Blackstone and Booze: Wisconsin Court of Appeals Discusses Retroactivity of Judicial Decisions

On August 26, the Wisconsin Court of Appeals released Mixx Night Club v. Milwaukee, 13AP2599, an opinion analyzing the retroactivity of Wisconsin Supreme Court decisions.

The case began with a rowdy nightclub in Milwaukee. The City of Milwaukee “non-renewed” Mixx Nightclub’s Class B tavern license, after “numerous disturbances” at Mixx in 2011 and 2012. Mixx sought review of the Common Council’s decision in the Milwaukee County Circuit Court. Relying on a recent Wisconsin Court of Appeals decision, Nowell v. Wausau, 2012 WI App 100, 344 Wis. 2d 269, 823 N.W.2d 373 (Nowell I), Judge Sankovitz conducted a de novo trial and vacated the Milwaukee Common Council’s non-renewal decision. The City appealed.

After the deadline for a reconsideration motion had passed but three weeks before the City filed its notice of appeal, the Wisconsin Supreme Court released its decision reversing the court of appeals in the Nowell case and holding that certiorari review (rather than de novo) is the proper standard of review for decisions of local governments involving licenses for alcoholic beverages.  Nowell v. Wausau, 2013 WI 88, 351 Wis. 2d 1, 838 N.W.2d 852 (Nowell II). Under certiorari review, a court considers whether a city’s decision is made within its jurisdiction, is lawful, is not arbitrary, and is supported by substantial evidence.

Mixx, seeking to preserve its victory in the circuit court, argued on appeal that Nowell II‘s certiorari standard should be applied prospectively. It argued that because Nowell I was the law when Mixx’s de novo trial was conducted, certiorari review was not appropriate.

The court rejected Mixx’s argument. It explained that Wisconsin follows the “Blackstonian doctrine” under which judicial decisions are applied retroactively except in limited circumstances. This doctrine “is based on the theory that courts declare but do not make law. . . . [W]hen a decision is overruled, it does not become ‘bad’ law; instead it never was the law.”

The court acknowledged that sometimes a new rule of law is applied prospectively (a practice known as “sunbursting”) when certain reliance interests, equities, or judicial administration favor prospective application. E.g., Colby v. Columbia Cnty., 202 Wis. 2d 342, 363-65, 550 N.W.2d 124 (1996). Finding no such special circumstances, the court held that Nowell II should be applied retroactively.

The result was an across-the-board loss for Mixx. Because its argument on appeal related solely to retroactivity and because it did not explain how the City’s decision could be reversed under certiorari review, the court of appeals reversed the circuit court’s decision.

Mixx‘s holding is that a new standard of review is not enough to warrant sunbursting, but the case is also a lesson for litigants who place too many eggs in one basket.