Author: Hamilton

Federal District Court Strikes Down ACA Mandate

Posted on by Hamilton

A federal district court in Texas has ruled that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. The court further found that, because the individual mandate is “essential” to the ACA, the remaining provisions of the law are also invalid.

Congress zeroed out the tax penalty appropriation, yet left in place the ACA’s individual mandate, in the federal tax reform bill in December 2017. Wisconsin, along with 18 other states, has led the lawsuit arguing that the remaining mandate, without an active tax penalty, violates the Commerce Clause of the U.S. Constitution, and Congress does not have the constitutional authority to compel citizens to purchase health insurance.

The district court did not place an immediate injunction on enforcement of the law, so there will be no immediate impact to 2019 coverage under the ACA. It is expected that the case will be appealed eventually to the U.S. Supreme Court.

Wisconsin Civil Justice Council Releases 2018 President’s Report

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WCJC released today the 2018 President’s Report from WCJC President Bill G. Smith. The report overviews WCJC’s successful 2017-18 legislative session.

Earlier this year, WCJC lobbied in support of 2017 Assembly Bill 773, which was signed into law by Gov. Scott Walker as 2017 Wisconsin Act 235. Act 235 amended Wisconsin’s civil discovery laws, which will reduce costs for businesses by curtailing the amounts of unnecessary, expensive discovery, and make Wisconsin the first state in the nation to shine the light on third-party litigation funding, the growing practice in which third parties “invest” in litigation and drive up the cost of lawsuits.

In addition to legislation, WCJC is also vigilant with respect to the courts. The biggest victory in 2018 before the Supreme Court was Mayo v. Wisconsin Injured Patients and Families Compensation Fund, where the Court upheld Wisconsin’s statutory limit on noneconomic damages in medical malpractice cases.

Finally, WCJC issued its comprehensive 2018 Guide to the Wisconsin Supreme Court and Judicial Evaluation, which reviews the most important cases decided by the Court affecting the business community.

WCJC has been extremely active again in 2017-18, and looks forward to continued success in 2019.

Download the 2018 President’s Report here: https://www.wisciviljusticecouncil.org/wwcms/wp-content/uploads/2018/12/Presidents-report-2018.pdf.

In Extraordinary Session, Wisconsin Legislature Approves Additional Oversight of AG Settlements

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In an extraordinary session on Dec. 4, the Wisconsin Senate and Assembly passed legislation giving the legislature additional oversight of settlements pursued by the state attorney general. The legislation provides a more stable, predictable regulatory and litigation environment for Wisconsin businesses by limiting the authority of activist attorneys general.

The extraordinary session legislation requires Joint Committee on Finance (JFC) approval of any compromise or discontinuance of an action pursued by the Department of Justice. (Current law requires approval from the governor.) Settlement plans my not concede the invalidity of a statue unless the Joint Committee on Legislative Organization approves. Actions for injunctive relief or proposed consent decrees are also subject to a 14-day passive review period by JFC. The legislation also removes the attorney general’s authority to expend settlement funds and instead automatically deposits any settlement funds directly into the general fund.

The legislature also may intervene in cases alleging that a state statute is unconstitutional, been preempted by federal law, or the validity of the statute is otherwise challenged.

It is anticipated that Gov. Scott Walker will sign the legislation into law later this month.

Read about other legislation passed in the extraordinary session.

 

 

2018-19 ATRA Judicial Hellholes Report Highlights Wis. Accomplishments

Posted on by Hamilton

The American Tort Reform Association recently released its 2018-19 Judicial Hellholes report. While the report’s focus is to recognize some of the worst-ranking civil justice climates in the country, the report also highlights several “Points of Light,” including civil justice reform accomplishments in Wisconsin over the past year.

The report recognizes the Wisconsin Supreme Court’s decision to uphold the constitutionality of a $750,000 limit on noneconomic damages in medical malpractice cases (Mayo v. Wisconsin Injured Patients and Families Compensation Fund, 2018 WI 78). WCJC had filed an amicus brief in the case, successfully arguing that the liability limit is constitutional.

The report also highlights civil justice reforms in AB 773 (signed into law as 2017 Wisconsin Act 235). Act 235 enacted several e-discovery and class action reforms to lower the costs of litigation for businesses, as well as groundbreaking provisions requiring transparency in third-party litigation funding.

Supreme Court December Oral Arguments

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The Wisconsin Supreme Court will meet just once for oral arguments in December. Of note, the Dec. 11 oral arguments include West Bend Mutual Insurance Co. v. Ixthus Medical Supply, Inc. The case will determine whether West Bend has a duty to defend Ixthus in a case involving the alleged illegal domestic sale of diabetic glucose test strips.

Health care manufacturing company Abbott filed a suit against Ixthus, claiming that Ixthus wrongfully diverted test strips intended for international markets to domestic markets. Ixthus subsequently filed a claim with its insurer West Bend for a covered “advertising injury” under its policy.

West Bend argues there is no coverage because the policy also contained an exclusion for instances where the insured knowingly violates the rights of another. West Bend also argues there is no connection between Ixthus’s covered advertising activity and the injury to Abbott.

The Supreme Court will review the Court of Appeals District II decision that granted Ixthus coverage.

