227.40 Declaratory judgment proceedings.

(1) Except as provided in sub. (2), the exclusive means of judicial review of the validity of a rule or guidance document shall be an action for declaratory judgment as to the validity of the rule or guidance document brought in the circuit court for the county where the party asserting the invalidity of the rule or guidance document resides or has its principal place of business or, if that party is a nonresident or does not have its principal place of business in this state, in the circuit court for the county where the dispute arose. The officer or other agency whose rule or guidance document is involved shall be the party defendant. The summons in the action shall be served as provided in s. 801.11 (3) and by delivering a copy to that officer or, if the agency is composed of more than one person, to the secretary or clerk of the agency or to any member of the agency. The court shall render a declaratory judgment in the action only when it appears from the complaint and the supporting evidence that the rule or guidance document or its threatened application interferes with or impairs, or threatens to interfere with or impair, the legal rights and privileges of the plaintiff. A declaratory judgment may be rendered whether or not the plaintiff has first requested the agency to pass upon the validity of the rule or guidance document in question.

(2) The validity of a rule or guidance document may be determined in any of the following judicial proceedings when material therein:

(a) Any civil proceeding by the state or any officer or agency thereof to enforce a statute or to recover thereunder, provided such proceeding is not based upon a matter as to which the opposing party is accorded an administrative review or a judicial review by other provisions of the statutes and such opposing party has failed to exercise such right to review so accorded.

(b) Criminal prosecutions.

(c) Proceedings or prosecutions for violations of county or municipal ordinances.

(d) Habeas corpus proceedings relating to criminal prosecution.

(e) Proceedings under s. 66.191, 1981 stats., or s. 40.65 (2), 106.50, 106.52, 303.07 (7) or 303.21 or ss. 227.52 to 227.58 or under ch. 102, 108 or 949 for review of decisions and orders of administrative agencies if the validity of the rule or guidance document involved was duly challenged in the proceeding before the agency in which the order or decision sought to be reviewed was made or entered.

(f) Proceedings under s. 227.114 (6m).

(3)

(ag) In any judicial proceeding other than one under sub. (1) or (2), in which the invalidity of a rule or guidance document is material to the cause of action or any defense thereto, the assertion of that invalidity shall be set forth in the pleading of the party maintaining the invalidity of the rule or guidance document in that proceeding. The party asserting the invalidity of the rule or guidance document shall, within 30 days after the service of the pleading in which the party sets forth the invalidity, apply to the court in which the proceedings are had for an order suspending the trial of the proceeding until after a determination of the validity of the rule or guidance document in an action for declaratory judgment under sub. (1).

(ar) Upon the hearing of the application, if the court is satisfied that the validity of the rule or guidance document is material to the issues of the case, an order shall be entered staying the trial of said proceeding until the rendition of a final declaratory judgment in proceedings to be instituted forthwith by the party asserting the invalidity of the rule or guidance document. If the court finds that the asserted invalidity of the rule or guidance document is not material to the case, an order shall be entered denying the application for stay.

(b) Upon the entry of a final order in the declaratory judgment action, it shall be the duty of the party who asserts the invalidity of the rule or guidance document to formally advise the court of the outcome of the declaratory judgment action so brought as ordered by the court. After the final disposition of the declaratory judgment action the court shall be bound by and apply the judgment so entered in the trial of the proceeding in which the invalidity of the rule or guidance document is asserted.

(c) Failure to set forth the invalidity of a rule or guidance document in a pleading or to commence a declaratory judgment proceeding within a reasonable time pursuant to the order of the court or to prosecute the declaratory judgment action without undue delay shall preclude the party from asserting or maintaining that the rule or guidance document is invalid.

(4)

(a) In any proceeding pursuant to this section for judicial review of a rule or guidance document, the court shall declare the rule or guidance document invalid if it finds that it violates constitutional provisions or exceeds the statutory authority of the agency or was promulgated or adopted without compliance with statutory rule-making or adoption procedures.

(b) Notwithstanding s. 227.54, in any proceeding under this section for judicial review of a rule, a court may not restrain, enjoin or suspend enforcement of the rule during the course of the proceeding on the basis of the alleged failure of the agency promulgating the rule to comply with s. 227.114.

(c) Notwithstanding par. (a), if a court finds that an agency did not adequately comply with s. 227.114, the court may not declare the rule invalid on that basis but shall order the agency to comply with that section and to propose any amendments to the rule that are necessary within a time specified by the court. Unless the legislature acts under s. 227.26 (2) to suspend the rule, the rule remains in effect while the agency complies with the order.

