Day: March 27, 2019

D.C. Climate Change Litigation to Allow for Third Party Litigation Financing

Posted on by Hamilton

Earlier in March, the Washington, D.C. Office of the Attorney General announced it is seeking outside counsel for a climate change investigation – and would allow attorneys to engage in third party litigation funding in the process.

D.C. Attorney General Karl Racine tweeted on March 15 a solicitation for outside legal counsel for climate change litigation, specifically an investigation into ExxonMobil for potential violations of D.C.’s Consumer Protection Procedures Act. (Note that D.C. already has a full-time lawyer working on climate change, hired through a grant program funded by Bloomberg Philanthropies and the New York University School of Law’s State Energy and Environmental Impact Center.) Lawyers hired for this climate change project would work on contingency fee arrangements for up to $25 million. Additionally, the contract includes provisions allowing for attorneys to engage in third party litigation funding to pay for up-front litigation costs. If the attorneys prevail in litigation, third party investors would receive a portion of D.C.’s award.

This type of third party litigation financing allowed by the D.C. solicitation leads to questionable claims, prolonged settlements, and the skirting of ethics rules as investors unrelated to the underlying issues of the case seek to maximize monetary awards. Third party litigation financing disadvantages defendants unaware their opposition is being funded by an unnamed third party and plaintiffs who lose control over decision making in their own litigation. Furthermore, in this case where the D.C. government is the plaintiff, third party involvement would reduce the amount of any awards dedicated to programs benefitting taxpayers.

Wisconsin led the nation on litigation funding transparency by passing 2017 Act 235 last session. The legislation provided that that, unless stipulated or ordered by the court, a party shall provide to the other parties any agreement under which any person, other than an attorney permitted to charge a contingent fee for representing a party, has a right to receive compensation that is contingent on and sourced from any proceeds of the civil action, by settlement, judgement, or otherwise. Read more about Act 235 here.

Meanwhile, the U.S. Chamber Institute for Legal Reform (ILR) is calling for third party litigation funding transparency at the federal level. ILR also recently issued reports detailing concerns about the growth of public nuisance lawsuits seeking to hold individual businesses accountable for the global issue of climate change, similar to the D.C. investigation.

Second Dane County Judge Orders Injunction of Extraordinary Session Legislation

Posted on by Hamilton

Following an injunction ordered by Dane County Judge Richard Niess in the League of Women Voters v. Knudson case against the 2018 Extraordinary Session laws, a second Dane County judge enjoined provisions of the laws this week in SEIU v. Vos.

Judge Frank Remington’s order partially grants the plaintiffs’ motion for temporary injunction. The order prevents enforcement of provisions of the extraordinary session

  • Requiring legislative approval for the attorney general to discontinue or settle cases.
  • Requiring transparency for agency guidance documents.
  • Allowing the legislature’s Joint Committee on Administrative Rules to suspend a rule multiple times.

Whereas the League of Women Voters order enjoined the extraordinary session laws in their entirety, the SEIU order found the plaintiffs did not establish sufficiently that a court would find other provisions unconstitutional. Specifically, the SEIU judge left in place provisions

  • Allowing the legislature to intervene and use outside counsel in certain cases.
  • Allowing the Wisconsin Economic Development Corporation to designate an unlimited number of enterprise zones, but requiring approval of the Joint Finance Committee on any new zone.
  • Requiring legislative oversight of agencies applying for federal waivers and seeking to reallocate funds.

The Legislature plans to appeal the order and has already appealed to the Court of Appeals District III for a stay in League of Women Voters.

Commercial Docket Pilot Project Expanding

Posted on by Hamilton

The Wisconsin Court System announced this week the expansion of the Commercial Docket Pilot Project beginning April 1. Under the expansion, parties filing commercial cases in any Wisconsin county will now be able to transfer their cases to the Commercial Docket.

Wisconsin’s Commercial Docket (a.k.a. Business Court) Pilot Project began in July 2017 in Waukesha County and the Eighth Judicial Administrative District. The Commercial Docket allows parties filing large claim and commercial cases to transfer their cases to specific judges with business experience for expedited resolution.

In her 2018 State of the Judiciary Address, Wisconsin Supreme Court Chief Justice Roggensack highlighted the pilot project. According to Chief Justice Roggensack, the majority of cases have been filed as prohibited business activity cases, and other cases include internal business organizations, business sale consolidations, franchise related claims, and sales securities. Chief Justice Roggensack said while these cases typically take about 36 months to resolve, the commercial docket has typically resolved cases in less than one year.

 

Wisconsin Supreme Court Accepts Two New Cases

Posted on by Hamilton

The Wisconsin Supreme Court has accepted two new cases. The Supreme Court will review recent Court of Appeals decisions related to eminent domain and recreational immunity in the following cases:

 

DSG Evergreen Family Limited Partnership v. Town of Perry (Eminent Domain)

In this case, The Town of Perry took property from DSG in an eminent domain action. The land taken included a road, and the condemnation petition required the town to replace the road at a different location. DSG argued that the new road did not meet the “same construction standards” as the former road, violating the petition.

