Opinion ID: 1912624
Heading Depth: 2
Heading Rank: 2

Heading: The Municipalities' Interests Are Insufficiently Related to the Subject of the Action

Text: ¶ 43 No precise test exists for determining which type of interest is sufficient to allow a party to intervene as a matter of right. [38] The interest requirement is nebulous; courts have not been able to develop more than general guidelines. [39] Instead of a precise test, courts employ a broader, pragmatic approach to intervention as of right, viewing the interest sufficient to allow the intervention practically rather than technically. [40] As the municipalities' brief recognizes, the interest requirement has generated a spectrum of approaches. ¶ 44 We thus approach the second requirement of Wis. Stat. § 803.09(1) with the same flexibility that we bring to the statute as a whole, measuring the sufficiency of the interest by focusing on the facts and circumstances of the particular case before [us] as well as the stated interest in intervention and analyzing these factors against the policies underlying the intervention statute, [41] namely to strike a balance between allowing the original parties to a lawsuit to conduct and conclude their own, lawsuit and allowing persons to join a lawsuit in the interest of the speedy and economical resolution of controversies without rendering the lawsuit fruitlessly complex or unending. We treat the interest test as primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process. [42] ¶ 45 At the same time, a claimed interest does not support intervention if it is only remotely related to the subject of the action. [43] There must be some sense in which the interest is of such direct and immediate character that the intervenor will either gain or lose by the direct operation of the judgment. [44] A movant may intervene as of right when the movant needs to protect a right that would not otherwise be protected in the litigation. [45] ¶ 46 The subject of the present action is the constitutionality of Wis. Stat. § 40.02(20), which defines dependent for purposes of state employee health insurance eligibility. Although the municipalities' employees are not involved in the subject of the action so defined, the municipalities put forth a number of interests and assert that each is sufficiently related to the subject of the action to allow intervention as of right. [46] They argue that they meet the interest, requirement for the following reasons: (1) three municipalities (Cottage Grove, Watertown, and Oostburg) would have to pay increased premiums on behalf of municipal employees enrolled in DETF health or dental plans should Helgeland prevail; (2) the collective bargaining agreements of all eight municipalities would be affected should Helgeland prevail, because employees' spouses are covered under the agreements but employees' same-sex domestic partners are not; (3) most of the municipalities participate in or sponsor the Wisconsin Retirement System qualified plan and the Wisconsin Deferred Compensation Program (both administered by DETF) that would be adversely affected should Helgeland prevail; and (4) the municipalities' home rule authority over their local affairs and government would be adversely affected by Helgeland's action. We discuss each argument in turn. (1) The Financial Interest of Three Municipalities in DETF Health Plans Is Not Direct, Immediate, or Special ¶ 47 We first consider the municipalities' argument that three of the eight municipalities' financial interest in their employees' DETF health benefit plans is an interest sufficiently related to the subject of Helgeland's action. ¶ 48 Cottage Grove, Watertown, and Oostburg each pay premium costs on behalf of employees who enroll in health or dental plans administered by DETF pursuant to collective bargaining agreements. The municipalities argue that including same-sex domestic partners in the plan could impose additional costs on municipal employers. [47] The municipalities therefore assert a financial interest that they claim is directly related to the subject of Helgeland's action. [48] ¶ 49 The court of appeals voiced some agreement with this portion of the municipalities' argument. While not reaching a definitive conclusion on the matter, the court of appeals conceded that [i]t appears likely that . . . Cottage Grove, Watertown, and Oostburg[ ] may have interests sufficiently related to the declaratory action by virtue of being enrolled in the DETF health plans. [49] The court of appeals reasoned that [a] decision affecting the applicability of Wis. Stat. § 40.02 . . . to same-sex domestic partners of state employees could directly affect these Municipalities in the administration of their health plans pursuant to these statutes, because a judgment in Helgeland's favor would likely increase the amount of benefits these Municipalities would be required to pay. [50] The court of appeals concluded, however, that the remaining five municipalities do not have sufficient interests because they are parties only to DETF pension plans, which Helgeland did not directly challenge. [51] ¶ 50 Helgeland and DETF respond, arguing that municipal employees' plans, including plans administered by DETF, are in no way the subject of Helgeland's action and that any judgment in favor of Helgeland would apply solely to DETF plans offered to state employees. Helgeland and DETF point to Wis. Stat. § 40.51(7), which provides that DETF may establish different eligibility standards for nonstate employees participating in DETF plans. According to Helgeland and DETF, judgment in favor of Helgeland does not directly affect the municipalities. ¶ 51 The municipalities make an additional argument. They charge that Helgeland has deliberately designed her action to gain a tactical advantage by excluding the municipalities from the litigation through shrewd pleading and cherry picking. ¶ 52 The municipalities seem to be arguing that when challenging the constitutionality of state conduct, Helgeland is obligated to name as defendants any conceivable state or municipal entity that may be engaging in the conduct challenged. No such requirement exists in the law. ¶ 53 We need not decide the legal issue of the effect of a judgment in the present case on the municipalities; under the practical standard we apply in interpreting and applying Wis. Stat. § 803.09(1), whether municipal employees' DETF plans are the exact plans considered in the action is not dispositive. A relationship may exist between the plans that DETF offers to state