Archive for December, 2011
While 2011 was a historic and productive year when it comes to passing substantive civil justice reforms, WCJC still has a number of priorities it would like to see pass in 2012. Among them are two bills pending in the Legislature:
- Repealing 2009 Act 20, which for the first time adopted punitive and compensatory damages in discrimination cases under the Wisconsin Fair Employment Act (SB 202/AB 289); and
- Eliminating felony conviction records as a protective class under the Wisconsin Fair Employment Act (SB 207/AB 286).
SB 202 (repealing punitive and compensatory damages under WFEA) passed the Senate 17-16 on November 3rd. The Assembly Republicans attempted to bring the bill up for a vote on the last day of the floor period for 2011, but it was blocked by Democrats on a procedural move. WCJC is working to make sure the bill is brought to a vote when the Assembly reconvenes in January 2012.
Both SB 207 and AB 286 (eliminating convicted felons as protected class under WFEA) passed out the Assembly and Senate Labor Committees and await a vote on the floor in each chamber.
WCJC is also considering a number of other pieces of legislation for 2012. WCJC’s legislative tracking report can be reviewed by clicking here.
2011 truly has been an historic year for civil justice reforms in Wisconsin. The strong support of Wisconsin Civil Justice Council’s (WCJC) Board, Partners, and Friends is one of the reasons our legal reform campaign has been so successful.
With that in mind, WCJC invites you to celebrate our successes by making a donation to WCJC and sharing news of our accomplishments, detailed in the end of the year report below, with your members and friends. We encourage you to reprint any of the following information in your organization’s publications, because without your support, all this would not have been possible.
Legal Reforms I
As you likely recall, soon after being sworn into office Gov. Scott Walker signed into law landmark legal reforms (Act 2). WCJC was the driving force behind this legislation. Act 2 included overdue policies that have been introduced and supported by the business community for many years. The important policies passed by the Legislature, and signed into law by Gov. Walker, include the following:
- Product Liability – Provisions of this bill will assist small and large businesses by requiring proof of a “reasonable alternative design” in an alleged defective design of a product, moving Wisconsin away from the broad “consumer expectation” test. By adopting this provision, Wisconsin will join 46 other states.
- Expert Opinion (Daubert) – Wisconsin joins more than 30 other states, and the entire federal court system, by adopting the Daubert standards. This common sense provision affects both parties in a case by limiting testimony of experts and evidence to that which is based on sufficient facts or data and is the product of reliable principles and methods.
- Risk Contribution – This provision overturns the Wisconsin Supreme Court’s 2005 decision, Thomas v. Mallet, where the Court adopted the deeply flawed “risk contribution” theory in cases involving lead-based paint. Wisconsin is the only state in the country to have adopted this theory. The Court’s decision led The Wall Street Journal to pen an editorial describing Wisconsin’s litigation climate as “Alabama North.”
- Caps on Punitive Damages – Sets a cap on punitive damages at $200,000 or two times compensatory damages, whichever is greater.
- Frivolous Lawsuits – Reduces frivolous lawsuits by holding a party liable for costs and fees for bringing a lawsuit or claim that is done solely for the purpose of harassing or maliciously injuring another party.
WCJC recognizes the importance of educating the legal community about these reforms, we are therefore looking forward to hosting Daubert Comes to Wisconsin, a CLE summit on expert opinion evidence on January 11, 2012.
Legal Reforms II
WCJC did not stop with these major victories. This fall, Gov. Walker called a second special session focusing on jobs, and once again WCJC was instrumental in crafting and advancing the following reforms:
- Interest on Judgments (2011 Wisconsin Act 69): Amends Wisconsin’s unjustifiably high interest rate on pre- and post-judgments from 12 percent to the federal prime rate, plus one percent.
- Trespasser Liability Act (2011 Wisconsin Act 93): Prevents courts from adopting the new Restatement Third of Torts which expands liability for injuries to trespassers. The legislation simply codifies Wisconsin’s existing law, which adequately protects landowners and renters from unwanted trespassers.
