Author: Hamilton

Town of Delafield v. Central Transport Kriewaldt (Federal Preemption of Weight Limits)

Posted on by Hamilton

In Town of Delafield v. Central Transport Kriewaldt (2017AP2525), the Court of Appeals District II held that federal transportation law does not preempt the town’s seasonal weight restriction on certain roads.

Delafield posted signs identifying a seasonal weight restriction prohibiting vehicles over six tons from driving on designated town roads. A Central Transport delivery truck over six tons was subsequently issued a citation for driving on one of the designated roads while making a delivery to a Delafield resident.

Federal law (U.S. Code Title 49 s. 31114(a) and Title 23 s. 658.19) requires towns provide “reasonable access” between the interstate and terminals. Central Transport argued that the federal transportation law preempts the town’s weight limit because it did not allow Central Transport reasonable access between the interstate and the place of delivery in the town.

The appeals court rejected Central Transport’s argument, stating that Delafield did allow reasonable access. Although the weight limit prohibited Central Transport from reaching the delivery location, the town had set up a permit process providing exceptions to the weight limit to companies who contact the town’s highway superintendent. The court said Central Transport was not denied reasonable access because it could have used the permit process. The court said being aware of the town’s weight limit and permit process is simply a “cost of doing business” for trucking companies.

Menard, Inc. v. City of Marinette (Property Tax Assessment)

Posted on by Hamilton

In Menard, Inc. v. City of Marinette (2018AP533), the Court of Appeals District III considered a lawsuit challenging the City of Marinette’s property tax assessment of a Menard’s store.

In 2016, Marinette assessed the Menard’s store at a value of $9 million. Menard challenged the assessment in circuit court, contending the fair market value of the property was $6 million. The parties agreed to certain deadlines, and the circuit court issued a scheduling order. Menard timely disclosed its expert witness but failed to timely file an expert report.

Meanwhile, Menard filed an essentially identical case challenging the city’s 2017 assessment of the store property. Menard moved to consolidate the two cases and modify the 2016 scheduling order. The circuit court accepted the consolidation but, not knowing Menard had missed a deadline in the 2016 case, ordered the newly consolidated cases to proceed under the 2016 scheduling order, under which Menard had failed to timely submit its expert report. The circuit court denied Menard’s motion for reconsideration of a new scheduling order and eventually granted summary judgment in favor of Marinette.

The appeals court upheld the circuit court’s initial decision to keep both cases on the 2016 scheduling order; however, the appeals court overturned the circuit court’s denial of Menard’s motion for reconsideration as to the 2017 case. The circuit court should have reconsidered the scheduling order for the 2017 case once it found out Menard had missed the 2016 deadline for its expert report. Menard had missed its opportunity to submit an expert report in the 2016 case, but the circuit court should not have prevented Menard from the opportunity to submit a timely report in the 2017 case. Accordingly, the appeals court upheld summary judgment in favor of Marinette in the 2016 case but remanded the 2017 case to proceed in circuit court.

Lead Paint Case Moving in Eastern District of Wisconsin

Posted on by Hamilton

This month, a federal court held a trial relitigating whether plaintiffs can hold companies liable for marketing and manufacturing lead paint before it became illegal in 1978. The plaintiffs’ case, currently in the Eastern District of Wisconsin under Milwaukee Judge Lynn Adelman, uses Wisconsin’s unique risk contribution theory of liability to allege defendant manufacturers caused their injuries, despite their inability to specifically link defendants’ products to their injuries.

 

Burton v. American Cyanamid et al.

The plaintiffs in this case allege they were injured from ingesting lead paint when they were children. They argue that, although they cannot identify the specific manufacturer of the paint that harmed them, the defendant lead paint manufacturers are liable under a risk contribution theory of liability. The risk contribution theory allows plaintiffs to hold defendants liable if they produced a harmful product that contributed to the general risk of injury to the public. Under the theory, plaintiffs no longer have to establish causation between a particular defendant and their injury.

The defendants argue the plaintiffs have not suffered actual injuries and, even if they did, they have no evidence linking them to specific manufacturers’ paints. Furthermore, the negligence of parents who failed to supervise the children who ingested lead paint chips and landlords who allowed lead paint to deteriorate were an intervening superseding cause of the plaintiffs’ injuries. Plaintiffs then failed to mitigate their damages with proper medical treatment for elevated blood poisoning levels. Even if the defendants did not properly warn of the risks of ingesting lead paint, the plaintiffs have not proved the failure to warn was a cause of their injuries.