employees and the DETF plans offered to the municipalities' employees. The relationship between the municipalities' interest and the subject of Helgeland's action is, however, too remote and speculative to support a right of intervention. [52] (2) The Municipalities' Collective Bargaining Agreements Are Not at Stake; ¶ 54 The municipalities' second claimed interest is that their collective bargaining agreements will be affected by Helgeland's action. They argue that this interest alone is sufficient to require intervention. We do not agree with the municipalities' statement of the law. ¶ 55 The municipalities cite a number of cases as overwhelming support for the position that a government or private entity has a right of intervention whenever a judgment may modify an agreement to which the entity is party. ¶ 56 These cases do not provide the support that the municipalities seek. Four of the cases cited simply do not consider the question of intervention. [53] In a fifth case; a federal district court granted permissive intervention under Rule 24(b)(2) of the Federal Rules of Civil Procedure but did not reach the question of intervention as of right under Rule 24(a)(2). [54] In an sixth case, a federal district court denied a motion to intervene on grounds that the movant could not meet the interest requirement of Rule 24(a)(2). [55] ¶ 57 Only one case that the municipalities cite lends any aid to their argument. In EEOC v. AT & T, 506 F.2d 735, 741-42 (3d Cir.1974), the Court of Appeals for the Third Circuit ruled that a movant union had the right to intervene as party defendant to oppose a consent decree that could modify or invalidate provisions in the union's collective bargaining agreement with defendant AT & T. The EEOC court did not, however, establish a general rule that a person may always claim an interest supporting intervention as of right when judgment in an action may leave the person unable to enforce rights under an agreement to which it is party. [56] ¶ 58 Although no judgment for Helgeland as a state employee would directly bind the municipalities, on a practical level  the level at which our analysis must focus  the municipalities arguably may be affected if a judgment is entered against DETF. Accordingly, the municipalities are concerned about the effect of stare decisis upon them. As we explain below, although the effect of stare decisis is a consideration in determining intervention as of right, it is not determinative. (3) The Municipalities' Pension and Deferred Compensation Plans Are Not at Stake ¶ 59 Thirdly, the municipalities allege that their interests in both the Wisconsin Retirement System and the Wisconsin Deferred Compensation Program (both administered by DETF) are at stake in the action. The court of appeals refused to consider the municipalities' arguments regarding pension benefits on grounds that Helgeland's complaint made no reference to pension plans. [57] Applying our practical standard, we examine the relation of the municipalities' interests in the retirement and deferred compensation plans to the present action. ¶ 60 The municipalities explain the relationship between their interest in the retirement and deferred compensation plans and Helgeland's action as follows: Although employees are free to designate any pension or deferred compensation beneficiary they wish, Wisconsin law provides that employees'spouses have specific rights to those benefits under qualified domestic relations orders. A qualified domestic relations order divides the participant's pension and deferred compensation benefits at divorce between the participant and the former spouse. [58] ¶ 61 The municipalities argue that because Helgeland asks that the court classify same-sex domestic partners of state employees as dependents for purposes of participation in all employee benefit contracts and plans . . . [59] and because the Wisconsin Retirement System and Wisconsin Deferred Compensation Program are administered by DETF, any judgment in favor of Helgeland will necessarily entail that DETF be compelled to permit a participant's former same-sex domestic partner to seek a qualified domestic relations order dividing the participant's benefits between the participant and the former same-sex domestic partner. ¶ 62 The municipalities further argue that such a remedy would jeopardize the tax-exempt or tax-deferred status of these plans if a former same-sex domestic partner were, like a spouse, permitted to obtain a qualified domestic relations order dividing a participant's benefits between the participant and the former same-sex domestic partner. The municipalities surmise that by allocating such a right to former same-sex domestic partners, DETF would in some way render the plans inconsistent with the federal Defense of Marriage Act, which provides that in determining the meaning of any federal statute or regulation, the word marriage means only a legal union between one man and one woman as husband and wife and the word spouse refers only to a person of the opposite sex who is a husband or a wife. The municipalities cite two IRS private letter rulings that the municipalities claim support their reading of federal law. [60] ¶ 63 The municipalities' arguments on federal law are extremely weak. Life insurance policies, deferred compensation plans, retirement plans, and pension plans administered by DETF already permit participants to name beneficiaries, of their choice. [61] Private letter rulings, as the municipalities themselves acknowledge, have no precedential value. Furthermore, the private letter rulings do not necessarily support the municipalities' position. ¶ 64 The private letter rulings instead conclude that each plan examined is an eligible deferred compensation plan, [62] while also noting that a registered domestic partner . . . is not a spouse . . . for purposes of the federal law and that if spousal provisions in the plans are not interpreted and applied in a manner consistent with the Defense of Marriage Act, the operation of [the plans] would not comply with federal law. [63] The private letter rulings do not explain whether an interpretation or application of a plan's spousal provisions would be inconsistent with the Defense of Marriage Act if, pursuant to state law, the plan provided the same benefits to registered domestic partners that it provides to spouses. ¶ 65 Lastly, the municipalities' argument depends upon an interpretation of the Defense of Marriage Act, which defines the word spouse. The only word at which Helgeland