- Reasonable Attorney Fees (2011 Wisconsin Act 92): Codifies 14 criteria which courts must consider when awarding attorney fees for the plaintiff. Also includes a rebuttable presumption that reasonable attorney fees are three times compensatory damages.
The American Tort Reform Association (ATRA) has released its annual Judicial Hellholes report, and instead of receiving negative scrutiny, Wisconsin received acclaims for the significant lawsuit reforms recently signed into law by Gov. Scott Walker and the Legislature. In its “Points of Light” section, the Judicial Hellholes report highlights Wisconsin as a leader when it comes to lawsuit reforms.
Without your financial support, these successes would not have happened. Our 2011-12 legislative session is not over, and we anticipate more reforms will pass. For example, WCJC supports two bills now working their way through the Legislature (see directly below). Therefore, we hope you renew your commitment to a fairer, more equitable civil justice system in Wisconsin.
- Repealing Punitive and Compensatory Damages under Wisconsin Fair Employment Act (SB 202 /AB 289): Repeals 2009 Wisconsin Act 20, which for the first time imposed punitive and compensatory damages in lawsuits filed under the Wisconsin Fair Employment Act (WFEA). SB 202 has already passed the Senate (17-16) and is awaiting a vote in the Assembly, where we are hopeful it will pass when the Legislature reconvenes in January 2012.
- Eliminating Felony Conviction Records from WFEA (SB 207 /AB 286): Protects employers by allowing consideration of an individual’s felony conviction record when deciding whether to hire or terminate the person. The bill has passed out of both Assembly and Senate Labor Committees. This will be a top priority for WCJC in January 2012.
WCJC Appellate Program
The addition of Justices Ziegler and Gableman to the Wisconsin Supreme Court over the past few years has resulted in a more balanced bench on civil liability issues. To help capitalize on the new makeup of the bench, WCJC has created an Appellate Program to submit amicus curiae (friend of the court) briefs to the Wisconsin Supreme Court on behalf of the WCJC in cases involving important civil liability issues.
The Appellate Program will file amicus curiae briefs for two vital reasons: 1) to ask the Court to accept civil justice cases of import to the business community, and 2) if accepted by the Court, to draft and file briefs in advancing WCJC’s positions.
This proactive program provides advantages of time and focus over prior practices of waiting for parties in cases to request our participation, which sometimes leaves important cases un-briefed from the broader business perspective.
To date, WCJC has filed amicus briefs in three Wisconsin Supreme Court cases:
- MercyCare Ins. Co. et al. v. Wis. Commissioner of Ins. – WCJC argued this case was an opportunity to clarify the appropriate deference courts should give to statutory interpretations by state agencies. In reaching its decision, the court applied due weight deference to the Wisconsin Commissioner of Insurance’s decision, reestablishing the varying standards of review the lower court had ignored.
- Casper, et al. v. American Int. South Ins. Co., et al. – A significant decision dealing with the liability of corporate officers for non-intentional torts and default judgments. The Great Lakes Legal Foundation lawyers, on behalf of WCJC, supervised the filing of WCJC’s brief by outside counsel in support of the employer and insurance company sued in the case.
- Rasmussen, et al. v. General Motors Corp., et al. – The issue before the Wisconsin Supreme Court was whether Wisconsin’s personal jurisdiction statute, Wis. Stat. § 801.05, allows for general or specific jurisdiction over a foreign parent corporation based on an agency theory. WCJC’s brief attempted to persuade the court to maintain the distinction between parent and subsidiary corporations which limits personal jurisdiction.
Judicial Evaluation Program
2011 was an important year for the Wisconsin Supreme Court. In April 2011, Justice David Prosser was narrowly reelected, thereby ensuring that the current makeup of the Court remains intact.
