Author: Hamilton

Supreme Court Set to Revisit Class Action Standards

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The U.S. Supreme Court recently granted certiorari to Tyson Foods, Inc. v. Bouaphakeo, a case which has the potential to shake up the class action bar.

The case revolves around a dispute raised by Tyson pork-processing workers from an Iowa plant who alleged they were underpaid for time spent putting on and taking off protective gear and walking to and from workstations. The scope of the class was created using statistical information about how much time the average Tyson worker took to don the gear and get to their work station. No individualized analysis of class members was undergone. The class was awarded a $5.8 million judgment at trial and the 8th Circuit Court of Appeals upheld the judgment. In challenging the judgment, Tyson contends the workers’ class should not have been certified because there were significant differences in the types of protective gear and equipment used by different workers. They argue these differences are significant enough to violate Federal Rule of Civil Procedure (FRCP) 23(a)(2), “there are questions of law or fact common to the class.” Under FRCP 23(b)(3), these questions must “predominate over any questions affecting only individual members.” Tyson further argues that class certification was inappropriate because hundreds of uninjured members (who would wrongfully be entitled to receive benefits) are in the class. The outcome of this case could be as groundbreaking as the Court’s 2011 decision in Wal-Mart Stores v. Dukes.

This case is representative of a series of litigation which has been winding its way through the federal courts. These cases all concern the same general question – whether or not a class can be certified by use of statistics when there are individualized differences among the members and the membership includes many individuals who are uninjured. The Supreme Court has yet to act on similar certiorari petitions, in Wal-Mart Stores v. Braun and Dow Chemical v. Industrial Polymers Inc.

New Legislation on Motor Vehicle Liability

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2015 Wisconsin Assembly Bill 92 (AB 92) increases monetary fines, creates a new criminal penalty, and limits the types of damages that are recoverable in lawsuits that derive from car crashes for those who do not have automotive liability insurance.

In March, Representatives Sanfelippo, Spiros, Weatherston, Tom Larson, Kapenga, and Jim Ott introduced AB 92 and the bill was referred to the Assembly Judiciary Committee. On May 11th a substitute amendment was offered by Representatives Horlacher, Jarchow, Jacque, Kulp, and Sanfelippo.

Under current law, all motorists who drive on state highways are required to have automotive liability insurance (with a few exceptions). If the driver is stopped by the police and they do not have insurance for their vehicle, then they can be fined up to $500. Current law also requires that a driver have proof of insurance on their person or in their vehicle. A driver can be fined $10 for not having proof of insurance.

The original bill greatly increased the monetary fines for driving without insurance. For a first offense a driver would have been fined $1,000 – $5,000. For a subsequent offense within three years of the first one, a driver would be fined $2,500 – $7,500. If an uninsured driver injured someone, they would be fined $5,000 – $7,500, but if the driver knew they were uninsured then they would be fined at least $10,000 and be subject to a class I felony.

The original bill also changed financial responsibility rules. Under current law if a court files a judgment against a driver for more than $500 of damage to another’s property caused by operating their motor vehicle, then the driver’s license is suspended unless they prove “financial responsibility.” To prove financial responsibility the driver needs to show the Department of Transportation that they have adequate liability insurance or deposit $60,000 with the Department of Transportation, which the Department will keep until the judgment is paid. Under the original bill, drivers who are convicted of operating a motor vehicle without insurance must prove “financial responsibility” with the DOT for five years after the conviction or have their license suspended.

The largest change from current law in the original bill was that it prohibited uninsured drivers from recovering non-economic damages against an insured driver when involved in a car accident regardless of which driver was at fault.

The substitute amendment reduced the proposed increases in monetary fees. Under the amendment, a first offense of driving without liability insurance would be a $500-$750 fine; Causing bodily harm while driving without liability insurance would be a $1,000-$1,500 fine; And causing death while driving without liability insurance would be at least a $2,500 fine and a class H felony.

The financial responsibility language was retained from the original bill.

The substitute amendment does not mention limiting the types of damages that an uninsured driver can recover in a lawsuit concerning an accident with an insured driver.

