Court Opinion

ID: 8204279
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:50:45.430466+00
Date Added: 2024-06-11T16:41:07.023456
License: Public Domain

FINE, J.,
¶ 27. (concurring). I agree with the Majority that we should affirm, reverse, and remand, but write separately because, in my view, the part of Heritage Credit Union v. Office of Credit Unions, 2001 WI App 213, 247 Wis. 2d 589, 634 N.W.2d 593, that we must follow is wrong.
¶ 28. As seen from the Majority opinion, the Department of Children and Families determined that Selina Mata's work for the El Corre Camino restaurant did not qualify for Wisconsin Shares child-care payments because during the relevant time the restaurant was "not qualified" under the Department's interpretation of the statute. It based this determination on a policy manual —not a rule.
¶ 29. As material, a person is eligible to "receive a subsidy for child care" if "child care services for that child are needed in order for the individual to .... Work in an unsubsidized job, including training provided by an employer during the regular hours of employment." Wis. Stat. § 49.155(lm)(a)2. The Department does not dispute that Mata's work for the restaurant was employment "in an unsubsidized job." If that is all there was here, the Department does not dispute that Mata would have been eligible for the child-care payments at issue. But there is more: the Department's Child Care Policy Manual requires that the "unsubsidized job" be with "a qualified employer who has a Federal Employer Identification Number."1 Wisconsin Shares Child Care Assistance Manual § 1.5.3(1). The Manual also says that to be a "qualified employer" the employer must:
*504• "have a Worker's Compensation insurance policy for its employees unless legally exempt";
• "comply with Wisconsin minimum wage law for all employees";
• "file a New Hire report on the employee within thirty days of the hiring date"; and
• "report wages to Unemployment Insurance unless exempt."
Wisconsin Shares Child Care Assistance Manual § 1.5.3.1.
¶ 30. As the Majority notes, the restaurant did not comply with these additional requirements, and, as a result, Mata is forced to return some of the child-care payments she received while she was working at the restaurant. There are, in my view, very real problems with inflicting this financial burden on a person who needs to work and needs child-care payments to work in order to sustain his or her family but who works for a seemingly legitimate business (as the restaurant was) that did not satisfy the five non-statutory requirements the Department imposes by its policy Manual (rather than by a "rule" properly promulgated). Further, and this would in my view guide any analysis as to whether the policy comported with the statutory scheme, it is not reasonable to assume that an employee and child-care-payment recipient such as Mata would be able to determine whether a seemingly reputable business:
• has a federal identification number;
• has a worker's compensation insurance policy for its employees;
• need not have a worker's compensation insurance policy for its employees because the business is "exempt" (how would Mata have discovered that without hiring a lawyer or having sufficient knowledge and *505skill to parse the myriad Wisconsin government web sites?);
• pays all its employees the minimum wage (would there be privacy concerns if a new hire asked this question of his or her employer?);
• will timely file the required "New Hire report";
• "report[s] wages to Unemployment Insurance"; or
• need not "report wages to Unemployment Insurance" because the business is "exempt" (again, how would Mata have discovered that without hiring a lawyer or having sufficient knowledge and skill to parse the myriad Wisconsin government web sites?).
¶ 31. As the Majority notes, however, we may not consider these important questions that, in my view, go to the heart of the requirements that the Department has added to the statute, because Mata did not serve the Joint Committee for Review of Administrative Rules with a copy of her petition for declaratory judgment.
¶ 32. Wisconsin Stat. § 227.40 permits a party aggrieved by an agency rule to challenge that rule. See Wis. Stat. § 227.40(1). As a precondition to such a challenge, however, Wis. Stat. § 227.40(5) requires the party challenging the rule to serve the Joint Committee for Review of Administrative Rules: "The joint committee for review of administrative rules shall be served with a copy of the petition in any action under this section and, with the approval of the joint committee on legislative organization, shall be made a party and be entitled to be heard." Further, Wis. Stat. § 227.40(4)(a) sets the scope of an in-court challenge to an agency rule: "In any proceeding pursuant to this section for judicial review of a rule, the court shall declare the rule invalid if it finds that it violates constitutional provisions or exceeds the statutory authority of the agency or was promulgated *506without compliance with statutory rule-making procedures." (Emphasis added.)
¶ 33. Heritage Credit Union held, as we will see, that what I have italicized in Wis. Stat. § 227.40(4)(a), in conjunction with § 227.40(2)(e), requires that a party challenging an agency policy that has not been adopted as a "rule" to also serve the agency whose action is being challenged: "[R]eview of the validity of a rule is available under § 227.40(2)(e) only 'if the validity of the rule involved was duly challenged in the proceeding before the agency in which the order or decision sought to be reviewed was made or entered.'" See Heritage Credit Union, 2001 WI App 213, ¶ 23, 247 Wis. 2d at 607, 634 N.W.2d at 602. As material, § 227.40(2)(e) provides: "The validity of a rule may be determined in any of the following judicial proceedings when material therein . .. if the validity of the rule involved was duly challenged in the proceeding before the agency in which the order or decision sought to be reviewed was made or entered." (Emphasis added.)
