Court Opinion

ID: 4281196
Source: CourtListenerOpinion
Date Created: 2018-06-05 12:53:58.235756+00
Date Added: 2024-06-11T13:10:34.217864
License: Public Domain

2018 WI 60

                  SUPREME COURT                  OF   WISCONSIN
CASE NO.:                2017AP1595-CQ
COMPLETE TITLE:          Winebow, Inc.,
                                   Plaintiff-Appellee,
                              v.
                         Capitol-Husting Co., Inc. and L'Eft Bank Wine
                         Co. Limited,
                                   Defendants-Appellants.

                             ON CERTIFIED QUESTION FROM THE UNITED STATES
                               COURT OF APPEALS FOR THE SEVENTH CIRCUIT

OPINION FILED:           June 5, 2018
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:           February 19, 2018

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:            BRADLEY, R. G., J. joined by ABRAHAMSON, J. and
                         KELLY, J. dissent (Opinion filed).
  NOT PARTICIPATING:

ATTORNEYS:

       For the defendants-appellants, there were briefs filed by
Thomas L. Shriner, Jr., Gregory N. Heinen, and Foley & Lardner
LLP,    Milwaukee.            There   was   an    oral    argument     by   Thomas   L.
Shriner, Jr.

       For the plaintiff-appellee, there was a brief filed by E.
King    Poor      (pro   hac    vice)    and    Quarles   &   Brady    LLP,   Chicago,
Illinois, with whom on the brief were Daniel M. Janssen, and
Quarles                  &              Brady             LLP,              Milwaukee.
                                                                    2018 WI 60
                                                              NOTICE
                                              This opinion is subject to further
                                              editing and modification.   The final
                                              version will appear in the bound
                                              volume of the official reports.
No.       2017AP1595-CQ

STATE OF WISCONSIN                        :            IN SUPREME COURT

Winebow, Inc.,

              Plaintiff-Appellee,                                FILED
      v.
                                                              JUN 5, 2018
Capitol-Husting Co., Inc. and L'Eft Bank Wine
Co. Limited,                                                   Sheila T. Reiff
                                                            Clerk of Supreme Court

              Defendants-Appellants.

      CERTIFICATION of question of law from the United States

Court of Appeals for the Seventh Circuit.              Certified question

answered in the negative and cause remanded.

      ¶1      ANN WALSH BRADLEY, J.    This case is before the court

on a certified question from the United States Court of Appeals

for the Seventh Circuit.       Winebow, Inc. v. Capitol-Husting Co.,

Inc., 867 F.3d 862 (7th Cir. 2017); see Wis. Stat. § 821.01

(2015-16).1      It certified the following question:               "Does the

definition       of   a   dealership   contained         in      Wis.      Stat.

      1
       All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.
                                                                   No.     2017AP1595-CQ

§ 135.02(3)(b)          include      wine       grantor-dealer      relationships?"

Winebow, 867 F.3d at 871.

    ¶2      Our answer to this certified question will aid the

Seventh Circuit in determining whether Winebow, Inc.'s (Winebow)

attempt     to    end     its     business       relationship      with      two   wine

distributors       is     governed        by      the    unilateral        termination

limitations of the Wisconsin Fair Dealership Law (WFDL).                            See

Wis. Stat. § 135.03.

    ¶3      Winebow unilaterally terminated its relationship with

Capitol-Husting Co., Inc. and L'Eft Bank Wine Co. Limited (the

Distributors) after becoming dissatisfied.                    It argues that the

action      was    permissible            because       the   parties'        business

relationship is not an "intoxicating liquor" dealership entitled

to the protections of the WFDL.                   See §§ 135.02(3)(b), 135.066.

On the other hand, the Distributors contend that a wine grantor-

dealer    relationship          is    a     "dealership"      entitled       to    such

protections and thus Winebow cannot unilaterally terminate its

relationship      with    the     Distributors      absent    a    showing    of   good
cause.

    ¶4      We conclude that a wine grantor-dealer relationship is

not included within the definition of a dealership in Wis. Stat.

§ 135.02(3)(b).            Section 135.066(2)           provides     the     operative

definition of "intoxicating liquor" for purposes of ch. 135, and

such definition explicitly excludes wine.

    ¶5      Accordingly, we answer the certified question in the

negative.

                                            2
                                                                              No.     2017AP1595-CQ

                                                  I

    ¶6         Winebow is engaged in the business of importing and

distributing          wine    to     downstream          wholesalers.               Since         2004,

Winebow has used Capitol-Husting as a distributor of its wines,

and in 2009 it commenced a similar relationship with L'Eft Bank.

    ¶7         After    becoming        dissatisfied              with    the       Distributors,

Winebow     abruptly         terminated         its      relationship           with        them    in

February of 2015.             The parties did not have any express written

agreement       that         would     prevent          Winebow          from       unilaterally

terminating their relationships.

    ¶8         The Distributors responded to Winebow's termination by

letter, indicating their belief that they are entitled to the

protections of the WFDL.               Such protections would prevent Winebow

from terminating their relationships absent "good cause."                                          See

Wis. Stat. § 135.03.

    ¶9         Winebow       countered       by       filing      a    declaratory          judgment

action    in    the     United       States       District        Court       for     the    Eastern

District of Wisconsin.                Winebow, Inc. v. Capitol-Husting Co.,
Inc., No. 15-CV-225, slip op. at *1 (E.D. Wis. June 18, 2015).

