On May 20, 2025, the Wisconsin Court of Appeals released an opinion in JusticePoint, Inc. v. City of Milwaukee. Although the opinion is a per curiam decision (and therefore not citable in Wisconsin state court), it illustrates how courts analyze the Wisconsin Fair Dealership Law (WFDL) and provides guidance to both dealers and grantors on how to structure their relationships to determine whether the WFDL applies:

1. Identify Whose Goods and Services the Dealer (or Vendee) Is Selling or Distributing in the Agreement. Distributor agreements should clearly and consistently identify the provider of the goods and services that are being distributed.
    
2. A Highly Structured Relationship Does Not Determine Whether the WFDL Applies. Don’t assume that close coordination between a grantor and a dealer will elevate the relationship to protection under the WFDL.
    
3. Business Diversification May Be a Sound Business Strategy, Though Not for Application of the WFDL. There is inherent tension between diversification of business and the demonstration of the dealer’s dependence on the grantor that undercut the prospective dealer in this case.

Continue reading for a more detailed discussion of the decision and practice points to take away.

Background

In 1983, the City of Milwaukee created the Municipal Court Alternative Services Program (MCAP) to address the increasing number of municipal court defendants with mental illness incarcerated because of an inability to pay their municipal fines. In 2015 and 2019, the City issued Requests for Proposals to provide services under MCAP, and awarded the contracts to serve as the program’s vendor to JusticePoint.

On May 15, 2023, during a contract extension period, the City terminated its contract with JusticePoint. JusticePoint filed suit, alleging that the WFDL prohibited the City from terminating JusticePoint’s contract without good cause, proper notice, and an opportunity to cure.

The circuit court dismissed JusticePoint’s complaint and request for an injunction, finding that the WFDL did not apply to the contract between JusticePoint and the City. JusticePoint appealed and sought a stay of JusticePoint’s termination pending the appeal.

Decision

The key issue on appeal was whether the contract between JusticePoint and the City created a “dealership” under the WFDL. The WFDL defines “dealerships” as (1) a contract or agreement between two or more persons; (2) by which a person is granted the right to sell or distribute goods or services; and (3) in which there is a “community of interest.”

The circuit court found—and the Court of Appeals agreed—that JusticePoint was distributing its own services, not the City’s services, and that JusticePoint was not entitled to WFDL protections. The Court of Appeals reasoned that the City, through the RFP process, had contracted with JusticePoint as an outside vendor to provide JusticePoint’s services through MCAP. The relationship thus resembled a vendor-vendee relationship, as contrasted to a dealership, where the dealer sells or distributes the grantor’s goods or services. Because JusticePoint did not sell or distribute the City’s services, the Court of Appeals agreed with the circuit court that the WFDL did not apply to the contract between JusticePoint and the City. Therefore, the Court of Appeals affirmed the circuit court’s order dismissing JusticePoint’s complaint and denying its request for an injunction.

Practice Points

What should grantors and dealers take away from JusticePoint, Inc. v. City of Milwaukee?

1. Identify Whose Goods and Services the Dealer (or Vendee) is Selling or Distributing in the Agreement. 
   In this case, application of the WFDL turned on whose services were being distributed. The line in this case was not necessarily clear-cut. As JusticePoint argued to the Court of Appeals in its briefing, the City routinely referred to MCAP services as its own. Avoid ambiguity by explicitly identifying in the contract whose goods or services are being sold or distributed and maintain consistent messaging throughout the business relationship.
    
2. A Highly Structured Relationship Does Not Determine Whether the WFDL Applies. 
   Students of the WFDL know that a “community of interest”—coordination and interdependence between a dealer and grantor—must exist for a grantor/dealer relationship to rise to the protections of the WFDL. In arguing that the WFDL applied to its contract with the City, JusticePoint argued that the City’s detailed requirements for the MCAP program and supervision of JusticePoint’s performance converted JusticePoint’s services into City services. The Court of Appeals was not persuaded. A dealer’s close coordination with a grantor is not enough, by itself, to invoke WFDL protections.
    
3. Business Diversification May Be a Sound Business Strategy, Though Not for Application of the WFDL. 
   The JusticePoint case illustrates a common dilemma for distributors seeking WFDL protections. A distributor that sources most of its business from a single grantor’s products or services will more easily establish a community of interest and protection from the WFDL. On the other hand, a distributor diversifying its business mitigates business risk from disruption associated with the grantor, but a court could perceive a diversity of revenue sources as a lack of dependency on the grantor, preventing application of the WFDL. In JusticePoint, the Court of Appeals noted that JusticePoint provided similar services to other municipalities, which contributed to its conclusion that JusticePoint was not dependent on its contract with the City of Milwaukee and that no dealership existed.

The JusticePoint case underscores the importance of careful contract drafting and relationship management. Godfrey & Kahn’s team is here to help you evaluate your agreements and determine whether WFDL protections may apply to your business.

A special thanks to summer associate, Kiana Pitsch, for her contributions to this article.