The appeals court held that DSG had no private right of action requiring the town to comply with certain construction standards under Wis. Stat. § 82.50(1) in completing the new road. The appeals court further held that claim preclusion applied because DSG failed to bring up its road construction standards argument in previous proceedings regarding just compensation for the eminent domain condemnation of its property.

The Supreme Court will examine whether claim preclusion bars property owners from actions to compel condemners to uphold promised standards of improvement, since they have already litigated just compensation. The court will also determine whether private citizens can bring actions against a town for failure to comply with Wis. Stat. § 82.50(1) design standards.

More information on the case.

 

Lang v. Lions Club of Cudahy Wisconsin, Inc. (Recreational Immunity)

In this case, the Court of Appeals District I held that recreational immunity did not apply to a sound engineer who set up cords that injured a woman at a music performance. The court said the sound engineer was not an “agent” or “occupier” immune under the statute (Wis. Stat. § 895.52).

The Supreme Court will revisit the issue of whether recreational immunity applies to the sound engineer.

More information on the case.

 

Supreme Court Decision: Kieninger v. Crown Equipment Corp. (Wages)

Posted on by Hamilton

In Kieninger v. Crown Equipment Corp. (2019 WI 27), the Wisconsin Supreme Court unanimously held that employers are not required to compensate employees for time spent commuting using the employer’s vehicle.

Crown Corp. allows its technicians to commute between work and home either in their personal vehicles or in company vans. Those commuting in personal vehicles meet at an assigned branch to pick up a company van at the beginning of the day, use the company van to travel between work sites throughout the day, then drop the van off again at the end of the work day and travel home in their personal vehicle. Those commuting in company vans may travel straight from home to various work sites, then straight home at the end of the day. Crown Corp. compensates technicians for all travel between work sites, but does not compensate technicians commuting using company vans for travel time between home and the first and last work sites of the day.

Crown Corp. technician Christopher Kieninger filed the instant class action lawsuit on behalf of similarly situated Crown Corp. employees who choose to commute using company vans. Kieninger argued that Crown Corp. is legally obligated to compensate technicians for the commuting time in company vans because he is transporting Crown Corp. tools to and from a jobsite. Because those tools are an “integral” (Wis. Admin. Code § DWD 272.12(2)(e)1.c.) part of the “principal activities” (§ DWD 272.12(2)(e)1.) technicians engage in during a “workday” (§ DWD 272.12(1)(a)2.), Kieninger argued Crown Corp. must compensate for commute time in company vans under Wis. Stat. § 109.03(1) and Department of Workforce Development rules.

However, Crown Corp. and the court rely on different DWD code to find that commute time, even in company vans, is not compensable. § DWD 272.12(2)(g)2. states plainly that travel between home and work is not work time. Furthermore, since employees commuting in company vans are not “required to report at a meeting place” to pick up tools as exemplified in § DWD 272.12(2)(g)5., this section requiring compensation for carrying tools to a worksite does not apply. The court states that Kieninger’s interpretation would read the statutes and regulations much too broadly, to the point that almost any commuting could be considered compensable. Therefore, Crown Corp. is not obligated to pay employees for commuting time in company vans.

Court of Appeals Decision: Emer’s Camper Corral, LLC v. Alderman (Negligent Procurement)

Posted on by Hamilton

In Emer’s Camper Corral, LLC v. Alderman (2018AP458), the Court of Appeals District III held that plaintiffs claiming negligent procurement by an insurance agent must establish that they could have obtained a non-injurious policy but for their agent’s alleged negligence. In this case, Camper Corral failed to produce evidence that it could have otherwise obtained a desired policy, so its agent Alderman did not cause Camper Corral’s damages.

After Camper Corral, a business that sells campers, had twice previously filed claims under previous insurers for approximately $100,000 in hail damage, Alderman procured an insurance policy through Western Heritage Insurance Company for Camper Corral to insure its inventory. The Western Heritage policy had a hail damage deductible of $5,000 per unit. According to Camper Corral, the following year Alderson told Camper Corral he obtained a reduced deductible of $1,000 per unit with a $5,000 total deductible cap. However, when Camper Corral filed a claim for another hail storm under the policy, the policy language actually retained the original $5,000 per unit.

Camper Corral filed the instant negligence action, seeking damages of amounts they were required to pay above the $5,000 total deductible cap they thought the policy included. Alderman argued that there was no evidence Camper Corral could otherwise have obtained a policy with the desired $1,000 per unit, $5,000 total deductible cap, so Alderman could not be held liable.

With no Wisconsin precedent to rely on, the appeals court looked to a Minnesota decision that requires plaintiffs to show they would have been able to obtain the desired policy terms absent the agent’s negligence. Camper Corral did not produce evidence to prove it could have obtained the desired hail damage policy, so its negligence claim failed.

