135.02 Annotation
Two guideposts for determining the existence of a "community of interest" under sub. (3) are: 1) a shared financial interest in the operation of the dealership or the marketing of a good or service; and 2) the degree of cooperation, coordination of activities, and sharing of common goals in the the parties' relationship. Ziegler Co., Inc. v. Rexnord, Inc.
139 Wis. 2d 593,
407 N.W.2d 873 (1987).
135.02 Annotation
A substantial investment distinguishes a dealership from a typical vendee-vendor relationship; establishing a loss of future profits is not sufficient. Gunderjohn v. Loewen-America, Inc.
179 Wis. 2d 201,
507 N.W.2d 115 (Ct. App. 1993).
135.02 Annotation
Contracts between an HMO and chiropractors for the provision of chiropractic services to HMO members did not did not establish the chiropractors as dealerships under ch. 135. Bakke Chiropractic Clinic v. Physicians Plus Insurance,
215 Wis. 2d 600,
573 N.W.2d 542 (Ct. App.1997).
135.02 Annotation
A dealership is a contract or agreement establishing a particular sort of commercial relationship that encompasses an extraordinary diverse set of business relationships not limited to the traditional franchise. The focus of the analysis must be on whether the business relationship can be said to be situated in the state after examining a broad set of factors outlined by the court. Baldewein Company v. Tri-Clover, Inc. 2000 WI 20,
233 Wis. 2d 57,
606 N.W.2d 145. See also Baldewein Company v. Tri-Clover, Inc.
183 F. Supp. 2d 1116 (2002).
135.02 Annotation
When an otherwise protected party transfers a protected interest to a third party, a "community of interest" is destroyed and the party removed from WFDL protection. Lakefield Telephone Co. v. Northern Telecom, Inc.
970 F.2d 392 (1992).
135.02 Annotation
A community of interest exists when a large proportion of a dealer's revenues are derived from the dealership, or when the alleged dealer has made sizable investments specialized in the grantor's goods or services. Frieburg Farm Equip. v. Van Dale, Inc.
978 F.2d 395 (1992).
135.02 Annotation
There is no "community of interest" in the sale of services not yet in existence when the availability of the services is dependent on the happening of an uncertain condition. Simos v. Embassy Suites, Inc.
983 F.2d 1404 (1993).
135.02 Annotation
This chapter does not protect a manufacturer's representative that lacks the unqualified authorization to sell or the authority to commit the manufacturer to a sale. Sales & Marketing Assoc., Inc. v. Huffy Corp.
57 F.3d 602 (1995).
135.02 Annotation
If a grantor is losing substantial money under the dealership relationship, it may constitute "good cause" for changes in the contract, including termination. Morley-Murphy Co. v. Zenith Electronics, Inc.
142 F.3d 373 (1998).
135.02 Annotation
This chapter specifies who may take advantage of its protections through the terms "dealer" and "dealership" and obviates the need to resort to conflict of laws principles. Investment in the state without in-state sales does not bring a party within the coverage of the chapter. Generac Corp. v. Caterpillar, Inc.
172 F.3d 971 (1999).
135.02 Annotation
A manufacturer's right of approval of its distributors' subdistributors did not create a contractual relationship between the manufacturer and the subdistributor subject to this chapter. Praefke Auto Electric & Battery Company, Inc. v. Tecumsah Products Company, Inc. 255 F3d 460 (2001).
135.02 Annotation
The distinction between a dealer and a manufacturer's representative is discussed. Al Bishop Agency, Inc. v. Lithonia-Division of National Services, Inc.
474 F. Supp. 828 (1979).
135.02 Annotation
The employment relationship in question was not a "dealership." O'Leary v. Sterling Extruder Corp.
533 F. Supp. 1205 (1982).
135.02 Annotation
The plaintiff was not a "dealer" since money advanced to the company for fixtures and inventory was refundable. Moore v. Tandy Corp. Radio Shack Div.
