Family Dollar Stores of Wisconsin LLC v. City of Milwaukee

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
October 11, 2022
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.

Appeal No. 2021AP1432 Cir. Ct. No. 2020CV3154

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT I

FAMILY DOLLAR STORES OF WISCONSIN LLC AND LONNIE MCCAFFETY,
AGENT,

PETITIONERS-APPELLANTS,

V.

CITY OF MILWAUKEE AND CITY OF MILWAUKEE COMMON COUNCIL,

RESPONDENTS-RESPONDENTS.

APPEAL from an order of the circuit court for Milwaukee County:
HANNAH C. DUGAN, Judge. Reversed and cause remanded with directions.

Before Brash, C.J., Dugan and White, JJ.

¶1 BRASH, C.J. Family Dollar Stores of Wisconsin LLC and Lonnie
McCaffety (collectively “Family Dollar”) appeal the order of the circuit court
denying its writ of certiorari relating to the decision of the City of Milwaukee and
the City of Milwaukee Common Council (collectively “the City”) not to renew its
No. 2021AP1432

Food Dealer and Weights & Measures licenses. Family Dollar argues that the City’s
notice regarding the possibility of nonrenewal of the licenses was deficient, and that
the hearings on this matter were not fair and impartial, in violation of its due process
rights. Family Dollar further argues that the City’s decision was arbitrary,
oppressive, and unreasonable, representing its will and not its judgment.

¶2 For reasons set forth below, we agree that the City’s decision not to
renew Family Dollar’s licenses was improper. We therefore reverse the City’s
decision.

BACKGROUND

¶3 Family Dollar has operated its store on North 27th Street in
Milwaukee for sixteen years. The store carries a wide variety of food items, and
food sales account for approximately one-third of Family Dollar’s revenue for the
store. The store is located in a predominantly low-income area of Milwaukee, and
many of its customers are beneficiaries of the Supplemental Nutrition Assistance
Program (SNAP). Additionally, the store is located in what is considered to be a
high-crime area of Milwaukee.

¶4 The record indicates that Family Dollar had issues relating to loitering
on the property, littering, and complaints about the maintenance of the store
building. Furthermore, in August 2019, Family Dollar received a notice from the
Milwaukee Police Department (MPD) that the store had been designated a Chronic
Nuisance Premises under the Milwaukee Code of Ordinances (MCO) 80-10. That
notice listed four incidents that had occurred in July and August of 2019. Three of
those incidents were reported by Family Dollar employees: two incidents of
shoplifting, and one incident of a customer damaging items and attempting to take
the firearm from Family Dollar’s security guard. The fourth incident involved a

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citation for public drinking that was issued after an individual was stopped by police
officers on store property.

¶5 In response to that nuisance designation notice, Family Dollar
submitted a plan to MPD to abate the nuisance activities occurring at the store. That
plan was reviewed and accepted by MPD in September 2019. There have been no
further citations issued to Family Dollar for the store since its abatement plan was
implemented.

¶6 In February 2020, Family Dollar submitted an application to renew its
licenses to the City. Family Dollar subsequently received a notice from the City in
April 2020 that its renewal application may be denied. The notice directed Family
Dollar to “[s]ee attached police report or correspondence” for specific information
regarding the reasons for possible nonrenewal. The only item that appears to have
been attached was an email from Keith Stanley of the Near West Side Partners
community group to Alderman Robert Bauman, who represents the 4th District,
where the store is located. The email, dated April 2019—prior to the nuisance
designation notice that was issued by MPD and the responsive abatement plan
implemented by Family Dollar—discussed issues such as trash littering the
property, a dirty façade and windows, hand-written signs in the windows, dirty
floors inside the store, and leaning shelving units.

¶7 A hearing before the Licenses Committee on the matter was held in
May 2020; it was held virtually, due to the COVID-19 pandemic.1 Stanley, from

1
Family Dollar makes numerous references in its briefs to a video of the hearings before
the Licenses Committee and the Common Council. This video was apparently submitted to and
reviewed by the circuit court; however, it was not included in the record filed with this court. “We
are bound by the record as it comes to us.” Fiumefreddo v. McLean, 174 Wis. 2d 10, 26, 496
N.W.2d 226 (Ct. App. 1993). Thus, the information in this opinion regarding the hearings was
taken from the circuit court’s decision and other documents in the record that describe the hearings.

