Shopper Advertiser, Inc. v. Wisconsin Department of Revenue

Citations: 344 N.W.2d 115; 117 Wis. 2d 223; 1984 Wisc. LEXIS 2306Docket: 81-1409

Court: Wisconsin Supreme Court; February 28, 1984; Wisconsin; State Supreme Court

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The case, involving Shopper Advertiser, Inc. and Shopping News, Inc. as petitioners and the Wisconsin Department of Revenue as the respondent, pertains to the judicial review of a tax assessment decision. The Supreme Court of Wisconsin reviewed a court of appeals decision that reversed a circuit court judgment. The central issues were the proper venue for judicial review of the Tax Appeals Commission's decision and whether the action was correctly transferred from Rock County to Dane County.

The dispute originated in 1975 when the Department assessed sales and use taxes against the petitioners for their publications. The petitioners argued that their publications qualified as exempt under state statutes. After the Department denied their request for redetermination, the petitioners sought review from the Wisconsin Tax Appeals Commission, which affirmed the Department's decision.

The petitioners filed for judicial review in Rock County within the statutory timeframe. Initially, the Department did not object to the venue. However, it later moved to dismiss based on improper venue, asserting that the correct venue was Dane County. The Rock County circuit court agreed but certified the case to Dane County due to the mistake of venue. The Dane County circuit court subsequently affirmed the Commission's decision.

The Supreme Court reversed the court of appeals' ruling and remanded the case for further proceedings, reaffirming the jurisdictional issues surrounding venue in tax appeal cases.

Taxpayers appealed a judgment from the Dane County Circuit Court, while the Department cross-appealed a Rock County Circuit Court order that denied its motion to dismiss and certified the matter to Dane County. The Court of Appeals confirmed that the Rock County Circuit Court lacked subject matter jurisdiction over the appeal from the Tax Appeals Commission's decision. It ruled that the appropriate venue for this review was the Dane County Circuit Court, according to § 77.59(6)(b) of the Wisconsin Statutes. The court further held that even if § 807.07(2) applied, it did not permit a transfer after the thirty-day period for initiating a review under § 227.16(1)(a) had elapsed. The transfer occurred beyond this thirty-day limit, resulting in the Dane County Circuit Court lacking jurisdiction for the review. Consequently, the Court of Appeals reversed the Dane County judgment affirming the Tax Appeals Commission's decision and remanded the case with instructions to vacate the judgment. It also reversed the Rock County order and instructed it to dismiss the review petition. The taxpayers subsequently petitioned for review, which was granted. The relevant statutes clarify that judicial review proceedings must be initiated by serving a petition on the agency and filing it in the appropriate circuit court within thirty days, with appeals from the Tax Appeals Commission specifically directed to the Dane County Circuit Court. The case references Wisconsin Valley Improvement Co. v. Public Service Comm. to illustrate that while the method of review is governed by § 227, the venue is determined by § 77.59(6)(b), emphasizing that venue does not equate to subject matter jurisdiction.

Subject matter jurisdiction pertains to a court's authority to hear a specific type of case, while venue refers to the appropriate court within that authority for rendering judgment. A court ruling in an improper venue is invalid due to lack of competency, not subject matter jurisdiction. Chapter 227 of Wisconsin statutes grants subject matter jurisdiction to all circuit courts for reviewing certain administrative decisions, aligning with the Wisconsin Constitution's provision for a unified court system. Specifically, when appealing decisions from the Tax Appeals Commission, the Department of Revenue must be named as the respondent, indicating legislative intent for uniform jurisdiction under Chapter 227. 

The legislature's 1977 amendment to section 227.16(1)(a) indicates that review actions should be filed in the petitioner's county, suggesting a decentralization of review locations while maintaining uniform jurisdiction. However, section 227.16(1) allows for exceptions where specific laws dictate otherwise; notably, section 77.59(6)(b) mandates that appeals from the Tax Appeals Commission be filed in Dane County. Consequently, while the Rock County circuit court had subject matter jurisdiction, it lacked the competency to issue a valid judgment, necessitating transfer to the Dane County circuit court.