631 F. Supp. 1037 (1986).
135.02 Annotation
It is improper to determine whether under sub. (3) a "community of interest" exists by examining the effect termination has on a division of the plaintiff. U.S. v. Davis,
756 F. Supp. 1162 (1990).
135.02 Annotation
The plaintiff's investment in "goodwill" was not sufficient to afford it protection under this chapter. Team Electronics v. Apple Computer,
773 F. Supp. 153 (1991).
135.02 Annotation
The "situated in this state" requirement under sub. (2) is satisfied as long as the dealership conducts business in Wisconsin. CSS-Wisconsin Office v. Houston Satellite Systems,
779 F. Supp. 979 (1991).
135.02 Annotation
There is no "community of interest" under sub. (3) when there is an utter absence of "shared goals" or "cooperative coordinated efforts" between the parties. Cajan of Wisconsin v. Winston Furniture Co.
817 F. Supp 778 (1993).
135.02 Annotation
Even if a person is granted a right to sell a product, the person is not a dealer unless that person actually sells the product. Smith v. Rainsoft,
848 F. Supp. 1413 (1994).
135.02 Annotation
Under sub. (3), de minimus use of a trade name or mark is insufficient: there must be substantial investment in it. Satellite Receivers v. Household Bank,
922 F. Supp. 174 (1996).
135.02 Annotation
A clause providing that the party who had drafted the contract and dictated all of its provisions was not a party to the contract was void, and that party was a grantor of a dealership. Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products, Co.
110 F. Supp. 2d 899 (2000).
135.02 Annotation
In search of a dealership definition: The teachings of Bush and Ziegler. Carter and Kendall. WBB Apr. 1988.
135.02 Annotation
The Wisconsin Fair Dealership Law's Territorial Imperative. Keeler. Wis. Law. Aug. 1999.
135.025
135.025
Purposes; rules of construction; variation by contract. 135.025(1)(1) This chapter shall be liberally construed and applied to promote its underlying remedial purposes and policies.
135.025(2)
(2) The underlying purposes and policies of this chapter are:
135.025(2)(a)
(a) To promote the compelling interest of the public in fair business relations between dealers and grantors, and in the continuation of dealerships on a fair basis;
135.025(2)(b)
(b) To protect dealers against unfair treatment by grantors, who inherently have superior economic power and superior bargaining power in the negotiation of dealerships;
135.025(2)(c)
(c) To provide dealers with rights and remedies in addition to those existing by contract or common law;
135.025(2)(d)
(d) To govern all dealerships, including any renewals or amendments, to the full extent consistent with the constitutions of this state and the United States.
135.025(3)
(3) The effect of this chapter may not be varied by contract or agreement. Any contract or agreement purporting to do so is void and unenforceable to that extent only.
135.025 History
History: 1977 c. 171.
135.025 Annotation
The choice of law clause in a dealership agreement was unenforceable. Bush v. National School Studios,
139 Wis. 2d 635,
407 N.W.2d 883 (1987).
135.025 Annotation
Federal law required the enforcement of an arbitration clause even though that clause did not provide the relief guaranteed by this chapter, contrary to this section and s. 135.05. Madison Beauty Supply v. Helene Curtis,
167 Wis. 2d 237,
481 N.W.2d 644 (Ct. App. 1992).
135.025 Annotation
A forum-selection clause in a dealership agreement was not freely bargained for and was rendered ineffective under sub. (2) (b). Cutter v. Scott & Fetzer Co.
510 F. Supp. 905 (1981).
135.025 Annotation
The relinquishment of territory and the signing of a guaranty agreement were changes insufficient to bring a relationship under this law. Rochester v. Royal Appliance Mfg. Co.
569 F. Supp. 736 (1983).
135.03
135.03
Cancellation and alteration of dealerships. No grantor, directly or through any officer, agent or employee, may terminate, cancel, fail to renew or substantially change the competitive circumstances of a dealership agreement without good cause. The burden of proving good cause is on the grantor.
