JusticePoint loses court fight to maintain services contract with Milwaukee Municipal Court

By Margo Kirchner
 
A judge denied JusticePoint’s motion for a preliminary injunction to maintain its contract providing services to low-income individuals facing citations in Milwaukee Municipal Court.
 
Milwaukee County Circuit Judge J.D. Watts issued his ruling in writing after hearing arguments on Thursday afternoon. He stayed his decision for a month to allow JusticePoint time to appeal and ask the court of appeals for a longer stay.
 
JusticePoint has run Milwaukee’s Municipal Court Alternative Services Program (MCAP) since 2015. Some of the organization’s staff have worked on the MCAP for four decades.
 
The goal of the MCAP is to help low-income municipal court defendants comply with alternatives to forfeiture payments (such as community service) and find needed social services like mental health or drug abuse treatment. JusticePoint is paid by the city for running the MCAP; those using the MCAP services pay nothing.
 
In spring 2023, Milwaukee Municipal Court officials told JusticePoint that judges were troubled by how JusticePoint was sharing citations with Legal Action of Wisconsin attorneys who represented municipal court defendants. The citations are public records that the attorneys would be entitled to receive upon request. JusticePoint stated at a public meeting in June that the practice of sharing citations was discussed with city officials years ago and no one objected to it until recently.
 
In May, city officials notified JusticePoint that its contract would terminate effective July 11. The city cited a contract provision allowing termination for “convenience.” Otherwise, the contract would have continued through Dec. 31, 2023, with a remaining one-year renewal allowing extension through 2024.
 
JusticePoint sued the city on July 10, moving for a temporary restraining order and preliminary injunction to keep the contract in place. JusticePoint alleged that the termination on short notice without a right to cure violated the Wisconsin Fair Dealership Law (WFDL).
 
Milwaukee County Circuit Court Judge Hannah Dugan granted a TRO on July 10, keeping JusticePoint’s contract alive until Thursday’s hearing.
 
Attorney Jeffrey Mandell represented JusticePoint at the hearing. Attorney Kathryn Block represented the city.
 
Mandell noted a lack of any evidence submitted by the city regarding the motion and walked through the WFDL statutory provisions and caselaw.
 
Under the WFDL, a dealership exists when a person or entity “is granted the right to sell or distribute goods or services” or use a trademark, and when a “community of interest” exists. Mandell argued that JusticePoint distributes city services to the individuals using the MCAP and that JusticePoint had invested in the program, meeting the definition.
 
Watts questioned Mandell about the lack of financial payment by those using JusticePoint’s services and discussed several cases regarding distribution of services.
 
The city did not dispute that a municipality may be considered the grantor of a dealership under the WFDL. Block instead focused her comments on city contracting requirements. Watts indicated that city rules on contract procurement had no bearing on whether the WFDL applied in the case. 
 
After a brief recess, Watts returned to court with a written decision finding that JusticePoint’s relationship with the city was not a dealership under the WFDL. He said that JusticePoint’s argument was “a bridge too far” regarding application of the WFDL.
 
In the written decision Watts found that JusticePoint distributes its own services, not those of the city. “The City did not have these services. The City had to go out and contract with JP to obtain them. The services that JP provided were uniquely JP’s,” he wrote.
 
He also found no community of interest between the parties because JusticePoint received no money from the individuals served. Money it invested in the contract services was done on its own behalf, not on the city’s, he said. 
 
Watts set a hearing on Nov. 8 to discuss lifting the stay of his decision if JusticePoint has not appealed and sought a stay from the court of appeals by that date. The stay means that the JusticePoint contract remains in place for another month unless JusticePoint chooses not to appeal.
 
Mandell said he needed to discuss the issue of appeal with his client.
 
Judge Molly Gena did not take office until May 1, 2023, and in a public meeting in June said she was not involved in the decision to terminate JusticePoint’s contract. Milwaukee Municipal Court Administrator Sheldyn Himle stated publicly in June that the decision to terminate the contract was made by the two other Milwaukee municipal judges, Phil Chavez and Valarie Hill. 
 
The city in its brief on the motion for preliminary injunction said no other vendor is in place to take over from JusticePoint. The city said it was “confident that another competitive procurement” will draw other vendors and that “[i]n the interim, Judges are able to make direct referrals to social service agencies without the need for a vendor intervening in the process.”