Department of Agriculture rules prohibiting a chain distributor scheme are valid. Unfair practices that may be prohibited are not limited to those affecting competitors. HM Distributors of Milwaukee, Inc. v. Department of Agriculture, 55 Wis. 2d 261
, 198 N.W.2d 598
The elements of misappropriation are: 1) the expenditure of time, labor, or money creating the misappropriated thing; 2) competition; and 3) commercial damage to the plaintiff. Mercury Record Productions, Inc. v. Economic Consultants, Inc., 64 Wis. 2d 163
, 218 N.W.2d 705
The trial court properly relied upon an administrative rule promulgated under sub. (2) in instructing the jury. State v. Clausen, 105 Wis. 2d 231
, 313 N.W.2d 819
The state may join as parties defendant assignees of contracts allegedly obtained by deceptive practices even though the assignees did not engage in deception. State v. Excel Management Services, Inc., 111 Wis. 2d 479
, 331 N.W.2d 312
Attorney fees for successful appellate work are recoverable under sub. (5). Fees are recoverable even when the person is represented at no charge by a legal services organization. Shands v. Castrovinci, 115 Wis. 2d 352
, 340 N.W.2d 506
Sub. (6) does not require a threat of future harm in order to obtain an injunction. State v. Fonk's Mobile Home Park & Sales, Inc., 117 Wis. 2d 94
, 343 N.W.2d 820
(Ct. App. 1983).
A plaintiff-tenant who prevails in an action for the violation of an order under this section is entitled to attorney fees irrespective of the amount of damages the landlord may recover in a counterclaim. Paulik v. Coombs, 120 Wis. 2d 431
, 355 N.W.2d 357
(Ct. App. 1984).
In cases when a landlord complies with the notification requirements and provides an accounting of amounts withheld from a security deposit, an award of double damages under sub. (5) is subject to offset for actual damages to the landlord. A damage award in the amount of double the security deposit, regardless of the landlord's damages, applies when the landlord fails to provide the accounting. Pierce v. Norwick, 202 Wis. 2d 587
, 550 N.W.2d 451
(Ct. App. 1996), 96-0067
The lender liability limits under s. 422.208 (4) do not limit the liability of lenders subject to the Home Improvement Trade Practices Code promulgated under this section. A homeowner may proceed under sub. (5) when there is a violation of the code. If a home improvement was financed by an interlocking consumer loan, full payment before discovering the violations of the code does not eliminate the consumer's cause of action against an assignee of the loan for the total amount that the consumer was obligated for at the time of entering into the contract. Jackson v. DeWitt, 224 Wis. 2d 877
, 592 N.W.2d 262
(Ct. App. 1999), 98-0493
When the plaintiff lost a sale of property as the result of a violation of an administrative rule adopted under sub. (2), it was proper to double the lost sale price of property prior to deducting the market price of the property in setting damages under sub. (5). Benkoski v. Flood, 2001 WI App 84
, 242 Wis. 2d 652
, 626 N.W.2d 851
A contract in violation of an administrative rule adopted under this section does not result in per se unenforceability of the contract. A lease provision requiring a tenant to pay all landlord attorney fees, in violation of a rule, was unenforceable because severing the clause from the remainder of the lease would undermine the goals of eliminating such clauses and preventing the intimidation of tenants that the clauses may cause. Baierl v. McTaggart, 2001 WI 107
, 245 Wis. 2d 632
, 629 N.W.2d 277
, 2001 WI 107
, a lease containing a provision violating an administrative rule is not necessarily void, but rather, may be unenforceable by one or both parties under certain circumstances. While a landlord cannot seek damages for abandonment of a lease that contains a code violation, a tenant who seeks to prospectively enforce the lease waives the tenant's rights pursuant to Baierl
in the event of a breach on the part of the tenant. By seeking to enforce a lease, a tenant reaffirms the terms of the lease and the landlord's reciprocal right to enforce those provisions. Dawson v. Goldammer, 2003 WI App 3
, 259 Wis. 2d 664
, 657 N.W.2d 432
To sue for double damages, costs, and attorney's fees under sub. (5), a party must establish a pecuniary loss because of a violation. Failure to allege any pecuniary loss for an alleged administrative code violation barred recovery under sub. (5). Snyder v. Badgerland Mobile Homes, Inc., 2003 WI App 49
, 260 Wis. 2d 770
, 659 N.W.2d 887
Holding individual wrongdoers accountable is necessary in order to adequately effectuate the purpose behind this section, protecting consumers from unfair dealings. When the corporate veil frustrates the purpose of a statute, it must be assumed that the legislature intended to pierce it. Rayner v. Reeves Custom Builders, Inc., 2004 WI App 231
, 277 Wis. 2d 535
, 691 N.W.2d 705
