Opinion ID: 1943110
Heading Depth: 1
Heading Rank: 4

Heading: Dane County Declaratory Judgment Action

Text: ¶ 50 We turn next to the action for declaratory judgment under Wis. Stat. § 804.06, which was dismissed on the grounds of sovereign immunity. Prism filed an amended complaint in Dane County seeking the following relief: (1) a declaration that the DOA should have awarded the contract to Prism and violated Adm Ch. 10 by not doing so; (2) a declaration that the DOA prevented and denied Prism the opportunity to protest under Adm Ch. 10; (3) a declaration that as the winning bidder of the first RFP, Prism had either a contract or an exclusive right to negotiate for a contract; (4) a declaration that the DOA violated Adm Ch. 10 by releasing the contents of Prism's first proposal to the public; and (5) a declaration that the DOA acted ultra vires by authorizing and conducting the second RFP. ¶ 51 As discussed above, the State cannot be sued without its consent, and the legislature directs the manner in which suits may be brought against the State. See Kenosha, 35 Wis.2d at 322, 151 N.W.2d 36; Lister v. Board of Regents, 72 Wis.2d 282, 291, 240 N.W.2d 610 (1976). A suit against a state agency constitutes a suit against the State for purposes of sovereign immunity. Lister, 72 Wis.2d at 291, 240 N.W.2d 610. If the legislature has not specifically consented to the suit, then sovereign immunity deprives the court of personal jurisdiction over the State, assuming that the defense has been properly raised. Id. at 291, 240 N.W.2d 610. ¶ 52 Like other lawsuits, actions for declaratory relief can be dismissed on the grounds of sovereign immunity. Nonetheless, there are occasions when a suit for declaratory judgment against a state agency is permissible. In Lister, we explained: [T]he court has [] recognized that the declaratory judgment procedure is particularly well-suited (in cases where such relief is otherwise appropriate) for resolving controversies as to the constitutionality or proper construction and application of statutory provisions. As a result, it has been necessary to engage in a fiction that allows such actions to be brought against the officer or agency charged with administering the statute[.] Id. at 303, 240 N.W.2d 610. ¶ 53 Declaratory judgment provides prospective rather than remedial relief. The purpose of declaratory relief and Wis. Stat. § 806.04, the Uniform Declaratory Judgments Act, is: to enable controversies of a justiciable nature to be brought before the courts for settlement and determination prior to the time that a wrong has been threatened or committed. The purpose is facilitated by authorizing a court to take jurisdiction at a point earlier in time than it would do under ordinary remedial rules and procedures. Id. at 307, 240 N.W.2d 610 (emphasis added). Declaratory judgment provides a remedy which is primarily anticipatory or preventative in nature. Id. ¶ 54 In Lister, a group of students brought suit against the University of Wisconsin Board of Regents. The students argued that they had been classified as non-residents contrary to the Wisconsin Statutes and therefore had to pay tuition at a higher rate. Among other remedies, they sought a declaratory judgment of their right to have been classified as residents. Id. at 305, 240 N.W.2d 610. ¶ 55 This court concluded that the action for a declaratory judgment could not be maintained. We said: A court cannot close its eyes to the purpose which a declaration of rights will serve in the particular case. It is not a sufficient ground for declaratory relief that the parties have a difference of opinion as to the proper construction and application of a particular statute. No anticipatory or preventative relief is sought in this action. To the extent that the complaint attempts to state a claim to relief under state law, the only consequence which the desired declaration of rights could have would be to settle the plaintiffs' rights to recover the amounts paid in nonresident tuition. The action is, in effect, one for damages. Id. at 308, 240 N.W.2d 610 (emphasis added); see also Brown v. State, 230 Wis.2d 355, 382, 602 N.W.2d 79 (Ct.App.1999) (We acknowledge that sovereign immunity does not bar a suit for a declaratory ruling that an individual state official or agency has violated a statute when there is an anticipatory or preventative purpose for the ruling . ... It is therefore not apparent from the complaint ... that there is any purpose for the declaratory judgment other than to establish the State's liability for damages on a claim barred by sovereign immunity. (emphasis added)). ¶ 56 The situation here is analogous to the situation in Lister. The declarations Prism seeks all relate to the DOA's past actions, such as failing to award the contract to Prism, rescinding the first RFP, and issuing a second RFP. None relates to the State's future conduct. In effect, Prism seeks a declaration that its rights were violated during the procurement procedure so it can pursue a damage remedy against the State. [20] ¶ 57 A declaration which seeks to fix the state's responsibility to respond to a monetary claim is not authorized by Wisconsin's Declaratory Judgments Act. Lister at 308, 240 N.W.2d 610. We conclude that