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Koschkee v. Taylor

Supreme Court of Wisconsin

June 25, 2019

Kristi Koschkee, Amy Rosno, Christopher Martinson and Mary Carney, Petitioners,
v.
Carolyn Stanford Taylor, in her official capacity as Wisconsin Superintendent of Public Instruction and Wisconsin Department of Public Instruction, Respondents.

         ORIGINAL ACTION for declaratory judgment.

          Oral Argument: April 10, 2019

          For the petitioners, there were briefs filed by Richard M. Esenberg, Brian McGrath, CJ Szafir, and Wisconsin Institute For Law & Liberty, Milwaukee. There was an oral argument by Richard M. Esenberg.

          For the respondents, there was a brief filed by Ryan Nilsestuen, Benjamin R. Jones, and Wisconsin Department of Public Instruction, Madison. There was an oral argument by Lester A. Pines and Pines Bach LLP, Madison.

          An amicus curiae brief was filed on behalf of Wisconsin Association of School Boards, Inc., and the Wisconsin School Administrators' Alliance, Inc., by Michael J. Julka, Richard F. Verstegen, M. Tess 0'Brien-Heinzen, and Wisconsin Association of School Boards, Inc. and School Administrators' Alliance, Inc., Madison. There was an oral argument by Richard F. Verstegen.

          An amicus curiae brief was filed on behalf of Peggy Coyne, Mary Bell, Mark W. Taylor, Corey Otis, Marie Stangel, Jane Weidner, and Kristin A. Voss, by lester A. Pines and Pines Bach IIP, Madison. With whom on the brief was Christina M. Ripley and Wisconsin Education Association Council, Madison. There was an oral argument by Jeffrey A. Mandell and Stafford Rosenbaum IIP, Madison.

          PATIENCE DRAKE ROGGENSACK, C.J.

         ¶1 This is an original action brought by Kristi Koschkee et al., two licensed teachers and two school board members, against Superintendent of Public Instruction (SPI) Carolyn Stanford Taylor and the Department of Public Instruction (DPI). The petitioners argue that the SPI and DPI must comply with the statutory requirement that, prior to drafting or promulgating an administrative rule, they must receive written approval from the governor.[1] The SPI and DPI argue that this requirement of gubernatorial approval is unconstitutional as applied to the SPI because, pursuant to Article X, Section 1 of the Wisconsin Constitution, no other officer may be placed in a position equal or superior to that of the SPI with regard to the "supervision of public instruction."

         ¶2 We conclude that the gubernatorial approval requirement for rulemaking is constitutional as applied to the SPI and DPI, whether such approval authority is found in 2017 Wis. Act 57 or in previous provisions of ch. 227. Article X, Section 1 vests supervision of public instruction, an executive function, in the SPI. In contrast, when the SPI, through the DPI, promulgates rules, it is exercising legislative power that comes not from the constitution but from the legislature. Stated otherwise, the legislature delegates part of its constitutional power to legislate to the SPI, DPI, and many other agencies in the form of rulemaking power. That the SPI also has the executive constitutional function to supervise public instruction does not transform the SPI's legislatively delegated rulemaking power into a constitutional supervisory function. Therefore, it is of no constitutional concern that the governor is given equal or greater legislative authority than the SPI in rulemaking.

         I. BACKGROUND

         ¶3 2011 Wis. Act 21 (Act 21) amended sections of Wis.Stat. ch. 227 (2009-10), the Wisconsin Administrative Procedure Act. Prior to the passage of Act 21, an agency[2] planning to draft an administrative rule submitted a "statement of scope" to the Legislative Reference Bureau (LRB) for publication, and to the "individual or body with policy-making powers over the subject matter of a proposed rule" for approval. Wis.Stat. § 227.135(2) (2009-10). A scope statement describes the rule and its objectives, the statutory authority for promulgating the rule, the time and resources required to develop the rule, the entities affected, and a summary of relevant federal regulations. Wis.Stat. § 227.135(1)(a)-(f) (2017-18).[3] After submitting the scope statement, the agency drafted the proposed rule and submitted it to the legislature for review. Wis.Stat. §§ 227.135-.19 (2009-10).

