CERTIFIED QUESTION FROM THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
of question of law from the United States Court of Appeals
for the Seventh Circuit. Certified question answered in the
negative and cause remanded.
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.
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.
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),  It certified the following question:
"Does the definition of a dealership contained in
Wis.Stat. § 135.02(3) (b) include wine grantor-dealer
relationships?" Winebow, 867 F.3d at 871.
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.
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.
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
Accordingly, we answer the certified question in the
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
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
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. §
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.
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.
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.
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.
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).
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
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.
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
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.
This revised "dealership" definition explicitly
incorporated the definition of "intoxicating
liquor" found in Wis.Stat. ch. 125, which regulates
alcohol beverages. Pursuant to Wis.Stat. § 125.02(8),
"vinous liquors, " or in other words "wine,
" is expressly included under the umbrella of
"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
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) .
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.
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.
Edits to Wis.Stat. § 135.066 were much more extensive.
The governor eliminated large portions of § 135.066 (2)
- (4) . What remained was the sole sentence,
"'Intoxicating liquor' has the same meaning
given in s. 125.02(8) minus wine."
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 ...