Author: Hamilton

Lee Quality Home Care LLC v. DHS (DHS Authority)

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In Lee Quality Home Care LLC v. DHS (2017AP1216), the Court of Appeals District IV held that the Wisconsin Department of Health Services (DHS) has the authority to recoup payments from a personal care provider for services performed by workers not trained according to DHS rules.

First, the court affirmed that the plaintiff Lee Quality Home Care did not train its workers according to DHS rules (Wis. Admin. Code § 105.17(1n)). Lee Quality argued that guidance documents from DHS relaxed personal care worker training requirements, but the court ruled that these documents did not change the administrative rules.

Because Lee Quality had not trained its workers according to DHS rules, the court held that DHS had the authority to recover Medicaid reimbursement payments from Lee Quality. Wis. Stat. § 49.45(2)(a)10.a. and Wis. Admin. Code § 108.02(9)(a) state that DHS can recover “improper” payments from providers. Federal code defines “improper payment” as a payment “made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirement” (42 C.F.R. § 431.958). The court determined that DHS’s payments to Lee Quality were “improper” because Lee Quality failed to comply with DHS’s “legally applicable” training requirements.

Among other arguments, Lee Quality contended that DHS cannot recover payments for services actually provided and that the payments were not “improper.” Lee Quality said Wis. Admin. Code § DHS 105.17(4)(c) provides that DHS give notice to noncompliant providers requiring providers to correct the noncompliance by a certain date. Instead of recollecting the Medicaid reimbursement payments, DHS should have allowed Lee Quality the opportunity to comply. The court rejected these arguments, allowing DHS to recover reimbursement payments to Lee Quality’s providers for services that they had performed.

Other Medicaid reimbursement cases regarding DHS authority are also making their way through Wisconsin courts. The Court of Appeals District III held in 2018 case Newcap, Inc. v. DHS (2017AP1432) that DHS has the authority to recoup Medicaid reimbursement payments for services provided when providers fail to maintain required records. However, Newcap did not have to repay DHS because the specific records in its case were not required by statutes or DHS rules.

In Kathleen Papa v. DHS, the Court of Appeals District II will decide whether DHS has the authority to recover Medicaid reimbursement payments for services provided when the provider fails to follow documentation requirements. The Great Lakes Legal Foundation and Wisconsin Manufacturers & Commerce have filed a joint amicus brief in this case.

State of Wisconsin ex rel. Annette Flynn v. Kemper Center, Inc. (Public Records)

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In State of Wisconsin ex rel. Annette Flynn v. Kemper Center, Inc. (2017AP1897), the Court of Appeals District II held that private corporation Kemper Center, Inc. is not a “quasi-governmental corporation” subject to the Wisconsin Public Records Law.

Kemper Center is a private corporation that leases property from Kenosha County and operates and maintains the property as a public park. Kenosha County provides some grants to Kemper Center, and other revenues come from rentals and user fees charged by Kemper Center.

Kenosha resident Annette Flynn filed a public records request for certain disclosures from Kemper Center. The issue before the court was whether Kemper Center is a “quasi-governmental corporation” under the definition of “authority” in Wis. Stat. §19.32(1), requiring it to disclose records to Flynn.

Citing factors from a previous Supreme Court decision that determined Beaver Dam Area Economic Development Corporation was a quasi-governmental corporation, the appeals court held that Kemper Center is not a quasi-governmental corporation because:

  1. Despite receiving grants from the County, Kemper Center is mostly funded by sources other than taxpayer dollars.
  2. While Kemper Center’s operation of the park does provide a public benefit, it does not provide an exclusively governmental function.
  3. Kemper Center does not have a public appearance of being governmental in nature. The court determined it is clear that the County owns the park, but Kemper Center, Inc.’s operation of the park does not appear governmental.
  4. The County does not have a significant degree of control over the Kemper Center operations.

Wisconsin Supreme Court Reins In Department of Natural Resources

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In a victory for property owners, the Supreme Court of Wisconsin held (6-1) that the Department of Natural Resources (DNR) does not have the authority to amend an expired construction permit (Myers v. Department of Natural Resources (2019 WI 5)). The opinion was authored by Justice Rebecca Dallet, her first opinion involving agency authority.

 

Facts

The DNR issued a permit to Philip and Terrie Myers to build a pier on Lake Superior. Over ten years later, DNR issued an amendment to the permit, requiring the Myers to significantly change their pier. The Myers filed a petition for judicial review of the DNR’s permit amendment. The issue before the Supreme Court was whether DNR has the statutory authority to amend the previously issued permit.

 

Court Decision

DNR argued that a condition within the permit stating “the authority herein granted can be amended or rescinded…” provided the agency authority to amend the permit. However, the court ruled that without explicit statutory authorization the condition itself did not allow DNR to amend the permit.

DNR further argued its statutory authority came from Wis. Stat. § 30.12(3m)(d)2. and § 30.12(3m)(c), which states that DNR “may establish reasonable conditions” in permits to satisfy certain statutory criteria for building piers. According to the DNR, the condition that DNR may amend the permit was such a “reasonable condition.” However, the court read the past tense of the statute to mean that the criteria must be satisfied only when the permit is granted. Once the permit is issued, the statute does not allow DNR ongoing review and authority to enforce whether the criteria are continuously being met.