135.03 History
History: 1973 c. 179;
1977 c. 171.
135.03 Annotation
A grantor may cancel, terminate, or non-renew a dealership if the dealer refuses to accept changes that are essential, reasonable, and not discriminatory. A dealer's failure to substantially comply with the changes constitutes good cause. Ziegler Co., Inc. v. Rexnor,
147 Wis. 2d 308,
433 N.W.2d 8 (1988).
135.03 Annotation
A drug supplier violated this section by terminating without good cause all dealership agreements with independently owned pharmacies in the state. Kealey Pharmacy & Home Care Service, Inc. v. Walgreen Co.
761 F.2d 345 (1985).
135.03 Annotation
This chapter did not apply to a grantor's action that was due to business exigencies unrelated to the dealer and was done in a nondiscriminatory manner. Remus v. Amoco Oil Co.
794 F.2d 1283 (1986).
135.03 Annotation
Economic duress may serve as a basis for a claim of constructive termination of a dealership. JPM, Inc. v. John Deere,
94 F.3d 270 (1996).
135.03 Annotation
A grantor's substantial loss of money under a dealership relationship may constitute "good cause" for changes in the contract, including termination. Morley-Murphy Co. v. Zenith Electronics, Inc.
142 F.3d 373 (1998).
135.03 Annotation
A change in credit terms was a change in a dealer's "competitive circumstances." Van v. Mobil Oil Corp.
515 F. Supp. 487 (1981).
135.03 Annotation
This section did not apply when a grantor withdrew in a nondiscriminatory fashion from a product market on a large geographic scale. A 90-day notice was required. St. Joseph Equipment v. Massey-Ferguson, Inc.
546 F. Supp. 1245 (1982).
135.03 Annotation
Franchisees failed to meet their burden of proof that their competitive circumstances would be substantially changed by a new agreement. Bresler's 33 Flavors Franchising Corp. v. Wokosin,
591 F. Supp. 1533 (1984).
135.03 Annotation
Good cause for termination includes failure to achieve reasonable sales goals. L.O. Distributors, Inc., v. Speed Queen Co.
611 F. Supp. 1569 (1985).
135.03 Annotation
Federal law preempts this chapter in petroleum franchise cases. Baker v. Amoco Oil Co.,
761 F. Supp. 1386 (1991).
135.03 Annotation
When parties continue their relations after the term of a dealership contract has expired, the contract has been renewed for another period of the same length. Praefke Auto Electric & Battery Co., Inc. v. Tecumseh Products, Co.
110 F. Supp. 2d 899 (2000). Reversed on other grounds.
135.03 Annotation
Constructive Termination Under the Wisconsin Fair Dealership Law. Cross and Janssen. Wis. Law. June 1997.
135.04
135.04
Notice of termination or change in dealership. Except as provided in this section, a grantor shall provide a dealer at least 90 days' prior written notice of termination, cancellation, nonrenewal or substantial change in competitive circumstances. The notice shall state all the reasons for termination, cancellation, nonrenewal or substantial change in competitive circumstances and shall provide that the dealer has 60 days in which to rectify any claimed deficiency. If the deficiency is rectified within 60 days the notice shall be void. The notice provisions of this section shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors or bankruptcy. If the reason for termination, cancellation, nonrenewal or substantial change in competitive circumstances is nonpayment of sums due under the dealership, the dealer shall be entitled to written notice of such default, and shall have 10 days in which to remedy such default from the date of delivery or posting of such notice.
135.04 History
History: 1973 c. 179.
135.04 Annotation
A grantor must give a 90-day notice when termination is for nonpayment of sums due. White Hen Pantry v. Buttke,
100 Wis. 2d 169,
301 N.W.2d 216 (1981).
135.04 Annotation
The notice requirement of this section applies to substantial changes of circumstances of a dealership, not a dealership agreement. Actions that substantially change competitive circumstances and that are controlled by the grantor or are allowed by the dealership agreement require the statutory notice. Jungbluth v. Hometown, Inc.