Patience Roggensack to stay Chief Justice – For Now

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U.S. District Court Judge James Peterson ruled that Patience Roggensack could remain chief justice while Justice Abrahamson’s, the former chief justice, lawsuit unfolds. Justice Abrahamson sued shortly after Wisconsin voters chose to amend the state constitution to allow the state supreme court justices to determine who amongst them would serve as chief justice. Prior to the referendum the longest serving justice on the court took on the role of chief justice. Abrahamson became chief justice in 1996 and contends that she should retain the role until the end of her elected term. In a hearing deciding the issue, Judge Peterson said he did not see the irreparable harm of Chief Justice Roggensack administering the court system while this case is decided.

On April 29, the Government Accountability Board certified the constitutional amendment results, and later that day the court voted to have Patience Roggensack become chief justice. Justices Gableman, Ziegler, Prosser voted for Roggensack, and Justices Abrahamson, Bradley, and Crooks did not participate. Roggensack cast the deciding vote for herself.

Justice Abrahamson filed a lawsuit on April 8, a day after voters approved the amendment. In her complaint, Justice Abrahamson is seeking declaratory judgment from the court to determine when the new constitutional amendment will come into effect. She argues that the amendment is prospective only and therefore does not apply until the end of her elected term in 2019. Alternatively she argues that a retroactive application of the amendment would change the terms of her office which would violate the Due Process and Equal Protection clauses of the 14th Amendment of the U.S. Constitution. Abrahamson argues that she has a property interest in her office and it is being taken without due process of law. She further argues that retroactive application of the amendment violates the Equal Protection Clause because no other elected official elected to a full term and still able to hold office would be “prematurely ousted from office on that basis.”

Judge Peterson has determined that the case can be decided without a trial. He will hand down his decision after July 1, the deadline for the last brief.

U.S. Supreme Court will not take up John Doe Case – Decision pending in Wisconsin Supreme Court

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As it relates to the current state of Wisconsin politics, the words “John Doe” have been omnipresent for what seems like Governor Walker’s entire tenure in office. The probe may be close to a conclusion as another challenge to the probe has been eliminated.

In the spring of 2014 Eric O’Keefe, Executive Director of Wisconsin Club for Growth, sued prosecutors in charge of the John Doe probe to hold them personally liable for violating his, and the Club for Growth’s, civil rights. U.S. District Court Judge Rudolph Randa ruled in favor of O’Keefe. The prosecutors appealed to the 7th Circuit Court of Appeals. The 7th Circuit reversed Judge Randa’s opinion, stating that the issues it raised should be decided by the state judiciary and dismissed the case. O’Keefe appealed to the U.S. Supreme Court in order to get the case reinstated and permanently block the probe. The Supreme Court denied certiorari last week, in effect rejecting O’Keefe’s appeal. The Supreme Court’s rejection ends O’Keefe’s case. However three cases concerning the probe are currently before the Wisconsin Supreme Court.

The state supreme court accepted three cases concerning the John Doe probe in mid-December 2014. Two cases were legal challenges from targets of the probe and a third was an action to reinstate the probe brought by special prosecutor Francis Schmitz. The court took up these cases after Judge Gregory Peterson determined the activities being investigated in the probe were not illegal. Schmitz appealed to the District Four Court of Appeals, based in Madison, arguing that Judge Peterson misinterpreted the campaign finance laws in question. The Court of Appeals rejected Judge Peterson’s ruling and the targets of the probe appealed to the state supreme court. The court decided not to hear oral arguments and rely solely on briefs when deciding the case. A decision is expected to be released this summer.

SCOTUS Cases to Watch this Summer

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King v. Burwell

This summer, the U.S. Supreme Court will decide on a case that could almost entirely dismantle President Obama’s most significant legislation of his presidency. In King v. Burwell, the high court could refuse subsidies for those on the federally-operated exchanges, making premiums unaffordable for those using the federal health care exchange and potentially resulting in enrollees fleeing the program for more affordable, privately-provided health insurance.

The lawsuit was brought forward when challengers argued the plain text of the Affordable Care Act limits federal subsidies to states who establish their own exchanges, which only includes 14 states and the District of Columbia; Wisconsin does not have its own exchange.

Oral arguments were held in early March, and high court watchers say the case could be decided in either direction. Chief Justice John Roberts is expected to be the swing vote, having written the decision that upheld the Affordable Care Act in 2012, however the Chief Justice was quiet during oral arguments.