 

Background on Lead Paint in Wisconsin

In 2005, the Wisconsin Supreme Court ruled in favor of plaintiffs using risk contribution theory in a similar case (Thomas v. Mallet). The decision allowed plaintiffs to hold manufacturers liable for contributing to the overall risk of lead poisoning, whether or not their paint specifically caused the injuries in question. The burden is placed on lead paint manufacturers to prove they did not produce or market lead paint during the relevant time period or in the geographical market.

In another case in 2010, a federal judge in the Eastern District ruled against plaintiffs, arguing it violates due process rights to hold manufacturers liable when plaintiffs cannot determine which manufacturer’s paint caused the injury. However, the 7th U.S. Circuit Court of Appeals reversed the decision in Gibson v. American Cyanamid (2014), allowing plaintiffs in Wisconsin to move forward with the overall risk contribution theory presented in this case.

Wisconsin is currently the only state to recognize risk contribution theory for lead paint poisoning. Meanwhile, some claims in other states, including Wisconsin, are going forward based on public nuisance theory.

 

Wisconsin Supreme Court Accepts New Cases

Posted on by Hamilton

The Wisconsin Supreme Court recently accepted several new cases. The final oral arguments of the 2018-19 term were held on May 15, so new cases will be heard in the fall. Cases of note include:

  • Town of Wilson v. City of Sheboygan (2018AP2162). The Supreme Court will review Kohler Co.’s petition to annex land from the Town of Wilson to the City of Sheboygan for the purpose of developing a golf course. The City of Sheboygan adopted the annexation ordinance, and the Town of Wilson filed the instant lawsuit.

    The Town argues that the annexation does not satisfy statutory requirements for contiguity, certified population count, and signatures. Furthermore, the City did not show there was a need for the annexed property.

    On the other hand, the City argues they and Kohler followed all statutory requirements related to the annexation. Furthermore, the City argues it had a need for expanded residential housing and other economic benefits provided by the annexation.

  • Steven J. Piper v. Jones Dairy Farm (2018AP1681). The Supreme Court will determine whether employees’ donning and doffing activities are compensable under state law and whether such compensation is precluded by their collective bargaining agreements.

    Plaintiffs are employees of Jones Dairy Farm seeking compensation for time spent putting on and removing safety shoe covers, frocks, hairnets, etc. before and after their shifts. Compensation for donning and doffing was not included in multiple collective bargaining agreements between the employees’ union and Jones Dairy.

    Jones Dairy argues that the plaintiffs bargained away their right to compensation for donning and doffing in the collective bargaining agreements. Furthermore, Jones Dairy does not owe the employees compensation because the time spent changing before and after shifts is de minimis.

Hull v. Glewwe (Claim Preclusion)

Posted on by Hamilton

In Hull v. Glewwe (2017AP2485), the Court of Appeals District III held that claim preclusion does not bar a plaintiff from pursuing a new negligence lawsuit when the plaintiff’s insurer has already defended the plaintiff in a previous lawsuit arising out of the same accident, wherein the plaintiff was not a named defendant.

Plaintiff Hull and defendant Glewwe were both injured in the same accident. Glewwe sued Hull’s insurer Unitrin Auto & Home Insurance Co., and that lawsuit ended in a settlement. Hull was not a named defendant in the lawsuit and did not participate in the settlement agreement. Hull subsequently filed the instant action seeking damages from Glewwe and his insurer State Farm. Glewwe argued that claim preclusion barred Hull’s action, and Hull instead should have raised his arguments as a counterclaim in the first lawsuit.

The appeals court held that claim preclusion does not bar Hull’s negligence claims because he was not a named party in the first lawsuit; therefore, Glewwe failed to satisfy the identity of parties element of claim preclusion. While Glewwe argued Hull was in privity with his defendant insurer in the first lawsuit, the court determined that Hull’s and his insurer’s interests were materially different. In the first lawsuit, the insurer had only a duty to defend Hull, not to pursue Hull’s cause of action for his own injuries. Finally, the appeals court determined that allowing Hull’s claim to proceed after the first lawsuit was settled does not contradict the direct action statute (Wis. Stat. § 632.24), which establishes that insurers are directly liable to persons entitled to recover.

The Wisconsin Insurance Alliance wrote an amicus brief in the case, arguing that allowing Glewwe’s claim preclusion defense to proceed would pose significant issues for both insurers and insureds.