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the Near West Side Partners group, testified in opposition to renewing Family
Dollar’s licenses. He stated that the store was “a hub of shoplifting, loitering,
fighting, and other nuisance activity,” calling it “a ‘blight’ on 27th Street[.]” He
further claimed that management for the store was “non-responsive to concerns.”
However, Stanley acknowledged that there was “value to the store” and that it was
“a resource to the community.”

¶8 The district captain for MPD at that time, Jeffrey Norman, also
testified at the hearing. He stated that the store was “a drain on police resources”
and that Family Dollar “did not communicate well” with MPD. Alderman Bauman,
who was not a member of the Licenses Committee but was present at the hearing in
his capacity of alderman for that district, testified that he did not support renewal of
the licenses due to its history of “nuisance activity.” Alderman Bauman also stated
that a different store nearby offered the same products as Family Dollar, although a
letter to the Licenses Committee from Stanley submitted a few days before the
hearing acknowledged that the Family Dollar store provides “low[-]priced goods
that are not readily available any other place in our community.”

¶9 Management for Family Dollar—two district managers and the new
regional manager—testified as well. They stated that the store had undergone “a
number of improvements at significant expense” over the past year, noting that there
were some restrictions since Family Dollar does not own the building.
Nevertheless, they indicated that they would continue to make improvements to the
store and were “happy to work with area residents” regarding any further issues that
arose.

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¶10 A motion for nonrenewal of the licenses was passed by the Licenses
Committee by a vote of 4-1. The matter was then forwarded to the Common
Council.

¶11 A hearing by the Common Council was held at the end of May 2020.
Family Dollar raised due process concerns based on being denied the opportunity
to cross-examine the witnesses who testified in favor of nonrenewal. It also
requested an alternative to the nonrenewal of its licenses, such as a progressive
penalty. However, the Common Council accepted the recommendation of the
Licenses Committee for nonrenewal by a vote of 9-6. Alderman Bauman
participated in that vote as a member of the Common Council.

¶12 Family Dollar then filed a petition for writ of certiorari with the circuit
court seeking reversal of that decision. It argued that its due process rights were
violated when it was denied the opportunity to cross-examine the witnesses who
appeared in favor of nonrenewal. It further asserted that there was insufficient
evidence to support nonrenewal, and that the decision was arbitrary, based on
Alderman Bauman’s “anti-national chain store bias[.]”

¶13 In October 2020, the parties stipulated to a remand of the matter to the
City for a new hearing that allowed for “full and complete cross[-]examination of
all testifying witnesses.”2 A new hearing before the Licenses Committee was
scheduled for November 2020.

2
The circuit court also granted Family Dollar a temporary injunction allowing for its
Licenses to remain valid until such time that the court could decide this matter on the merits.
Family Dollar’s motion to stay that order was granted, and it remained in effect while this appeal
was pending.

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¶14 A notice for that remand hearing was provided to Family Dollar.
Attached to that notice was the August 2019 letter from MPD regarding the nuisance
designation for the store, and a copy of the letter notifying Family Dollar that its
abatement plan to address the nuisance issues had been accepted by MPD. Also
attached to the notice was a copy of the same April 2019 email from Stanley to
Alderman Bauman that was attached to the original notice for the first hearing.3

¶15 At the remand hearing in November 2020, the district captain for
MPD at that time testified regarding the number of calls MPD had received relating
to the store since January 2020. He explained that some of these were “business
checks,” which is when an officer checks on the store to ensure there are no issues,
either by entering the store and talking to employees or simply driving by. He also
stated that the nuisance designation had been lifted from the store. However, the
district captain at the time of the first hearing, Norman—who had been promoted to
assistant chief at the time of the remand hearing—testified that the number of calls
MPD received relating to the store was still “higher than one would expect.”

¶16 The same managers from Family Dollar who testified at the first
hearing testified at the remand hearing, along with the new store manager. They
stressed that they took the concerns about the store seriously, and emphasized their
willingness to work with MPD and community groups regarding improvements.