         ¶4 Act 21 altered this procedure. Act 21 required an agency first to submit its scope statement to the governor for approval; agencies were prohibited from submitting a scope statement to the LRB until the governor issued a written notice of approval. An agency could not "perform any activity in connection with the drafting of a proposed rule . . . until the governor and the individual or body with policy-making powers over the subject matter of the proposed rule approve[d]." Wis.Stat. § 227.135(2). Additionally, rather than submitting final drafts of proposed rules directly to the legislature for approval, agencies were required first to submit final drafts of proposed rules to the governor for approval. Wis.Stat. § 227.185. The proposed rule could not be submitted to the legislature for approval unless and until the governor again approved the rule in writing. Id.

         ¶5 We reviewed these gubernatorial approval requirements in Coyne v. Walker, 2016 WI 38, ¶6, 368 Wis.2d 444, 879 N.W.2d 520');">879 N.W.2d 520, and decided that they were "void as applied to the [SPI] and his subordinates." Id., ¶4. There was no majority opinion in Coyne. Our mandate resulted from a one-justice lead opinion, a two-justice concurrence, and a one-justice concurrence, all of which agreed only on the outcome of the case.

         ¶6 In 2017, the Wisconsin legislature passed the Regulations from the Executive in Need of Scrutiny Act, 2017 Wis. Act 57 (REINS Act). The REINS Act added the requirement that agencies submit scope statements to the Department of Administration (DOA), which determines whether the agency has authority to promulgate the rule. REINS Act, § 3. The DOA also makes a non-binding recommendation to the governor. REINS Act, § 3. The REINS Act required agencies to hold a preliminary public hearing and comment period on the scope statement at the request of a co-chairperson of the Joint Committee on Review of Administrative Rules (JCROR). REINS Act, § 5.

         ¶7 The REINS Act did not alter Act 21's requirement that an agency (1) submit a statement of scope to the governor for approval prior to drafting a proposed rule, and (2) submit a final draft of a rule to the governor for approval before submitting it to the legislature.

         ¶8 The petitioners conceded at oral argument that the SPI and DPI had submitted scope statements to the DOA and held preliminary public hearings and comment periods upon request. However, the petitioners assert that the REINS Act "variously amends and reenacts parts of a comprehensive statutory scheme" and that their challenge therefore encompasses the "full suite of requirements" of ch. 227.[4] The petitioners ask us to overrule Coyne's mandate and hold that the SPI and DPI must comply with the "full suite of requirements" of ch. 227, including the requirement for written gubernatorial approval both before drafting a proposed rule and before submitting a final draft of a proposed rule to the legislature. We accepted the petition for original action, and now conclude that the requirement that agencies receive gubernatorial approval prior to drafting a proposed rule and again before submitting it to the legislature for approval is constitutional as applied to the SPI and DPI. Accordingly, we overrule our prior decision in Coyne v. Walker, 368 Wis.2d 444.[5]

         II. DISCUSSION

         A. Standard of Review

         ¶9 We are required to interpret Article X, Section 1 in order to decide the pending controversy. Interpretations of provisions of the Wisconsin Constitution present legal questions. Custodian of Records for the LTSB v. State, 2004 WI 65, ¶6, 272 Wis.2d 208, 680 N.W.2d 792. This case also requires us to apply a statute. The interpretation and application of a statute to a given set of facts present questions of law as well. Marder v. Bd. of Regents of Univ. Wis. Sys., 2005 WI 159, ¶19, 286 Wis.2d 252, 706 N.W.2d 110. B. Rulemaking Authority

         ¶10 The Wisconsin Constitution establishes three separate branches of government, with "no branch subordinate to the other, no branch to arrogate to itself control over the other except as is provided by the constitution, and no branch to exercise the power committed by the constitution to another." State ex rel. Friedrich v. Dane Cty. Cir. Ct., 192 Wis.2d 1, 13, 531 N.W.2d 32 (1995) (citation omitted). Legislative power is vested in a senate and assembly, executive power is vested in a governor, and judicial power is vested in a unified court system. Wis. Const. art. IV, V, VII.