Payday Loan Resolution, LLC v. DFI (Agency Police Power Over Out-of-State Business)

Posted on by Hamilton

In Payday Loan Resolution, LLC v. DFI (2018AP821), the Court of Appeals District IV held that Florida debt settlement business Payday Loan Resolution is subject to Wisconsin Department of Financial Institutions (DFI) licensing requirements and enforcement.

DFI received two consumer complaints against Payday from Wisconsin residents. DFI then proceeded with enforcement actions against Payday, stating that Payday was operating as an unlicensed “adjustment service company” under Wisconsin law. In response to DFI’s enforcement actions, Payday argued that, as a Florida company, it is not subject to Wisconsin regulation. Ultimately, DFI ordered Payday to cease its business activities in Wisconsin, pay a forfeiture, and issue refunds to Wisconsin consumers. Payday sought judicial review of the order, arguing that the order violates due process rights because Wisconsin does not have personal jurisdiction over Florida-based Payday.

The appeals court determined Payday’s due process rights were not violated, and DFI could enforce regulations against Payday. The court relied on a 1953 Wisconsin Supreme Court decision Metropolitan Finance Corp. v. Matthews, which established that Wisconsin can exercise its police power to regulate an out-of-state entity which conducts activities in the state intimately related to local welfare. The court said the contractual transactions between Payday and the Wisconsin consumers were sufficient to establish that Payday “requires activities within the state” according to Metropolitan Finance. Therefore, DFI could enforce the licensing requirement against Payday.

Wisconsin Supreme Court Hears Oral Arguments in First Extraordinary Session Challenge

Posted on by Hamilton

In its last oral arguments of the 2018-19 term, the Wisconsin Supreme Court heard a case that will decide whether the Legislature constitutionally convened the December 2018 extraordinary session. The issue in League of Women Voters v. Evers is whether extraordinary sessions are “provided by law” as required by Wisconsin Constitution Art. IV § 11.

Counsel for the defendant Legislature Misha Tseytlin argued that the Legislature did not violate the Wisconsin Constitution by meeting in December. Citing State ex rel. Sullivan v. Damman (1936) and State ex rel. Thompson v. Gibson (1964), the Legislature said that while each chamber recessed in March 2018 the legislature did not finally dissolve itself and end the biennial session until January 2019. The biennial session continued after March 2018 as a committee period, and in December 2018 the Legislature converted the committee period to a floor period pursuant to 2017 Senate Joint Resolution 1. Wis. Stat. § 13.02(3) authorizes the legislature to develop a work schedule such as SJR 1.

Justice Kelly seemed to agree with the Legislature’s argument, emphasizing the logic that Wis. Const. Art. IV § 11 requires the Legislature to meet “as provided by law” and that law is Wis. Stat. § 13.02(3), which then allows the Legislature to create its own work schedule by joint resolution. If the court finds the Legislature met according to SJR 1, the Legislature met constitutionally.

Justices Dallet and Walsh Bradley voiced concerns with the Legislature’s argument, questioning how an “extraordinary session” can be part of a “regular session.” Tseytlin responded that the December 2018 floor period was constitutional whether the Legislature called it an “extraordinary session” or simply a non-prescheduled floor period within the regular session.

(Defendants’ brief)

The plaintiffs’ arguments began with Justice R. Bradley questioning how the decades-old practice of the Legislature holding extraordinary sessions can just now be found unconstitutional. Counsel for the plaintiff League of Women Voters Jeffery Mandell argued that no Wisconsin law provides for extraordinary sessions. Justice Kelly questioned whether regularly scheduled floor periods would also be unconstitutional since they are not found explicitly in the statutes. Overall, the plaintiffs seek to invalidate the extraordinary session laws because § 13.02 did not “provide by law” for the December 2018 extraordinary session in accordance with Wis. Const. Art. IV § 11.

(Plaintiffs’ brief)

While it can be difficult to predict how the court will decide based on the line of questioning by the justices, it is likely the court will narrowly rule in favor of the Legislature.

League of Women Voters is the first of several cases challenging the extraordinary session to be heard by the Wisconsin Supreme Court. Read about other extraordinary session litigation here.

JFC Removes Qui Tam Provision from Gov. Evers Budget

Posted on by Hamilton

In its first executive session on the 2019-21 state budget on May 9, the Wisconsin Legislature’s Joint Finance Committee voted to remove a provision of Gov. Tony Evers’s budget that would have restored a private individual’s ability to bring a qui tam claim against a person who makes a false claim against the state.

