of the majority‘s claim that had the circuit court considered “how other reasonable jurists on appeal may . . . interpret[] the relevant law” under the de novo standard of review, the circuit court‘s analysis would have been “different.” See majority op., ¶53. The record shows that the circuit
¶93 The majority and the concurrence also fault the circuit court for resting on its summary-judgment analysis in evaluating Petitioners’ likelihood of success on the merits, but again fail to say why that‘s a problem. It will often be the case a party is unlikely to succeed on appeal for the same reasons it did not succeed on summary judgment, particularly in cases that aren‘t close calls. That is why we have previously concluded that when a circuit court decides a question of law and “believe[s] its decision [i]s in accordance with the law,” that reason is good enough in most cases for it to also conclude that the losing party “would not be successful on appeal.” See Weber, 272 Wis. 2d 121, ¶36. Conversely, “if the circuit court concludes the issue is a close or complex one, the likelihood of success on appeal will generally be greater.” See Scullion v. Wis. Power & Light Co., 2000 WI App 120, ¶19, 237 Wis. 2d 498, 614 N.W.2d 565. There is nothing in this record, though, indicating that the circuit court found the statutory-interpretation issue to be close or complex. And the fact that this court ultimately reached a different conclusion on the merits doesn‘t mean the circuit court was wrong on that score.
¶94 The upshot is that the majority may be right that the first factor will “rarely if ever” favor the movant. See majority op., ¶52. Most parties who lose at summary judgment will have a difficult time showing that they are likely to win on appeal. But that does not mean that a circuit court will never grant those parties a stay. There are three other factors under the Gudenschwager test, and a stronger showing on those may outweigh the moving party‘s low likelihood of success on the merits. See Weber, 272 Wis. 2d 121, ¶35 (explaining that the factors are not “prerequisites, but rather interrelated considerations that must be balanced together“).
¶95 The majority‘s discussion of those other factors, however, provides little clarity for how a circuit court should analyze them. The majority‘s application of the second factor——irreparable injury——lowers the bar for when an injury is considered “irreparable.” Traditionally, “irreparable injury” means an injury that, without a stay, will harm the movant in a way that “is not adequately compensable in damages” and for which there is no “adequate remedy at law.” See Allen v. Wis. Pub. Serv. Corp., 2005 WI App 40, ¶30, 279 Wis. 2d 488, 694 N.W.2d 420. “The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against” a claim that an injury is irreparable. Sampson v. Murray, 415 U.S. 61, 90 (1974) (quoted source omitted); see also Brock v. Milwaukee Cnty. Pers. Rev. Bd., No. 97-0234, unpublished op., 1998 WL 261627, at *3 (Wis. Ct. App. May 26, 1998).
¶96 The majority lowers that threshold by conflating an “adequate remedy at law” with Petitioners’ preferred remedy. It describes Petitioners’ injury as their being unable to retain “counsel of [their] choice” to assist with redistricting, and insists that the injury was irreparable because Petitioners “could not get legal advice ‘back’ for this critical time in which an injunction was in effect.” See majority op., ¶57. The concurrence further muddies the waters
If the Legislature needs assistance in its redistricting work, it has plenty of options. . . . [I]t has available to it the Legislative Reference Bureau, the Legislative Technology Services Bureau, the Wisconsin Legislative Council, and the Attorney General‘s Office. Among those various agencies and groups there are plenty of resources available to the Legislature to engage in their redistricting role.
In any event, Petitioners could have avoided any harm altogether by entering into or ratifying the contracts “in the way specified” by
¶97 On the third factor——potential harm to the non-moving party——the majority proposes an unprecedented per capita calculation for taxpayer harms. The majority claims that potential harm to the plaintiffs was “minimal” because they are only “three individuals out of a state population of 5.8 million,” see majority op., ¶¶58–59, implying that even if Petitioners were illegally spending taxpayers’ money, the only relevant harm to the plaintiffs were their per capita shares. Not only is there no support in our jurisprudence for such a narrow view of taxpayers’ harms, the majority offers no explanation for what number of taxpayers or how high of a per capita share is significant enough to weigh against a stay——again leaving circuit courts in the dark. Our precedent also undermines the concurrence‘s implication that so long as government officials’ wrongdoing can be measured only in “dollars and cents,” there‘s “not much” of a harm to taxpayers, concurrence, ¶67. See S.D. Realty Co. v. Sewerage Comm‘n of City of Milwaukee, 15 Wis. 2d 15, 22, 112 N.W.2d 177 (1961) (explaining the “substantial interest” that every taxpayer has in preventing the “illegal expenditure of public funds“). As for the majority‘s claim that the circuit court should have considered whether the plaintiffs could pursue “a disgorgement remedy,” majority op., ¶59, it is unclear how that would work. Disgorgement requires a party to give up profits obtained illegally, e.g., Country Visions Coop. v. Archer-Daniels-Midland Co., 2020 WI App 32, ¶46, 392 Wis. 2d 672, 946 N.W.2d 169, aff‘d on other grounds, 2021 WI 35, 396 Wis. 2d 470, 958 N.W.2d 511, but Petitioners have no profits to give up because they were allegedly spending money illegally. Outside counsel profited, and they are not parties to this case.
¶98 Finally, in addressing the fourth Gudenschwager factor——that the moving party show that a stay will do “no harm” to the public interest, 139 Wis. 2d at 440——the majority and the concurrence again identify no error by the circuit court. Instead, the majority improperly conflates the legislature‘s interest in obtaining outside legal advice and the public‘s interest in the legislature obtaining such advice. At a minimum, there are two conflicting public interests at play here——the public‘s interests in informed legislative decision-making and in preventing Petitioners from unlawfully spending taxpayer funds. The majority makes no attempt
¶99 Before today, our precedent for how circuit courts should decide whether to grant a stay pending appeal was well settled and easily applied. But here the majority reinterprets the legal standard for each of the four Gudenschwager factors, and provides circuit courts with precious little guidance for how to apply them. The result is a guessing game about how to conduct a Gudenschwager analysis. We can and should do better.
¶100 For the foregoing reasons, I dissent.
¶101 I am authorized to state that Justices ANN WALSH BRADLEY and JILL J. KAROFSKY join this opinion.
Notes
Id. at 441.(1) All supplies, materials, equipment, permanent personal property and contractual services required within the legislative branch shall be purchased by the joint committee on legislative organization or by the house or legislative service agency utilizing the supplies, materials, equipment, property or services. All supplies, materials, equipment, permanent personal property and contractual services required within the judicial branch shall be purchased by the director of state courts or the judicial branch agency utilizing the supplies, materials, equipment, property or services.
. . .
(2)(b) Contracts for purchases by the senate or assembly shall be signed by an individual designated by the organization committee of the house making the purchase. Contracts for other legislative branch purchases shall be signed by an individual designated by the joint committee on legislative organization. Contracts for purchases by the judicial commission or judicial council shall be signed by an individual designated by the commission or council, respectively. Contracts for other judicial branch purchases shall be signed by an individual designated by the director of state courts.
. . .
(4) Each legislative and judicial officer shall file all bills and statements for purchases and engagements made by the officer under this section with the secretary, who shall audit and authorize payment of all lawful bills and statements. No bill or statement for any purchase or engagement for the legislature, the courts or any legislative service or judicial branch agency may be paid until the bill or statement is approved by the requisitioning or contracting officer under sub. (2).