Regarding the transfer process, section 807.07(2) mandates that if a court's jurisdiction is questioned and the error resulted from a mistake, the case should be certified to a court with proper jurisdiction. The court of appeals examined the applicability of this section to Chapter 227 actions and concluded it is applicable, supporting this interpretation with reference to prior case law. There is no significant distinction between an "appeal" and an "action to review" that would preclude section 807.07(2) from applying to cases under Chapter 227, thus allowing for correction of procedural errors without dismissals on technical grounds.

In Dring v. Mainwaring, the Wisconsin court ruled that the Iowa county court lacked the authority to hear the case, directing it to transfer to a court with proper jurisdiction. Citing sec. 2836a, akin to current sec. 807.07(2), the court emphasized that this provision allows transfers when a case is filed in a court without subject matter jurisdiction or in an improper venue. The court interpreted "jurisdiction" to include both subject matter jurisdiction and venue competency, underscoring legislative intent to prevent dismissals due to jurisdictional mistakes. 

The court found that sec. 807.07(2) applies to actions under chapter 227, particularly where the court has subject matter jurisdiction but lacks venue competency. The circuit court's conclusion that the filing error in Rock county was due to mistake was supported by the record. Previous cases highlighted the complexity and potential confusion surrounding sec. 227.16, which addresses administrative decision reviews, noting conflicts with sec. 77.59(6)(b) concerning venue. 

Taxpayers were reasonably led to believe their review action fell under sec. 227.16(1)(a), which allows for review in the petitioner’s county of residence, despite the existence of conflicting provisions. The court stressed the importance of ensuring that individuals are not hindered in seeking redress due to confusing statutory language and conflicting venue rules, concluding that the taxpayers acted in good faith in their filing.

The circuit court's determination that the misfiling was due to a mistake is upheld, aligning with the evidence presented. The proper venue for the case is established as Dane County, validating the Rock County circuit court's decision to transfer the case there under sec. 807.07(2) Stats. The court of appeals incorrectly ruled the certification untimely, asserting it was beyond the thirty-day limit following the Tax Appeals Commission’s decision, citing the necessity of strict procedural compliance for review actions. However, previous case law indicates that the circuit court had jurisdiction to transfer the case, and the filing in Rock County on October 12, 1979, was timely since it fell within the thirty-day window. The running of the time limit for appeal was tolled upon the initiation of the case in Rock County, thereby preserving the taxpayer's right to appeal. Consequently, the court of appeals' conclusion regarding the lack of jurisdiction in Dane County is reversed, and the case is remanded for further consideration of all unresolved issues. Justice Abrahamson concurs in part, recognizing the procedural error but emphasizes the need for clearer definitions regarding "subject matter jurisdiction" and "competency."

The Restatement of Judgments uses the terms "subject matter jurisdiction" and "competency" interchangeably, but the Second Restatement prefers "subject matter jurisdiction" for clarity in American legal terminology. Scholars have differing opinions on these terms, as well as "territorial jurisdiction" and "state power." However, consensus exists that the specific terminology is less important than consistent definitions and explanations of classifications by the court. The majority opinion defines subject matter jurisdiction related to a court's power to entertain a specific action, aligning it with the definition of competency from a previous case (Mueller). The majority also conflates competency with venue, defining venue as the appropriate court for hearing a case. This approach creates confusion, as the First Restatement categorizes venue primarily as a procedural issue, not affecting subject matter jurisdiction or competency. The consequences of misclassifying errors are crucial; a judgment is void if made by a court lacking competency, while an improper venue results in an invalid judgment, which can only be challenged directly. The majority's conclusion that an improper venue renders the judgment invalid and the court lacks competency raises contradictions in terminology. Finally, the majority incorrectly references a section of the statutes that defines jurisdiction to include venue, suggesting a transfer of the case, instead of a more appropriate provision for changing the place of trial.

The court acknowledges the thoughtful analysis in the appellate opinion but concurs with the majority's conclusion that the error in court selection does not necessitate dismissal of the action. However, the court criticizes the majority opinion for adding confusion regarding competency, subject matter jurisdiction, and venue rather than clarifying these legal concepts. The court dissents from the decision to remand unresolved issues to the court of appeals, arguing that the entire case should be decided by the court to promote judicial efficiency, expedite appeals, minimize costs for litigants, and ensure finality. The court references previous cases and legislative amendments to support its position on venue and jurisdiction, suggesting that the reliance on prior case law was misplaced. It distinguishes between general competency and specific competency, implying that venue issues may fall under specific competency rules, which affect the consequences of jurisdictional defects.