Gov. Evers’ budget bill would have reinstated the qui tam law, not just for alleged Medicaid fraud, but for all state agencies. This policy provides an incentive for plaintiff attorneys to sue medical providers, pharmaceutical companies, and any other business contracting with the state, for alleged fraud. The proposal would allow the whistleblower and his or her plaintiff attorney to seek up to 30 percent of all of the damages, along with attorney’s fees and costs.

WCJC actively lobbied against the qui tam provision and were successful in convincing the Joint Finance Committee to remove the provision. WCJC met with key committee members and submitted a memo explaining why the law is unnecessary and would only benefit plaintiff attorneys.

At the May 9 executive session, the Joint Finance Committee also removed Gov. Evers’s proposal to repeal of provisions of extraordinary session legislation 2017 Act 369 including:

  • The requirement that the legislature approve certain settlements and legal actions by the attorney general.
  • The ability of the legislature to intervene in lawsuits involving the state.
  • The ability of the legislature to obtain outside legal counsel.
  • The definition and public transparency requirements for agency guidance documents.
  • The requirement that agencies cite statutes supporting any interpretation of law they publicly provide.
  • The ability of the Joint Committee for Review on Administrative Rules to suspend rules multiple times.

Altogether, the Joint Finance Committee removed a total of 131 policy items that had been proposed by the governor.

The Joint Finance Committee will continue voting on various agency budgets throughout May before sending their amended budget to the full legislature for approval.

 

Wagner v. Allstate Property and Casualty Insurance Co. (Judicial Estoppel)

Posted on by Hamilton

In Wagner v. Allstate Property and Casualty Insurance Co. (2018AP162), the Court of Appeals District IV declined to dismiss a personal injury case based on the doctrine of judicial estoppel. The court said it was unclear whether the plaintiff intentionally contradicted her claim in a previous bankruptcy case.

In April 2015 plaintiff Melinda Wagner was injured in a car accident. Wagner later filed the instant lawsuit against the other driver’s insurer Allstate and her own insurer Acuity. The insurers sought to dismiss the action based on the doctrine of judicial estoppel. The insurers argued Wagner failed to disclose her claims against the insurers as required in her previous filing for bankruptcy.

Under Wisconsin case law, the doctrine of judicial estoppel, which states that a party cannot take a position contrary to a position taken in a separate case, requires an intentional misrepresentation by the party. The appeals court agreed that Wagner did present a position in the personal injury case against the insurers inconsistent with her position in the bankruptcy case by failing to disclose the case against the insurers during the bankruptcy proceedings. However, the court found there were genuine issues of material fact as to whether Wagner’s failure to disclose the information was intentional and remanded the case to circuit court.

Moustakis v. DOJ (Public Records)

Posted on by Hamilton

In Moustakis v. DOJ (2018AP373), the Court of Appeals District III held that the public records law is constitutional as applied to elected officials.

Former district attorney Albert Moustakis was the subject of a public records request. The Department of Justice (DOJ) compiled records, which contained unsubstantiated complaints about Moustakis, and performed a weighing of interests, ultimately determining disclosure of the records was in the public’s interest.

Moustakis received a copy of the records prior to their release, then filed the instant lawsuit seeking to enjoin DOJ from releasing the records. Moustakis argued that 1) DOJ’s records custodian made an arbitrary determination and should redo the public interest balancing test, and 2) the public records law (Wis. Stat. § 19.356) is unconstitutional as applied to him in his capacity as an elected official.

The appeals court rejected both Moustakis’s arguments. First, the court determined Moustakis did not show he had a clear legal right to a writ of mandamus requiring a new balancing test. Statutes favor disclosure of records even when they contain unsubstantiated complaints, and the law does not require the records custodian to consult with the records subject before making a disclosure determination. Therefore, the DOJ records custodian was acting within his discretionary power and did not make an arbitrary determination to release the records.

Second, the court determined that the public records law is constitutional as applied to Moustakis in his capacity as an elected official. Wis. Stat. § 19.356 provides that authorities need not notify record subjects before release; however, the statute does have an exception for public employees. Moustakis argued this exception offered to public employees and not elected officials violates his constitutional equal protection rights. The court determined that the statute did not violate Moustakis’s fundamental rights, so rational basis, not strict scrutiny, applied. The court agreed with DOJ that providing the public with the greatest information possible on their elected officials was a rational basis for the legislature to enact the statute distinguishing between public employees and elected officials. Therefore, the public records law is constitutional as applied to Moustakis.