(5) The joint committee for review of administrative rules shall be served with a copy of the petition in any action under this section and, with the approval of the joint committee on legislative organization, shall be made a party and be entitled to be heard.

(6) Upon entry of a final order in a declaratory judgment action under sub. (1) with respect to a rule, the court shall send an electronic notice to the legislative reference bureau of the court's determination as to the validity or invalidity of the rule, in a format approved by the legislative reference bureau, and the legislative reference bureau shall publish a notice of that determination in the Wisconsin administrative register under s. 35.93 (2) and insert an annotation of that determination in the Wisconsin administrative code under s. 13.92 (4) (a).

History: Sup. Ct. Order, 67 Wis. 2d 585, 775 (1975); 1977 c. 29, 449; 1981 c. 278 s. 6; 1983 a. 90; 1983 a. 191 s. 6; 1985 a. 182 ss. 26, 55 (1), 57; Stats. 1985 s. 227.40; 1987 a. 403 s. 256; 1989 a. 31; 1991 a. 316; 1995 a. 27; 1999 a. 82; 2003 a. 145; 2005 a. 249; 2011 a. 21; 2013 a. 20; 2015 a. 197 s. 51; 2017 a. 369.

The plaintiff could not bring a declaratory judgment action under sub. (1) since it could contest the validity of a rule in an action brought against the plaintiff under sub. (2). Phillips Plastics Corp. v. DNR, 98 Wis. 2d 524, 297 N.W.2d 69 (Ct. App. 1980).

Pleading requirements for challenging administrative rules are established. The record for judicial review and the scope of judicial review are discussed. Liberty Homes, Inc. v. DILHR, 136 Wis. 2d 368, 401 N.W.2d 805 (1987).

A failure to comply with this section prevented the trial court from acquiring jurisdiction. Harris v. Reivitz, 142 Wis. 2d 82, 417 N.W.2d 50 (Ct. App. 1987).

Under sub. (5), the plaintiff must serve JCRAR within 60 days of filing, pursuant to s. 893.02. Richards v. Young, 150 Wis. 2d 549, 441 N.W.2d 742 (1989).

In a conflict between a statute and a rule, the statute controls. Debeck v. DNR, 172 Wis. 2d 382, 493 N.W.2d 234 (Ct. App. 1992).

This section encompasses policies or other statements, standards, or orders that meet the definition of a rule under s. 227.01 (13) but have not been promulgated as rules under s. 227.10. Heritage Credit Union v. Office of Credit Unions, 2001 WI App 213, 247 Wis. 2d 589, 634 N.W.2d 593, 00-3162.

The trial court erred by denying a motion to change venue to Dane County when the motion asserted that a department of corrections system was a rule, although it was never promulgated as a rule, and therefore, the “rule" was invalid. Johnson v. Berge, 2003 WI App 51, 260 Wis. 2d 758, 659 N.W.2d 418, 02-0911.

Although administrative agencies do not have the power to declare statutes unconstitutional, and the lack of authority has been a basis for not applying the exhaustion of administrative remedies doctrine, if the agency has the authority to provide the relief requested without invalidating the rule, a constitutional basis for a claim does not in itself support an exception to the rule. Metz v. Veterinary Examining Board, 2007 WI App 220, 305 Wis. 2d 788, 741 N.W.2d 244, 06-1611.

A challenge to a policy on the basis that it is actually a rule is to be construed as a challenge to the validity of a rule, and the requirements of this section do apply. Because the challenge falls under this section, the petitioner was required to serve the Joint Committee for Review of Administrative Rules with a copy of her petition. Because she failed to do so, the court lacked competency to review the issue. Mata v. Department of Children and Families, 2014 WI App 69, 354 Wis. 2d 486, 849 N.W.2d 908, 13-2013.

Even without the statutory presumption in s. 227.20 (3), the party challenging the validity of rules has the burden of proving the invalidity of the rules. Wisconsin Realtors Association v. Public Service Commission of Wisconsin, 2015 WI 63, 363 Wis. 2d 430, 867 N.W.2d 364 13-1407.

How to review an administrative rule. Levine. WBB Oct. 1983.

The standard of review of administrative rules in Wisconsin. Zabrowski. 1982 WLR 691.

Challenging a State Agency Regulation. Webendorfer. Wis. Law. Nov. 2017.