Month: April 2015

Legislation Introduced to Change Interest Rates in Small Claims Court

Under current Wisconsin law, plaintiffs who win favorable verdicts are usually entitled to recover interest on the monetary judgments awarded to them. There are two types of interest. There is post-judgment interest, which is meant to compensate the plaintiff for loss of the use of the money while a defendant appeals an unfavorable judgment. Post-judgment interest accrues from the time the judgment is made until the time the judgment is paid. There is also pre-judgment interest, which accrues from the time the plaintiff makes an offer of settlement until the settlement is paid.

Past Reform

Prior to 2011, pre- and post- judgment interest rates were set at 12 percent. Because appeals or settlement agreements and payment can take time, plaintiffs could receive a significant windfall due to the high interest rate. 2011 Senate Bill 14 signed into law as 2011 Act 69 changed the interest formula from 12 percent to the prime rate set by the Federal Reserve Board plus one percent. This ensures that plaintiffs do not receive a windfall while also ensuring that defendants pay a reasonable interest rate.

2015 Assembly Bill 95

Assembly Bill 95 (AB 95) seeks to change the interest rate for pre- and post –judgment interest for verdicts in small claims court from the formula created in Act 69 back to the 12 percent rate. The primary author of AB 95 is Representative Thiesfeldt. The bill was introduced on March 12 and was referred to the Assembly Committee on Judiciary. A public hearing on the bill was held on April 7. The primary author AB 95’s companion in the Senate, 2015 SB 76, is Senator Nass. SB 76 was introduced on March 23 and referred to the Senate Committee on the Judiciary and Public Safety.

Wisconsin Chiropractic Association Seeks New Cause of Action Against Insurance Companies

Background:

In 1987 the state legislature passed the “Chiropractic Insurance Equality Statute” (Wis. Stat. § 632.87(3)) in the 1987-89 state budget. Prior to this law, insurers could treat chiropractors and chiropractic services differently from physicians and their services. Many insurance companies did not cover diagnosis and treatment of a patient by a chiropractor. This law was an attempt to remedy the situation by requiring that insurance companies treat chiropractors and physicians equally in a series of enumerated areas.

The Wisconsin Chiropractic Association (WCA) reports that its members have experienced a lack of compliance by the insurance industry and a lack of enforcement by the Wisconsin Office of the Commissioner of Insurance. Therefore the WCA has called for a modernization of Wis. Stat. § 632.87(3).

The Chiropractic Insurance Equality Modernization Act of 2015

State Senator Roger Roth (R-Appleton) and Representative Kathleen Bernier (R-Chippewa Falls) have agreed to author WCA’s Chiropractic Insurance Equality Modernization Act of 2015. The bill has yet to be introduced, but the WCA seeks to modernize various definitions in Wis. Stat. § 632.87(3) in order to modernize the language of the law to reflect current practices. However, the WCA also seek substantive changes to the law in order to correct the perceived lack of enforcement and compliance.

To attempt to secure compliance with the Office of the Commissioner of Insurance (OCI) the WCA is seeking to require insurers to submit an annual report to the OCI that demonstrates compliance with the law.

To attempt to stop violations by insurance companies the WCA proposes a new private right of action against insurance companies by parties with standing that do not comply with the law to recover “actual loses” resulting from the violations. Without the bill draft, the WCJC is unable to elaborate on the cause of action further at this time. We will keep you up-to-date as this bill moves forward.

For more information about the proposed bill click here.

JFC Takes First Executive Action on State Budget

The Joint Finance Committee (JFC) held its first executive session this week on Governor Walker’s proposed 2015-2017 state budget. The committee took action in a number of areas, including the Secretary of State, the Public Service Commission (PSC), State Treasurer, Department of Revenue-Lottery Administration, Department of Administration – Division of Gaming, the Supreme Court, Circuit Courts, Court of Appeals, Judicial Council, Judicial Commission and Employment Relations Commission.

Read a summary of the proposals made by Governor Walker the state judiciary.

In the state judiciary budget, JFC rejected a number of Governor Walker’s proposals this week, including his proposal to eliminate the Judicial Council and reallocating appropriations of the Judicial Commission. In addition, the JFC took action on proposed block grants for the Supreme Court and Circuit Court.

Supreme Court Block Grant: JFC approved the governor’s proposal, on a party line vote, to consolidate GPR appropriations for the director of state courts and the state law library under the Director of State Courts and Law Library general program operations appropriation, funded at $10.3 million general purpose revenue (GPR) each fiscal year. The governor recommends these appropriations be changed from annual to biennial. However, the proposed consolidation of these appropriations does not include a decrease in revenue to these programs. Furthermore, the governor recommends transferring the appropriation for library collections and services to the Director of State Courts and Law Library general program operations appropriation. The block grant system is designed to give supreme court justices more flexibility to determine how to spend its appropriation.

Circuit Court Block Grant: JFC voted to approve the governor’s recommendation to create a circuit court block grant that would create individual appropriations from court interpreter fees, circuit court support payments and guardian ad litem costs. JFC modified the governor’s proposal slightly by delaying the consolidation of the appropriations until the second year of the biennium in order to provide the Director of State Courts time to determine how to implement the changes.

