Author: Hamilton

Extraordinary Session Litigation Update

Posted on by Hamilton

Several ongoing cases seeking to void the 2018 extraordinary session legislation are moving through Wisconsin and federal courts. This article provides background on each of the cases and updates on where each of the cases are in the legal process.

League of Women Voters v. Evers

Status

6/21/19: In a 4-3 decision the Wisconsin Supreme Court ruled the Legislature’s 2018 extraordinary session was constitutional, upholding 2017 Acts 368, 369, and 370 and the confirmation of 82 appointments.  

5/15/19: The Wisconsin Supreme Court held oral arguments in League of Women Voters v. Evers. 

4/30/19: In a 4-3 decision, the Wisconsin Supreme Court restored the 82 appointments that Gov. Tony Evers had rescinded under the initial circuit court injunction.

4/15/19: The Wisconsin Supreme Court accepted the League of Women Voters’s petition to bypass the Court of Appeals. The Supreme Court will hold oral arguments on May 15.

4/15/19: Gov. Tony Evers filed a brief in opposition to the Legislature’s motion for emergency temporary relief.

4/10/19: The Legislature has filed a motion asking the Wisconsin Supreme Court to take original jurisdiction over the case or, alternatively, to immediately reinstate the rescinded appointments.

4/9/19: The appeals court denied the Legislature’s motion to enforce the stay, arguing Gov. Tony Evers’s withdrawal of the appointments was valid because the governor had the authority to rescind the appointments while the temporary injunction was in place.

4/3/19: The plaintiff League of Women Voters petitioned the Wisconsin Supreme Court to bypass the Court of Appeals, arguing the case presents novel questions of state constitutional law, and only the Supreme Court can provide a definitive resolution.

4/1/19: Due to the disagreement between Gov. Tony Evers’s administration and the defendant legislature as to whether the appointees who had been rescinded are now reinstated, the legislature filed an expedited motion to enforce the court of appeals stay after the administration prevented appointees from returning to work the day after the court issued the stay.

3/27/19: The Court of Appeals District III has issued a stay of the temporary injunction issued by a Dane County circuit court. The Dane County judge had ordered the injunction of 82 appointments confirmed in the extraordinary session and the extraordinary session laws in their entirety. The appeals court order reasons that the Dane County circuit court failed to evaluate the irreparable harm that could result from enjoining the legislation if it is later found valid. The order stays the temporary injunction and establishes an expedited appeal process with all briefs due by the end of April.

Background

The plaintiffs 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. Therefore, the Legislature met as provided by law under the Constitution and Wis. Stat. § 13.02(3).

SEIU v. Vos

Status

10/21/19: The Wisconsin Supreme Court held oral arguments in SIEU v. Vos.

6/11/19: The Wisconsin Supreme Court granted the defendant Legislature’s motion for temporary relief pending appeal by staying the temporary injunction issued by the Dane County Circuit Court. However, the Supreme Court left in place the injunction on Act 369 provisions that would have rescinded improperly promulgated guidance documents on July 1, 2019. Additionally, the Supreme Court stayed proceedings on the case in the lower court, cancelling the trial on guidance document provisions of Act 369 set to begin in Dane County on June 12. Read more. 

4/19/19: The Wisconsin Supreme Court assumed jurisdiction of this case, several weeks after a second Dane County judge issued a temporary injunction preventing enforcement of some extraordinary session legislation provisions requiring legislative approval for the attorney general to discontinue or settle cases, requiring transparency for agency guidance documents, and allowing for more legislative oversight of agency rulemaking, while leaving in place other portions of the laws. The defendant legislature had also appealed this injunction, but the court of appeals had not provided a ruling before the Supreme Court assumed the case.

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

Background

The plaintiffs, Service Employees International Union, Wisconsin Federation of Nurses and Health Professionals, American Federation of Teachers-Wisconsin, and Milwaukee Area Service and Hospitality Workers, allege that the extraordinary session laws are an unconstitutional violation of the separation of powers doctrine.