It sought a declaration that it has no continuing obligations to

the Distributors.            Id.

    ¶10         The    District       Court       ruled      in       Winebow's       favor.        It

determined      that     "[w]ine        is      not     intoxicating            liquor       in    the

context    of    the     WFDL,       and     thus      the     [Distributors']              business

relationship      with        Winebow      is     not     subject        to     the    unilateral

termination limitations of Chapter 135."                           Id. at *4.

                                                  3
                                                                            No.     2017AP1595-CQ

       ¶11    The Distributors appealed to the United States Court

of     Appeals      for     the    Seventh       Circuit,         contending        that     wine

dealerships         are      per    se     "intoxicating           liquor"          dealerships

entitled to the protections of the WFDL.                           Winebow, 867 F.3d at

867.     The Seventh Circuit certified to this court the question

of    whether     the     definition       of    "dealership"        contained         in     Wis.

Stat. § 135.02(3)(b) includes wine grantor-dealer relationships.

Id. at 870-71.

                                                II

       ¶12    Underlying this case are proposed statutory changes to

the    WFDL     and    the    governor's        partial       veto   of      some     of     these

changes.       See 1999 Wis. Act 9, §§ 2166m, 2166s.                        We thus provide

brief background on the WFDL, the proposed changes to it, and

the partial veto.

       ¶13    The      WFDL    provides         in    part    that      a    grantor        of    a

dealership may not terminate a dealership agreement without good

cause.       Wis. Stat. § 135.03; see Ziegler Co., Inc. v. Rexnord,

Inc.,     139 Wis. 2d 593,           594,     407 N.W.2d 873        (1987).             Its
underlying       purposes         and    policies       include      "[t]o         promote       the

compelling interest of the public in fair business relations

between       dealers      and     grantors,         and     in   the       continuation         of

dealerships on a fair basis."                       § 135.025(2)(a).              Additionally,

it    aims    "[t]o       protect       dealers      against       unfair         treatment       by

grantors,        who      inherently      have       superior       economic        power        and

superior bargaining power in the negotiation of dealerships[.]"

§ 135.025(2)(b).

                                                4
                                                                No.     2017AP1595-CQ

     ¶14    A grantor who violates the WFDL may be subject to an

action for "damages sustained by the dealer as a consequence of

the grantor's violation, together with the actual costs of the

action,     including    reasonable      attorney      fees."          Wis.     Stat.

§ 135.06.      Further, a "dealer also may be granted injunctive

relief against unlawful termination, cancellation, nonrenewal or

substantial change of competitive circumstances."                 Id.

     ¶15    However,     the    WFDL   does   not    apply   to       all    business

relationships, but only to those defined as "dealerships."                          In

1999, the legislature sought to broaden the WFDL's reach to

ensure that "intoxicating liquor" dealers were protected.                           See

1999 Wis. Act 9, §§ 2166m, 2166s.

     ¶16    It did so by making two significant changes.                       First,

it   amended    the     definition     of     a    "dealership"        to     include

distributors    of    "intoxicating      liquors."       1999         Wis.    Act   9,

§ 2166m.        The     new     definition,       codified   at        Wis.     Stat.

§ 135.02(3)(b), included within a "dealership":

     A contract or agreement, either expressed or implied,
     whether oral or written, between 2 or more persons by
     which a wholesaler, as defined in s. 125.02(21), is
     granted the right to sell or distribute intoxicating
     liquor or use a trade name, trademark, service mark,
     logotype, advertising or other commercial symbol
     related to intoxicating liquor.    This paragraph does
     not apply to dealerships described in s. 135.066(5)(a)
     and (b).
1999 Wis. Act 9, § 2166m.

     ¶17    This      revised     "dealership"       definition          explicitly

incorporated the definition of "intoxicating liquor" found in
Wis. Stat. ch. 125, which regulates alcohol beverages.                       Pursuant

                                        5
                                                                    No.     2017AP1595-CQ

to Wis. Stat. § 125.02(8), "vinous liquors," or in other words

"wine,"     is     expressly        included        under     the         umbrella    of

"intoxicating liquor":

     "Intoxicating liquor" means all ardent, spirituous,
     distilled or vinous liquors, liquids or compounds,
     whether medicated, proprietary, patented or not, and
     by whatever name called, containing 0.5 percent or
     more of alcohol by volume, which are beverages, but
     does not include "fermented malt beverages."
§ 125.02(8).

     ¶18    Second, the legislature created Wis. Stat. § 135.066.

1999 Wis. Act 9, § 2166s.               This new provision expressed the

legislature's      desire     for   a   competitive         and    stable     wholesale

liquor    market.       See    § 135.066(1).           Like       the     legislature's

revised definition of "dealership," the newly enacted § 135.066

imported     the     definition         of       "intoxicating          liquor"      from

§ 125.02(8).       § 135.066(2).

     ¶19    Both of these changes were included in the 1999 budget

bill.     See 1999 Wis. Act 9.           However, Governor Tommy Thompson

used his partial veto power to alter the revisions passed by the

legislature.2

     2
       The governor's partial veto power arises from Article V,
§ 10   of  the   Wisconsin   Constitution, which   sets  forth,
"Appropriation bills may be approved in whole or in part by the
governor, and the part approved shall become law." Wis. Const.
art. V, § 10(1)(b).    Pursuant to the partial veto power, the
governor may strike out language in an appropriation measure,
but may not add language. See State ex rel. Wisconsin Senate v.
Thompson, 144 Wis. 2d 429, 437, 424 N.W.2d 385 (1988); State ex
rel. Kleczka v. Conta, 82 Wis. 2d 679, 707-08, 264 N.W.2d 539
(1978).