Nothing in this section or ch. 97 evinces a legislative intent to preclude the Department of Agriculture, Trade and Consumer Protection from declaring, by rule, that a violation of department rules governing food labeling is an unfair trade practice amenable to private enforcement action under sub. (5). Gallego v. Wal-Mart Stores, Inc., 2005 WI App 244
, 288 Wis. 2d 229
, 707 N.W.2d 539
Wisconsin Administrative Code ch. ATCP 110, entitled Home Improvement Practices (HIPA), was adopted under authority of this section. Violations are governed by the discovery rule and the six-year statute of limitations under s. 893.93 (1) (b) [now s. 893.93 (1m) (b)]. Sub. (5) authorizes the doubling of an entire damage award, even if a HIPA violation is combined with additional wrongdoing that contributes to the loss in question. A corporate employee may be personally liable for acts in violation of HIPA made on behalf of the corporate entity that employs the employee. Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 22
, 308 Wis. 2d 103
, 746 N.W.2d 762
Under sub. (5), a person suffering pecuniary loss because of a violation by any other person of any order issued under this section may sue for damages. Using the common understanding of the term “because of," the “pecuniary loss" is clearly the amount suffered to be paid as a result of the violation of the order. When a general order promulgated under sub. (2) prohibits the retention or receipt of the customer's money, the consumer suffers a pecuniary loss under sub. (5) in the amount that was wrongfully retained or received. Kaskin v. John Lynch Chevrolet-Pontiac Sales, Inc., 2009 WI App 65
, 318 Wis. 2d 802
, 767 N.W.2d 394
A reasonably prudent landlord would be able to understand, by reviewing the relevant statutes and administrative code provisions that, upon withholding some or all of a tenant's security deposit, the landlord may be held criminally liable for failing to provide a tenant with a statement of withholdings. A landlord has sufficient notice that failure to comply with the requirements under s. ATCP 134.06 (4), Wis. Adm. Code, could result in a violation of this section as an unfair business or trade practice and, therefore, could be criminally prosecuted under s. 100.26 (3). The statutory scheme is not void for vagueness and comports with due process in this regard. State v. Lasecki, 2020 WI App 36
, 392 Wis. 2d 807
, 946 N.W.2d 137
A tenant's ability to collect double damages in a civil lawsuit under sub. (5) does not mean that a circuit court can order a landlord to pay a tenant double the tenant's pecuniary loss as restitution in a criminal case under s. 973.20. A primary purpose of restitution is not to punish the defendant, but to compensate the victim for actual loss. In compensating the victim, the goal is to make the victim whole again. In this case, the effect of the court's decision to award as restitution the double damages permitted by sub. (5) was either to punish the landlord or to compensate the tenants for a nonpecuniary injury in violation of s. 973.20. State v. Lasecki, 2020 WI App 36
, 392 Wis. 2d 807
, 946 N.W.2d 137
Allegations that a Department of Agriculture rule prohibiting chain distributor schemes as an unfair trade practice abridged the 1st amendment protection of commercial speech were not so obviously without merit so as to be insubstantial for purposes of the statute requiring hearing and determination by a three-judge court. Holiday Magic, Inc. v. Warren, 497 F.2d 687
Federal law did not preclude the enforcement of this section. Time Warner Cable v. Doyle, 847 F. Supp 635
No private cause of action exists under this section except for violations of a Department of Agriculture, Trade and Consumer Protection order. Emergency One, Inc. v. Waterous Co., 23 F. Supp. 2d 959
Protection for Consumers Against Unfair and Deceptive Business. Jeffries. 57 MLR 559 (1974).
State Deceptive Trade Practices and Consumer Protection Acts: Should Wisconsin Lawyers be Susceptible to Liability Under Section 100.20? Anderson. 83 MLR 497 (1999).
Navigating Wisconsin's Consumer Protection System. Greene. Wis. Law. Sept. 2017.
Unfair trade practices in the dairy industry. 100.201(1)(1)
Unless context requires otherwise:
“Broker" means any person engaged in negotiating sales or purchases of selected dairy products for or on behalf of a retailer or wholesaler or both.
“Retailer" means every person making any sale of selected dairy products at retail within this state unless otherwise excepted; provided, that in the case of a person making both sales at retail and sales at wholesale such term shall apply only to the retail portion of such sales. “Retailer" does not include the United States, the state, any municipality as defined in s. 345.05 (1) (c)
, or any religious, charitable or educational organization or institution, but does include any other person engaged in the business of making retail sales wholly or in part for the person's own profit at an institution operated by such an exempt party.