3
The notice included several other attachments, such as a letter from Stanley to the
Licenses Committee members dated May 6, 2020—prior to the first committee hearing—outlining
various concerns the group had with the store, which were similar to those addressed in the nuisance
designation letter from MPD. Also included with the notice was a map of the area, marked to
indicate where other businesses with food licenses were located. Family Dollar asserts that this
information should not have been included in the record before this court because it objected to this
information being presented at the remand hearing, since it was available at the first hearing but
never provided to Family Dollar, and that objection was sustained. We are unable to confirm those
events since video of the hearings was not included with the record, as previously noted, and
information on this issue does not appear elsewhere in the record.

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They also contended that many of the police calls actually stemmed from incidents
relating to a tavern located near the store, whose patrons engage in drug use and
fights in the Family Dollar parking lot. The store manager, who had only been with
the store for six months, testified that she had started training the staff on how to
handle “security issues.” The management staff all testified as to the improvements
that had been made to the store itself to address the issues raised, although one
manager observed that the corporation which owns Family Dollar was unlikely to
invest in further improvements for the store with its licenses in jeopardy.
Nevertheless, the regional manager stated that she had “walked the store” on
October 1, 2020, with management, the Department of Neighborhood Services, and
MPD, and there were “no code violations or safety issues.”

¶17 Alderman Bauman again testified that he was not in favor of renewing
Family Dollar’s licenses. He also again asserted that there was another grocery store
in the area for residents to patronize. He further commented that Family Dollar
“could care less about how this store is operating.” Stanley echoed that sentiment
during his testimony, stating that Family Dollar had been “unresponsive and not
committed to be involved in the community.”

¶18 Family Dollar had the opportunity to cross-examine each witness who
testified in opposition to the renewal of the licenses at the remand hearing.
Additionally, counsel for Family Dollar emphasized management changes at Family
Dollar in the past six months, which he asserted had provided more stability for the
store. Counsel further advocated that a penalty short of nonrenewal was a more
appropriate remedy, based on the evidence. Nevertheless, the Licenses Committee
again voted to recommend nonrenewal by a vote of 4-0;4 the Common Council

4
Alderwoman Milele Coggs was excused from the proceedings.

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subsequently followed that recommendation, voting in favor of nonrenewal by a
vote of 13-0 with two abstentions. Alderman Bauman again participated in that
vote.

¶19 The matter then returned to the circuit court5 for review. Family
Dollar asserted that the decision denying renewal of its licenses was arbitrary,
oppressive and unreasonable, and contrary to the evidence. Family Dollar further
argued that its due process rights were violated because the notices from the City
regarding the hearings were insufficient, and because of technological issues
relating to the virtual format of the hearings.

¶20 The circuit court rejected Family Dollar’s arguments. It found that
the notices were sufficient, and that any technical “glitches” that occurred during
the hearings did not affect Family Dollar’s opportunity to be heard. The court also
rejected Family Dollar’s argument that the Licenses Committee, in “delegating its
fact-finding responsibilities to Alderman Bauman,” had not asked “meaningful
questions” during the hearings. The court determined that Family Dollar “had the
opportunity to ask meaningful questions during its own witnesses’ testimonies,” and
thus had not established that its due process rights were violated in that regard.

¶21 Furthermore, the circuit court found that there was sufficient relevant
evidence upon which the Licenses Committee and the Common Council relied for
their nonrenewal recommendation and decision, and therefore those actions were
not arbitrary, oppressive, or unreasonable. This appeal follows.

5
The order remanding this matter to the City was issued by the Honorable Jeffrey A.
Conen; the decision ultimately denying Family Dollar’s petition for writ of certiorari was issued
by the Honorable Hannah C. Dugan.

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DISCUSSION

¶22 Judicial review by certiorari of the final decision of a municipal board
is permitted pursuant to WIS. STAT. § 68.13 (2019-20).6 On certiorari review, this
court is “limited to determining whether: (1) the governmental body’s decision was
within its jurisdiction, (2) the body acted according to law, (3) the decision was
arbitrary or oppressive, and (4) the evidence of record substantiates its decision.”
State ex rel. Bruskewitz v. City of Madison, 2001 WI App 233, ¶11, 248 Wis. 2d
297, 635 N.W.2d 797. We review de novo the municipality’s decision, not the
decision of the circuit court. Id.