To help educate the business community and the general public about the Supreme Court, the WCJC supported the preparation of the 2011 Guide to the Wisconsin Supreme Court highlighting the most important cases decided over the past two terms (from 2008 through 2010). The 2011 Guide describes the Supreme Court’s decisions in each selected case, WCJC’s position, and how each justice decided the case.
In addition to advancing vital legislative reforms, your contribution will help us expand both the Appellate and Judicial Evaluation Programs.
There are many ways to support the Wisconsin Civil Justice Council:
Donate by mail: Download a printer-friendly PDF to mail to us at:
Wisconsin Civil Justice Council, Inc.
c/o Andrew Cook
10 East Doty Street, Suite 500
Madison, WI 53703
Donate by phone: Call Jennifer Bodensteiner at 608.661.9166.
Donate online: Donate online with Paypal
The Wisconsin Civil Justice Council (WCJC) at its annual luncheon honored Sen. Rich Zipperer (R-Pewaukee) and Rep. Jim Ott (R-Mequon) for their outstanding leadership in the area of civil justice reform.
“2011 has been a historic year for lawsuit reforms in Wisconsin, and Sen. Zipperer and Rep. Jim Ott have been instrumental in helping pass these important measures,” said Bill G. Smith, Wisconsin Director of the National Federation of Independent Business and President of WCJC.
Earlier this year, the Wisconsin Legislature passed into law 2011 Wisconsin Act 2, which contained some of the most comprehensive changes to Wisconsin’s civil justice system in years.
Sen. Zipperer and Rep. Jim Ott co-authored the legislation at the request of Gov. Scott Walker, and passed the omnibus bill through their respective committees. Sen. Zipperer and Rep. Jim Ott chair the Senate and Assembly Judiciary Committees.
In Gov. Walker’s recently concluded second special session, the Legislature passed three more lawsuit reform bills focusing on interest paid by defendants to plaintiffs (2011 Wisconsin Act 69), trespasser liability (2011 Wisconsin Act 93), and court-awarded attorney fees (2011 Wisconsin Act 92).
“Once again, Sen. Zipperer and Rep. Jim Ott played a key role in passing these lawsuit reforms,” said Jerry Deschane, Executive Director of the Wisconsin Builders Association and Secretary of WCJC.
“Due to the leadership shown by Sen. Zipperer and Rep. Jim Ott, Wisconsin has become known as a national leader in the area of lawsuit reform, which has enhanced the state’s business climate,” added Deschane.
The American Tort Reform Association (ATRA) today came out with its annual Judicial Hellholes report, and instead of receiving negative scrutiny, Wisconsin received acclaims for the significant lawsuit reforms recently signed into law by Gov. Scott Walker and the Legislature.
Although ATRA’s Judicial Hellholes report is renowned for documenting abuses of the civil justice system in jurisdictions that are among the most unfair and out of balance in the nation, the report also highlights those jurisdictions and states where positive reforms are taking place.
“As anemic economic growth and high unemployment continue to plague much of the country, many governors and state legislators were determined to make their states more competitive and attractive to employers with a variety of tort reform measures,” said ATRA President Tiger Joyce.
“None were more successful than Gov. Scott Walker and lawmakers in Wisconsin. They pushed a comprehensive civil justice reform package to enactment early in the year, before coming back for three more significant measures in a special session this fall,” added Joyce.
In its “Points of Light” section (p. 38), the Judicial Hellholes report highlights Wisconsin as a leader when it comes to lawsuit reforms.
ATRA’s report summarizes the major provisions contained in Special Session Senate Bill 1, which was enacted into law as 2011 Wisconsin Act 2:
- Adoption of more reasonable product liability standards for manufacturers and sellers.
- Elimination of the deeply flawed “risk contribution” theory in manufacturing lawsuits.
- Adoption of sound science principles (Daubert principles).
- Limits on punitive damages at $200,000 or twice compensatory damages, whichever is greater.
- Sanctions on frivolous lawsuits.
