2013’s largest settlements

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The following are the six largest settlements reported to Wisconsin Law Journal in 2013

NOTE: Some of the cases concluded in 2012, but were reported in 2013. 

Clean Air Act violations cost utility $307 million

The Wisconsin Public Service Corp., a utility company, reached a settlement agreement with the U.S. Department of Justice in a lawsuit concerning alleged violations of the Clean Air Act.

The Department of Justice’s Office of Public Affairs stated that under the terms of the settlement agreement, the defendant, Wisconsin Public Service Corp., “will invest approximately $300 million in pollution control technology, pay a civil penalty of $1.2 million, and spend $6 million on environmental mitigation projects to resolve violations of the Clean Air Act.”

Go to 2013′s largest verdicts

The settlement covers the Wisconsin Public Service Corp.’s two power plants — the Pulliam plant located in Green Bay, and the Weston plant located in Rothschild — and requires the defendant to install new pollution control technology on one of its largest units, and to continuously operate the new and existing pollution controls and comply with stringent emission rates and annual tonnage limitations. Under the terms of the consent decree, the defendant also was required to permanently retire, refuel or repower four additional coal-fired units at the Pulliam and Weston plants. The actions to be taken by the defendants are calculated to result in annual reductions of sulfur dioxide, nitrogen oxides, and particulate matter emissions by approximately 15,000 tons from 2010 levels. The settlement covers all eight coal-fired boilers at the defendant’s two power plants.

The utility company must spend $6 million on projects that will benefit the environment and human health in communities located near its facilities. Specifically, the defendant agreed to pay $250,000 each to the U.S. Forest Service and the National Park Service, to be used on projects to address damage from the defendant’s alleged excessive air emissions. Up to $4 million will be spent on a renewable energy resource enhancement project, up to $1.2 million on a wood stove change-out project, and up to $300,000 on a community digester project to convert food and/or animal waste to biogas or electricity.

Power cooperative agrees to pay millions for environmental violations

In an environmental violation lawsuit brought by the United States of America, defendant Dairyland Power Cooperative, the U.S. and nonparty to the lawsuit the Sierra Club signed a consent decree whereby the defendant agreed to reduce sulfur dioxide, nitrogen oxides, and particulate matter emissions, pollutants known to be harmful to the environment and health.

In addition, Dairyland Power agreed to pay a $950,000 civil penalty and to spend $5 million to implement environmental mitigation projects.

The plaintiff claimed the defendant “modified, and thereafter operated, certain coal-fired electricity generating units without first obtaining appropriate permits authorizing the modification and subsequent operation of the units, and without installing and employing the best available control technology to control emissions of sulfur dioxide, nitrogen oxides, and/or particulate matter,” as required by the Clean Air Act and applicable regulations.

As a result, large amounts of sulfur dioxide, nitrogen oxides, and particulate matter pollution were released into the atmosphere each year.

According to court records, Dairyland Power Cooperative “is rebuilding the 20 mile Genoa to La Crosse portion of its 161 kV Q1 transmission line” and “is purchasing the excess energy output from a new 368 kW solar photovoltaic installation at the City of Galena, Illinois Wastewater Treatment Plant . . . [and] purchasing the renewable energy output from a wind farm located near Lewiston, Minn.”

According to the U. S. Environmental Protection Agency, Dairyland Cooperative also agreed to invest approximately $150 million in pollution control technology that will protect public health and resolve violations of the CAA, as part of the injunctive relief of the settlement.

Wisconsin joins 36 other states in $200 million settlement agreement

Wisconsin Attorney General J.B. Van Hollen announced that he and 36 other state attorneys general reached a settlement agreement with Janssen Pharmaceuticals Inc., a subsidiary of Johnson & Johnson, totaling $200 million. Wisconsin’s portion of the settlement was $4,267,876.

In the complaint filed by the state of Wisconsin against Janssen Pharmaceuticals in Dane County Circuit Court, Van Hollen claimed that Janssen Pharmaceuticals had improperly marketed the antipsychotic drugs Risperdal, Risperdal Consta, Risperdal M-Tab, and Invega.

Specifically, Van Hollen alleged that the defendant “engaged in unfair and deceptive practices when it marketed Risperdal for unapproved or off-label uses.”

For example, Janssen Pharmaceuticals allegedly promoted Risperdal for off-label uses to geriatric and pediatric populations and targeted patients with Alzheimer’s disease, depression, dementia, anxiety, and depression, even though those uses were not approved by the U.S. Food and Drug Administration. Federal law prohibits promotion by pharmaceutical companies of their products for off-label uses. Doctors, though, may prescribe the drugs for such uses.

Furthermore, the defendant reportedly sent a form letter Nov. 10, 2003, downplaying any connection between the use of Risperdal and the development of diabetes. The letter apparently prompted the FDA to send a letter April 19, 2004, issuing a warning to Janssen Pharmaceuticals, stating its letter “misleadingly omits information about Risperdal, minimizes potentially fatal risks associated with the drug, and claims superior safety to other drugs in its class without adequate substantiation,” violating the Federal Food, Drug and Cosmetic Act.

In addition to the monetary settlement, the defendant agreed to modify how it promoted and marketed its drugs and agreed to refrain from false, misleading or deceptive promotion of the drugs. Specifically, the settlement prohibited the defendant from promoting its atypical antipsychotic drugs for “off-label” uses that the FDA had not approved.

A four-year long investigation reportedly was led by the Florida attorney general.

Hospital pays millions to settle wage dispute

This hybrid action alleged wage and hour violations as a collective action under 29 U.S.C. § 216(b) of the Fair Labor Standards Act and as a class action pursuant to Federal Rule of Civil Procedure 23 under Wisconsin’s state wage and hour laws.