¶23 Furthermore, on certiorari review “there is a presumption of
correctness and validity to a municipality’s decision.” Ottman v. Town of
Primrose, 2011 WI 18, ¶48, 332 Wis. 2d 3, 796 N.W.2d 411. The petitioner bears
the burden of overcoming this presumption. Id., ¶50.

Due Process Claims

¶24 We first address Family Dollar’s due process arguments, which fall
under the second category of review, acting according to law. See Marris v. City of
Cedarburg, 176 Wis. 2d 14, 24, 498 N.W.2d 842 (1993) (“[t]he phrase ‘acted
according to law’ has been interpreted as including ‘the common-law concepts of
due process and fair play’” (citations omitted)). Family Dollar raises two due
process concerns: that the notices for the hearings provided by the City were
insufficient, and that the hearing was not fair and impartial. We agree with Family
Dollar that its due process rights were violated in both instances.

6
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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¶25 First, with regard to the sufficiency of the notices, the City is required
to provide “written notice of the possibility of non[]renewal[.]” See MCO 85-3.1.a.
That written notice must include, among other things, “[a] statement of the specific
reasons for … non[]renewal.” See MCO 85-3.1.b-3. “[T]he rules of construction
for statutes have been long held applicable to the construction of municipal
ordinances[.]” State ex rel. B’nai B’rith Found. of U.S. v. Walworth Cnty. Bd. of
Adjustment, 59 Wis. 2d 296, 308, 208 N.W.2d 113 (1973). The purpose of statutory
or ordinance construction is to determine the intent of that statute or ordinance,
which is “primarily deduced from the language” of that statute or ordinance. See
Fond Du Lac Cnty. v. Town of Rosendale, 149 Wis. 2d 326, 332, 440 N.W.2d 818
(Ct. App. 1989). Statutory and ordinance construction are questions of law that we
review de novo. DOR v. River City Refuse Removal, Inc., 2007 WI 27, ¶26, 299
Wis. 2d 561, 729 N.W.2d 396.

¶26 The notices provided by the City to Family Dollar, for both the initial
hearing and the remand hearing of the Licenses Committee, were essentially form
letters. They contained the requisite statement of the possibility of nonrenewal, as
well as the dates and times of the hearings. Additionally, both notices provided a
list of the various types of evidence the Committee might consider, such as “failure
of the applicant to meet municipal qualifications,” pending criminal charges, or
municipal offenses which “substantially relate” to the licenses at issue.

¶27 The notices further indicated that if the “activities of the applicant”
involved a licensed premises, the Licenses Committee may consider additional
evidence of whether “the premises tends to facilitate a public or private nuisance or
has been the source of congregations of persons which have resulted in” certain
crimes or ordinance violations, including theft, disturbing the peace, drinking in
public, excessive littering, loitering, and other conduct that “reasonably relates to

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the public health, safety and welfare[.]” Another factor that may be considered is
the “failure to comply with the approved plan of operation.” Nothing in the body
of this list, however, referenced Family Dollar as specifically involved in any of
these concerning behaviors.

¶28 Both notices to Family Dollar also stated that there were “attached
police report[s] or correspondence” relating to the applicant. However, there were
no police reports attached to the initial hearing notice; the only attachment was the
email from Stanley to Alderman Bauman, dated prior to the store being designated
a nuisance property. That same email was attached to the remand hearing notice,
along with the August 2019 letter from MPD regarding the nuisance designation for
the store. That letter listed the four incidents occurring in July and August of 2019
to which MPD had responded, as discussed above—two instances of shoplifting
reported by employees, an unruly customer in the store also reported by employees,
and public drunkenness outside the store—which had apparently precipitated the
store being designated a nuisance. Also attached to the remand hearing notice was
a copy of the letter notifying Family Dollar that its abatement plan to address the
nuisance issues had been accepted by MPD.