                                                                            (continued)
                                             6
                                                            No.    2017AP1595-CQ

      ¶20   Specifically, the governor struck language proposed by

the   legislature         from   both   Wis.    Stat.   §§ 135.02(3)(b)      and

135.066.     With respect to § 135.02(3)(b), he deleted the cross-

reference to the existing definition of "intoxicating liquor"

found in ch. 125.3

      ¶21   Edits     to     Wis.   Stat.      § 135.066   were     much     more

extensive.          The     governor    eliminated      large     portions    of

     The partial veto power was originally a very broad power,
but has been subsequently limited.    Originally, the governor
could "veto individual words, letters and digits, and also may
reduce appropriations by striking digits, as long as what
remains after veto is a complete, entire, and workable law."
Wisconsin Senate, 144 Wis. 2d at 437.

     A 1990 amendment slightly limited the power, dictating that
"the governor may not create a new word by rejecting individual
letters in the words of the enrolled bill." Wis. Const. art. V,
§ 10(1)(c) (1990). This was the version in effect when Governor
Thompson exercised the veto at issue in this case. A subsequent
revision in 2008 brought Article V, § 10 to its present form,
further limiting the partial veto power by stating that "the
governor may not create a new word by rejecting individual
letters in the words of the enrolled bill, and may not create a
new sentence by combining parts of 2 or more sentences of the
enrolled bill." Wis. Const. art. V, § 10(1)(c).
      3
       The  governor's   veto           with     respect   to     Wis.     Stat.
§ 135.02(3)(b) was as follows:

      A contract or agreement, either expressed or implied,
      whether oral or written, between 2 or more persons by
      which a wholesaler, as defined in s. 125.02(21), is
      granted the right to sell or distribute intoxicating
      liquor, as defined in s. 125.02(8), or use a trade
      name, trademark, service mark, logotype, advertising
      or other commercial symbol related to intoxicating
      liquor. This paragraph does not apply to dealerships
      described in s. 135.066(5)(a) and (b).

                                        7
                                                                  No.      2017AP1595-CQ

§ 135.066(2)-(4).      What    remained             was    the      sole     sentence,

"'Intoxicating    liquor'    has     the       same       meaning    given      in   s.

125.02(8) minus wine."4

     4
       Observe   that   the  words   "minus"   in  Wis. Stat.
§ 135.066(2)(a),    formerly  subsection    (2)(b)  in  draft
legislation, and "wine" in former subsection (2)(d) are left
unscathed:

     (2) DEFINITIONS. In this section:

          (a) "Intoxicating liquor" has the same meaning
          given in s. 125.02(8).

          (b) "Net revenues" means the gross dollar amount
          received from the sale of intoxicating liquor
          minus adjustments for returns, discounts and
          allowances.

          (c) "Wholesaler"         has       the    meaning      given     in   s.
          125.02(21).

          (d) "Wine" has the meaning given in 125.02(22).

     (3) LIABILITY    OF    TRANSFEREE         OF     INTOXICATING         LIQUOR
     GRANTOR.

          (a) In this subsection:

                 1.   "Goodwill"    includes  the  use  of   a
                 trademark, trade name, logotype or other
                 commercial   symbol,    and  the  use  of   a
                 variation   of   a   trademark,  trade  name,
                 logotype, advertisement or other commercial
                 symbol.

                 2. "Transferee" means a person who acquires
                 any asset or activity of a grantor's
                 intoxicating liquor business and who uses
                 the    goodwill    associated     with  the
                 intoxicating liquor of the grantor.

          (b) A transferee shall be bound by each of the
          grantor's   dealerships   with   the   grantor's
          wholesalers and consequently shall be considered
                                                    (continued)
                                         8
                                                        No.    2017AP1595-CQ

    ¶22    Legislative   findings       enumerated     in     Wis.   Stat.

§ 135.066(1) and a severability provision in sub. (6) escaped

the veto pen, but the governor struck several references to wine

in sub. (5), a nonapplicability provision.5          The legislature did

not override the governor's veto.

           a grantor for the purposes of, and shall comply
           with, the requirements of this chapter.

    (4) CHANGE IN OWNERSHIP.

           (a) In this subsection, "successor wholesaler"
           means   a   wholesaler   who   succeeds   to  the
           management, ownership or control of a wholesaler
           or wholesaler's business or any part of a
           wholesaler's business by any means including by
           stock purchase, sale of assets or transfer or
           assignment of a brand of intoxicating liquor that
           is the subject of a dealership agreement.

           (b) A change in the management, ownership or
           control of a wholesaler, a wholesaler's business
           or any part of a wholesaler's business is not
           good cause for a grantor to terminate, cancel,
           fail to renew or substantially change the
           competitive circumstances of its dealership with
           a   successor     wholesaler    if    the   successor
           wholesaler meets the grantor's reasonable and
           material qualifications for wholesaler applicants
           in effect at the time of the change. If the
           successor    wholesaler     meets     the   grantor's
           reasonable    and    material    qualifications   for
           wholesaler applicants in effect at the time of
           the   change,    the   successor   wholesaler   shall
           succeed   to    the   dealership    rights   of   the
           predecessor wholesaler and the grantor shall
           continue to be bound by the dealership.
    5
        In this section, the partial veto was as follows:

    (5) NONAPPLICABILITY. This section does not apply to
    any of the following dealerships:
                                                  (continued)
                                    9
                                                           No.       2017AP1595-CQ

                                      III

    ¶23     This   case    requires     us     to   interpret        Wis.    Stat.