Finally, DNR argued that Wis. Stat. § 30.2095(2), which states DNR may modify permits for good cause before their expiration, gave it authority to amend the Myers’ permit because the permit never expired.  However, the court, rejecting DNR’s reading of § 30.2095(1), determined the permit did expire because the Myers completed construction within the authorized three-year period.

In a dissent, Justice Walsh Bradley argued that DNR does have the authority to amend permits. Walsh Bradley states the statutes necessarily imply that DNR has the authority to continuously enforce the § 30.12(3m)(c) criteria. Furthermore, pier permits apply not only for construction but also for ongoing maintenance, so the Myers’ permit was not expired.

 

Yacht Club at Sister Bay Condo Association, Inc. v. Village of Sister Bay (Public/Private Nuisance)

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In Yacht Club at Sister Bay Condo Association, Inc. v. Village of Sister Bay (2019 WI 4), the Supreme Court determined that each nuisance-causing event at a town concert venue is a new “event” triggering a new 120-day notice period for filing a claim against the town.

The Village of Sister Bay built an outdoor concert venue near the Yacht Club condominiums. When the village began hosting loud concerts into the night, the Yacht Club filed a written notice of injury against the village, claiming the noise pollution was a nuisance. The notice stated the date of the last concert (Sept. 1, 2015).

The village moved to dismiss the Yacht Club’s suit, arguing that the Yacht Club failed to serve the notice within 120 days of the date when the concerts began (August 2014). Conversely, the Yacht Club argued each new concert is a new “event giving rise to the claim” as required by Wis. Stat. § 893.80(1d)(a).

The Supreme Court unanimously agreed with the Yacht Club that each concert is a new event because, depending on the level and length of noise, not every concert is necessarily a nuisance. Common law of nuisance says that continued nuisances are new events, and in the instant case this interpretation does not conflict with the intent of the notice of claim law to provide governments sufficient information to prepare for litigation.

 

AG Kaul Announces Wisconsin DOJ Appointees

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After taking office on Jan. 7, newly elected Attorney General Josh Kaul has announced several appointments within the Department of Justice (DOJ). Appointees include current DOJ employees and alumni, as well as some new faces. Kaul’s appointments include:

  • Deputy attorney general – Eric J. Wilson. Wilson comes to DOJ from Godfrey & Kahn. His previous experience includes work as an assistant U.S. attorney in Chicago and an assistant attorney general in Wisconsin.
  • Chief of staff – Ashley Viste. Viste was Kaul’s campaign manager and as also worked on campaigns for U.S. Sen. Tammy Baldwin, now-Gov. Tony Evers’s Superintendent of Public Instruction campaign, and state Sen. Dave Hansen (D-Green Bay).
  • Communications director – Gillian Drummond. Drummond served as a senior advisor to Kaul during the campaign. Her previous experience includes running communications for Wisconsin Supreme Court Justice Rebecca Dallet’s campaign, the Democratic Party of Wisconsin, Hillary for Wisconsin, and Milwaukee mayor Tom Barrett. Drummond also served as chief of staff to then-minority leader Sen. Chris Larson (D-Milwaukee).
  • Director of the Division of Legal Services – Charlotte Gibson. Gibson has been an assistant attorney general since 2001 and director of the special appeals unit since 2011.
  • Director of the Division of Law Enforcement Services – Tina Virgil. Virgil has worked at DOJ for 26 years, including as director of the Special Investigations Bureau and state fire marshal.

Kaul also announced he will retain Schimel appointees Michelle Viste as director of the Office of Crime Victim Services and Kristen Devitt as the director of the Office of School Safety.

Wisconsin Supreme Court Candidates Finalized

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Court of Appeals Judges Brian Hagedorn and Lisa Neubauer have both officially filed to run for the Wisconsin Supreme Court in the April 2019 election. Hagedorn and Neubauer will compete to replace Justice Shirley Abrahamson, who announced in May she will not run for re-election after four terms on the bench. With just two candidates running, there will be no statewide primary in the nonpartisan race.

Gov. Scott Walker appointed Hagedorn to the Court of Appeals in 2015. Hagedorn previously served as chief legal counsel to Walker, assistant attorney general to J.B. Van Hollen, and clerk for recently retired Wisconsin Supreme Court Justice Michael Gableman. Hagedorn was president of the Federalist Society at Northwestern Law School.

Judge Neubauer has served on the Second District Court of Appeals in Waukesha since she was appointed by Gov. Jim Doyle in 2007. She became chief judge in 2015. Prior to serving on the appeals court, Judge Neubauer was a partner at Foley & Lardner and clerked for U.S. Judge Barbara Crabb.

2019-20 Judiciary & Courts Committees

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Senate and Assembly leadership have finalized committee assignments for the 2019-20 session, including those committees that will likely be tasked with legal reform bills. Lists of committee members are below.