a declaratory action cannot be maintained because Prism is seeking money damages rather than anticipatory or preventative relief. ¶ 58 Nonetheless, Prism argues that its amended complaint is justiciable because Wis. Stat. § 775.01 waives sovereign immunity and authorizes suit against the State for contract actions that would render the state a debtor. Wis. Stat. § 775.01 provides: Upon the refusal of the legislature to allow a claim against the state the claimant may commence an action against the state by service ... and by filing with the clerk of court a bond ... to the effect that the claimant will indemnify the state against all costs that may accrue in such action ... in case the claimant fails to obtain judgment against the state. Chapter 775 is limited to claims which, if valid, would render the State a debtor to the claimant. Brown, 230 Wis.2d at 364, 602 N.W.2d 79 (citing Cords v. State, 62 Wis.2d 42, 50, 214 N.W.2d 405 (1974)). The chapter does not authorize tort claims against the State. See id. ; Houston v. State, 98 Wis. 481, 487, 74 N.W. 111 (1898). ¶ 59 Prism's argument that Section 775.01 authorizes this lawsuit is unpersuasive for two reasons. First, Prism is procedurally barred from relying on Wis. Stat. Ch. 775 because it has not met the conditions precedent for filing such a claim. Before a Chapter 775 claim can be filed, the following conditions must be met: (1) the claim must be submitted to the legislature; (2) the claim must be denied; and (3) the claimant must file a bond with the clerk of courts. Wis. Stat. § 775.01. ¶ 60 Prism acknowledges that it has not satisfied these statutory requirements. Rather, it contends that the Claims Board declined to take any action on the claim until the court case was completed because the Claims Board is a forum of last resort. Prism argues that it was placed in a Catch-22 situation because it could not file a claim until this court case was complete, but it could not be granted relief in court unless it could demonstrate that the legislature authorized suit. ¶ 61 This argument is not persuasive. Here, Prism filed an action in court seeking a declaration of rights, presumably so that it could later file a claim for money damages with the legislature. In order to have personal jurisdiction over the DOA, however, we must first conclude that the legislature authorized this suit. The legislature has not authorized this suit against the State unless Prism has followed the conditions precedent for bringing suit. It has not done so here. ¶ 62 Second, the damages Prism seeks are not the type that are authorized under Section 775.01 as that statute has been interpreted by the courts. In Koshick v. State, 2005 WI App 232, 287 Wis.2d 608, 706 N.W.2d 174, the plaintiff brought a breach of contract action against the State. He asserted that he entered into a contract with the State permitting him to lease the Wisconsin State Fair Park for an event. Id., ¶ 2. The State reneged on its promise. Id. Koshick followed the statutory procedures necessary to bring a claim against the State. Id., ¶ 4 n. 3. When the legislature rejected his claim, he then filed a civil suit in circuit court seeking damages for lost profits and expenses incurred. Id., ¶ 1. ¶ 63 The court of appeals interpreted a long line of cases to determine whether Koshick could maintain a breach of contract claim under § 775.01 for lost profits and expenses incurred. Relying on a 1952 case, Trempealeau County v. State, 260 Wis. 602, 51 N.W.2d 499 (1952), the court concluded that § 775.01 authorizes suits to recover a specific sum of money which is due or owing from [the State] to another. Koshick, 287 Wis.2d 608, ¶ 11, 706 N.W.2d 174. The court concluded that Koshick could not maintain an action under § 775.01 because he was not seeking an amount due for goods or services that he has sold or delivered to the State or money that the State has received that he asserts he is entitled to. [21] Id., ¶ 12. ¶ 64 The facts in this case are similar to the facts in Koshick. As in Koshick, Prism claims that it had a contract with the State and it seeks damages for the cost of preparing its winning bid and for the value of the contract. [22] ¶ 65 Prism does not assert that its ch. 775 action can be maintained under the holding of Koshick. Instead, it contends that Koshick was wrongly decided. In essence, Prism concedes that we must overrule Koshick to permit Prism's claim under Section 775.01 to go forward. ¶ 66 We decline to do so here. It is the role of the legislature, rather than that of the court, to consent to suit against the State. The Koshick court relied on the text of the statute and existing case law when it concluded that a breach of contract action for lost profits and expenses incurred could not be maintained under § 775.01. [23] ¶ 67 We conclude that Prism cannot maintain a declaratory action against the DOA because Prism is seeking money damages rather than anticipatory or preventative relief. We further determine that Wis. Stat. § 775.01 does not waive sovereign immunity in this case because Prism has not complied with the statutory conditions precedent of that section and because even if it had, the damages Prism seeks cannot be maintained in an action under § 775.01.