¶29 We fail to see how these notices, with these attachments, constituted
sufficient notice to Family Dollar of the evidence the Licenses Committee was
going to consider at the hearings. There was no explanation of the “municipal
qualifications” that Family Dollar was required to meet and whether they failed to
meet them. Additionally, the attachments included were related to issues that had
already been addressed by Family Dollar, and there had been no further citations
issued in the time frame between the approval of its abatement plan by MPD and
the hearings. Moreover, there were no other details specific to Family Dollar
describing conduct or activities that were of concern to the Committee. In contrast,

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this court previously held in Questions, Inc. v. City of Milwaukee, 2011 WI App
126, ¶¶2, 4, 38, 336 Wis. 2d 654, 807 N.W.2d 131, that a “fourteen page police
report synopsis” relating to “a wide variety of issues from traffic congestion, noise,
fighting, armed robbery, property theft, and shots fired” in and around a night club
seeking to renew its Tavern and Amusement License was sufficient notification to
the business as “the basis for the possibility of non[]renewal or suspension.”

¶30 In short, the notices failed to provide Family Dollar with sufficient
pertinent information, such that it could prepare and offer responses to the Licenses
Committee at the hearings. We thus conclude that this was a violation of Family
Dollar’s due process rights. See Marris, 176 Wis. 2d at 24.

¶31 Turning to Family Dollar’s other due process claim—that it did not
receive a fair and impartial hearing—we find the Marris case particularly
instructive. Like the zoning decision at issue in Marris, licensing decisions
“implicate important private and public interests; they significantly affect …
property ownership rights as well as community interests[.]” See id. at 25.

¶32 Recognizing that the decisions of municipal boards are vulnerable to
“problems of bias and conflicts of interest” due to the “localized nature of the
decisions,” and that such biases may “distort judgment,” our supreme court in
Marris stated that matters before local boards require “impartial decision-makers”
in order to “ensure both sound fact-finding and rational decision-making as well as
to ensure public confidence in the decision-making process.” Id. at 25-26.
“Determining whether a board member has prejudged a matter requires an
examination of the facts of the individual case.” Id. at 26. For example, “[a] clear
statement ‘suggesting that a decision has already been reached, or prejudged, should
suffice to invalidate a decision.’” Id. (citation omitted).

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¶33 Here, the record clearly indicates that Alderman Bauman was not in
favor of renewing Family Dollar’s licenses; indeed, he said as much during his
testimony at both hearings. Furthermore, it appears that Alderman Bauman, who
was not a member of the Licenses Committee, was primarily questioning the
witnesses during the hearings, rather than the witnesses being questioned by
members of the Licenses Committee. Family Dollar asserts this was an
inappropriate “delegat[ion] [of the Committee’s] fact-finding responsibilities[.]” In
fact, it was the refusal by the Committee to allow Family Dollar to cross-examine
any witnesses at the first hearing—after Alderman Bauman’s questioning—that led
to the stipulation among the parties for a remand hearing.

¶34 Moreover, Alderman Bauman made comments at both hearings that
suggest he may be biased against Family Dollar because it is a chain store. At the
first hearing, he stated “this corporation could care less about this store and they
would never know they lost this store.” He echoed this sentiment at the second
hearing, stating “Family Dollar could care less about how this store is operating,”
adding that he “is an advocate for the residents and businesses in his community.”
Alderman Bauman further noted that there was another store in the neighborhood
which offers products similar to those offered at Family Dollar and had “fewer
disturbances” than Family Dollar, which he believed was “due to local
management.”

¶35 These facts suggest that Alderman Bauman, who seems to have
spearheaded these proceedings, had prejudged this matter. On the contrary, the City
characterizes Alderman Bauman’s conduct as “passionate advocacy on behalf of his
constituents” with regard to a “problematic establishment in his district,” which is
“precisely the type of participation that is expected from local elected officials when
matters [a]ffecting their constituents are at issue.” However, not only does the City

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fail to support this statement with any legal authority, it flies in the face of the legal
standard for board decisions discussed in Marris. See id. at 25-26. Indeed, when
“[t]aken together,” Alderman Bauman’s actions and statements have the capacity to
“overcome the presumption of honesty and integrity that would ordinarily be
applied” to the decisions of municipal boards by “creat[ing] a situation in which the
risk of bias was impermissibly high.” See id. at 29-30.

¶36 Therefore, we conclude that Family Dollar’s due process rights were
violated during the hearing process. See id. at 25-26. As a result, the City did not
act according to law in making its determination not to renew Family Dollar’s
licenses. See id. at 24.

