Archive for June, 2011

U.S. Supreme Court Strikes Down Public Finance Law Similar to Wisconsin’s “Impartial Justice Act”

Monday, June 27th, 2011

The Supreme Court of the United States today issued a major decision — McComish et al v. Bennett, Secretary of State of Arizona, et al. – striking down Arizona’s public campaign finance law. The 5-4 decision, authored by Chief Justice John Roberts, and joined by Justices Scalia, Kennedy, Thomas, and Alito,  is likely to impact Wisconsin’s “Impartial Justice Act,” which contains similar campaign finance restrictions as the law struck down in Bennett.

The Arizona Citizens Clean Elections Act created a public financing system for candidates for state office. Candidates who opted to participate in public financing system were granted a certain amount of public campaign funds. In addition, the candidate that accepted public financing was granted additional matching funds if a privately financed candidate exceeded the publicly financed candidate’s initial state allotment. This also applied to campaign funds spent by independent groups. Thus, if a private third party group spent campaign funds against the publicly financed candidate, or in favor of the privately financed candidate, the publicly financed candidate would receive a dollar-for-dollar match. The matching funds under Arizona’s law topped out at two times the initial grant of money to the publicly financed candidate.

The Supreme Court struck down Arizona’s law, ruling that the matching funds scheme “substantially burdens political speech and is not sufficiently justified by a compelling interest to survive First Amendment scrutiny.” The court specifically noted how the campaign finance law burdened independent groups. For example, an independent group can only avoid the matching funds going to the candidate they oppose by changing their message or choosing not to speak altogether.

Wisconsin’s Impartial Justice Act, which was signed into law in 2009, contained a similar public funding matching scheme as the Arizona law. A lawsuit was filed in federal court, but the court upheld the law. The 2011-13 budget bill recently signed into law defunded the law. Wisconsin’s law is all but dead now, with the Supreme Court’s decision finding Arizona’s law unconstitutional.

For more discussion about Wisconsin’s law, click here.

18 States Have Passed Tort Reform Laws – Wisconsin Paved the Way

Friday, June 24th, 2011

As many states begin to wind down their legislative sessions for the year, the UPI reports that 18 states have passed some form of civil liability reform. The article notes that Wisconsin led the way, becoming the first state to pass comprehensive reforms in Act 2.

Supreme Court Issues Big End of Session Opinions

Monday, June 20th, 2011

This morning the United States Supreme Court issued four decisions, including the global warming standing case American Electric Power Co. v. Connecticut and the class action certification case Wal-Mart v. Dukes.

American Electric Power Co. v. Connecticut

This is the Court’s first opinion on climate change since it ruled in 2007 in Massachusetts v. EPA that greenhouse gases are “pollutants” subject to Clean Air Act regulation.

Wisconsin (before it dropped out of the case) was one of eight states that sued defendant utilities, American Electric Power Co., Southern Co., Xcel Energy Inc., the Tennessee Valley Authority, and Cinergy Corp., for their alleged contribution to global warming. The states were asking the court to impose stricter greenhouse-gas regulations than those currently imposed by the EPA by declaring CO2 a nuisance.

The Court unanimously ruled that the Clean Air Act and EPA action authorized by the Act displaced any right under federal common law to sue for reduction of carbon dioxide emissions from these companies.

Opinion author Justice Ruth Bader Ginsburg emphasized the role of the EPA compared to the courts. “The critical point is that Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation displaces federal common law,” and “[i]t is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions. The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order.”

The Supreme Court split 4-4 on the issue of whether the U.S. Court of Appeals for the Second Circuit had jurisdiction to hear this case in the first place, questioning the states’ standing to sue. Justice Sotomayor abstained from the entire case since she sat on the lower court whose opinion was being reviewed.

Justice Alito, joined by Justice Thomas, wrote a short concurrence. Justice Alito made clear that he agreed with the Court only on the assumption that Massachusetts v. EPA interpreted the Clean Air Act correctly since the merits of that opinion were not at issue. This could be a signal that Alito and Thomas would reconsider the holding in Massachusetts v. EPA if the issue were before them.