         ¶11 "Legislative power, as distinguished from executive power, is the authority to make laws, but not to enforce them." Schuette v. Van De Hey, 205 Wis.2d 475, 480-81, 556 N.W.2d 127 (1996). Powers constitutionally vested in the legislature include the powers: "'to declare whether or not there shall be a law; to determine the general purpose or policy to be achieved by the law; [and] to fix the limits within which the law shall operate.'" See, e.g., Schmidt v. Dep't of Res. Dev., 39 Wis.2d 46, 59, 158 N.W.2d 306 (1968) (quoting State ex rel. Wis. Inspection Bureau v. Whitman, 196 Wis. 472, 505220 N.W. 929 (1928)).

         ¶12 A "rule" is "a regulation, standard, statement of policy, or general order of general application that has the force of law and that is issued by an agency to implement, interpret, or make specific legislation enforced or administered by the agency or to govern the organization or procedure of the agency." Wis.Stat. § 227.01(13). Therefore, when administrative agencies promulgate rules, they are exercising legislative power that the legislature has chosen to delegate to them by statute. See id. at 505-06 (the legislature "may delegate to administrative agencies the authority to exercise such legislative power as is necessary to carry into effect the general legislative purpose . . . . It [] leads to confusion and error to say that the power to fill up the details and promulgate rules and regulations is not legislative power."); Brown Cty. v. DHFS, 103 Wis.2d 37, 43, 307 N.W.2d 247 (1981) ("Where the legislature has set forth the 'fundamentals of a law, it may delegate to administrative agencies the authority to exercise such legislative power as is necessary to carry into effect the general legislative purpose.'") (citations omitted).

         ¶13 From time to time, the legislature has used its power to create administrative agencies, such as the Department of Health Services and the Department of Financial Institutions, and to delegate to agencies certain legislative powers. The legislature created DPI in 1967. Wis.Stat. § 15.37 (1967).

         ¶14 Agencies are considered part of the executive branch. Citizens Concerned for Cranes and Doves v. DNR, 2004 WI 40, ¶14, 270 Wis.2d 318, 677 N.W.2d 612. They possess "'only those powers [that] are expressly conferred or [that] are necessarily implied by the statutes under which [they] operate[].'" See, e.g., Kimberly-Clark Corp. v. Pub. Serv. Comm'n, 110 Wis.2d 455, 461-62, 329 N.W.2d 143 (1983). The DPI is the administrative agency responsible for promulgating rules related to public instruction, and acts "under the direction and supervision of the [SPI]." Wis.Stat. § 15.37.

         ¶15 The powers delegated to administrative agencies by the legislature include the power to promulgate rules within the boundaries of enabling statutes passed by the legislature. See Wis. Stat. § 227.11(2)(a) ("Each agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute, but a rule is not valid if the rule exceeds the bounds of correct interpretation."); State ex rel. Castaneda v. Welch, 2007 WI 103, ¶26, 303 Wis.2d 570, 735 N.W.2d 131.

         ¶16 In Wis.Stat. § 227.19(1)(b), the legislature explained that its delegation of legislative power is a recognition of "the need for efficient administration of public policy," and it also outlined reservations of that delegation.

         Accordingly, in its general rulemaking delegation, the legislature "reserves to itself" all of the following:

1. The right to retract any delegation of rule-making authority.
2. The right to establish any aspect of general policy by legislation, notwithstanding any delegation of rule-making authority.
3. The right and responsibility to designate the method for rule promulgation, review and modification.
4. The right to delay or suspend the implementation of any rule or proposed rule while under review by the legislature.

§ 227.19 (1)(b)1.-4.

         ¶17 We have long recognized that "the delegation of the power to make rules and effectively administer a given policy is a necessary ingredient of an efficiently functioning government." Gilbert v. Med. Examining Bd., 119 Wis.2d 168, 184, 349 N.W.2d 68 (1984); see also Schmidt, 39 Wis.2d at 58 ("[O]ur government could not efficiently operate without the administrator and administrative agency."). The administration of state government is complex. For example, "[t]he Wisconsin Administrative Code is more than 11, 000 pages long with just under 1, 800 chapters of regulations that affect businesses, local governments, licensed professionals, and consumers and touch[es] virtually every industry in Wisconsin." See, e.g., Jodi E. Jensen, Regulatory Reform: Moving Policymaking from State Agencies to the Legislature, 91 Wis. Law. 24, 25 (Oct. 2018).