The Points of Light section in the report further notes that Gov. Walker and the Legislature didn’t stop there. In the fall of 2011, the Legislature passed into law three more bills introduced by Gov. Walker in his second special session focusing on job creation. The three new lawsuit reform bills include:
- Interest on Judgments – Reduces interest on pre- and post-judgments awarded to plaintiffs (2011 Wisconsin Act 69).
- Trespasser Liability – Protects landowners and land possessors from greater liability by prohibiting courts from expanding the duty of care owed to trespassers (2011 Wisconsin Act 93).
- Limiting Attorney Fees – Creates certain criteria courts must consider when awarding attorney fees, and creates a rebuttable presumption that attorney fees can be no more than three times compensatory damages (2011 Wisconsin Act 92).
The Wisconsin Civil Justice Council, which supported these measures, commended ATRA for recognizing Wisconsin in its report.
“Once again, Gov. Walker and the Wisconsin Legislature are being recognized as a national leader when it comes to lawsuit reforms,” said Bill G. Smith, Wisconsin Director of the National Federation of Independent Business and President of the Wisconsin Civil Justice Council.
“These positive reforms will enhance Wisconsin’s business climate by protecting employers from costly and meritless lawsuits,” added Smith.
To learn more, read ATRA’s Judicial Hellholes report.
One of the most important pieces of legislation adopted in the special session on civil justice earlier this year was the adoption of the Daubert standards for the admission of expert opinion evidence, bringing Wisconsin in line with the entire federal system and a majority of states.
“When hearing about the change to the Daubert standard for expert evidence in Wisconsin, some defense lawyers may think it is just for those handling toxic tort cases and that they don’t need to concern themselves with the new standard for admissibility of expert evidence.
Their thinking might be that with the usual experts in an auto case – accident reconstruction, orthopods, neuropsychologists, life care planners and vocational experts – there will be no change in their practice. And, further, that if there is going to be a Daubert challenge, there will be a motion hearing and plenty of time to get up to speed when that comes along.
Wrong! Savvy trial lawyers are going to begin laying Daubert traps in deposition questioning, and then sit back and wait until after direct examination, to bring a motion to strike an expert on Daubert grounds because an appropriate Daubert foundation has not been laid.
The Daubert standard will have to be part of the preparation of experts in all cases and not just toxic tort cases.“
-Why Daubert Knowledge and Expertise is Critical, Ric Gass, Gass Weber Mullins LLC
The Wisconsin Civil Justice Council (WCJC) is hosting Daubert Comes to Wisconsin, a 7 CLE credit* summit on expert evidence.
WCJC’s one day “summit” is for trial lawyers and in-house counsel who are engaged in the defense of civil litigation as well as those lawyers who represent businesses and professionals, and whose litigation fate relies heavily on the admissibility – or non-admissibility – of expert testimony, including the elimination of “junk science.”
We invite you to attend this exceptional CLE program on January 11, 2012 at the Milwaukee Marriott West.
WCJC is proud to partner with the Wisconsin Defense Counsel (WDC), the Wisconsin Insurance Alliance (WIA), the Wisconsin Hospital Association (WHA) and the Wisconsin Association of Manufacturers and Commerce (WMC) in sponsoring Daubert Comes to Wisconsin.
*Attorneys admitted to the practice of law in odd-numbered years and who wish to maintain an active law license in Wisconsin must complete their continuing legal education (CLE) credits by January 31, 2012, and file their CLE report by February 1, 2012, in order to avoid late fees and other potential penalties.
The U.S. Court of Appeals for the 7th Circuit this week issued its decision in Wisconsin Right to Life State Political Action Committee v. Barland, which is one of three lawsuits challenging Wisconsin’s contribution laws.
At issue in this case was Wis. Stat. § 11.26(4), which provides: “No individual may make any contribution or contributions to all candidates for state and local offices and to any individuals who or committees which are subject to a registration requirement under s. 11.05, including legislative campaign committees of a political party, to the extent of more than a total of $10,000 in any calendar year.”