The outcome is viewed as a win for the Obama administration and industry, both of which would rather regulate climate change through the EPA (if at all), and a defeat for environmentalists who had previously been successful at advancing their goals in the courts. However, the courts may not be completely off limits. The Court remanded the questions of whether parties can take action against utilities under certain state laws to the U.S. Court of Appeals for the Second Circuit.

Wal-Mart v. Dukes

The 5-4 majority in Wal-Mart reversed the decision of the Ninth Circuit which certified a class of hundreds of thousands of female employees of Wal-Mart who claimed they were discriminated against through pay and promotion policies.

Justice Scalia authored the majority opinion, which was joined in full by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito. The opinion held that the certification of the class violated Federal Rule of Civil Procedure 23(a)’s requirement that a party seeking certification prove that the class has common “questions of law or fact.”

“Here respondents wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer to the crucial question why was I disfavored.”

Justice Ginsburg filed an opinion concurring in part and dissenting in part, which was joined by Justices Breyer, Sotomayor, and Kagan. Ginsburg agreed that the class “should not have been certified under Federal Rule of Civil Procedure 23(b)(2),” but would have remanded the case since “[a] putative class of this type may be certifiable under Rule 23(b)(3) if the plaintiffs show that common class questions ‘predominate’ over issues affecting individuals— e.g., qualification for, and the amount of, backpay or compensatory damages—and that a class action is ‘superior’ to other modes of adjudication.”

This ruling means that the thousands of plaintiffs must pursue their claims individually. The ruling could affect other class-action lawsuits, such as those against tobacco companies and Costco, and is considered to be the most important employment case of the last decade.

The other two cases released today are Borough of Duryea v. Guarnieri, on the right of a public employee to petition for grievances under the U.S. Constitution, and Turner v. Rogers, on an individual’s right to counsel in a civil contempt hearing.

This post was authored by Hamilton Consulting Group’s intern Emily Kelchen, a recent graduate of the University of Wisconsin Law School.

Tort Reform Improving Business Climate

Tuesday, June 14th, 2011

In a recently published editorial, The Wall Street Journal reported that Texas has created 37 percent of all new American jobs since the economic recovery began last summer. The Journal interviewed Richard Fisher, the president of the Federal Reserve Bank of Dallas, who attributed much of Texas’s job surge to the Lone Star State’s tort reforms:

Based  on his conversations with CEOs and other business leaders, Mr. Fisher says one of Texas’s huge competitive advantages is its ongoing reform of the tort system, which has driven litigation costs to record lows.

According to an article in today’s Milwaukee Journal Sentinel, Milwaukee’s jobs outlook is brightening as well. The story cites a new survey conducted by ManpowerGroup placing Milwaukee among the U.S. cities where hiring is the strongest.

And just last month Wisconsin jumped 17 spots – from 41st to 24th –  in a study performed by Chief Executive, a magazine that annually surveys the nation’s CEOs on their perception of business climates.

It appears that the landmark tort reforms contained in Act 2 — among other reforms — have helped improve Wisconsin’s business climate.

GAB Approves Recall Elections for Republicans

Thursday, June 2nd, 2011

Government Accountability Board (GAB) has approved recall elections for Wisconsin Republican Senators Robert Cowles (Allouez), Alberta Darling (River Hills), and Sheila Harsdorf (River Falls).

Six Wisconsin GOP senators are almost certain to face recall elections this summer.

The consideration of petitions against Democratic Senators Robert Wirch (Pleasant Prairie), Jim Holperin (Conover) and Dave Hansen (Green Bay) may be delayed because election staff need more time to review the Democratic challenges to the petitions, according to GAB.

The six GOP senators will likely be scheduled for a recall vote on July 12th, however this date may change given legal challenges and an extension request. It is likely that the elections for targeted Democrats would be held later if an extension is approved.