The plaintiffs worked as nurses at St. Mary’s Hospital. Each nurse there works in a particular nursing unit and also “floats” to other units to meet patient needs. Nurses are classified as FLSA nonexempt and are paid on an hourly basis.

Each nurse working at St. Mary’s Hospital is subject to a meal break policy by which a half-hour meal period is automatically deducted from the nurse’s pay for each shift worked over five and a half hours. If a nurse does not take an uninterrupted meal break and wishes to get paid for this time, he or she must hit “cancel” at the end of a shift or complete a Human Resource Management Information Sheet to add the cancellation.

The plaintiffs alleged that the defendant’s automatic meal deduction policy caused the putative class members to spend time working without proper compensation, including overtime. They also claimed that nurses were unable to leave the premises during their unpaid half hour meal period. Plaintiffs additionally claimed that nurses were interrupted during meal periods by physicians, family members, coworkers and telephone calls. Thus, nurses worked during their meal periods but were not compensated for this time.

The case settled for $3,500,000, inclusive of attorney’s fees and costs. The average claim amount for each nurse was $1,639.64. The FLSA class was comprised of “all persons who have been or are currently employed by SSM as a nurse at St. Mary’s Hospital and who have been denied minimum wage and/or overtime wages for on duty meal periods at any time three years prior to the commencement of this lawsuit to the present.”

For settlement purposes only, the court also certified a Rule 23 Class comprised of “All persons who have been or are currently employed by SSM as a nurse at St. Mary’s Hospital at 700 S. Park St. in Madison during the period from Aug. 23, 2009 and April 13, 2013.”

Milwaukee firm lands client settlement years after workplace accident

The plaintiff Annmarie Reif had been working at Kohler Co., Sheboygan, for 18 years when she had a workplace accident July 8, 2008.

On that day, Reif drove a forklift on to one of site’s trailers to do her work, when the floor of the trailer gave way and the forklift fell through. She initially felt sore and had pain in her low back.

Approximately a week after the incident, she first visited with a Kohler doctor. He diagnosed a low back strain and started her on conservative treatment and restrictions from work. Reif continued to treat the bilateral low back pain, worse on the left, over the next six months with various Kohler doctors, all treating her as if she had suffered a low back strain.

Kohler had Reif examined by Dr. Richard Karr on Dec. 1, 2008 and March 17, 2009. His report essentially concluded that her presentation before him was inconsistent with her prior treatment; there was no radiographic treatment that indicated there was anything wrong with her; and that she reached maximum healing as of Jan. 8, 2009 with no permanent residuals.

With this report, Kohler terminated her worker’s compensation benefits after paying approximately $15,000 in medical bills and $4,000 in lost wages for a total of $19,000.

Following the accident, Reif had retained the services of a Milwaukee law firm to represent her in a potential third-party action against Markwardt Sales and Service, who leased the trailers to Kohler. In February 2009 General Casualty Co., Markwardt’s insurer, directed a letter to Reif’s attorney denying any liability for Reif’s injuries as once Markwardt leased the trailer to Kohler, it had no further obligation to maintain the trailer. Based on the denial of liability, the law firm in September 2009 declined to perform any further representation of Reif for her workplace injury.

In May 2010, Reif retained the firm of Warshafsky, Rotter, Tarnoff & Bloch SC to pursue a third-party claim. Through discovery the firm was able to clearly establish Markwardt was duty bound to maintain these trailers; that it failed for years to ever inspect the trailer; and the forklift going through the trailer floor was a result of Markwardt’s failure to do so.

In January 2010, a Sheboygan physician diagnosed Reif with sacroiliac joint dysfunction. She had two surgeries as a result.

Roughly one week before trial, her case with Markwardt and General Casualty settled, with the companies agreeing to pay $1,650,000.

Settlements reached in wrongful death action

A wrongful death action filed in Rock County Circuit Court ended with two settlements awarding the plaintiffs a total of $1,521,500.

After a June 4, 2010, altercation involving defendants James Monroe Humphrey and Richard Tyler Hall, Humphrey accidently fired a gun at a Jeep in which Samuel Aegerter, who was struck and killed, was a backseat passenger.

Humphrey pled guilty to first-degree reckless homicide, a class B felony. He was sentenced to 45 years in prison without eligibility for the Challenge Incarceration Program, Earned Release Program or Risk Reduction Program.

Amanda Aegerter, as special administrator, personal representative and power of attorney for the Estate of Samuel Aegerter and guardian of his two minor children, sought monetary damages.

The plaintiffs’ attorney asserted Hall and Humphrey were both negligent, “participating in a situation of mutual stimulation.” The plaintiffs’ attorney also argued the defendants acted in accordance with a common scheme or plan, as enumerated in Wis. Stat. § 895.045(2) and as a result, were jointly and severally liable for all damages resulting from their concerted action.

Before the plaintiffs reached the settlement agreements, the court dismissed the plaintiffs’ claims against Hall and two of the defendant insurance companies: Erie Insurance Exchange and Dairyland Insurance Co.

Under the terms of the first settlement agreement, defendant insurance companies agreed to pay $21,500 as settlement of all claims, except as to defendant James Monroe Humphrey personally, to compensate the minor plaintiffs for the loss of their father.

Under the terms of the second settlement agreement, Humphrey, stipulated that he acted negligently and his negligence caused the death of the plaintiffs’ decedent. He further stipulated that the decedent had earned approximately $26 per hour as an electrician and if the decedent had worked to the age of 67 years, he would have earned $2,000,960 not including overtime.

As such, the minor plaintiffs would be entitled to the wrongful death nonpecuniary limits of $350,000. However, in order to settle the matter without the need for additional litigation, the parties stipulated to judgment against Humphrey in the amount of $1.5 million.