Author: Hamilton

Rosneck v. LIRC (Employment Discrimination)

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In Rosneck v. LIRC (2018AP1179), the Court of Appeals District IV upheld a Labor and Industry Review Commission (LIRC) decision that the University of Wisconsin-Madison did not discriminate against employee Karen Rosneck when it declined to reclassify her position.

During a state reallocation survey of library services assistant positions, Roscneck requested administrators reclassify her from her current paraprofessional position as a library services assistant-advanced to the professional position of librarian. After an audit of her position, the administration declined to reclassify her. Rosneck filed a complaint alleging UW violated the Wisconsin Fair Employment Act by discriminating against her based on her age, sex, and prior discrimination complaints. LIRC decided against Rosneck, finding no evidence of discrimination.

The court of appeals upheld LIRC’s decision. Regarding her complaint of discrimination based on prior complaints, the court found the UW employees evaluating Rosneck’s position were likely unaware of her previous complaints. The court dismissed Rosneck’s complaint that another male employee was reclassified quicker because the male employee requested a horizontal move to another paraprofessional position, while Rosneck requested a more substantial move from a paraprofessional to professional position. Overall, there was substantial evidence to support LIRC’s decision that UW did not discriminate against Rosneck.

Anderson v. DFI (Due Process)

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In Anderson v. DFI (2017AP1670), the Court of Appeals District II held that the Department of Financial Institutions’s (DFI) notice to the plaintiff regarding his liability for involvement in illegal securities transactions violated constitutional due process.

DFI sent plaintiff Gregory Anderson a notice alleging that he was engaging in illegal securities transactions. The notice informed Anderson that an order requiring takings of $3 million in restitution plus a $25,000 civil penalty would become final unless Anderson requested a hearing within 30 days. Anderson sent a request on the thirtieth day. DFI, reading an administrative rule (Wis. Admin. Code § DFI § 8.01) in conjunction with the securities statute (Wis. Stat. Ch. 551), denied Anderson’s request because it was not timely. DFI argued the request must be received by DFI within 30 days.

In an opinion written by Wisconsin Supreme Court Justice-elect Brian Hagedorn and joined by Chief Judge Lisa Neubauer, the appeals court opted not to decide whether DFI needed to receive Anderson’s filing before the thirtieth day. The court seemed to disagree with DFI’s reading of the statute, especially since no other jurisdiction sharing Wisconsin’s Uniform Securities Act has interpreted filing requirements in this way.

But without ruling on whether DFI’s reading is correct, the court ruled in favor of Anderson by determining DFI’s notice to Anderson violated constitutional due process. Both the federal and Wisconsin constitutions require government to provide sufficient notice prior to taking private property. Reasonable notice must be given as to how the recipient of the notice can prevent the taking of his or her property. In this case, DFI did not provide reasonable notice that DFI must receive Anderson’s response by the thirtieth day.

In a dissent, Judge Gundrum agreed with DFI’s reading of the code and statute and said the DFI notice to Anderson provided reasonable notice of how to timely request a hearing; therefore, the notice did not violate Anderson’s due process rights.

Correa v. Wooodman’s Food Market (Personal Injury)

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In Correa v. Wooodman’s Food Market (2018AP1165), the Court of Appeals District I held that a plaintiff who slipped and fell in a grocery store lacked sufficient evidence to establish the store had constructive notice of the hazard.

Jose Correa slipped and fell on an unidentified substance in a Woodman’s store and subsequently filed negligence and safe place statute (Wis. Stat. § 101.11(1)) claims against Woodman’s. A trial court found Woodman’s negligent and awarded Correa nearly $170,000 in damages. Woodman’s appealed, arguing Correa’s evidence that Woodman’s had constructive notice of the spill was speculative.

The appeals court agreed that Correa’s evidence was speculative. The safe place statute and related case law require owners to have constructive knowledge of conditions causing the plaintiff’s injuries. Constructive notice means the condition existed for a long enough time period to allow the owner to discover and repair the condition.

In this case, Correa could not prove the spill existed for a long enough time period to establish Woodman’s was negligent. Video footage before the accident did not show a spill happening and could not identify any substance on the floor of the store. Because Correa lacked sufficient evidence, the court ruled in favor of Woodman’s.