§§ 135.02    and   135.066.     Statutory      interpretation        presents    a

question of law we review independently.            Roberts v. T.H.E. Ins.

Co., 2016 WI 20, ¶19, 367 Wis. 2d 386, 879 N.W.2d 492.                      We are

not bound by the federal district court's interpretation, but it

may aid in our analysis.            Baldewein Co. v. Tri-Clover, Inc.,

2000 WI 20, ¶10, 233 Wis. 2d 57, 606 N.W.2d 145 (citing Daanen &

Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 400, 573
N.W.2d 842 (1998)).

                                      IV

    ¶24     With the preceding context and standard of review in

hand, we examine next the specific question certified by the

Seventh     Circuit:      whether    the     definition   of     a    dealership

            (a) Dealerships in which a grantor, including any
            affiliate, division or subsidiary of the grantor,
            has never produced more than 200,000 gallons of
            intoxicating liquor in any year.

            (b) Dealerships in which the dealer's net
            revenues from the sale of all of the grantor's
            brands of intoxicating liquor, except wine,
            constitute less than 5% of the dealer's total net
            revenues from the sale of intoxicating liquor,
            except wine, during the dealer's most recent
            fiscal year preceding a grantor's cancellation or
            alteration of a dealership and the dealer's net
            revenues from the sale of all of the grantor's
            brands of wine constitute less than 5% of the
            dealer's total net revenues from the sale of wine
            during the dealer's most recent fiscal year
            preceding a grantor's cancellation or alteration
            of a dealership.

                                      10
                                                                      No.     2017AP1595-CQ

contained in Wis. Stat. § 135.02(3)(b) includes wine grantor-

dealer relationships.

    ¶25     Winebow asserts that the "minus wine" definition of

"intoxicating liquor" in Wis. Stat. § 135.066 applies to the

entirety of ch. 135, and that consequently we should answer the

certified       question     in     the        negative.             Conversely,       the

Distributors      contend    that    the       definition       of    "dealership"      in

§ 135.02(3)(b)        incorporates       the     definition          of     "intoxicating

liquor" from ch. 125, a definition that expressly includes wine.

    ¶26     Statutory interpretation begins with the language of

the statute.       State ex rel. Kalal v. Circuit Court for Dane

Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110.                            If the

meaning    of   the    statute      is   plain,       we    need     not     further   the

inquiry.    Id.

    ¶27     Wisconsin       Stat.    § 135.066(2)           defines         "intoxicating

liquor"    as   having     "the   meaning       given      in   s.    125.02(8)      minus

wine."      Winebow      suggests    that       the    language       of     the   statute

plainly and unambiguously excludes wine from the definition of
"intoxicating liquor" for chapter 135.

    ¶28     We agree with Winebow.                Its interpretation of Wis.

Stat.     § 135.066(2)      is    supported       by       several        considerations.

First, contrary to the Distributors' argument, the fact that the

definition is not located in the "definitions" section of the

statute is not dispositive.               Neither the Distributors nor the

dissent cite any case law that exclusively tethers definitions

to a correspondingly labeled section of the statutes.

                                          11
                                                               No.       2017AP1595-CQ

     ¶29    Wisconsin     Stat.        § 135.066(2)        provides       the     sole

definition of "intoxicating liquor" in ch. 135, and it excludes

wine.    The term "intoxicating liquor" is used eleven times in

chapter 135, but defined only once.                We aim for uniformity of

definitions     within    a     statutory       chapter,     not     diversity      of

definitions.       See Bank Mut. v. S.J. Boyer Const., Inc., 2010 WI
74, ¶31, 326 Wis. 2d 521, 785 N.W.2d 462.                  "When the same term

is used throughout a chapter of the statutes, it is a reasonable

deduction that the legislature intended that the term possess an

identical     meaning    each    time    it     appears."          Id.      For     one

definition    of    "intoxicating      liquor"    to   control      § 135.066       and

another to control the rest of the chapter would run afoul of

this maxim.

     ¶30    Rather, "[s]ections of statutes relating to the same

subject matter must be construed in pari materia."6                        State v.

Clausen, 105 Wis. 2d 231, 244, 313 N.W.2d 819 (1982).                       Applying

this canon on interpretation here, we arrive at the conclusion

that the single "intoxicating liquor" definition supplied in ch.
135 should apply to the entirety of the chapter.

     ¶31    Further,     the    Wis.    Stat.    § 135.066(2)        "minus       wine"

definition would serve no purpose if limited in its application

     6
       "In pari materia" refers to statutes and regulations
relating to the same subject matter or having a common purpose.
In re Jeremiah C., 2003 WI App 40, ¶17, 260 Wis. 2d 359, 659
N.W.2d 193.   The statutory construction doctrine of in pari
materia requires a court to read, apply, and construe statutes
relating to the same subject matter together. Id.