Should the court decide in favor of the plaintiffs, the IRS will have to stop disbursements of subsidies in the 36 states using the federal exchange.

The court’s decision is expected to be released in late June.

Obergefell v. Hodges

The U.S. Supreme Court is poised to make what could be the final legal decision on same-sex marriage in the United States this June. In Obergefell v. Hodges, the court will decide whether state bans on same-sex marriage, specifically in Kentucky, Michigan, Ohio and Tennessee, are constitutional. Currently, same-sex marriage is legal in 37 states and the District of Columbia, including Wisconsin.

Court observers believe Justice Anthony Kennedy will cast the deciding vote in the case, as he wrote the majority opinion in Untied States v. Windsor, which called the federal ban on same-sex marriage unconstitutional in 2013.

The court’s decision is expected at the end of June.

Roggensack elected new Chief Justice

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Within hours of state elections officials certifying the April 7th referendum results, four Wisconsin Supreme Court Justices elevated Justice Patience Roggensack into the role of chief justice. The vote was taken via email with four justices – Gableman, Prosser, Ziegler, and Roggensack – taking part and voting for Roggensack. The other three justices on the court – Abrahamson, Bradley, and Crooks – did not cast votes in the election.

Justice Abrahamson filed a lawsuit the morning after the referendum passed in which she argues that she should remain chief justice until the end of her term in the spring of 2019.  In a letter to the U.S. District Court, Abrahamson’s attorney argued that she still holds the position of chief justice. Also in the letter, Abrahamson contests the procedure used for electing the chief justice. She argues the court should have conferenced to decide on a procedure before electing the chief justice. However Roggensack’s attorney, who is also the attorney for every other justice on the court but Justice Bradley, contended that once the election results were ratified the justices had the ability to elect a new chief justice at any time.

Chief Justice Roggensack stated in an interview this week “there’s no doubt about it,” she’s the new chief justice. The state supreme court website lists Roggensack as chief justice, and features a welcome message from her. She also plans to meet with staff to discuss the transition.

Bradley has stated the election of a new chief justice was premature. She noted that the issue of whether the constitutional amendment is to be applied “retroactively” (before Abrahamson’s term is up) needs to be decided in federal court. Therefore the court does not yet know if a vacancy exists to fill.

However, Justice Gableman argues the vote was not premature. He has told the media that when the federal judge denied Abrahamson’s request for a temporary restraining order to stop the members of the court from electing a new chief justice, the judge stated that when and how to implement the amendment was a question of state law. Therefore since the judge did not restrain the court from enacting the amendment, the members of the court were able to elect a new chief justice at a time of their choosing.

Justice Prosser, who voted in favor for Roggensack, says he does not think the court should install the new chief justice until the beginning of the court’s next term in the fall.

Chief Justice Patience Roggensack stated in a press release that as chief justice she intends to repair the damage done to the reputation of the state supreme court and broaden the involvement that justices, and judges around the state, have in the administration of the court system. Chief Justice Roggensack also intends to donate the addition $8,000 of her salary to the Access to Justice Commission which arranges civil legal services for those individuals who are unable to afford them. She has not indicated when she believes her term will begin.

Joint Committee on Finance Approves Creation of the Office of Solicitor General

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Governor Walker’s budget recommendation provides the Attorney General authority to appoint, in the unclassified service, a Solicitor General and no more than three deputy solicitors general.  Further, the Governor’s recommendation provides the Attorney General authority to assign assistant attorneys general to assist the Solicitor General.  In executive action on Thursday, May 7, the Joint Committee on Finance approved creation of this office.  In a slight revision to the Governor’s recommendation, the committee voted to eliminate four vacant positions in the agency in exchange for creating these four new appointed positions.

The Wisconsin Civil Justice Council supported the Governor’s recommendation and argued creating a Solicitor General’s office will:

  • Allow the Attorney General to provide more direction to and supervision of litigation.
  • Allow the Attorney General to help ensure the state’s legal arguments, litigation strategy, and representation reflect his or her priorities.