According to the plaintiffs, Article V of the Wisconsin Constitution gives the governor the exclusive power to execute laws. Furthermore, Article V guarantees that one branch may not interfere with another branch’s powers. The plaintiffs allege that extraordinary session provisions, including increased legislative oversight of rulemaking, attorney general lawsuits, and agency appropriations, interfere with the governor’s and attorney general’s constitutional powers. Furthermore, committee oversight without opportunity for a governor veto violates constitutional separation of powers.

The defendant legislature argues that the Wisconsin Constitution explicitly allows the legislature to prescribe the powers of the attorney general. Furthermore, Wisconsin case law has interpreted the Constitution as a fluid rather than rigid political design of separate branches of government.

Democratic Party of Wisconsin v. Vos

Status

The Democratic Party of Wisconsin (DPW) has filed a complaint in the U.S. District Court Western District of Wisconsin seeking to declare the extraordinary session legislation in violation of the U.S. Constitution. Parties are continuing to brief the case, and oral arguments will be held on April 26.

Background

The complaint alleges that the legislation violates the plaintiffs’ First and Fourteenth amendment rights, as well as the Guarantee Clause.

The U.S. Constitution Art. 4 § 4 guarantees states a republican form of government. DPW’s complaint alleges that the Republican legislature violated the Guarantee Clause by removing powers from the incoming Democratic administration to the legislature.

DPW also claims that the extraordinary session violated the plaintiffs’ First Amendment rights to free association and free speech because the state legislature retaliated against Democratic candidates based on their political viewpoints by limiting their ability to enact their policy preferences via the newly elected Democratic Gov. Tony Evers and Attorney General Josh Kaul.

Finally, DPW argues the legislation violates the Fourteenth Amendment’s Equal Protection Clause because it dilutes the power of Democratic votes.

Judge Brian Hagedorn Wins Wisconsin Supreme Court Race

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In the only statewide race in the Wisconsin 2019 spring elections on April 2, Court of Appeals Judge Brian Hagedorn beat Court of Appeals Chief Judge Lisa Neubauer for an open seat on the Wisconsin Supreme Court. Hagedorn won by close to 6,000 votes, and Judge Neubauer has officially conceded, declining to call for a recount.

Conservative Hagedorn will replace liberal Justice Shirley Abrahamson, who has been on the court since 1976. Hagedorn’s win puts the court at a 5-2 conservative-liberal balance. The next Supreme Court race will be in 2020 for conservative Justice Daniel Kelly’s seat.

Wisconsin Supreme Court Considers Whether DPI and Superintendent Violated REINS Act

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The Wisconsin Supreme Court heard arguments on April 10 in one of the more important cases of the term, Koschkee v. Evers. The case presents important state constitutional issues centered on whether the Department of Public Instruction and Superintendent of Public Instruction violated the 2017 Regulations from the Need of Scrutiny Act (REINS Act). The case also will be closely watched to see whether the Supreme Court revisits and overturns its previous decision, Coyne v. Walker.

 

Background

In 2017, the Wisconsin Legislature passed comprehensive regulatory reform legislation that was signed into law by Gov. Scott Walker as Act 57. Known as the REINS Act, the law mandates that before a state agency may begin to work on drafting an administrative rule, the agency must first submit what is known as a “statement of scope” with the Department of Administration to determine whether the agency has explicit statutory authority to promulgate the rule. The agency must also submit the statement of scope to the governor for approval. The statement of scope provides a summary of the proposed administrative rule as well as the agency’s statutory legal authority to issue the rule. The REINS Act left in place previous law that requires, after the rule goes through the rulemaking process, final approval from the governor before it can go into effect.

After Act 57 went into effect, the Department of Public Instruction sent statements of scope to the Legislative Reference Bureau to be published in the Wisconsin Administrative Register without first submitting the statements of scope with the Department of Administration and governor as required by the law. In each statement of scope, the Department of Public Instruction stated that it was not required to submit the statements of scope to the Department of Administration and governor based on a previous court decision, Coyne v. Walker, which addressed a similar law enacted in 2011.