 

 

 

Court of Appeals Decision: O’Brien v. Travelers Inn, LLC (Minimum Wage)

Posted on by Hamilton

In O’Brien v. Travelers Inn, LLC (2018AP1483), the Court of Appeals District IV held that employees are entitled to the minimum wage minus a statutorily set lodging deduction, regardless of the value of the lodging provided.

Travelers Inn compensated employee Deborah O’Brien solely with lodging at a value of $500 per month. Divided by the number of hours O’Brien worked, the value of the lodging equaled $12.17 per hour, which is above the minimum wage. However, Wisconsin statutes and administrative code require a maximum lodging deduction of $58 per week or $8.30 per day (Wis. Stat. § 104.035(1)(b)1.; Wis. Admin. Code § DWD 272.03(3)(a)1.).

Although the value of the lodging was more than the maximum allowable lodging deduction, the court held that Travelers could only deduct the maximum $58 per week or $8.30 per day from the minimum wage owed to O’Brien. Therefore, Travelers owed O’Brien wages beyond the lodging. The court held that Wisconsin statutes do not allow Travelers to contract out of the minimum wage and maximum lodging deduction obligations.

Additionally, the court found that Travelers could not claim a lodging deduction under federal law because it did not comply with record keeping requirements. The court awarded O’Brien back pay and liquidated damages and stated she is entitled to attorney fees under federal law.

Court of Appeals Decision: Wolff v. Menard, Inc. (Negligence and Safe Place Statute)

Posted on by Hamilton

In Wolff v. Menard, Inc. (2018AP119), the Court of Appeals District I held that summary judgment was applicable because there were no issues of material fact related to where an accident at a Menards store occurred and who was responsible for it.

Menard contracted with Neumann to maintain parts of its premises in the winter. 1st Auto & Casualty Insurance Co. insured Neumann’s vehicles used for salting. When plaintiff Marvin Wolff slipped and fell outside a Menards store, he sued Menard, Neumann, and 1st Auto for negligence and violation of Wisconsin’s Safe Place Statute. 1st Auto sought a summary judgement ruling that there was no coverage because Wolff fell on a sidewalk and Neumann was not responsible for maintaining sidewalks.

Menard argued there were genuine issues of material fact precluding summary judgment in regard to two issues: 1) whether Wolff fell on a sidewalk or in the parking lot and 2) whether or not Neumann was responsible for maintaining sidewalks in addition to the parking lot. However, the court found: 1) no evidence contrary to Wolff’s testimony that he fell on the sidewalk and 2) no evidence that Neumann used a vehicle to maintain the sidewalk, which would have implicated coverage. Therefore, the court upheld summary judgment in favor of 1st Auto.

Dane County Judge Orders Temporary Injunction of Extraordinary Session Laws

Posted on by Hamilton

On March 21, Dane County Circuit Court Judge Richard Niess issued an order granting a temporary injunction prohibiting the enforcement of laws passed in the 2018 Extraordinary Session. Provisions blocked by the order include limits on the attorney general’s authority to withdraw from or settle certain cases, the legislature’s ability to intervene in certain lawsuits, agency guidance documents transparency requirements, increased legislative oversight of agency rulemaking, and 82 agency appointments.

The plaintiffs in the case, League of Women Voters v. Knudson, argue that the extraordinary session was not convened in accordance with the Wisconsin Constitution, which authorizes the legislature to meet only as provided by law or when convened by the governor (Wis. Const. Art. IV, § 11).

The Legislature intervened as a defendant and argues that convening an extraordinary session does not violate the Wisconsin Constitution because the rules for the 2017-18 session prescribed in 2017 Senate Joint Resolution 1 specifically state that any days not reserved for scheduled floorperiods are available for the legislature to convene an extraordinary session. The Legislature met as provided by law under the Constitution and Wis. Stat. § 13.02(3).

In his order, Judge Niess agreed with the plaintiffs’ argument that non-prescheduled floorperiods in the joint resolutions are not “allowed by law” according to the Constitution because resolutions are not law. The judge stated that temporary injunction is necessary because the plaintiffs are likely to succeed with this argument, enforcement of the extraordinary session legislation would result in “substantial changes to Wisconsin government,” and failure to enjoin the enforcement of unconstitutional laws would be an irreparable harm to the state.

The judge also denied the Legislature’s motion to dismiss the case and its alternative motion to stay the temporary injunction pending appeal.

Immediately following the enjoinment of the extraordinary session laws, Gov. Tony Evers directed Attorney General Josh Kaul to withdraw Wisconsin from the multistate lawsuit seeking to declare the Affordable Care Act unconstitutional. Act 369, now temporarily unenforceable under the court order, had required approval of the legislature before the attorney general could withdraw from the lawsuit. Kaul subsequently filed a motion to withdraw Wisconsin from Texas v. United States.

Evers also rescinded the 82 appointments approved by the Senate in the extraordinary session.

 On March 22, the Legislature filed an emergency motion in the Court of Appeals District III to stay the injunction. The Legislature argues they are exceedingly likely to prevail on the merits on appeal, and a stay will prevent irreparable harm caused by blocking the extraordinary session laws. The appeals court has yet to issue a decision on the stay.