                                        12
                                                            No.    2017AP1595-CQ

to § 135.066 but not the remainder of ch. 135.               Outside of the

"minus      wine"     definition,      § 135.066     contains      legislative

findings,     a     nonapplicability    provision,    and   a     severability

provision.        The "minus wine" language does not affect any of

these remaining provisions.7           Limiting the application of the

"minus wine" definition to § 135.066 would render the language a

nullity.8

     ¶32     Additionally, treatises on both the WFDL and alcohol

regulation uniformly support our application of the "minus wine"

definition provided by Wis. Stat. § 135.066(2).             As one treatise

on the WFDL advises, "intoxicating liquor refers to spirits, not

wine or beer."         Michael A. Bowen et al., The Wisconsin Fair

     7
       The dissent asserts that "[t]he definition of intoxicating
liquor in § 135.066 retains a function even if limited to its
specific section of ch. 135."     Dissent, ¶50.    According to the
dissent, "[i]t applies to the legislative findings of sub. (1),
the   non-applicability   provisions    of    sub.  (5),   and  the
severability part of sub. (6).      Id.    But if the "minus wine"
definition applies within § 135.066 only, what is its actual
effect? The legislative findings are mere background and define
no substantive rights.        Further, as the Seventh Circuit
correctly recognized in its certification, none of the other
provisions of § 135.066 is affected by the "minus wine" language
of sub. (2).    See Winebow, Inc. v. Capitol-Husting Co., Inc.,
867 F.3d 862, 868 (7th Cir. 2017). The dissent's interpretation
thus renders the "minus wine" language superfluous.
     8
       Stated differently, to read the statute to include wine
would render "minus wine" mere surplusage, a result that must be
avoided. See Milwaukee Cty. v. Dep't of Indus., Labor and Human
Relations Comm'n, 80 Wis. 2d 445, 452-53, 259 N.W.2d 118 (1977)
(quoting Cook v. Indus. Comm'n, 31 Wis. 2d 232, 239-40, 142
N.W.2d 827 (1966) ("[S]tatutes should be so construed that no
word or clause shall be rendered surplusage.")).

                                       13
                                                                             No.     2017AP1595-CQ

Dealership        Law     § 4.34A     at       61    (4th      ed.   2012);       see   also       id.

(explaining          that    "the    governor's            partial       vetoes    of   the       1999

amendment         make      it     clear       that       he     intended        (3)(b)      to    be

inapplicable to wine wholesalers.").9

       ¶33      Similarly, a treatise on Wisconsin alcohol beverages

regulation           opines        that        "the         applicable           definition         of

intoxicating liquor in Wis. Stat. ch. 135 excludes wine, such

that       [ch.      135's]      special        WFDL        provisions       apply        only     to

distilled-spirits             distribution           agreements."            Aaron      R.     Gary,

Alcohol Beverages Regulation in Wisconsin § 4.66 (2nd ed. 2016).

       ¶34      In the over eighteen years since the enactment of the

"minus      wine"     provision,         the     legislature         certainly       could        have

acted      to     amend      the    law     if       it     thought        the     commentators'

understanding was incorrect.                        However, it did not override the

governor's        veto      in   1999,     and       it    has    remained       silent      in   the

intervening years.

       ¶35      As    the        Seventh       Circuit           aptly     observed       in       its

certification,            there      is     "no           express        statutory      language"
supporting the Distributors' position.                            See Winebow, 867 F.3d at

       9
       In his veto message, Governor Thompson was explicit
regarding the reasons for his partial veto:    "I am partially
vetoing these provisions so that wine will be excluded from
treatment under these changes to the Wisconsin Fair Dealership
Law because I object to wine being treated the same as
intoxicating liquor." Governor's Veto Message, Act 9, at § F.4
(Oct. 27, 1999); see State ex rel. Kalal v. Circuit Court for
Dane Cty., 2004 WI 58, ¶51, 271 Wis. 2d 633, 681 N.W.2d 110
("legislative history is sometimes consulted to confirm or
verify a plain-meaning interpretation").

                                                    14
                                                                      No.      2017AP1595-CQ

869.      Cross      references      to     their    preferred        definition       were

removed from Wis. Stat. § 135.066 by Governor Thompson's partial

veto.     Following that veto, what remains is unambiguous in its

effect    to    exclude      wine    from    the    definition      of      "intoxicating

liquor."

       ¶36     Instead      of   giving       effect      to    ch.      135's      single

definition of "intoxicating liquor," the Distributors would have

the court follow a path through ch. 125 to arrive at their

preferred definition.            The Distributors' circuitous route begins

at Wis. Stat. § 135.02(3)(b), which references the definition of

"wholesaler"        from     § 125.02(21).           Pursuant     to        § 125.02(21),

"'[w]holesaler' means a person, other than a brewer, brewpub,

manufacturer, or rectifier, who sells alcohol beverages to a

licensed retailer or to another person who holds a permit to

sell alcohol beverages at wholesale."                     We are then directed to

§ 125.02(1),        which    defines      "alcohol       beverages"      as    "fermented

malt beverages and intoxicating liquor."                        Finally, moving to

§ 125.02(8),        we     arrive    at     the    definition     of        "intoxicating
liquor" as including "vinous liquors," more commonly known as

wine.

       ¶37     Our interpretation gives effect to the sole definition

of   "intoxicating         liquor"    located       in    ch.   135,     one     which   is

located        in    a      statutory       section       beneath        the      heading,

"Intoxicating liquor dealerships."                   If the court here were to

decide that it is acceptable to effectuate a definition from ch.

125 that is not referenced within ch. 135, there would be no
clear stopping point to such a practice.
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    ¶38   In        sum,        we    conclude    that    a   wine     grantor-dealer

relationship        is     not       included    within   the   definition       of   a

dealership     in        Wis.    Stat.    § 135.02(3)(b).            Wisconsin   Stat.