         ¶18 However, while the breadth of government legislation has resulted in some delegation of legislative power to agencies, such agencies remain subordinate to the legislature with regard to their rulemaking authority. Stated otherwise, agencies "ha[ve] no inherent constitutional authority to make rules, and, furthermore, [their] rule-making powers can be repealed by the legislature." Martinez v. DILHR, 165 Wis.2d 687, 698, 478 N.W.2d 582 (1992); Wis.Stat. § 227.19(1)(b)1.

         ¶19 In addition, the case before us does not present issues that should give rise to a dogmatic exposition on the merits, or lack thereof, of administrative agencies. Rather, we are asked to determine the extent to which the legislature can change a past delegation of rulemaking authority when the SPI's rulemaking is affected.

         ¶20 Legislative change and control of rulemaking are within the constitutional power of the legislature. Martinez, 165 Wis.2d at 698. As we have explained, an agency's "'powers, duties and scope of authority are fixed and circumscribed by the legislature and subject to legislative change.'" Id. (quoting Schmidt, 39 Wis.2d at 56). Because the legislature has the authority to take away an administrative agency's rulemaking authority completely, it follows that the legislature may place limitations and conditions on an agency's exercise of rulemaking authority, including establishing the procedures by which agencies may promulgate rules. The legislature may therefore retract or limit any delegation of rulemaking authority, determine the methods by which agencies must promulgate rules, and review rules prior to implementation. Wis.Stat. § 227.19(1)(b)1.-4.; see, e.g., Wis. Realtors Ass'n v. Pub. Serv. Comm'n, 2015 WI 63, ¶23, 363 Wis.2d 430, 867 N.W.2d 364.

         ¶21 After the enactment of Act 21, agencies must first submit scope statements to the governor for approval; agencies may not submit scope statements to the LRB, or begin drafting any proposed rule, "until the governor issues a written notice of approval of the statement." Wis.Stat. § 227.135(2). Additionally, rather than submit final drafts of proposed rules directly to the legislature for approval, agencies must first submit final drafts of proposed rules to the governor for approval. Wis.Stat. § 227.185. A proposed rule may not be submitted to the legislature without a second approval of the governor. § 227.185. Act 21 therefore altered the legislature's delegation of rulemaking power to agencies by allowing the governor to block a proposed rule at two separate stages of the rulemaking process. C. SPI's Constitutional Authority

         ¶22 The constitutional genesis of the SPI is found in Article X, Section 1, which provides:

The supervision of public instruction shall be vested in a state superintendent and such other officers as the legislature shall direct; and their qualifications, powers, duties and compensation shall be prescribed by law. The state superintendent shall be chosen by the qualified electors of the state at the same time and in the same manner as members of the supreme court, and shall hold office for 4 years from the succeeding first Monday in July. The term of office, time and manner of electing or appointing all other officers of supervision of public instruction shall be fixed by law.

Wis. Const. art. X, § 1. Article X, Section 1 does not define the term "supervision."

         ¶23 When we interpret an undefined constitutional term we examine the common law as it existed at the time the constitutional provision was enacted, the constitutional debates that bore on the undefined term, the plain meaning of the term at the time the constitutional provision was adopted, and the earliest interpretation in laws passed shortly after adoption of the constitutional provision or our opinions that interpreted the provision. See Polk Cty. v. State Pub. Def., 188 Wis.2d 665, 674, 524 N.W.2d 389 (1994) (citing State v. Beno, 116 Wis.2d 122, 136-38, 341 N.W.2d 668 (1984)).

         ¶24 Our examination of the common law functions of the SPI at statehood provides no guidance, because an officer responsible for public education did not exist prior to 1848. Therefore, Article X, Section 1 did not "incorporate[] an ancient common law office, possessing defined powers and duties, into the constitution. Public instruction and its governance had no long-standing common law history at the time the Wisconsin ...


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