Such an office is a well-established practice within the United States. The Legislative Fiscal Bureau, in its analysis of the Governor’s recommendation, noted that “[a]ttorney general offices in 42 states, as well as the District of Columbia, Puerto Rico, and the Virgin Islands, had [in March of 2014] a person appointed to oversee their offices’ civil appellate practice, and in some cases criminal appellate practice.”

Related news coverage: Committee OKs Solicitor General Office for DOJ.

Legislation Introduced to Change Interest Rates in Small Claims Court

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Under current Wisconsin law, plaintiffs who win favorable verdicts are usually entitled to recover interest on the monetary judgments awarded to them. There are two types of interest. There is post-judgment interest, which is meant to compensate the plaintiff for loss of the use of the money while a defendant appeals an unfavorable judgment. Post-judgment interest accrues from the time the judgment is made until the time the judgment is paid. There is also pre-judgment interest, which accrues from the time the plaintiff makes an offer of settlement until the settlement is paid.

Past Reform

Prior to 2011, pre- and post- judgment interest rates were set at 12 percent. Because appeals or settlement agreements and payment can take time, plaintiffs could receive a significant windfall due to the high interest rate. 2011 Senate Bill 14 signed into law as 2011 Act 69 changed the interest formula from 12 percent to the prime rate set by the Federal Reserve Board plus one percent. This ensures that plaintiffs do not receive a windfall while also ensuring that defendants pay a reasonable interest rate.

2015 Assembly Bill 95

Assembly Bill 95 (AB 95) seeks to change the interest rate for pre- and post –judgment interest for verdicts in small claims court from the formula created in Act 69 back to the 12 percent rate. The primary author of AB 95 is Representative Thiesfeldt. The bill was introduced on March 12 and was referred to the Assembly Committee on Judiciary. A public hearing on the bill was held on April 7. The primary author AB 95’s companion in the Senate, 2015 SB 76, is Senator Nass. SB 76 was introduced on March 23 and referred to the Senate Committee on the Judiciary and Public Safety.

Wisconsin Chiropractic Association Seeks New Cause of Action Against Insurance Companies

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Background:

In 1987 the state legislature passed the “Chiropractic Insurance Equality Statute” (Wis. Stat. § 632.87(3)) in the 1987-89 state budget. Prior to this law, insurers could treat chiropractors and chiropractic services differently from physicians and their services. Many insurance companies did not cover diagnosis and treatment of a patient by a chiropractor. This law was an attempt to remedy the situation by requiring that insurance companies treat chiropractors and physicians equally in a series of enumerated areas.

The Wisconsin Chiropractic Association (WCA) reports that its members have experienced a lack of compliance by the insurance industry and a lack of enforcement by the Wisconsin Office of the Commissioner of Insurance. Therefore the WCA has called for a modernization of Wis. Stat. § 632.87(3).

The Chiropractic Insurance Equality Modernization Act of 2015

State Senator Roger Roth (R-Appleton) and Representative Kathleen Bernier (R-Chippewa Falls) have agreed to author WCA’s Chiropractic Insurance Equality Modernization Act of 2015. The bill has yet to be introduced, but the WCA seeks to modernize various definitions in Wis. Stat. § 632.87(3) in order to modernize the language of the law to reflect current practices. However, the WCA also seek substantive changes to the law in order to correct the perceived lack of enforcement and compliance.

To attempt to secure compliance with the Office of the Commissioner of Insurance (OCI) the WCA is seeking to require insurers to submit an annual report to the OCI that demonstrates compliance with the law.

To attempt to stop violations by insurance companies the WCA proposes a new private right of action against insurance companies by parties with standing that do not comply with the law to recover “actual loses” resulting from the violations. Without the bill draft, the WCJC is unable to elaborate on the cause of action further at this time. We will keep you up-to-date as this bill moves forward.

For more information about the proposed bill click here.

JFC Takes First Executive Action on State Budget

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The Joint Finance Committee (JFC) held its first executive session this week on Governor Walker’s proposed 2015-2017 state budget. The committee took action in a number of areas, including the Secretary of State, the Public Service Commission (PSC), State Treasurer, Department of Revenue-Lottery Administration, Department of Administration – Division of Gaming, the Supreme Court, Circuit Courts, Court of Appeals, Judicial Council, Judicial Commission and Employment Relations Commission.