Wisconsin Supreme Court Rules Extraordinary Session Laws Constitutional in League of Women Voters Case

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In a 4-3 decision on June 21, the Wisconsin Supreme Court affirmed that the Legislature’s 2018 extraordinary session was constitutional in League of Women Voters v. Evers (2019 WI 75), thus upholding 2017 Acts 368, 369, and 370 and the confirmation of 82 appointments.

 

Background

The Wisconsin Legislature passed three laws limiting the power of the attorney general and the governor in a “lame duck” extraordinary session in December 2018, after Gov. Tony Evers was elected but before he took office. Additionally, the Senate approved 82 former Gov. Scott Walker appointees in the December extraordinary session.

The League of Women Voters and other plaintiffs subsequently filed the instant lawsuit seeking to overturn the laws and appointments. The League argued the Legislature does not have the constitutional authority to convene an extraordinary session.

 

Decision

The Supreme Court opinion, authored by Justice R. Bradley (joined by Chief Justice Roggensack, Justice Kelly, and Justice Ziegler) rules in favor of the Legislature, finding the Legislature constitutionally met to vote on the laws and the appointments.

The court said the Wisconsin Constitution authorizes the Legislature to meet only as provided by law or when convened by the governor (Wis. Const. Art. IV, § 11). Wis. Stat. § 13.02(3) provides that the Legislature can implement a work schedule. The Legislature provided a work schedule for the 2017-18 session in 2017 Senate Joint Resolution 1, specifically stating that any days not reserved for scheduled floorperiods are available for the Legislature to convene an extraordinary session. Furthermore, Art. IV § 8 of the Constitution provides that “Each house may determine the rules of its own proceedings.” Therefore, the court ruled the Legislature met as provided by law under the Constitution and Wis. Stat. § 13.02(3).

The League of Women Voters argued that 13.02(3) only authorizes “regular” sessions, not “extraordinary” sessions. However, the court said the lack of the work “extraordinary” in the statute does not make it unconstitutional.

Regarding separation of powers arguments, the Supreme Court said the circuit court’s decision ruling the extraordinary session unconstitutional improperly encroached on the Legislature’s constitutional powers. While the courts can determine whether laws enacted by the Legislature are constitutional, courts do not have jurisdiction over how the Legislature enacts laws.

 

Dissent

Justice Dallet’s dissent (joined by Justices Abrahamson and Walsh Bradley) would have affirmed the circuit court’s decision blocking the extraordinary session laws. The dissent said the court’s reading of the constitutional provisions would give the Legislature unlimited authority to convene, which was contrary to the intention of the drafters of Art. IV, § 11. Furthermore, the joint resolution allowing the Legislature to meet for extraordinary sessions was not “law” as required by Art. IV, § 11.

 

There are other cases both in state and federal court seeking to declare the extraordinary session laws unconstitutional. Read more about the other litigation here.

Tort Filings in Wisconsin Increase in 2018

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Source: Wisconsin Circuit Court Statistics

Despite a general decrease in tort filings in Wisconsin courts over the past decade, tort filings increased slightly in Wisconsin in 2018. 5,996 tort cases were filed in 2018, 58 more than in 2017 but still 130 less than in 2016 and over 500 cases less than the average number of tort cases filed from 2018 to 2004 (the first year for which data are available).

As is typical, most tort cases filed in 2018 were personal injury cases related to automobile accidents (63 percent). The 3,757 auto personal injury cases filed in 2018 is 119 less than in 2017.

Other personal injury cases made up 16 percent of tort filings in 2018, and property damage cases made up 13 percent. Products liability, medical malpractice, wrongful death, and intentional torts altogether made up the remaining 8 percent of cases filed. Most categories did not change much from 2017 to 2018, but property damage cases increased from 614 cases in 2017 to 785 cases in 2018.

Source: Wisconsin Circuit Court Statistics

The percent of cases settled without going to trial decreased by 6 percent from 2017 to 2018. The percent of settlements in Wisconsin tort has cases has generally been on the rise since a significant bump in 2011. The number of cases going to jury trial has remained steady over the past decade at 3 to 4 percent.

 

Wisconsin overall has a positive legal climate that keeps these tort filing numbers in a reasonable range. In its 2018-19 “Judicial Hellholes” report, American Tort Reform Association recognized Wisconsin as a “Point of Light” for the 2018 Wisconsin Supreme Court decision upholding limits on noneconomic damages in medical malpractice cases and civil litigation reforms in 2017 Act 235.