3rd District Court of Appeals Decision: Engelking v. Enbridge (Pipeline Right of Way Grant)

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The Court of Appeals District III held in Engelking v. Enbridge (2017AP2450) that property owners’ future damages claims against Enbridge for pipelines located on their property were barred by claim preclusion. The appeals court also upheld summary judgment in favor of Enbridge, allowing it to continue transporting natural gas liquids (NGLs) via the pipelines.

Property owners Barbara and Jeremy Engelking inherited a Right of Way Grant from their predecessor in title. The grant allowed Enbridge right of way to transport “crude petroleum, its products and derivatives” via the pipelines on the Engelking property.

The Engelkings had filed a previous action against Enbridge in 2010, seeking damages for trespass and unjust enrichment from the pipelines on their property. The Engelkings argued the instant case is distinct from their 2010 claims because they sought future damages, whereas the 2010 claims sought remedy for past damages. However, the court ruled that the 2010 claims precluded the instant case because the Engelkings did have the opportunity to pursue future economic damages claims in 2010.

The Engelkings also argued the grant did not allow Enbridge to transport NGLs via the pipelines on their property because NGLs are not a derivative of crude petroleum. However, the court ruled the grant’s language as unambiguously including NGLs as an eligible derivative of crude petroleum, citing an Enbridge chemical engineer’s affidavit. The court upheld summary judgment in favor of Enbridge accordingly.

Final MU Poll Before Election Shows Close AG Race

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On Oct. 31, Marquette University Law School (MU) released its final poll before the 2018 midterm elections. Overall, numbers remained largely the same as in the previous poll. Incumbent Attorney General Brad Schimel is still up, but his lead has narrowed to a two point race. Schimel led Democrat opponent Josh Kaul by four points earlier in October and seven points in September.

In this poll, Kaul’s favorable/unfavorable numbers improved slightly to 16 percent favorable and 12 percent unfavorable, up from 10 percent favorable and 8 percent unfavorable in the previous poll. On the other hand, Schimel’s favorable ratings decreased to 29 percent favorable and 25 percent unfavorable from 32 percent favorable and 22 percent unfavorable in the previous poll.

Kaul’s name recognition has also begun to improve slightly from the previous two polls, in which around 67 percent of voters hadn’t heard enough about him to form an opinion. However, this poll showed 56 percent still haven’t heard enough about Kaul, compared to 33 percent who haven’t heard enough about Schimel.

This poll is the last snapshot of voter opinions before they head to the polls on Tuesday, but still anything can happen to shift the outcome of the election in the next few days.

Read more MU poll results. 

2018 State of the Judiciary Address Highlights Business Court Pilot

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On Oct. 31, Chief Justice Patience Roggensack delivered the 2018 State of the Judiciary Address. Among other topics, Chief Justice Roggensack’s remarks highlighted Wisconsin’s Commercial Docket (a.k.a. Business Court) Pilot Project that began in July 2017.

According to Chief Justice Roggensack, the commercial docket has handled 35 cases as of September, 14 of which have been resolved. 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 resolved the 14 completed cases in less than one year.

The Chief Justice noted positive anecdotal feedback of the project and said the Commercial Docket Pilot Project judges are recommending expanding case types handled by the business court to include receiverships in excess of $250,000 and enforcement of arbitration awards.

Chief Justice Roggensack acknowledged that one challenge of the pilot project has been getting attorneys to file their cases in the commercial docket, rather than waiting for the clerk of courts or a judge to transfer the case.

In her address, Chief Justice Roggensack also discussed eFiling, research and justice statistics, drug treatment courts, and judicial salaries.

Read the full address.

Supreme Court Decision: SECURA Insurance v. Lyme St. Croix Forest Co. (Occurrences from a Single Cause)

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In SECURA v. Lyme St. Croix Forest Co., LLC (2018 WI 103), the Supreme Court issued its first major decision of the 2018-19 term, ruling in a unanimous decision on a tort case involving insurance coverage for property damaged in the Germann Road Fire.

The issue before the court was whether multiple occurrences may arise from a single cause for insurance coverage purposes. In this case, SECURA argued that the fire spreading across multiple property lines was a single occurrence and thus coverage arising from the fire would be capped at the per-occurrence limit of $500,000. On the other hand, plaintiffs argued that a separate occurrence began each time the fire crossed into another property. Thus, coverage would be capped at $500,000 per property damaged, up to the policy’s $2 million aggregate limit.

The court ultimately sided with SECURA, determining that the fire was a single occurrence and coverage should be capped at the policy’s $500,000 per-occurrence limit. The court based its decision on the “cause theory” that says damages from a “single, uninterrupted cause” are a single occurrence. The court ruled the fire a single, uninterrupted cause and argued ruling otherwise would have arbitrary and unreasonable consequences.

Supreme Court Adopts Petition Amending Default Judgment Rule

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Recently, the Supreme Court adopted a petition amending the default judgment rule (Wis. Stat. § 806.02) for parties failing to timely file answers to complaints. Under previous law, only plaintiffs could obtain default judgments against defendants who fail to comply with deadlines in Wis. Stat. § 802.06(1). Under the statute as amended by the Supreme Court, default judgment may now be rendered in favor of any party in the case that does not comply with deadlines for answers and replies to complaints, counterclaims or cross claims.

The statutory changes from the petition are effective Jan. 1, 2019.