201 Wis. 2d 320,
548 N.W.2d 519 (1996),
94-1523.
135.04 Annotation
Steps that the grantor requires the dealer to take in order to rectify a deficiency must be reasonable. Al Bishop Agency, Inc. v. Lithonia, etc.
474 F. Supp. 828 (1979).
135.04 Annotation
The notice requirement does not impermissibly burden interstate commerce. Designs in Medicine, Inc. v. Xomed, Inc.
522 F. Supp. 1054 (1981).
135.04 Annotation
Remedies for termination should be available only for unequivocal terminations of the entire relationship. Meyer v. Kero-Sun, Inc.
570 F. Supp. 402 (1983).
135.04 Annotation
The insolvency exception to the notice requirement did not apply to insolvency that was not known to the grantor at the time of termination. Bruno Wine & Spirits v. Guimarra Vineyards,
573 F. Supp. 337 (1983).
135.045
135.045
Repurchase of inventories. If a dealership is terminated by the grantor, the grantor, at the option of the dealer, shall repurchase all inventories sold by the grantor to the dealer for resale under the dealership agreement at the fair wholesale market value. This section applies only to merchandise with a name, trademark, label or other mark on it which identifies the grantor.
135.045 History
History: 1977 c. 171.
135.045 Annotation
"Fair wholesale market value" means wholesale price. Roedel-Hanson and Associates, Inc. v. Environamics, Corp.
242 F. Supp. 2d 582 (2003).
135.05
135.05
Application to arbitration agreements. This chapter shall not apply to provisions for the binding arbitration of disputes contained in a dealership agreement concerning the items covered in
s. 135.03, if the criteria for determining whether good cause existed for a termination, cancellation, nonrenewal or substantial change of competitive circumstances, and the relief provided is no less than that provided for in this chapter.
135.05 History
History: 1973 c. 179.
135.05 Annotation
Federal law required enforcement of an arbitration clause even though that clause did not provide the relief guaranteed by this chapter, contrary to this section and 135.025. Madison Beauty Supply v. Helene Curtis,
167 Wis. 2d 237,
481 N.W.2d 644 (Ct. App. 1992).
135.06
135.06
Action for damages and injunctive relief. If any grantor violates this chapter, a dealer may bring an action against such grantor in any court of competent jurisdiction for damages sustained by the dealer as a consequence of the grantor's violation, together with the actual costs of the action, including reasonable actual attorney fees, and the dealer also may be granted injunctive relief against unlawful termination, cancellation, nonrenewal or substantial change of competitive circumstances.
135.06 History
History: 1973 c. 179;
1993 a. 482.
135.06 Annotation
In an action for termination of a dealership upon written notice not complying with this chapter and without good cause, the statute of limitations started running upon receipt of the termination notice. Les Moise, Inc. v. Rossignol Ski Co., Inc.
122 Wis. 2d 51,
361 N.W.2d 653 (1985).
135.06 Annotation
The term "actual costs of the action" includes appellate attorney fees. Siegel v. Leer, Inc.
156 Wis. 2d 621,
457 N.W.2d 533 (Ct. App. 1990).
135.06 Annotation
The measure of damages is discussed. C. A. May Marine Supply Co. v. Brunswick Corp.
649 F.2d 1049 (1981).
135.06 Annotation
A cause of action accrued when a defective notice under s. 135.04 was given, not when the dealership was actually terminated. Hammil v. Rickel Mfg. Corp.
719 F.2d 252 (1983).
135.06 Annotation
This section does not restrict recovery of damages with respect to inventory on hand at the time of termination to "fair wholesale market value." Kealey Pharmacy v. Walgreen Co.
761 F.2d 345 (1985).
135.06 Annotation
Accountant fees were properly included under this section. Bright v. Land O' Lakes, Inc.
