Wisconsin Supreme Court Strikes Down "Opt Out" Property Assessment Appeal Legislation, Restores Right to De Novo Court Review for All Wisconsin Property Taxpayers; Holds No Right to Jury Trial
On March 25, 2011, the Wisconsin Supreme Court issued its decision in Metropolitan Associates v. City of Milwaukee, 2011 WI 20, a case that significantly impacts appeal rights for Wisconsin property taxpayers.
In Metropolitan Associates, the court reviewed the constitutionality of 2007 Wis. Act 86 (Act 86). Act 86 permitted municipalities to curtail non-manufacturing property owners’ options for challenging property tax assessments by adopting ordinances allowing taxpayers to obtain a 60-day postponement of board review hearings. Under Act 86, taxpayers in municipalities that adopted such ordinances (opt out municipalities) no longer had the right to file de novo refund actions in court under Wis. Stat. § 74.37. Instead, such taxpayers would be limited to seeking more restricted certiorari review under § 70.47.
The trial court in Metropolitan Associates held that certain provisions of Act 86 violated the Equal Protection Clause and invalidated those specific provisions. The court of appeals reversed, holding that the “enhanced” rights and procedures under Act 86 removed any significant differences between the certiorari and de novo review procedures. In a 4-3 decision, the Wisconsin Supreme Court reversed the court of appeals, holding that the Act 86 enhancements are insufficient to provide taxpayers in opt out municipalities an equivalent opportunity to “fully contest their case in a court trial.” The majority further found there was no rational basis for the distinction. Going beyond the trial court’s holdings, the Court held that the offending provisions of Act 86 are not severable and, therefore, invalidated Act 86 in its entirety, except for the interest provision in section 10 of the Act.
In the course of comparing the § 74.37 and § 70.47 review options, the Court considered whether there is a right to a jury trial in § 74.37 de novo refund actions. The Court concluded there is no right to a jury trial in de novo refund actions that challenge excessive assessments under § 74.37 because no such right existed at common law. However, the decision seems to suggest there may be a right to a jury trial in an action under § 74.35 challenging an unlawful assessment.
Implications of the Metropolitan Associates Decision
The Court’s decision in Metropolitan Associates restores important rights to taxpayers in opt out municipalities, including the City of Milwaukee. Taxpayers in those municipalities no longer will have to rush to try to make a complete and thorough evidentiary record at the board of review hearing, with no assurance that a reviewing court will permit additional evidence to be submitted. Rather, as is the case with taxpayers in other municipalities, they will have the option to start fresh in circuit court after obtaining the board of review’s determination, at which time they may make new arguments and submit additional evidence. The Metropolitan Associates decision also eliminates the administrative burdens Act 86 imposed on taxpayers with properties in multiple jurisdictions, restoring uniform appeal procedures regardless of where in Wisconsin the property is located.
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Maureen A. McGinnity
Erik G. Weidig
Theresa A. Andre