¶ 34. I agree with the Majority that we are bound by Heritage Credit Union and its equating the challenge to a rule that is promulgated by an agency with rule-writing authority to the challenge of an agency policy that has not been promulgated as a rule, with all the protections and public input afforded to those mostly formal procedures, see Wis. Stat. §§ 227.10-227.20. I write this concurrence in the hope that the supreme court will, if Mata files a petition for review, grant that petition and overrule Heritage Credit Union's holding in that regard. Before I turn to Heritage Credit Union, however, I look briefly at Kruczek v. Wisconsin Department of Workforce Development, 2005 WI App 12, 278 Wis. 2d 563, 692 N.W.2d 286, upon which the Majority also relies.
*507¶ 35. The Department of Workforce Development in Kruczek prevented Kruczek Construction from getting "municipal and state public works projects for six months." Id., 2005 WI App 12, ¶ 1, 278 Wis. 2d at 570, 692 N.W.2d at 290. The Department based its action on existing Department of Workforce Development rules in Wis. Admin. Code ch. DWD 294. See Kruczek, 2005 WI App 12, ¶¶ 15-16, 278 Wis. 2d at 575-576, 692 N.W.2d at 293. Kruczek Construction challenged the power of the Department of Workforce Development to prevent it from getting the state-projects work, and Kruczek interpreted that challenge in reality as a challenge to the "administrative rules" in Wis. Admin. Code ch. DWD 294. Kruczek, 2005 WI App 12, ¶¶ 45-46, 278 Wis. 2d at 587, 692 N.W.2d at 298. Kruczek Construction did not, however, serve the Joint Committee for Review of Administrative Rules, and Kruczek held that the failure "deprives the court of jurisdiction to hear a challenge to the rule." Id., 2005 WI App 12, ¶ 46, 278 Wis. 2d at 587, 692 N.W.2d at 299.
¶ 36. Heritage Credit Union is a horse of a different color because it held that a party challenging an agency's decision must serve the agency (in Heritage Credit Union, the Credit Union Review Board) even though the party was not challenging a rule in the Wisconsin administrative code.
¶ 37. Heritage Credit Union was an Illinois-chartered credit union that wanted to open branches in Wisconsin but, with a minor exception, was forbidden to do so by the Wisconsin Office of Credit Unions. Heritage Credit Union, 2001 WI App 213, ¶ 1, 247 Wis. 2d at 592-593, 634 N.W.2d at 595. Among other things, Heritage Credit Union argued that the Office's "decision is based on a policy that is invalid because it was not promulgated as a rule under Wis. Stat. ch. 227." Heritage *508Credit Union, 2001 WI App 213, ¶¶ 1, 26, 247 Wis. 2d at 593, 609, 634 N.W.2d at 595, 603. Heritage Credit Union explained that this made no difference, and that the courts did not have jurisdiction over Heritage Credit Union's challenge because it did not serve the Credit Union Review Board:
It is trae that Heritage challenged [the Office of Credit Unions]'s decision on a variety of grounds that might loosely be characterized as "lacking legal authority"; and we agree that a challenge because the decision was based on a policy that should have been promulgated as a rule would come within that broad characterization. However, to accept this as a fulfillment of the requirement in Wis. Stat. § 227.40(2) (e) would, we conclude, be inconsistent with the purpose of the requirement. The purpose of the requirement is to provide an opportunity for the agency to address a challenge to the validity of a rule before the challenger may seek judicial review of the challenge. That purpose is thwarted if any challenge to a decision that can be characterized as a "lack of legal authority" permits judicial review of a rule's invalidity on grounds not raised in the administrative proceedings.
We conclude that under Wis. Stat. § 227.40(2) (e), Heritage was required to present to the board its argument that [the Office of Credit UnionsJ's decision was based on a policy that was invalid because it was not promulgated as required by Wis. Stat. § 227.10. Since Heritage did not, we conclude it may not obtain a judicial ruling on this issue.
Heritage Credit Union, 2001 WI App 213, ¶¶ 27-28, 247 Wis. 2d at 609-610, 634 N.W.2d at 603 (emphasis added). I agree with the Majority that a neutral-principled reading of Heritage Credit Union requires our conclusion that Mata forfeited her right to challenge the Department's policy in its Manual. But I also believe that Heritage Credit Union erroneously equated *509a challenge to a policy that was not adopted as a rule under Wis. Stat. ch. 227 with a challenge to an adopted rule. I respectfully suggest that the supreme court set things right and remand the case so that the circuit court and we may consider the validity of the Department's policy.
¶ 38. I am authorized to state that JOAN F. KESSLER joins in this concurrence to urge the Supreme Court to review and overrule the holding in Heritage Credit Union.

 The Department's Child Care Policy Manual also says that "Unsubsidized Employment" (bolding omitted) may also include "Being legitimately self-employed." Wisconsin Shares Child Care Assistance Manual § 1.5.3(2).