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January/February 2023 Issue

Also in this issue: Seventh Circuit Dismisses Challenge to Madison's Digital Sign Ordinance     |     Welcome Joesph Hasler and Maximillian Buckner     |     Wisconsin Supreme Court Clarifies How Tax Assessment Claims Must Proceed     |     Court Dismisses RLUIPA Challenge to City's Stadium Lighting Decision

Wisconsin Appellate Court Rules City of Milwaukee Violated Family Dollar’s Due Process Rights When it Denied the Renewal of Food Dealer and Weights & Measures Licenses

In Family Dollar Stores of Wisconsin LLC et​.al. v. City of Milwaukee et​.al., 2021AP1432, decided October 11, 2022, the Court of Appeals ruled the City of Milwaukee violated Family Dollar’s due process rights when it denied an application to renew Family Dollar’s Food Dealer and Weights & Measures licenses.

In 2019, a Family Dollar store located in the City of Milwaukee was designated as a nuisance property by the City due to increased police activity, loitering, lack of maintenance, and other related issues. The City and Family Dollar entered into an abatement plan in 2019. In 2020, Family Dollar applied to renew its Food Dealer and Weights & Measures licenses with the City.

The City provided Family Dollar with a notice, which included a copy of an email from a community group to an Alderman detailing sanitary and maintenance issues with Family Dollar. The application was then heard in front of the Licenses Committee.

A member of the community group, the Milwaukee Police District Captain, and the Alderman all testified at the committee hearing against renewing the application. Of note, the Alderman noted that a different store nearby offered the same products as Family Dollar. Family Dollar representatives were not permitted to cross examine witnesses that testified against the application and the questioning was led by the Alderman, who was not on the committee. Family Dollar representatives then testified in support of the application. After the hearing, the Licenses Committee voted against renewing the application.

The application then went to the Common Council. A hearing was held at the Common Council where Family Dollar raised due process concerns based on being denied the right to cross-examine witnesses. After the hearing, the Common Council denied the application in a 9 – 6 vote and the Alderman who testified at the committee hearing voted against renewal.

Family Dollar filed a petition for writ of certiorari with the circuit court based on the due process argument. The City and Family Dollar then agreed to remand the case back to the Licenses Committee to allow Family Dollar to cross-examine witnesses.

The City provided notice of the remand hearing to Family Dollar, including a letter from the Milwaukee Police Department designating the store as a nuisance, a copy of the letter notifying Family Dollar of acceptance of the abatement plan, and a copy of the email from the community group to the Alderman. At the second hearing in front of the Licenses Committee, representatives from the Milwaukee Police Department, the community group, and the Alderman testified again. The testimony was generally the same as the first hearing, except Family Dollar was able to cross-examine witnesses. The Licenses Committee voted against approving the application. The Common Council unanimously followed the Committee’s recommendation and denied the application, with the Alderman voting again.

The circuit court affirmed the City’s denial of the application and Family Dollar appealed arguing its due process rights were violated. The appellate court agreed with Family Dollar for two reasons: (1) the notices provided to Family Dollar were insufficient, and (2) the Licenses Committee hearing was not fair and impartial.

The City was required to provide written notice to Family Dollar of the possibility of non-renewal of their license and the notice was required to include a statement of specific reasons for non-renewal. The appellate court found the City’s notices were insufficient. It first notes that the notices provided to Family Dollar were essentially form letters” that contained a statement of the possibility of non-renewal and various types of evidence the Committee might consider in making the determination. Beyond that statement, the other information provided in the notices was an email from the community group, a letter from the Milwaukee Police Department detailing four incidents supporting the designation of the property as a nuisance, and a letter approving the abatement plan.

The appellate court found that the information in the notices was not enough, because the information in the notices had already been addressed by Family Dollar, and no further citations had been issued after the abatement plan was implemented. The City failed to provide Family Dollar with sufficient pertinent information, such that it could prepare and offer responses” at the hearing. Thus, Family Dollar’s due process rights were violated.

In addition, the appellate court found the City violated Family Dollar’s due process rights due to the Alderman’s bias. The Alderman, who was not on the Licenses Committee, testified and then questioned witnesses at the committee hearings. He made his position clear that he was against renewing the license. He made comments at the committee hearings that he may be biased against Family Dollar because it is a chain store. Based on this information, the appellate court found that the Alderman prejudged” the matter and that his actions overcame the presumption of honesty and integrity creating a situation where the risk of bias was impermissibly high. Therefore, again, Family Dollar’s due process rights were violated.

This case is a warning to municipalities on two separate issues. First, municipalities must be aware of notice requirements and provide sufficient, detailed notices. In this instance, the City was required to provide detailed information and facts sufficient to support a reason for non-renewal in their notice. Despite an attempt to use a form letter and attach letters and emails, the City failed to provide sufficient notice. Second, municipalities must provide an unbiased hearing process. Individuals running the hearings must provide a fair hearing process and the local board must be made up of impartial decision makers. Municipalities and board members should be informed of the risk of bias and be prepared to take steps to prevent bias and conflicts of interest in decision making.

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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