Wisconsin AG Joins Lawsuit to Block T-Mobile-Sprint Merger, Other Multistate Actions

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On June 11, Wisconsin Attorney General Josh Kaul joined eight other states and Washington, D.C. in a civil antitrust lawsuit to block the proposed merger of wireless communication companies T-Mobile and Sprint.

The complaint argues that combining the market share of T-Mobile and Sprint would result in less competition, higher prices, and reduced innovation. The state attorneys general allege the merger is in violation of the Clayton Act, the federal antitrust law prohibiting mergers that substantially lessen competition. Therefore, the U.S. District Court for the Southern District of New York should permanently enjoin the merger and award the plaintiff states fees and costs.

T-Mobile and Sprint agreed to merge in 2018. As part of the merger, the companies have made commitments to the Federal Communications Commission (FCC) that the newly merged company would work to deploy 5G technology and broadband, including in rural areas. The companies also committed to keeping rates the same or better for three years after the merger.

The FCC has not yet approved the merger, though some commissioners have announced their support. The federal Department of Justice is expected to issue a decision on the merger soon. T-Mobile and Sprint had hoped to close the deal by July 2019, but the state attorneys general lawsuit could cause a delay.

Wisconsin DOJ press release

On June 12, Attorney General Kaul also signed onto two additional multistate attorneys general actions. Kaul joined 43 state attorneys general in comments urging the Federal Trade Commission to develop antitrust policies for major tech companies like Facebook, Google, and Amazon, suggesting prior approval of acquisitions and transparency requirements. Kaul also joined a coalition of 20 states in an amicus brief in Sierra Club et al. v. Trump et al. The brief opposes the federal government’s motion to stay a preliminary injunction blocking the use of federal funds diverted to construct a border wall in New Mexico and Arizona.

Wisconsin Supreme Court Accepts New Cases

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The Wisconsin Supreme Court recently accepted several new cases. Cases of note include:

 

Chris Hinrichs v. DOW Chemical Company (2017AP2361) – Fraudulent Misrepresentation

In this case, Hinrichs’s company used a malfunctioning DOW Chemical adhesive, which negatively affected the company’s sales. Hinrichs filed misrepresentation claims, which the court of appeals dismissed on the basis of the economic loss doctrine. The economic loss doctrine provides that plaintiffs cannot sue to recover solely economic losses from the nonperformance of a contract. The appeals court declined to determine whether the plaintiffs might be considered “the public” for the purposes of bringing forth a fraudulent representation claim under Wis. Stat. § 100.18.

The Supreme Court will determine whether the “particular relationship test” used in previous cases to determine whether plaintiffs are members of the public is consistent with the statutes and review whether the plaintiffs in this case should be considered “the public” despite their commercial relationship to DOW. Furthermore, the court will review whether the economic loss doctrine claim can apply to the plaintiffs’ § 100.18 claims.

More about the case.

 

Roger Choinsky v. Germantown School District Board of Education (2018AP116) – Duty to Defend

In this case, a group of retired teachers filed a lawsuit against their school district for breach of contract following the enactment of 2011 Act 10. The district tendered its defense to its insurers, Employers Insurance Company of Wausau and Wausau Business Insurance Company. The circuit court agreed to bifurcate the coverage and merits issues of the case but denied the motion to stay the merits case, citing the need for urgency in resolving the underlying employee benefits issue. The insurers agreed to meanwhile provide defense to the district on the merits case – including retroactive fees – until the court decided the coverage issue. The school district sought attorney fees for the coverage issue under Elliot v. Donahue because the insurers did not immediately accept its defense.

The Supreme Court will review the court of appeals decision holding that the insurers did not breach their duty to defend when they did not immediately accept the defense of the insured.

More about the case.

 

Pinter v. Village of Stetsonville (Governmental Immunity)

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In Pinter v. Village of Stetsonville (2019 WI 74), a 4-3 Wisconsin Supreme Court held that a village’s oral policy related to wastewater processes did not create a ministerial duty exempting it from governmental immunity protections. Furthermore, expert testimony was required for the plaintiff to proceed with a public nuisance claim against the village.