For the purpose of this section any subsidiary or affiliate corporation, limited liability company, cooperative, or unincorporated cooperative association, and any officer, director, partner, member or manager of a corporation, cooperative, unincorporated cooperative association, partnership or limited liability company which is a retailer of selected dairy products, and any individual, corporation, cooperative, unincorporated cooperative association, partnership, limited liability company, association or any other business unit which owns, controls or franchises any retailer or which has any retailer as an affiliate, member or subsidiary, is deemed to be a retailer of selected dairy products and the prohibitions of sub. (2)
shall also apply to any such person or business unit which sells any selected dairy product at wholesale.
Milk, skim milk, fortified milk, flavored milk, flavored skim milk, buttermilk, cream, sour cream, half and half, whipping cream, whipped cream and cottage cheese; and
Ice cream, ice milk, sherbet, custard, water ices, quiescently frozen ices and frozen dessert novelties manufactured from any such products.
The department may by rule, after hearing, designate as selected dairy products such other products derived in whole or in part from milk as it finds necessary to effectuate the purposes of this section.
In no event shall there be designated as selected dairy products any of the following:
Condensed, concentrated or evaporated milk in hermetically sealed containers.
“Sell at retail," “sales at retail" and “retail sales" include any transfer for a valuable consideration made in the course of trade or conduct of the seller's business, of title to tangible personal property to the purchaser for consumption or use other than resale or further processing or manufacturing, and include any transfer of such property where title is retained by the seller as security for the payment of the purchase price.
“Sell at wholesale," “sales at wholesale" and “wholesale sales" include any transfer for a valuable consideration made in the course of trade or conduct of the seller's business, of title to tangible personal property to the purchaser for purposes of resale or further processing or manufacturing, and include any transfer of such property where title is retained by the seller as security for the payment of the purchase price.
“Wholesaler" means every person making sales of selected dairy products at wholesale within this state, unless otherwise excepted; provided, that in the case of a person making both sales at retail and sales at wholesale such term shall apply only to the wholesale portion of such business.
For the purpose of this section any subsidiary or affiliate corporation, limited liability company, cooperative, or unincorporated cooperative association, and any officer, director, partner, member or manager of a corporation, cooperative, unincorporated cooperative association, partnership or limited liability company which is a wholesaler of selected dairy products, is deemed to be a wholesaler of selected dairy products.
This section is applicable to consignment sales and a consignor shall be deemed to be a wholesaler and a consignee to be a retailer for the purposes of this section.
Each of the practices described in this subsection is declared to be an unfair trade practice. It is unlawful for any person to be engaged in such practices. No wholesaler shall:
Give or extend discounts or rebates, directly or indirectly, to retailers or other wholesalers on selected dairy products or give or extend to such purchasers any services connected with the delivery, handling or stocking of such products except in accordance with published price lists. A wholesaler may sell selected dairy products at a price different from or with services less than or additional to those in said published price list in order to meet a bona fide offer by a competitor to a particular retailer or wholesaler, but such discount, rebate or service shall not be given until the wholesaler first makes a written record of the date of such competitive offer, the terms thereof, the name of the retailer or wholesaler to whom made and the name of the competitor by whom made. Such record shall be available within this state for inspection and copying by any retailer or wholesaler upon the retailer's or wholesaler's written request therefor. It is the duty of every wholesaler under this subsection to prepare and publish as hereinafter provided current price lists giving the prices of all selected dairy products sold by the wholesaler at wholesale, directly or indirectly, to retailers or other wholesalers, including all discounts, rebates and services connected with the delivery, handling or stocking of such products, giving the effective dates of such prices, and giving the amount paid or anything of value given or granted by the wholesaler for such sales made through a broker as commission, brokerage, allowance or other compensation. Such price lists shall be available within this state for inspection and copying by any retailer or wholesaler upon the retailer's or wholesaler's written request therefor.
Every wholesaler shall file with the department the address of the wholesaler's principal business office in this state, if any. If a wholesaler has such a principal business address in this state written request for any record or price list required to be made available under this subsection shall be sent to such business office and the information requested shall be made available there. A wholesaler having no principal business office within this state shall file with the department or a designated agent approved by the department such current records or price lists required to be made available under this subsection. Such current records or price lists shall be available for inspection and copying by any retailer or wholesaler upon the retailer's or wholesaler's written request therefor. The failure or refusal of any wholesaler to make available for inspection and copying any record or price list required to be made available under this subsection within 24 hours after a request has been received or to file with the department current records or price lists as required shall be prima facie evidence of a violation of this subsection.