Claim that Decision was Arbitrary, Oppressive, and Unreasonable

¶37 Family Dollar also claims that the City’s decision was arbitrary,
oppressive, and unreasonable, representing its will and not its judgment. “‘[A]n
agency does not act in an arbitrary ... manner if it acts on a rational basis’; rather,
‘[a]rbitrary action is the result of an unconsidered, wil[l]ful or irrational choice, and
not the result of the ‘sifting and winnowing’ process.’” Smith v. City of Milwaukee,
2014 WI App 95, ¶21, 356 Wis. 2d 779, 854 N.W.2d 857 (citation omitted;
alterations in Smith).

¶38 As discussed above, the Licenses Committee’s actions appear to have
been driven by Alderman Bauman, whom we have concluded prejudged this matter.
Thus, Alderman Bauman’s role in directing the course of the hearings and the
evidence received calls into question the reliability of the “sifting and winnowing”
process here. See id. For instance, Family Dollar’s previous nuisance designation
had been lifted after it responded to the concerns noted in the MPD letter and made
improvements in and around the store in accordance with its abatement plan, as

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explained during the testimony of the Family Dollar managers. There had been no
further citations issued at the store at the time of the hearings, and although there
was testimony that the number of calls to MPD regarding the store were still “higher
than one would expect,” it was also noted and undisputed that the neighborhood in
which the store is located is challenged by high crime rates.

¶39 Furthermore, the votes by the Common Council also suggest a
decision based on its will rather than its judgment. The vote by the Council after
the first hearing of the Licenses Committee was 9-6 in favor of nonrenewal. After
the remand hearing, the vote by the Council was 13-0, with two abstentions. This
difference in voting occurred even though the witnesses and evidence introduced
during the two hearings were virtually identical. Moreover, both votes by the
Council included Alderman Bauman’s votes in favor of nonrenewal, when he had
essentially acted as an advocate against Family Dollar throughout these
proceedings.

¶40 Additionally, at the remand hearing, Family Dollar introduced
examples of the Common Council’s actions relating to other businesses’ license
issues between January 2019 and July 2020. Those examples indicated that
nonrenewal was generally recommended for egregious conduct, such as a high
number of health code violations being issued over a two-year period; the rejection
of an applicant’s nuisance abatement plan after it was deemed a chronic nuisance
property after four shootings in a one-year period; pornographic videos being shot
inside a premises; withholding customers’ WIC benefits cards; and crimes such as
physical assault, drug dealing, and illegal utility hook-ups being committed on the
premises. In further contrast to the Family Dollar proceedings, in June 2020 the
Licenses Committee initially recommended nonrenewal of a business’s Food Dealer
license based on testimony of “multiple shootings at the location, increased violence

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in the neighborhood, and issues with unlicensed operators”; however, that business
was later granted renewal with a sixty-day suspension.

¶41 The City’s decision in this case also stands in stark contrast to its
decision in Questions. The fact set in Questions indicates that there were numerous
police contacts with the night club which involved serious issues such as armed
robbery and shots fired; it also included testimony from a neighbor who stated that
bullets that had come through his living room and bedroom windows. See id., 336
Wis. 2d 654, ¶¶3-4. Yet, the Common Council voted to renew its license with only
a twenty-five day suspension. Id., ¶9.

¶42 Therefore, we conclude that based on the evidence set forth in the
record, the City’s decision not to renew Family Dollar’s licenses was arbitrary,
representing its will rather than its judgment. As a result of this conclusion, as well
as our conclusion that the City did not act according to law, we reverse the decision
of the Common Council for the nonrenewal of Family Dollar’s licenses. See State
ex rel. Lomax v. Leik, 154 Wis. 2d 735, 741, 454 N.W.2d 18 (Ct. App. 1990) (on
certiorari review, the reviewing court is generally “bound to either affirm or
reverse,” although it may remand “for limited purposes” such as supplementing an
incomplete record). Accordingly, we remand this matter to the circuit court with
the direction to order the City to vacate its decision not to renew Family Dollar’s
licenses.

By the Court.—Order reversed and cause remanded with directions.

Not recommended for publication in the official reports.

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