Opinion ID: 6113063
Heading Depth: 2
Heading Rank: 2

Heading: The Standard For Stays Pending Appeal

Text: ¶48 After awarding summary judgment in Respondents' favor, the circuit court in this case enjoined Petitioners from constitute contractual services under Wis. Stat. § 16.74, nor does it claim, as do the Respondents, that § 16.74 fails to provide independent legal authority to complete legislative purchases. Instead, the dissent advances a distinct statutory interpretation undeveloped by Respondents on appeal. It notes that § 16.74(1) permits purchases by the joint committee on legislative organization or by the house or legislative service agency utilizing the goods or services, and it claims that neither the joint committee nor the senate or assembly as a whole voted to approve the contracts at issue. Yet, the statute does not bar the senate or assembly from designating committees to complete purchases on behalf of the two houses. It is well understood that the legislature adopts and utilizes internal rules to govern[] how it operates. Custodian of Recs. for Legis. Tech. Servs. Bureau v. State, 2004 WI 65, ¶28, 272 Wis. 2d 208, 680 N.W.2d 792; see also League of Women Voters of Wis. v. Evers, 2019 WI 75, ¶39, 387 Wis. 2d 511, 929 N.W.2d 209 (noting that the legislature has the discretion to determine for itself the rules of its own proceedings); see, e.g., Flynn v. DOA, 216 Wis. 2d 521, 531-32, 576 N.W.2d 245 (1998) (explaining that the legislature delegated to a committee the authority to narrow and eliminate alternatives of proposed legislation). The senate and assembly may, as was done in this case, appoint committees on organization to approve necessary purchases on behalf of the two houses. Under the dissent's reading, if purchases are not made through the joint committee on organization, the entirety of each house would be forced to vote on specific, and often mundane, legislative purchases. The text of § 16.74 does not require the legislature to engage in such inefficient practices. In fact, § 16.74 expressly contemplates the designation of committees to facilitate necessary purchasing. The statute states that contracts for purchases by either house must be signed by an individual designated by the organization committee of the house making the purchase. § 16.74(2)(b) (emphasis added); see State ex rel. Kalal v. Cir. Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110 ([S]tatutory language is interpreted in the context in which it is used . . . .). That is exactly what occurred in this case. 29 No. 2021AP802 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 30 No. 2021AP802 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, represent[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 31 No. 2021AP802 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 Wis. Stat. § 16.74, which neither this court nor the court of appeals had previously interpreted, to conclude that an appeal would be meritless. Instead, the circuit court should have considered how other reasonable jurists on appeal may have interpreted the relevant 32 No. 2021AP802 law and whether they may have come to a different conclusion.16 If the circuit court had done so, its stay analysis would have been different. As explained above, under the plain language of § 16.74, the legislature had authority to hire counsel for redistricting, and reasonable judges on appeal could easily have disagreed with the circuit court's holdings. ¶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 By contrast, appeals of decisions left primarily to the 16 discretion of circuit courts, such as the length of a criminal sentence or the admissibility of evidence under Wis. Stat. § 904.03, have a smaller likelihood of success than appeals requiring de novo interpretation of statutes. See State v. Taylor, 2006 WI 22, ¶17, 289 Wis. 2d 34, 710 N.W.2d 466 (A circuit court exercises its discretion at sentencing, and appellate review is limited to determining if the court's discretion was erroneously exercised.); State v. Plymesser, 172 Wis. 2d 583, 595, 493 N.W.2d 367 (1992) (Section 904.03 gives a judge discretion to exclude evidence if its probative value is substantially outweighed by the danger of unfair prejudice.). 33 No. 2021AP802 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 34 No. 2021AP802 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 harm will come to other interested parties. Scott, 382 Wis. 2d 476, ¶46. However, similar to the circuit court's consideration of harm to the movant, courts consider the period of time that the case is on appeal, not any harm that could occur in the future. Courts must consider the extent of harm the non-movant will experience if a stay is entered, but the non-movant is ultimately successful in having the . . . injunction affirmed and reinstated. Waity, No. 2021AP802, unpublished order, at 11 (quoting Serv. Empls. Int'l Union, No. 2019AP622, unpublished order, at 6-7). Thus, the stay analysis is not a mere repetition of any harm analysis conducted by the circuit court when it originally issued an order granting relief, which may consider generally all future harms to the non-movant. See Kocken v. Wis. Council 40, 2007 WI 72, ¶27 n.12, 301 Wis. 2d 266, 732 N.W.2d 828 (explaining that [a] permanent injunction will not be granted unless there is the threat of irreparable injury that cannot be compensated with a remedy at law). 35 No. 2021AP802 ¶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 36 No. 2021AP802 on the rights of Wisconsin voters. See Wis. Const. art. IV, § 3. Consequently, the public is better served when the legislature has effective representation in performing redistricting and preparing for subsequent litigation. This interest was more significant, during the time period of appeal, than the public interest in preventing allegedly unauthorized expenditures. ¶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.