 

2016 Decision – Coyne v. Walker

In 2011, the Wisconsin Legislature enacted a comprehensive regulatory reform bill that was signed into law as Act 21. Similar to the REINS Act, Act 21 provided that state agencies could not begin to work on an administrative rule until the statement of scope was first submitted to the governor’s office for his or her approval. Act 21 also put in place the requirement that the final rule must be approved by the governor before it may go into effect.

Act 21 was challenged as unconstitutional as applied to the Department of Public Instruction and the Superintendent of Public Instruction. A fractured Wisconsin Supreme Court held that Act 21 was unconstitutional as applied to Department of Public Instruction and Superintendent. While a majority agreed Act 21 was unconstitutional, there was no majority opinion written by the Wisconsin Supreme Court in Coyne. Instead, a number of separate opinions written by former Justices Michael Gableman and David Prosser, and current Justices Shirley Abrahamson and Ann Walsh Bradley, declared Act 21 unconstitutional as applied to the Department and the Superintendent. No one of the opinions is controlling.

Chief Justice Patience Roggensack, joined by Justices Annette Ziegler and Rebecca Bradley, wrote a dissenting opinion arguing that Act 21 is constitutional and that the Department of Instruction and Superintendent had to abide by the rulemaking provisions in Act 21.

 

Koschkee v. Evers Preview

The Wisconsin Institute for Law Liberty filed a lawsuit directly with the Wisconsin Supreme Court in which it alleged that the Department of Public Instruction and former Superintendent of Public Instruction Tony Evers, now Gov. Evers, violated Act 57 by failing to submit the statements of scope with the Department of Administration and the governor. The Supreme Court accepted the case and set oral arguments for Wednesday, April 11.

What is different this time as compared to the Coyne case is the makeup of the Wisconsin Supreme Court. As previously noted, Justices Gableman and Prosser were part of the plurality opinion in Coyne that held that Act 21 was unconstitutional as it applied to the Department of Public Instruction and the Superintendent. Justice Prosser was replaced by Justice Daniel Kelly, while Justice Gableman was replaced by Justice Rebecca Dallet.

Assuming that Chief Justice Roggensack and Justices Ziegler and Rebecca Bradley rely on their previous Coyne opinion – in which they held Act 21’s requirement that any statements of scope by the Department of Public Instruction must be approved by the governor before it begins the rulemaking process – only one more justice is needed to join them to overrule the plurality decision in Coyne.

Therefore, it is safe to say that the attorneys from both sides will be directing their arguments at the two newest justices, Daniel Kelly and Rebecca Dallet. A decision by the court is expected some time this spring or summer.

 

 

Appeals Court Issues Stay of Injunction on Extraordinary Session Laws

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The Court of Appeals District III has issued a stay of the temporary injunction in League of Women Voters v. Evers, one of the cases challenging the constitutionality of the 2018 extraordinary session laws. The stay comes after a Dane County circuit court judge ordered the injunction of 82 appointments confirmed in the extraordinary session and the extraordinary session laws in their entirety.

The appeals court order reasons that the Dane County circuit court failed to evaluate the irreparable harm that could result from enjoining the legislation if it is later found valid. The order stays the temporary injunction and establishes an expedited appeal process with all briefs due by the end of April.

Read more about the League of Women Voters case.

Despite the appeals court order reinstating the extraordinary session laws in League of Women Voters, some parts of the extraordinary session laws are still unenforceable after a second Dane County judge issued a temporary injunction in a separate case, SEIU v. Vos. The SEIU injunction prevents enforcement of provisions requiring legislative approval for the attorney general to discontinue or settle cases, requiring transparency for agency guidance documents, and allowing for more legislative oversight of agency rulemaking, while leaving in place other portions of the laws. The defendant Legislature also plans to appeal this injunction, but there has yet to be an appeals court ruling on a stay.

Read more about the SEIU case.

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

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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

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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

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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

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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)

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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)

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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.