In anticipation of the 2010 general elections, Wisconsin Right to Life and its State Political Action Committee filed a federal lawsuit challenging various Wisconsin campaign-finance laws under the First Amendment. The suit was put on hold at the defendant’s, the Government Accountability Board members, request until the Wisconsin Supreme Court decided a similar challenge, Wisconsin Prosperity Network v. Myse, No. 2010AP001937 (Wis. filed Aug. 9, 2010).
In preparation for the summer of 2011 recall elections, Wisconsin Right to Life PAC petitioned the federal court to stop waiting on the Wisconsin Supreme Court and enjoin § 11.26(4) so it could raise unlimited funds for the recall elections. A temporary injunction on the contribution limits was granted in August.
7th Circuit Opinion
In an opinion written by Judge Diane Sykes, the court agreed that the temporary injunction was proper and remanded the case with directions to permanently enjoin enforcement of § 11.26(4).
The opinion relies on the U.S. Supreme Court’s ruling in Citizens United.
“[A]fter Citizens United v. FEC, 130 S. Ct. 876 (2010), section 11.26(4) is unconstitutional to the extent that it limits contributions to committees engaged solely in independent spending for political speech. Citizens United held that independent expenditures do not pose a threat of actual or apparent quid pro quo corruption, which is the only governmental interest strong enough to justify restrictions on political speech. Id. at 909-11. Accordingly, applying the $10,000 aggregate annual cap to contributions made to organizations engaged only in independent spending for political speech violates the First Amendment.”
According to the ruling, the limit is only unconstitutional to the extent that it limits PACs like Wisconsin Right to Life “that only engage in independent spending for political speech,” or in other words, do not contribute money to political candidates’ campaigns.
This post was authored by GLLF staff attorney Emily Kelchen.
Today, Governor Scott Walker signed into law two of the remaining special session tort reforms bills recently passed by the Legislature. The two bills the Governor signed were:
TRESPASSER LIABILITY – SPECIAL SESSION SB 22/AB 22 – 2011 WISCONSIN ACT 93
Previously, trespasser liability law was based solely on common law, which adopted provisions of the Restatement (Second) of Torts. At common law, a land possessor is liable for intentional or willful injury against a trespasser and is required to warn known trespassers of dangerous conditions on the premises. This legislation codifies the traditional common law regarding trespasser liability and prevents the implementation of a newly rewritten Restatement of the Law (Third) Torts: Liability for Physical and Emotion Harm (Section 51). This new Restatement would have imposed a duty on land possessors to exercise reasonable care to all entrants, including unwanted trespassers, unless the trespasser is “flagrant,” which has yet to be defined. This bill codifies current case law and protects landowners from potential liability due to injury to trespassers.
AWARDING REASONABLE ATTORNEY FEES – SPECIAL SESSION SB 12/AB 12 – 2011 WISCONSIN ACT 92
This legislation provides certainty for businesses by creating new factors for a court must weigh in determining reasonable attorney fees in fee-shifting cases. The bill also places a cap on attorney fees.
The bill lists the following criteria a court must consider when setting reasonable attorney fees: 1) the time and labor required by the attorney; 2) the novelty and difficulty of the questions involved; 3) and the complexity of the case; 4) the skills needed to perform the legal service properly; 5) the likelihood that the acceptance of the particular case prevented the attorney from accepting other work; 6) the fee customarily charged in the locality for similar legal services; 7) the amount involved in the legal dispute and the results obtained; 8 ) the fees granted in similar cases; 9) the time limitations imposed by the client or by the circumstances; 10) the nature and length of the professional relationship with the client; 11) the experience, reputation, and ability of the attorney performing the services; 12) whether the fee is fixed or contingent; and 13) the legitimacy of any defenses raised in the case.