Also, following the governor’s initial budget recommendations it was revealed the budget did not include full funding increases and related costs provided for 278 court reporter positions. JFC resolved the error unanimously, and deleted the governor’s recommendation and maintained current law to provide funding for the court reporters.

Elimination of Surcharge Exemptions: Currently there are various exemptions from the civil clerk fee and justice information fee for failure to wear a seatbelt, smoking in a public place, failure to carry proof of motor vehicle insurance and failure to carry a handicap permit. The governor’s budget proposes to eliminate these exemptions in order to generate more revenue. JFC voted unanimously to delete the governor’s proposal from the budget.

Judicial Council: JFC voted 15-1 to reject the governor’s proposal to eliminate the Judicial Council. The JFC did change the council’s funding source.  The council is funded jointly through GPR and the supreme court’s program revenue (PR) appropriation.  The JFC voted instead to fund the council through the court’s PR appropriation. 

Judicial Commission: JFC unanimously approved rejecting the governor’s proposal to move the appropriations of the Judicial Commission under the Supreme Court’s purview.

Broadband Expansion Grants: The governor’s budget proposes to change the broadband expansion grants appropriation from a continuing appropriation to a biennial appropriation and authorizes the use of the universal serve fund revenues to fund the grant program. Currently, grant expenditures of up to $500,000 annually from a continuing appropriation, but the governor’s proposal would set the appropriation amount at $6 million biennially.

A motion put forward by Representative Amy Loudenbeck (R-Clinton) and Senator Alberta Darling (R-River Hills) modified the governor’s proposal by providing $1.5 million each year for four years, until 2018-19, instead of providing $6 million SEG in 2015-16 and an ongoing amount beginning in 2016-17. The motion was passed by JFC 16-0.

Funding for State Broadband Office: The governor’s budget proposed to increase expenditure authority of the PSC’s appropriation of the state broadband office by $250,000 PR annually. JFC passed a motion 15-1, put forward by Rep. John Nygren (R-Marinette), which increases expenditure authority by $125,000, instead of the governor’s proposed $250,000 increase.

Wind Energy Health Study: The governor’s budget included a proposal to allocate no more than $250,000 PR in 2015-16 to study health issues related to wind energy systems. The PSC would be required to submit its report a little over one year after the biennial budget goes into effect. JFC voted to approve a motion that would require the PSC to review studies previously conducted to ascertain the health effects of industrial wind turbines on people residing near a wind turbine. Unlike the governor’s provision, the motion did not include an increase of any appropriations to the PSC.

JFC is meeting on Friday, April 17 to take hold another executive session on the budget. The agenda includes:

  • Department of Health Services – Medical Assistance – Administration
  • Office of the Commissioner of Insurance
  • Wisconsin Technical College System
  • Department of Military Affairs
  • Department of Veterans Affairs
  • Board on Aging and Long Term Care
  • Board for People with Developmental Disabilities

Chief Justice Abrahamson Sues to Keep Her Position as Chief Administrator

On April 7, Wisconsin voters chose to amend Art. VII §4(2) of the Wisconsin Constitution to allow state supreme court justices to elect the chief justice among themselves. The elected chief justice would have a two-year term. The amendment passed with 53% of the vote. The next morning Chief Justice Abrahamson sued her fellow justices and several other statewide elected officials in order to keep her position on the court.

In her complaint, Chief Justice Abrahamson is seeking a declaratory judgment from the court to determine when the new constitutional amendment will come into effect. She argues that the amendment is prospective only and therefore does not apply until the end of her elected term in 2019. Alternatively, she argues that a retroactive application of the amendment would change the terms of her office, which would violate the Due Process and Equal Protection clauses of the 14th Amendment of the U.S. Constitution. The Chief Justice argues that she has a property interest in her office and it is being taken without due process of law. She further argues that retroactive application of the amendment violates the Equal Protection Clause because no other elected official elected to a full term and still able to hold office would be “prematurely ousted from office on that basis.”

Chief Justice Abrahamson also filed a motion for a temporary restraining order to stop the amendment from taking effect prior to this litigation being resolved. District Court Judge (Wis. W.D.) James Peterson denied the motion because the Chief Justice did not show imminent harm.

Marquette University Law School Professor Rick Esenberg responded in a column in the Milwaukee Journal Sentinel where he rebuts the Chief Justice’s arguments. First, Professor Esenberg argues that the amendment does not apply retroactively because it goes into effect on the day the election results are certified, not prior to that and therefore it applies prospectively. Second, he contends that if applying the amendment after the election results are certified is considered retrospective, then it is not clear why applying the results at the chief justice’s term would not still be retrospective. This, according to Esenberg, is because “if a prospective application requires the existence of a vacancy in the office of the Chief Justice, there will be none until the incumbent either relinquishes the office or leaves the Court.” In replying to the Chief Justice’s alternative argument, Professor Esenberg explains that there is U.S. Supreme Court precedent that states that elected officials do not have a vested property interest in their office.

On Monday, April 13, several Wisconsin voters submitted a motion to intervene in the case arguing that if Chief Justice Abraham’s lawsuit succeeds that it will undermine the voters’ ability to direct democracy in Wisconsin. See the motion here and the supporting brief here. There motion to intervene was denied because the court found the voters’ interests are already adequately represented by the Department of Justice. You can read the ruling here.

A status conference for the case will be held on April 21.