844 F.2d 436 (7th Cir. 1988).
135.06 Annotation
There is no presumption in favor of injunctive relief and against damages for lost future profits. Frieburg Farm Equip. v. Van Dale, Inc.
978 F.2d 395 (1992).
135.06 Annotation
The determination of damages and attorney fees is discussed. Esch v. Yazoo Manufacturing Company, Inc.
510 F. Supp. 53 (1981).
135.06 Annotation
Punitive damages are not available in what is essentially an action for breach of contract. White Hen Pantry, Div. Jewel Companies v. Johnson,
599 F. Supp. 718 (1984).
135.06 Annotation
An arbitration award that did not award attorney fees was enforceable. Parties may agree to bear their own legal expenses when resolving differences; what the parties may do, an arbitrator as their mutual agent may also do. George Watts & Son, Inc. v. Tiffany & Co.
248 F.3d 577 (2001).
135.065
135.065
Temporary injunctions. In any action brought by a dealer against a grantor under this chapter, any violation of this chapter by the grantor is deemed an irreparable injury to the dealer for determining if a temporary injunction should be issued.
135.065 History
History: 1977 c. 171.
135.065 Annotation
Four factors considered in granting preliminary injunction are discussed. The loss of good will constituted irreparable harm. Reinders Bros. v. Rain Bird Eastern Sales Corp.
627 F.2d 44 (1980).
135.065 Annotation
The court did not abuse its discretion in granting a preliminary injunction notwithstanding the arguable likelihood that the defendant would ultimately prevail at trial. Menominee Rubber Co. v. Gould, Inc.
657 F.2d 164 (1981).
135.065 Annotation
Although the plaintiff showed irreparable harm, the failure to show a reasonable likelihood of success on the merits precluded a preliminary injunction. Milwaukee Rentals, Inc. v. Budget Rent A Car Corp.
496 F. Supp. 253 (1980).
135.065 Annotation
A presumption of irreparable harm exists in favor of a dealer when a violation is shown. For the presumption to apply, a dealership relationship must be shown to exist. Price Engineering Co., Inc. v. Vickes, Inc.
774 F. Supp. 1160 (1991).
135.066
135.066
Intoxicating liquor dealerships. 135.066(1)
(1)
Legislative findings. The legislature finds that a balanced and healthy 3-tier system for distributing intoxicating liquor is in the best interest of this state and its citizens; that the 3-tier system for distributing intoxicating liquor has existed since the 1930's; that a balanced and healthy 3-tier system ensures a level system between the manufacturer and wholesale tiers; that a wholesale tier consisting of numerous healthy competitors is necessary for a balanced and healthy 3-tier system; that the number of intoxicating liquor wholesalers in this state is in significant decline; that this decline threatens the health and stability of the wholesale tier; that the regulation of all intoxicating liquor dealerships, regardless of when they were entered into, is necessary to promote and maintain a wholesale tier consisting of numerous healthy competitors; and that the maintenance and promotion of the 3-tier system will promote the public health, safety and welfare. The legislature further finds that a stable and healthy wholesale tier provides an efficient and effective means for tax collection. The legislature further finds that dealerships between intoxicating liquor wholesalers and manufacturers have been subject to state regulation since the enactment of the
21st Amendment to the U.S. Constitution and that the parties to those dealerships expect changes to state legislation regarding those dealerships.
135.066(5)
(5) Nonapplicability. This section does not apply to any of the following dealerships:
135.066(5)(a)
(a) Dealerships in which a grantor, including any affiliate, division or subsidiary of the grantor, has never produced more than 200,000 gallons of intoxicating liquor in any year.
135.066(5)(b)
(b) Dealerships in which the dealer's net revenues from the sale of all of the grantor's brands of intoxicating liquor constitute less than 5% of the dealer's total net revenues from the sale of intoxicating liquor during the dealer's most recent fiscal year preceding a grantor's cancellation or alteration of a dealership.