§ 135.066(2) provides the operative definition of "intoxicating

liquor" for purposes of Wis. Stat. ch. 135, and such definition

explicitly excludes wine.

    ¶39   Accordingly, we answer the certified question in the

negative and remand the cause to the United States Court of

Appeals for the Seventh Circuit.

    By the Court.—Certified question answered in the negative

and cause remanded to the United States Court of Appeals for the

Seventh Circuit.

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       ¶40        REBECCA   GRASSL     BRADLEY,         J.     (dissenting).           The

legislature unquestionably intended to include wine distributors

as    dealers       under   Wis.   Stat.     ch. 135     and    then-Governor        Tommy

Thompson1 obviously intended to exclude them.                           But legislative

intent behind enactment of a law——or executive intent motivating

the exercise of a veto——cannot govern statutory interpretation.

Rather, our analysis must focus on the statutory language itself

and "[i]f the meaning of the statute is plain, we ordinarily

stop the inquiry."             State ex rel. Kalal v. Circuit Court for

Dane Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110.                             A

plain meaning interpretation of ch. 135, giving effect to every

word, requires answering the certified question from the Seventh

Circuit Court of Appeals in the affirmative:                       The definition of

a "[d]ealership" contained in Wis. Stat. § 135.02(3)(b) includes

wine grantor-dealer relationships.                     The isolated definition in

Wis.       Stat.    § 135.066(2)(a),       on    which   the    majority      relies    to

reach       the     opposite   conclusion,         applies     only      in   § 135.066.

Because the majority's interpretation is wrong, I respectfully
dissent.

                                             I

       ¶41        Wisconsin Stat. ch. 135, also known as the Wisconsin

Fair Dealership Law, governs grantor-dealer relationships and

"shall       be    liberally    construed        and    applied    to     promote"     the

purposes set forth in Wis. Stat. § 135.025(2), which include,

for    example,       (1)   fairness    in       business    relationships       between

       1
       Then-Governor Tommy Thompson will subsequently be referred
to as "Governor."

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dealers and grantors and in their continuation; (2) protection

of dealers from grantors who "have superior economic power and

superior     bargaining     power";   and   (3)    statutory      rights    and

remedies for dealers.2

      ¶42    The question before the court is whether the two wine

distributors in this case are "[d]ealers" protected by ch. 135.

The   wine   distributors     claim   dealership   status,     while    Winebow

insists ch. 135 does not apply to wine distributors at all.                   A

textual interpretation of ch. 135 provides a clear answer:                  the

wine distributors are "[d]ealers."

      ¶43    The   analysis     necessarily    starts     in     Wis.      Stat.

§ 135.02, which supplies the definitions to be used throughout

      2
       Wisconsin Stat. ch. 135 comprises eleven subsections.
Wisconsin Stat. § 135.01 gives the title of chapter 135.
Section 135.02 furnishes the definitions that apply throughout
the entirety of ch. 135.    Section 135.025 details the purposes
of the chapter, requires liberal application to meet those
purposes, and prohibits parties from contracting away ch. 135's
protections.   Section 135.03 explains that dealerships may not
be altered or terminated without a showing of good cause.
Section 135.04   imposes   rules   and   notice   deadlines  for
termination or changes in a dealership. Section 135.045 governs
the repurchase of inventory upon termination of a dealership by
the grantor.     Section 135.05 discusses the applicability of
arbitration agreements in ch. 135.       Section 135.06 affords
dealers the right to recover attorney fees and obtain injunctive
relief in actions against grantors for violating ch. 135.
Section 135.065 deems any violation of the chapter by a grantor
an irreparable injury for purposes of seeking a temporary
injunction.     Section 135.066 contains legislative findings
specific to intoxicating liquor dealers, defines "[i]ntoxicating
liquor," renders this section inapplicable to two types of
dealerships, and makes the provisions in this section severable.
Section 135.07 declares ch. 135 inapplicable to motor vehicle
dealers, insurance businesses, and door-to-door sales of goods
or services.

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ch. 135.    Section 135.02 defines both "Dealer" and "Dealership."

Section 135.02 provides, as material:

    In this chapter:

    (2) "Dealer" means a person who is a grantee of a
    dealership situated in this state.

    (3)     "Dealership" means any of the following:

    . . . .

    (b)   A contract or agreement, either expressed or
    implied, whether oral or written, between 2 or more
    persons by which a wholesaler, as defined in s.
    125.02(21), is granted the right to sell or distribute
    intoxicating liquor or use a trade name, trademark,
    service   mark,   logotype,   advertising   or   other
    commercial symbol related to intoxicating liquor.
    This paragraph does not apply to dealerships described
    in s. 135.066(5)(a) and (b).
(Emphasis added.)    To determine whether a "[d]ealership" exists

between Winebow and the two wine distributors, we need to know

whether the wine distributors are "wholesaler[s]."

    ¶44     The language of Wis. Stat. § 135.02(3)(b) directs us

to the definition of "wholesaler" under Wis. Stat. § 125.02(21).3

Section 125.02(21) defines "[w]holesaler" as "a person, other

than a brewer, brewpub, manufacturer, or rectifier, who sells
alcohol beverages to a licensed retailer or to another person

who holds a permit to sell alcohol beverages at wholesale."             The

dispute in this case revolves around whether wine is an "alcohol

beverage"    as   referenced   in       the   "wholesaler"    definition.