The bill also limits attorney fees to three times the amount of compensatory damages awarded, except in cases of nonmonetary relief, or in cases involving both compensatory and nonmonetary relief. Senate Amendment 2 modified the provisions of the bill regarding the “three times” limitation. Under the amendment, the court must presume that reasonable attorney fees do not exceed three times compensatory damages, but this presumption may be overcome if the court determines, after weighing the above factors, that a greater amount is reasonable.
WCJC’s Legislative Director, Andrew Cook, had an article published in the most recent edition of the Wisconsin Defense Counsel’s Wisconsin Civil Trial Journal.
The article, Governor Walker and Legislature Continue Focus on Civil Liability Reforms, summarizes the slew of civil justice initiatives considered in the regular and special legislative sessions during the last half of this year.
Additional information about the reforms discussed in the article is available on the WCJC Key Issues page. These landmark reforms were for the most part drafted in prior sessions by WCJC consultants and members to address major deficient in existing Wisconsin law, many of which were needed to address flawed court decisions.
The Wisconsin Supreme Court today heard oral arguments in Johnson v. Cintas Corp. No. 2, et al., 2011 WI App 5, 2009AP2549, which is the latest in a number of recent cases accepted by the Court dealing with default judgments. (The oral argument can be viewed on WisconsinEye.)
The issue is whether a default judgment is void because the summons and complaint names the wrong corporate defendant and thus personal jurisdiction is not obtained over the correct corporate entity.
Robert Johnson, an employee for Cintas Corporation No. 2 (“Cintas No. 2”), was injured in a car accident resulting in permanent injury. Johnson was a passenger in the vehicle, which was being driven by a friend. Johnson was required to use his vehicle during the course of his employment and held auto liability insurance through Cintas No. 2. Johnson sought treatment coverage from Cintas No. 2 through its health insurance provider. When Cintas No. 2 refused to pay benefits, Johnson filed suit.
Johnson’s attorney filed the original summons and complaint naming “Cintas Corporation” as the defendant, instead of Cintas Corporation No. 2. Cintas Corporation No. 2 is a wholly-owned subsidiary of Cintas Corporation. Cintas Corporation No. 2 is a foreign corporation registered with the State of Wisconsin, whereas Cintas Corporation is a foreign corporation not registered in Wisconsin and does not do business within the State of Wisconsin.
Neither Cintas Corporation No. 2 nor Cintas Corporation responded to the complaint, and Johnson moved for default judgment. Cintas Corporation filed an Emergency Motion to Strike and Dismiss for Lack of Personal Jurisdiction. At the default judgment hearing Johnson was allowed to amend the summons and complaint. The trial court then granted default judgment against Cintas Corporation No. 2.
Cintas No. 2 then contacted the trial court and filed its answer to the original and amended complaints, but the court refused to hear Cintas No. 2’s motions because it had already granted default judgment against Cintas No. 2.
Cintas No. 2 filed a motion for relief from judgment, which the court granted and then vacated the default judgment. Johnson filed a motion for reconsideration and argued that newly obtained information proved that Cintas No. 2 effectively held itself out as Cintas Corporation. The trial court granted Johnson’s motion and reinstated the default judgment.
Court of Appeals Decision
The court of appeals reversed the trial court. The court held that because Johnson’s summons failed to accurately name the proper defendant (Cintas Corporation No. 2), the service of process failed to confer personal jurisdiction over that defendant.
The court further explained that regardless of how Cintas Corp. No. 2 held itself out to the public, the amendment of the summons and complaint had the effect of bringing a new party into the action. According to the court, added parties must be served with the summons or voluntarily appear. The court further noted that strict compliance with the rules of statutory service upon amendment naming a new corporate entity is consistent with Wisconsin’s policy viewing default judgments with disfavor.
A decision by the Wisconsin Supreme Court is expected before it ends its current term in July 2012.
Andrew Cook, Director of Legal Service, Great Lakes Legal Foundation