 

Facts

The underlying claim in the case arose when the Village of Stetsonville failed to abide by its oral policy to bypass typical wastewater treatment processes during heavy rains. As a result, waste and sewage leaked into Alan Pinter’s basement. Pinter filed the instant lawsuit, claiming negligence and private nuisance. The village argued it was protected under governmental immunity (Wis. Stat. § 891.80(4)). Pinter argued that by not following the village’s oral policy, the village failed to perform a ministerial duty, exempting it from governmental immunity.

 

Decision

The Supreme Court ruled that the oral policy to bypass wastewater treatment processes when excess water reached a certain point did not constitute a ministerial duty. Instead, it was a discretionary “rule of thumb.” Department of Natural Resources rules related to bypassing wastewater treatment underscore the discretionary nature of the decision whether or not to bypass, as they require village employees to determine whether damage would be “unavoidable” and whether there are “feasible alternatives” to bypassing typical processes. Because the decision whether or not to bypass was discretionary, the ministerial duty exception did not apply and governmental immunity blocked Pinter’s negligence claim.

On Pinter’s private nuisance claim, the court determined that expert testimony was required for Pinter to prove that the village’s failure to maintain its wastewater disposal system caused the damages to his basement. In private nuisance cases, the burden is on the plaintiff to prove causation, and without expert testimony on this complex subject, Pinter failed to raise a genuine issue of material fact as to causation. Therefore, the court upheld summary judgment in favor of the village.

 

Dissent

In a dissent, Justice Dallet (joined by Justices R. Bradley and Kelly) advocated that the court should return to the plain text of the governmental immunity statute and afford governmental immunity only to employees acting “in the exercise of legislative, quasi-legislative, judicial, or quasi-judicial functions” (Wis. Stat. § 891.80(4)). In this case, the village employees reacting to the wastewater emergency were not engaging in these functions, especially since the village had not legislatively formalized the “rule of thumb” bypass policy. Therefore, the dissent would not have afforded governmental immunity to the village. These justices authored a similar dissent in Engelhardt v. City of New Berlin earlier this year.

On the private nuisance claim, the dissent takes issue with the court’s decision requiring expert testimony in all cases related to negligent maintenance of wastewater systems. The dissent argues the need for expert testimony should be decided according to the facts on a case-by-case basis. In this case, inferences from the record were sufficient to establish a genuine issue of material fact without expert testimony.

 

Rural Mutual Insurance Co. v. Lester Buildings, LLC (Subrogation Waiver)

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In Rural Mutual Insurance Co. v. Lester Buildings, LLC (2019 WI 70), the Wisconsin Supreme Court determined that a subrogation waiver did not violate Wis. Stat. § 895.447, which provides that any provision to limit tort liability in a construction contract is against public policy and void.

Jim Herman, Inc. and Lester Building entered into a contract to build a barn. The contract contained a subrogation waiver requiring both parties to waive all rights against each other and their subcontractors. Lester then contracted with a concrete provider in the building process. When a storm caused half of the barn to collapse due to improper installation of the concrete, Herman’s insurer Rural Mutual alleged breach of contract and negligence against Lester and its contractors. Lester argued the claims were barred because of the subrogation wavier.

In this case, the Supreme Court found that the subrogation waiver’s provision to “waive all rights against each other…for the recovery of any damages…to the extent covered by property insurance” did not eliminate tort liability in violation of Wis. Stat. § 895.447. Instead, the waiver left the parties to the contract liable beyond whatever damages were covered by property insurance policies like the Rural Mutual policy.

Furthermore, the court determined that the waiver was not an unenforceable exculpatory contract contrary to public policy. An exculpatory contract is one which relieves a party from liability for its own negligence. In this case, the subrogation waiver did not relieve Lester’s liability but instead shifted the payment of damages for Lester’s liability to the insurer. Beyond the insurance policy, Lester would be liable for its own damages.

For these reasons, the court affirmed the court of appeals decision preventing Rural Mutual from recovering from Lester and its contractors. Justice Dallet, Chief Justice Roggensack, and Justice R. Bradley made up the majority in this 3-2 decision.

In a dissent, Justice Kelly (joined by Justice Walsh Bradley) argued that the court conflated wholeness in recovery of damages with full tort liability. Rural Mutual was Herman’s casualty insurer and did not contract to cover Herman’s tort liability, so using Rural Mutual’s payments for property damage as a stand-in for some of the tort liability owed by Lester and its contractors did limit their liability in violation of Wis. Stat. § 895.447.