    3
       Wisconsin Stat. ch. 125 specifically governs the sale of
alcohol beverages in the State of Wisconsin and addresses the
importance    of   the   three-tier   system   of   "production,
distribution, and sale." See Wis. Stat. § 125.01.

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Section 125.02(1) defines "alcohol beverage" as "fermented malt

beverages    and     intoxicating        liquor"     and      § 125.02(8)       defines

"[i]ntoxicating liquor" as:

    [A]ll ardent, spirituous, distilled or vinous liquors,
    liquids or compounds, whether medicated, proprietary,
    patented or not, and by whatever name called,
    containing 0.5 percent or more of alcohol by volume,
    which are beverages, but does not include "fermented
    malt beverages".
(Emphasis added.)          Everyone agrees that vinous liquors include

wine.      Construing      the   text    of    these     statutes       leads   to   the

inexorable conclusion that the wine distributors are wholesalers

whose agreements with Winebow create dealerships protected by

ch. 135.

    ¶45     The majority decries this interpretive exercise as a

"practice" with "no clear stopping point."                     Majority op., ¶37.

While our judicial duty of declaring what a statute says would

be easier if each statutory chapter confined its subject matter

to that particular chapter, legislative enactments are rarely so

linear.     On the scale of interpretive complexity, our task falls

on the easy end.        Inexplicably, the majority maintains the key

definition    from    Wis.     Stat.     ch. 125    is   not     referenced      within

ch. 135, see majority op., ¶37; this is of course inaccurate

because    Wis.    Stat.     § 135.02(3)(b)        explicitly      references        Wis.

Stat.      § 125.02(21),         which     provides        the         definition     of

"[w]holesaler."         This     cross-reference         to    ch. 125      (governing

alcohol beverages) within the rather brief ch. 135 requires no

more than reading three definitions within the same section of
ch. 125 (i.e., § 125.02), each of which is explicitly connected.

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Far from lacking a clear stopping point, the analysis requires

us to start with ch. 135 and end in one section of ch. 125.                                    The

majority criticizes this statutory construction as "circuitous."

Majority op., ¶36.                Following a single cross-reference to find

the meaning of a defined term is hardly circuitous; regardless

of how it is characterized, it is nonetheless the only correct

interpretation.

                                                 II

       ¶46       Although the text clearly leads to the conclusion that

ch. 135          applies     to     wine    grantor-dealer             relationships,          the

Seventh          Circuit    certified        the      question     because        Wis.       Stat.

§ 135.066(2)(a) provides a seemingly contradictory definition of

"[i]ntoxicating liquor."4                  This conflicting definition, however,

does       not    override       the    definition       of   "[i]ntoxicating            liquor"

within Wis. Stat. § 125.02(8).

       ¶47       First, the definition of intoxicating liquor in Wis.

Stat.       § 135.066        contains       no       language     suggesting          that    its

definition          applies       throughout          ch. 135.         In      contrast,      the
definition           of          "intoxicating          liquor"         embedded          within

§ 135.02(3)(b) resides in the "definitions" section of ch. 135,

which      specifically          says   that     the    definitions           apply   "in     this

chapter"——that             is,     ch. 135.            Because     the        definition        of

intoxicating liquor that includes wine——which is rooted in Wis.

Stat.       § 135.02(3)(b)——applies                  across      the     chapter,        it     is

       4
       Wisconsin Stat. § 135.066(2)(a) provides:   "'Intoxicating
liquor' has the meaning given in s. 125.02(8) minus wine."

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textually        insupportable      to     apply    § 135.066's     definition     of

"intoxicating liquor" beyond the section it inhabits.

      ¶48    Second, in order to give effect to all the words used

within      ch. 135,     Wis.     Stat.     § 135.066's     definition     must     be

limited to that particular section where it appears.                       Allowing

§ 135.066's definition to apply anywhere else would render the

"[i]n this chapter" language of Wis. Stat. § 135.02 superfluous.

If definitions outside of § 135.02 also applied throughout the

chapter, despite the absence of express language so directing,

§ 135.02's        language    rendering      its    definitions     applicable    "in

this chapter" would amount to a bootstrap provision at best,

merely      emphasizing,      but    not     controlling,     the    operation      of

ch. 135's        definitions.        Because       basic   tenets    of   statutory

construction dictate avoiding surplusage, the majority errs in

its   interpretation         by   creating      overlapping   definitions.         See

Kelley Co. v. Marquardt, 172 Wis. 2d 234, 250, 493 N.W.2d 68

(1992) (we are to construe a statute, where possible, so that no

part of it is rendered superfluous); see also Antonin Scalia &
Bryan A. Garner, Reading Law:               The Interpretation of Legal Texts

174 (2012) ("If possible, every word and every provision is to

be given effect (verba cum effectu sunt accipienda[ ]).                           None

should      be    ignored.        None     should     needlessly     be   given    an

interpretation that causes it to duplicate another provision or

to    have       no   consequence.").           The   majority's      creation     of

overlapping but contradictory definitions requires it to select

one and ignore the other.            This consequence is objectionable but
avoidable by giving effect to both definitions, as the text

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directs us:            one applies throughout the chapter and the other

applies only within its own section.

      ¶49       Third,    it   is    Wis.    Stat.      § 135.02(3)           that   defines

whether     a    relationship       between      a   grantor      and     a    dealer    is   a

"[d]ealership."           Wisconsin Stat. § 135.066 does not.