In case of the failure or refusal of any wholesaler to make available or file any record or price list as required by this paragraph, any court of record of competent jurisdiction shall, upon a showing of such failure or refusal, and upon notice, order said wholesaler to give to the retailer or wholesaler so requesting, within a specified time, an inspection thereof, with permission to make a copy therefrom, or to file such information with the department.
Discriminate in price, directly or indirectly, between different purchasers of selected dairy products of like grade and quality where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly, or to injure, destroy or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them. Proof made at any proceeding under this paragraph that there has been discrimination in price shall be prima facie evidence of the truth of such charges. The burden of rebutting such prima facie evidence by a showing of justification shall be upon the person charged with the violation. Nothing in this paragraph shall prevent any person charged with a violation of this paragraph from rebutting such prima facie evidence by showing that the person's lower price was made in good faith to meet an equally low price of a competitor. Nothing in this paragraph shall be construed to apply to the submission of bids to or sales to the United States, the state, any municipality as defined in s. 345.05 (1) (c)
, or any religious, charitable or educational organization or institution. Nothing in this paragraph shall prevent:
Price differentials which merely allow for differences in the cost of manufacture, sale or delivery resulting from the differing methods or quantities in which such selected dairy products are sold or delivered to such purchasers.
Persons engaged in selling selected dairy products from selecting their own customers in bona fide transactions and not in restraint of trade.
Price changes from time to time resulting from changing conditions affecting the market for or the marketability of the selected dairy products concerned, including but not limited to actual or imminent deterioration, obsolescence, distress sales under court process, or sales in good faith in discontinuance of business in the selected dairy products concerned.
Make payments of money, credit, gifts or loans to retailers as rental for the storage or display of selected dairy products on the premises where they are offered for sale by the retailer.
Make or underwrite loans to a retailer or become bound in any manner for the financial obligation of any retailer except that a wholesaler may lend money to a retailer for the purchase of equipment for the storage, transportation, and display of selected dairy products, provided the loan is for not more than 90 percent of the purchase price, bears at least a 5 percent annual interest rate, is payable in equal monthly installments over a period of not more than 48 months, and is secured by a security interest created by a security agreement specifying all payments by the retailer and duly filed by the wholesaler within 10 days after the making or underwriting of said loan, as provided in subch. V of ch. 409
regarding debtors who are located in this state.
Furnish, sell, give, lend or rent any equipment to a retailer except:
The wholesaler, under a bill of sale or security agreement describing the property sold and specifying the price and terms of sale duly filed by the wholesaler under subch. V of ch. 409
within 10 days after delivery of the equipment described therein, may sell equipment for the storage, transportation, and display of selected dairy products to the retailer but the selling price shall be not less than the cost to the wholesaler, less 10 percent per year depreciation, plus transportation and installation costs, plus at least 6 percent, but in no event shall it be less than $100 per unit. In filing bills of sale under this section, the filing officer shall follow the procedure under subch. V of ch. 409
regarding debtors who are located in this state insofar as applicable. If the wholesaler makes the sale under a security agreement, the terms of sale shall be no more favorable to the retailer than those under sub. (2) (d)
. Failure by any wholesaler to enforce the wholesaler's security interest under this paragraph or sub. (2) (d)
if a retailer is in default for more than 90 days shall constitute prima facie evidence of a violation of this section. No wholesaler shall renegotiate a security agreement which is in default.
The wholesaler may provide without restriction coin-vending machines from which the product vended is consumed on the premises.
The wholesaler may furnish equipment to retailers for the storage, transportation or display of selected dairy products for one period of not longer than 10 consecutive days a year to any one retailer for use at a fair, exhibition, exposition or other event for agricultural, industrial, charitable, educational, religious or recreational purposes.
A wholesaler who furnishes, lends or rents the use of equipment for the storage or display of selected dairy products to any person exempt under sub. (1) (b) 1.
shall not sell selected dairy products which will be stored or displayed in such equipment to any retailer using the equipment on the premises of such exempt person unless such retailer purchases said equipment in accordance with this paragraph or par. (d)
. Nothing in this paragraph shall limit sales of selected dairy products to retailers in conjunction with equipment furnished under subd. 3.
A wholesaler may sell or rent portable freezer cabinets, each with a storage capacity not exceeding 12 cubic feet, to retailers for the purpose of displaying frozen dessert novelties to retail customers.