Read a summary of the proposals made by Governor Walker the state judiciary.

In the state judiciary budget, JFC rejected a number of Governor Walker’s proposals this week, including his proposal to eliminate the Judicial Council and reallocating appropriations of the Judicial Commission. In addition, the JFC took action on proposed block grants for the Supreme Court and Circuit Court.

Supreme Court Block Grant: JFC approved the governor’s proposal, on a party line vote, to consolidate GPR appropriations for the director of state courts and the state law library under the Director of State Courts and Law Library general program operations appropriation, funded at $10.3 million general purpose revenue (GPR) each fiscal year. The governor recommends these appropriations be changed from annual to biennial. However, the proposed consolidation of these appropriations does not include a decrease in revenue to these programs. Furthermore, the governor recommends transferring the appropriation for library collections and services to the Director of State Courts and Law Library general program operations appropriation. The block grant system is designed to give supreme court justices more flexibility to determine how to spend its appropriation.

Circuit Court Block Grant: JFC voted to approve the governor’s recommendation to create a circuit court block grant that would create individual appropriations from court interpreter fees, circuit court support payments and guardian ad litem costs. JFC modified the governor’s proposal slightly by delaying the consolidation of the appropriations until the second year of the biennium in order to provide the Director of State Courts time to determine how to implement the changes.

Also, following the governor’s initial budget recommendations it was revealed the budget did not include full funding increases and related costs provided for 278 court reporter positions. JFC resolved the error unanimously, and deleted the governor’s recommendation and maintained current law to provide funding for the court reporters.

Elimination of Surcharge Exemptions: Currently there are various exemptions from the civil clerk fee and justice information fee for failure to wear a seatbelt, smoking in a public place, failure to carry proof of motor vehicle insurance and failure to carry a handicap permit. The governor’s budget proposes to eliminate these exemptions in order to generate more revenue. JFC voted unanimously to delete the governor’s proposal from the budget.

Judicial Council: JFC voted 15-1 to reject the governor’s proposal to eliminate the Judicial Council. The JFC did change the council’s funding source.  The council is funded jointly through GPR and the supreme court’s program revenue (PR) appropriation.  The JFC voted instead to fund the council through the court’s PR appropriation. 

Judicial Commission: JFC unanimously approved rejecting the governor’s proposal to move the appropriations of the Judicial Commission under the Supreme Court’s purview.

Broadband Expansion Grants: The governor’s budget proposes to change the broadband expansion grants appropriation from a continuing appropriation to a biennial appropriation and authorizes the use of the universal serve fund revenues to fund the grant program. Currently, grant expenditures of up to $500,000 annually from a continuing appropriation, but the governor’s proposal would set the appropriation amount at $6 million biennially.

A motion put forward by Representative Amy Loudenbeck (R-Clinton) and Senator Alberta Darling (R-River Hills) modified the governor’s proposal by providing $1.5 million each year for four years, until 2018-19, instead of providing $6 million SEG in 2015-16 and an ongoing amount beginning in 2016-17. The motion was passed by JFC 16-0.

Funding for State Broadband Office: The governor’s budget proposed to increase expenditure authority of the PSC’s appropriation of the state broadband office by $250,000 PR annually. JFC passed a motion 15-1, put forward by Rep. John Nygren (R-Marinette), which increases expenditure authority by $125,000, instead of the governor’s proposed $250,000 increase.

Wind Energy Health Study: The governor’s budget included a proposal to allocate no more than $250,000 PR in 2015-16 to study health issues related to wind energy systems. The PSC would be required to submit its report a little over one year after the biennial budget goes into effect. JFC voted to approve a motion that would require the PSC to review studies previously conducted to ascertain the health effects of industrial wind turbines on people residing near a wind turbine. Unlike the governor’s provision, the motion did not include an increase of any appropriations to the PSC.

JFC is meeting on Friday, April 17 to take hold another executive session on the budget. The agenda includes:

  • Department of Health Services – Medical Assistance – Administration
  • Office of the Commissioner of Insurance
  • Wisconsin Technical College System
  • Department of Military Affairs
  • Department of Veterans Affairs
  • Board on Aging and Long Term Care
  • Board for People with Developmental Disabilities