      ¶50       The    majority     concludes        that   Wis.    Stat.       § 135.066's

definition        of    "[i]ntoxicating       liquor"        must   apply       across      the

chapter,        thereby    removing    ch. 135's        protections           from   the    two

wine distributors in this case, in order to give the definition

meaning.        I disagree.       The definition of "[i]ntoxicating liquor"

in § 135.066 retains a function even if limited to its specific

section of ch. 135.            It applies to the legislative findings of

sub. (1), the non-applicability provisions of sub. (5), and the

severability part of sub. (6).

      ¶51       The effect of confining the Wis. Stat. § 135.066(2)(a)

definition         of     "[i]ntoxicating            liquor"       to     § 135.066         may

contravene the Governor's intention in excising wine from that

definition.            Regardless of what he intended in exercising his
partial veto power, this is what the Governor wrote.                                 We give

effect to the text, not the intentions of its drafters.                                    As a

result, under sub. (1), the legislative findings regarding the

three-tier system for distributing intoxicating liquor do not

apply to wine dealerships.                  Subsection (5) renders § 135.066

inapplicable to certain "intoxicating liquor" dealerships whose

production        of    "intoxicating       liquor"     does      not     exceed     certain

thresholds in gallons or revenue.                    Because wine was struck from
the   "intoxicating         liquor"    definition           in   § 135.066(2)(a),           the

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                                                                 No.    2017AP1595-CQ.rgb

non-applicability provision in sub. (5) does not apply to wine

dealerships.           Finally,     sub.    (6)    makes        the     provisions      of

§ 135.066 severable; under Wis. Stat. § 990.001(11), this means

that if one section is declared invalid, the remaining sections

shall    stand    unaffected.        Restricting      the       application       of   the

§ 135.066(2)(a) definition of "intoxicating liquor" to § 135.066

may not be what the Governor intended, but it is what he left of

the legislation in exercising his partial veto power.                          And it is

the text, not intentions, that reigns supreme.                          State ex rel.

Kalal, 271 Wis. 2d 633, ¶41 ("a 'policy favoring conventional

meanings         and      general      understandings             over         obscurely

evidenced intention of the legislators is supported in the oft-

repeated      premise     that intention must        be     determined         primarily

from the language of the statute itself'" (quoting 2A Norman J.

Singer, Sutherland Statutory Construction § 45.08, at 40 (6th

ed. 2000))); Scalia & Garner, supra ¶9, at 56 ("The words of a

governing text are of paramount concern, and what they convey,

in their context, is what the text means.").
       ¶52    The majority emphasizes the history of these statutes

before enactment by including the full text proposed by the

legislature, the strikethroughs made by the Governor's veto pen,

and     the   Governor's      letter       explaining       the        basis     for   his

substantial      edits.      Placing       the    focus    on     these    non-textual

considerations         improperly   influenced       the    majority's         statutory

construction.          "It is always perilous to derive the meaning of

an    adopted    provision    from     another     provision           deleted    in   the
drafting process."          District of Columbia v. Heller, 554 U.S.
8
                                                                         No.    2017AP1595-CQ.rgb

570, 590 (2008).              This caution applies no less to provisions

deleted by the Governor exercising his veto power.

      ¶53   The majority underscores the legislature's ability to

amend the law if it in fact disagreed with certain treatises'

take on the effect of the Governor's partial vetoes to remove

wine wholesalers from the fair dealership law.                                 This court has

explained      that        legislative      acquiescence           is    a     slim    reed    upon

which to support a judicial construction of a statute because

"[n]umerous variables, unrelated to conscious endorsement of a

statutory      interpretation,             may       explain     or      cause        legislative

inaction."       Wenke        v.    Gehl       Co.,       2004 WI 103,      ¶33,     274
Wis. 2d 220, 682 N.W.2d 405; see also Johnson v. Transp. Agency,

480 U.S. 616, 672 (1987) (Scalia, J., dissenting) ("[I]t [is]

impossible       to        assert    with        any      degree        of     assurance       that

congressional         failure       to   act     represents        (1)       approval     of    the

status quo, as opposed to (2) inability to agree upon how to

alter the status quo, (3) unawareness of the status quo, (4)

indifference          to     the     status       quo,      or      even        (5)     political
cowardice.").         Our judicial duty is to say what the law is, not

to   surmise     meaning       from      legislative        quiescence.               Legislative

inaction cannot support an interpretation of the statute that is

contrary    to    the       plain     meaning        of   the    language        used     in    the

statute.

                                               III

      ¶54   Applying a textual analysis of the language in ch. 135

leads to but one conclusion:                   wine distributors are wholesalers
as that term is defined in Wis. Stat. § 135.02.                                   The majority

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                                                           No.   2017AP1595-CQ.rgb

fixates on what the Governor struck from the legislation rather

than what remained, thereby giving effect to what the Governor

intended rather than what he actually signed into law.                   Reading

the   pertinent      provisions    of   ch. 135    without   the    obfuscating

portions that did not survive the Governor's veto dissolves any

ambiguity.      The majority adopts a statutory construction that

rewrites ch. 135 by subtracting language from it, rather than

giving effect to every word.            The majority errs.       I would answer

the    certified        question        affirmatively,       and     therefore,

respectfully dissent.

      ¶55   I   am   authorized    to    state    that   Justices    SHIRLEY   S.

ABRAHAMSON and DANIEL KELLY join this dissent.

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1