Maintain or make repairs of any equipment owned by a retailer except those used exclusively for selected dairy products. On such repairs the wholesaler shall make charges for the service and parts at the same prices as are charged by 3rd persons rendering such service in the community where the retailer is located but in no event shall the charges be less than the cost thereof to the wholesaler plus a reasonable margin of profit.
Extend or give credit to any retailer in excess of 30 days payable 15 days thereafter.
Sell or offer to sell, directly or indirectly, any selected dairy product at less than cost with the purpose or intent of injuring, destroying or eliminating competition or a competitor or creating a monopoly, or where the effect may be any of the same. This paragraph shall apply to all sales, including those made to any instrumentality of state or local government and to all religious, charitable or educational organizations or institutions, but does not apply to sales made to the United States.
“Cost" of a selected dairy product to a wholesaler means that portion of all of the cost of raw product plus all costs of manufacturing, processing, packaging, handling, sale, delivery and overhead of such wholesaler which, under a system of accounting in accordance with sound accounting principles and reasonably adapted to the business of such wholesaler, is fairly allocable to such selected dairy product and the sale thereof to its customers or to a particular class thereof. Such cost shall include, but not be limited to, all expenses for labor, salaries, bonuses, fringe benefits, administration, rent, interest, depreciation, power, raw and processed ingredients, materials, packaging, supplies, maintenance of equipment, selling, advertising, transportation, delivery, credit losses, license and other fees, taxes, insurance, and other fixed and incidental operating expenses and costs of doing business.
The department may by rule after hearing adopt a uniform system of accounting to be used by the department in determining the cost of a selected dairy product and to require wholesalers to file reports of such cost based upon such adopted system of accounting.
Proof made at any proceeding under this paragraph of a sale or offer to sell, directly or indirectly, any selected dairy product at less than cost as determined by department rule, if adopted, shall be prima facie evidence that it was made with the purpose or intent of injuring, destroying or eliminating competition or a competitor or creating a monopoly and that the effect may be any of the same. The burden of rebutting such prima facie evidence shall be upon the person charged with a violation of this paragraph. Nothing in this paragraph shall prevent any person charged with a violation of this paragraph from rebutting such prima facie evidence by showing that the person's sale or offer to sell was made in good faith to meet competition.
This paragraph shall also apply to any retailer who owns, operates or otherwise contracts for, directly or indirectly, facilities for manufacturing or processing any selected dairy product, and to the cost of a selected dairy product, as defined in this paragraph, shall be added both the wholesale and retail markup as provided in s. 100.30
Give, offer to give, furnish, finance or otherwise make available, directly or indirectly, to any retailer or to any other person doing business with a retailer anything of value which is connected with, or which aids or assists in, or which may induce or encourage, the purchase, handling, sale, offering for sale or promotion of the sale of the wholesaler's selected dairy products by a retailer or any other person doing business with a retailer, unless given, offered, furnished, financed or otherwise made available on proportionately equal terms to all other retailers or persons doing business with retailers. The term “anything of value" as used herein includes, but is not limited to:
Any payment, discount, rebate, allowance, gift, goods, merchandise, privilege, contest, service or facility, whether or not given, offered, furnished, financed or otherwise made available in combination with or contingent on a purchase, or as compensation for or in consideration of the furnishing of any service or facility by or through a retailer.
Any transaction involving the use of a coupon, token, slip, punch card, trading stamp or other device similar in nature, including any part of a container or package intended to be used as such device, and which transaction involves any participation by or purchase from a retailer.
The good faith meeting of competition by offering or making available services and facilities offered or made available by a competitor.
Nothing in this paragraph authorizes the sale of selected dairy products, or the furnishing of services or facilities in violation of pars. (a)
Operation of retail outlet by wholesaler.
Nothing in this section shall be interpreted to prohibit the operation of a retail outlet by a wholesaler for retail sales or to prohibit the use by the wholesaler in such retail outlet of any equipment or advertising or miscellaneous matter owned by the wholesaler provided that such retail outlet is under direct control and management of the wholesaler.
Unlawful acts of retailers.
It is unlawful for any retailer or any officer, director, employee or agent thereof to solicit or receive, directly or indirectly, from or through a wholesaler, broker or another retailer, anything which is prohibited by sub. (2)
, where the retailer, officer, director, employee or agent knows or, in the exercise of reasonable prudence, should know that the same is prohibited.
It is unlawful for a broker, or any officer or agent thereof, to participate, directly or indirectly, in any unfair trade practice described in sub. (2)
It is unlawful for a wholesaler to engage or offer to engage in any unfair trade practice described in sub. (2)
, directly or indirectly, through a broker.