takes aim is, however, the word dependent in the state statute. The municipalities offer no reason to conclude that a judgment in favor of Helgeland interpreting the word dependent might entail interpretation of the word spouse as well. ¶ 66 The municipalities' arguments about federal law are based on likely scenarios and speculation about the effect of Helgeland's action on the tax status of the retirement and deferred compensation plans and application of the Defense of Marriage Act (DOMA), the Employee Retirement Income Security Act of 1974 (ERISA), and the Comprehensive Omnibus Budget Reconciliation Act (COBRA). The municipalities spin an argument but cite, no examples or case law illustrating the dire consequences they predict. In contrast, numerous governmental entities now grant employees domestic partner benefits and retain federal tax benefits and apparently do not run afoul of federal laws. (4) The Municipalities' Home Rule Authority Is Not at Stake ¶ 67 We turn finally to the municipalities' contention that judgment for Helgeland would deprive the municipalities of constitutional and statutory home rule powers. [64] The municipalities suggest that Helgeland threatens the municipalities' authority to hire personnel and negotiate employment contracts, to negotiate collective bargaining agreements, to establish and administer benefit plans for municipal employees, and generally to determine municipal policy. ¶ 68 Helgeland's position does not threaten to deprive the municipalities of any part of their home rule powers. The municipalities apparently would have, this court hold that they face deprivation of their home rule authority  and accordingly may claim an interest supporting intervention  every time a court considers whether a constitutional or statutory provision prohibits the state or municipalities from engaging in some particular form of conduct. We do not so hold. The municipalities' home rule authority is not related to the subject of Helgeland's action. ¶ 69 That a judgment for Helgeland might affect the constitutional or statutory powers of a municipality in operating health care or pension plans does not constitute a deprivation of the municipalities' home rule powers. Home rule, powers are explicitly constrained by the state constitution and the statutes. [65] (5) Summary ¶ 70 In summary, we examine all of the municipalities' arguments about their interests together and apply the broad, pragmatic approach to intervention as of right required by Wis. Stat. § 803.09(1). We determine whether the municipalities' interests are sufficient to allow the intervention practically rather than technically and examine the interest factor in relation to the other factors to decide whether to allow intervention as of right. We balance the right of the original parties to conduct their own lawsuit with allowing others to join the lawsuit in the interest of speedy and economical resolution of the controversy. ¶ 71 Although the municipalities claim that they have interests related to the subject of Helgeland's action, they have failed to show in the circuit court or here how their interests relate to the subject of the action in a direct and immediate fashion. Furthermore, the municipalities' interest in the present case is not a unique or special interest but rather, as Justice Butler's concurrence demonstrates, one that other municipalities or other entities or individuals could claim in almost any action challenging the constitutionality of a state statute, or that any employer could claim when an action before a court affects a similar contract or threatens to increase costs that employers are obligated to pay on behalf of their employees. [66] When the interests of a movant are substantially similar to those of a party, as the municipalities claim, it is more difficult for the movant to demonstrate that it is not adequately represented by the party. [67] The municipalities' interests do diverge from DETF's. The municipalities' interest is in the employees covered by their own plans, not in the state employees who have brought the action. Furthermore, the municipalities' interest in the outcome is more attenuated than the State's. The municipalities, unlike the State, would not be subject to immediate potential damages as well as costs to the taxpayers should the court ultimately rule in Helgeland's favor. ¶ 72 The municipalities cite no case holding that a movant meets the interest requirement of either Wis. Stat. § 803.09(1) or Rule 24(a)(2) of the Federal Rules of Civil Procedure merely when it engages in, and wishes to continue engaging in, conduct identical to another's conduct challenged on constitutional grounds but governed by a different contract. The municipalities also adduce no precedent recognizing a right of intervention based on a widely shared financial interest such as presented in the instant case. Many entities may be concerned with Helgeland's action, but involving them as intervenors as of right is not likely to be compatible with efficiency and would not contribute to the resolution of the controversy unless the movant had a sufficiently different stake in the controversy, was not adequately represented by a party, and could make a unique contribution to the proceedings. ¶ 73 The municipalities conclude their interest argument by asserting that when, as in the present case, the claimant (Helgeland) brings public interest litigation that may change constitutional doctrine and statewide governmental practice, greater consideration should be given for intervention by parties of differing perspectives to allow fuller development of the issues. Under this theory, any significant legal question of first impression cannot be resolved without allowing intervention by every person whose rights in a future case might be affected by the stare decisis effect of the decision. This type of free-for-all intervention could not have been contemplated by the legislature. The municipalities' reasoning is therefore flawed. ¶ 74 The municipalities' generalized interest in the subject Of the instant action, namely, the constitutionality of a statute applicable to a plan for state employees, is at the far edge of what may constitute a sufficiently related interest for purposes of the right to intervene statute. The weakness of the municipalities' showing with respect to the interest requirement means that to demonstrate a right of intervention the municipalities should make a strong showing in the other requirements to intervene as of right.