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July/August 2018 Issue

Also in this issue: The End of Deference to Agency Interpretations of Law in Wisconsin     |     U.S. Supreme Court Decision Impacts Public Safety Union’s Dues Deductions     |     Wisconsin Supreme Court Extends Building Permit Rule to Land     |     Court of Appeals Clears the Way for Badger Coulee Project

Court of Appeals Rules for City in Town’s Challenge to Annexation Ordinance

In a recent case, Town of Lincoln v. City of Whitehall, Case No. 2017AP684 (April 17, 2018), the Wisconsin Court of Appeals clarified the standards and limitations that apply to a town’s legal challenge of a grassroots annexation procedure known as “direct annexation by unanimous approval.”  This procedurally streamlined form of annexation requires that an annexation petition be signed by all of the electors residing in the territory to be annexed, along with all owners of the property located within that territory.  The annexation petition is then presented to the annexing municipality on a “take it or leave it” basis.  Subject to certain filing requirements and the requirement that the property be “contiguous” to the annexing municipality, the municipality may then adopt an annexation ordinance by a 2/3 vote of its governing body.  Because the annexation is initiated by electors and landowners, rather than the annexing municipality, the statutes provide that the town from which the territory was annexed may only bring a legal challenge to the annexation on very narrow grounds.  

Town of Lincoln v. City of Whitehall concerns the Town of Lincoln’s legal challenge to annexation ordinances enacted by the City of Whitehall.  Whitehall Sand and Rail, LLC was interested in locating a sand mine near the City, and wanted it to ultimately be located within City boundaries.  The LLC selected the land it would like to purchase, and then made offers to purchase the land from the current landowners, contingent on annexation.  The Town exercised its right under Wis. Stat. § 66.0217(6)(d) to seek review of the annexation from the Department of Administration, which concluded that the annexation violated the statutory requirement that that the property annexed be “contiguous” to the annexing municipality.  The Town then brought a declaratory judgment action, asking the court to declare the annexation ordinances invalid and unenforceable on a variety of theories, including lack of contiguity.  

The Court of Appeals concluded that, because the challenge was to a direct annexation by unanimous consent, Wis. Stat. § 66.0217(11)(c) limited the Town to challenging the annexation ordinances on the basis of contiguity or county parallelism (the requirement that some part of the annexing municipality be located in the same county as the territory to be annexed—a requirement that was not at issue in this case).  The Town could not raise any other theories in its lawsuit challenging the annexation (e.g., failure to obtain necessary signatures on the petition, or lack of reasonable present or demonstrable future need for the annexed property).

With respect to its contiguity claim, the Town argued that, although the annexed territory was physically touching the City’s boundaries, it was not truly “contiguous,” because it was an arbitrary and odd shape.  In its opinion, the Court of Appeals explained that the word “contiguous” generally means “some significant degree of physical contact between the properties in question.”  That requirement was met in this case, because the annexed territory shared an approximately ¾ mile border with the City. However, the court acknowledged that there were certain limited circumstances where an arbitrarily shaped boundary could give rise to a finding that annexed territory in a direct annexation by unanimous consent, although physically contiguous to the annexing municipality, does not meet the statutory contiguity requirement.  

The first circumstance is when the annexing municipality is one of the petitioning landowners or the “real controlling influence” in the proceedings.  In order to be considered the “real controlling influence,” a municipality must do more than provide technical assistance or recommendation to the petition signers.  Instead, the municipality must engage in conduct by which it “dominates” the petitioners so as to have effectively selected the boundaries of the annexed territories itself.  That standard was not met in this case because the City did not solicit or encourage property owners to file an annexation petition, but instead the LLC selected the parcels and entered into agreements with the landowners requiring annexation.  Although the City did advise the LLC (after the petitions had been submitted) that excluding certain property was likely to create an illegal town “island,” the court concluded that that was not enough for the City to be considered a real controlling influence.

Second, physically contiguous territory may be found to violate the statutory contiguity requirement when the territory is of an “exceptional shape.”  In the context of owner-initiated annexations, the court explained that this analysis protects against only the “most egregious” configurations.  Shapes that are merely irregular, or that are arm-like extensions from a municipal boundary, do not necessarily demonstrate that the territory is exceptionally shaped.  In this case, the Town argued that the City’s annexation was a so-called “balloon-on a string” or “shoestring” configuration, in which the annexed territory includes isolated areas connected by means of a narrow strip of land.  The court disagreed, noting that the so-called “string” territory was over 1,000 feet wide at its narrowest point and was not included in the annexation merely as a means to reach the alleged “balloon” territory, but instead would be an integral part of the mining operation.  Thus, the court held that the territory was not such an egregiously exceptional shape as to invalidate the annexation.

Ultimately, the Court of Appeals ruled in favor of the City on all claims.  This case should serve as a reminder to municipalities that all annexations are not created equal.  When it comes to direct annexations by unanimous consent, a Town’s ability to challenge the annexation is severely constrained by statute.  Towns may only challenge such an annexation on the basis of contiguity or county parallelism.  If the property is physically contiguous to the annexing municipality (i.e., there some significant degree of physical contact between the properties), then the statutory contiguity requirement will be satisfied unless the annexing municipality signed the petition (or is the “real controlling influence” behind it) or the annexed territory is of a “most egregious” “exceptional shape.”  

— Julia K. Potter

This newsletter is published and distributed for informational pur- poses only. It does not offer legal advice with respect to particular situations, and does not purport to be a complete treatment of the legal issues surrounding any topic. Because your situation may differ from those described in this Newsletter, you should not rely solely on this information in making legal decisions.

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