 

Senate Committee on Judiciary & Public Safety

  • Van Wanggaard (R-Racine), Chair
  • Andre Jacque (R-DePere), Vice-Chair
  • Alberta Darling (R-River Hills)
  • Fred Risser (D-Madison)
  • Lena Taylor (D-Milwaukee)

 

Senate Committee on Insurance, Financial Services, Government Oversight & Courts

  • Dave Craig (R-Big Bend), Chair
  • Duey Stroebel (R-Saukville), Vice-Chair
  • Dan Feyen (R-Fond du Lac)
  • Lena Taylor (D-Milwaukee)
  • Fred Risser (D-Madison)

 

Assembly Committee on Judiciary

  • Jim Ott (R-Mequon), Chair
  • Cody Horlacher (R-Mukwonago), Vice-Chair
  • Jeremy Thiesfeldt (R-Fond du Lac)
  • Rob Brooks (R-Saukville)
  • Ron Tusler (R-Harrison)
  • Samantha Kerkman (R-Salem)
  • Jimmy Anderson (D-Fitchburg)
  • Gary Hebl (D-Sun Prairie)
  • Marisabel Cabrera (D-Milwaukee)

Complaint Filed Seeking to Declare Extraordinary Session Legislation Unconstitutional

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A coalition has filed a complaint seeking to deem the legislature’s 2018 extraordinary session legislation unconstitutional and unenforceable. The complaint argues 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 plaintiffs’ coalition includes the League of Women Voters of Wisconsin, Disability Rights Wisconsin, Black Leaders Organizing for Communities, a heavy equipment operator and union member, a former Department of Natural Resources attorney, and a former Department of Justice attorney. Plaintiffs claim they are harmed provisions of the legislation including: new voting requirements, the elimination of illegal guidance documents, the elimination of judicial deference, the requirement that the attorney general deposit settlement funds into the general fund, and the legislature’s authority to intervene in attorney general actions.

However, a recent memo from Wisconsin Legislative Council to Assembly Speaker Robin Vos (R-Rochester) plainly states that convening an extraordinary session does not violate the Wisconsin Constitution. The constitution states that each house of the legislature can determine its own rules for proceedings (Wis. Const. Art. IV § 8). The rules for the 2017-18 session proscribed 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. Furthermore, the Wisconsin Supreme Court generally defers to the legislature on issues of legislative procedure (see State ex rel. La Follette v. Stitt, 114 Wis. 2d 358 (1983)). The complaint argues that since the rules were enacted by joint resolution, not a bill, they do not have the force of law allowing the legislature to meet according to Art. IV, § 11.

The Joint Committee on Legislative Organization has approved hiring outside counsel to defend the legislation.

Court of Appeals Certification: Clean Wisconsin v. Department of Natural Resources

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The Court of Appeals District II submitted a certification this week asking the Wisconsin Supreme Court to take up Clean Wisconsin v. Department of Natural Resources. The issue in this case is whether 2011 Act 21 precludes DNR from considering cumulative environmental impacts in issuing high capacity well permits under Wis. Stat. § 281.34.

DNR argues that Act 21, which clarified that agencies may not enforce requirements unless explicitly permitted by statute or properly promulgated rule, prevents the agency from considering environmental impacts not specifically noted in the statutes. DNR’s argument relies on a May 2016 formal opinion from former Attorney General Brad Schimel.

Clean Wisconsin argues that the 2011 Supreme Court decision Lake Beulah Management District v. DNR still holds. Lake Beulah broadly held that DNR has the authority to preserve waters of the state under the constitutional and statutory public trust doctrines. Since the Supreme Court decided Lake Beulah after the enactment of Act 21 but declined to address the Act’s bearing on the case, a decision in the Clean Wisconsin case would clarify DNR’s authority on high capacity well permits and the general scope of Act 21 in environmental cases.

Supreme Court Decision: Engelhardt v. City of New Berlin (Governmental Immunity)

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In Engelhardt v. City of New Berlin (2019 WI 2), the Supreme Court held that the City of New Berlin was negligent when a child drowned on a field trip because the known and present danger exception to governmental immunity applied.

Lily Engelhardt drowned on a field trip with the City of New Berlin Parks and Recreation Department. Lily’s parents had previously informed a New Berlin staff member that Lily could not swim. The Engelhardts sued the city.

Government employees are immune from liability under Wis. Stat. § 893.80(4) unless certain exceptions apply. One exception states that government employees may be held liable if they fail to respond to a known, present, and compelling danger. In this case, the court held that the known and present danger exception did apply because the danger of a non-swimmer drowning on the field trip was compelling and obvious. The park staff failed to properly respond to this danger by taking Lily on the field trip without sufficient supervision, a life jacket, or a swim test.

In a concurring opinion, Justice Dallet (joined by Justices R. Bradley and Kelly) agreed that New Berlin was liable but argued the known and present danger exception did not apply here. Instead, Dallet found the city was not acting in a quasi-legislative or quasi-judicial function when it failed to supervise Lily on the field trip; therefore, governmental immunity did not apply under the language of § 893.80(4).