Justices Abrahamson and Ziegler did not participate in the case.

David Paynter v. ProAssurance Wisconsin Insurance Co. (Borrowing Statute in Medical Malpractice)

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In David Paynter v. ProAssurance Wisconsin Insurance Co. (2019 WI 65), the Wisconsin Supreme Court held that in medical malpractice cases where a misdiagnosis causes latent, continuous injury, the plaintiff’s first injury determines whether the action is a “foreign cause of action” under Wisconsin’s statute applying foreign statutes of limitation (Wis. Stat. § 893.07), also known as the “borrowing statute.” The court determines the jurisdiction of the injury based on where it is first felt by the patient.

 

Facts

The underlying claim in the case arose when Dr. James Hamp, who operates offices in both Wisconsin and Michigan, misdiagnosed a growth on patient David Paynter, a Michigan resident. Paynter first saw Dr. Hamp in his Michigan office, but Dr. Hamp called Paynter with the misdiagnosis from his Wisconsin office. Paynter was residing in Michigan at the time of the call and for the next four years before he found out his growth was cancerous. Paynter sued Dr. Hamp and both his Michigan and Wisconsin malpractice insurance policies, claiming both negligence and violation of the patient’s right to informed consent.

 

Decision

The issue before the Supreme Court was whether Paynter’s injury was a “foreign cause of action” under Wis. Stat. § 893.07, thus barring the claim under Michigan’s statute of limitations. The court held that in medical malpractice cases like Paynter’s where a misdiagnosis causes latent, continuous injury, the plaintiff’s first injury determines whether the action is a “foreign cause of action” under the borrowing statute. The court based the determination on previous case law holding that an actionable injury in medical malpractice cases occurs when the misdiagnosis causes a greater harm than previously existed.

On Paynter’s negligence claim, the court could not identify when and where the Paynter’s greater harm first occurred. When the plaintiff’s place of injury is unknowable, the borrowing statute does not apply. Therefore, Wisconsin’s longer medical malpractice statute of limitations applied to Paynter’s negligence claim, allowing this claim to proceed.

On Paynter’s informed consent claim, the court determined that Paynter’s injury occurred in Michigan because Paynter was in Michigan when Dr. Hamp called him with the misdiagnosis. Previous case law states that “the injury occurs where it is felt rather than where it originates.” Therefore, Paynter’s injury was a “foreign cause of action” under the borrowing statute, so Michigan’s shorter medical malpractice statute of limitations barred his informed consent claim.

The Supreme Court declined to adopt Paynter’s argument that at least some of his injuries occurred in Wisconsin since he spent time in Wisconsin during the four year period after the misdiagnosis. The court said Paynter’s proposed analysis would allow almost any misdiagnosis case to proceed as non-foreign and encourage venue-shopping in Wisconsin courts.

The court declined to address the issue of insurance coverage related to this case.

 

Dissents

In a partial dissent, Justice Walsh Bradley disagreed with the court’s determination on Paynter’s informed consent claim. Instead of finding that the injury occurs where it is felt (i.e. where the patient receives the misdiagnosis call), the court should have used the test from International Shoe Co. v. Washington, which requires a defendant to have minimum contacts in Wisconsin in order to apply Wisconsin’s statute of limitations. In this case, Dr. Hamp had enough contacts in Wisconsin to pass the International Shoe test, so the Wisconsin statute of limitations would have applied, allowing the plaintiff’s claims to proceed. The dissent notes complications could occur using the test adopted by the court because patients could be anywhere when they receive a misdiagnosis call.

In another partial dissent, Justice R. Bradley (joined by Justice Kelly) noted similar concerns regarding the impracticalities of the court’s place-of-injury test and “where the injury was felt” test in determining whether the borrowing statute applies in misdiagnosis cases. The dissent would also have remanded the case to lower court to determine whether Paynter actually stated an informed consent claim for which relief may be granted. Furthermore, the dissent agreed with the court’s decision not to rule on coverage, but rejected the court’s criticism of how Dr. Hamp’s insurer ProAssurance Wisconsin Insurance Co. handled its briefing on the subject.