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DWD loses jurisdiction over claim

“We reject Albrechtsen’s (and the Dissent’s) suggestion that subject matter jurisdiction can be switched ‘on and off’ at will, or that Wis. Stat. sec. 230.88(2)(c) permits jurisdiction to be initially possessed by the Commission, lost to the federal court and then regained by the Commission when the federal litigation ended.”

Hon. David G. Deininger
Wisconsin Court of Appeals

The Wisconsin Court of Appeals held on Oct. 13 that, once the Department of Workforce Development loses jurisdiction over an employee’s claim under the “whistleblower law” — because the employee also filed suit in court — jurisdiction cannot be regained with the dismissal of the court action.

In 1998, Steven J. Albrechtsen, a University of Wisconsin employee, filed a complaint with the Personnel Commission, alleging that University officials had retaliated against him for activities protected by the whistleblower law. A Commission investigator found probable cause on some but not all of Albrechtsen’s allegations.

In 2000, Albrechtsen informed the Commission, pursuant to sec. 230.88(2)(c), that he intended to pursue the claim in court, and asked the Commission to stay the proceedings. The University did not object and the Commission ordered the administrative proceeding held in abeyance pending the disposition of the federal lawsuit.

In federal court, Albrechtsen alleged both whistleblower claims, and federal civil rights claims. The University moved the federal court to dismiss the state-law whistleblower claims on the grounds that the administrative proceeding before the Commission was the exclusive means of pursuing violations of the law.

Albrechtsen conceded the court did not have jurisdiction, and the whistleblower claims were dismissed without prejudice.

Back before the Commission, the university then moved to dismiss the complaint for lack of jurisdiction. The Commission agreed and dismissed the case. Albrechtsen sought judicial review, but Dane County Circuit Court Judge Angela B. Bartell affirmed, as did the court of appeals, in a decision written by Judge David G. Deininger, and joined by Judge Charles P. Dykman. Judge Margaret J. Vergeront dissented.

At issue was sec. 230.88(2)(c), which provides that, if an employee commences “an action in a court of record,” alleging a whistleblower law violation, he must notify the Commission. The statute adds, “Upon commencement of such an action in a court of record, the [Commission] has no jurisdiction to process a complaint filed under s. 230.85 except to dismiss the complaint and, if appropriate, to assess costs under this paragraph.”

It was undisputed that Albrechtsen filed an action alleging a whistleblower violation, but he contended that the federal district court is not a “court of record” because it is not a “court of competent jurisdiction,” The court of appeals disagreed, finding that the legislature knows how to refer to “a court of competent jurisdiction” when that is what it intends.

The court also rejected Albrechtsen’s argument that the Commission, by holding the administrative proceedings in abeyance after he commenced the federal court action, implicitly ruled that its subject matter jurisdiction over his complaint would continue; the court found that because the issue of jurisdiction was not raised at that time, and thus, there was no implicit holding.

The court added that, even if the court had implicitly ruled it had jurisdiction, the ruling would be of no effect, citing State ex rel. R.G. v. WM.B., 159 Wis. 2d 662, 666, 465 N.W.2d 221 (Ct. App. 1990), for the holding that, “A judgment is void if the court rendering it lacked subject matter jurisdiction.”

What the court held

Case: Steven J. Albrechtsen v. Wisconsin Department of Workforce Development, No. 2004AP2130.

Issue: Can an administrative proceeding be held in abeyance while a court action alleging the same claim is pending?

Holding: No. Section 230.88(2)(c) requires that the proceeding be dismissed, and even if the commission erred by holding the proceeding in abeyance, it must be dismissed after the court action was dismissed and the parties returned to the administrative proceeding.

Counsel: David E. Lasker, Madison; Kirt Posthuma, Madison, for appellant; David C. Rice, Madison; Richard B. Moriarty, Madison, for respondent.

The court further rejected Albrechtsen’s argument that the purposes of the statute — preventing parallel litigation in two forums — is served by permitting the Commission to hold the action in abeyance, and resume jurisdiction over the action after the court action is dismissed.

The court wrote, “We reject Albrech-tsen’s (and the Dissent’s) suggestion that subject matter jurisdiction can be switched ‘on and off’ at will, or that Wis. Stat. sec. 230.88(2)(c) permits jurisdiction to be initially possessed by the Commission, lost to the federal court and then regained by the Commission when the federal litigation ended. As we have discussed, under sec. 230.88(2)(c), when Albrechtsen filed his federal action, the Commission lost jurisdiction and thereafter lacked the power to do anything other than dismiss the administrative proceeding. The statute does not say or even suggest that the Commission can stay its proceeding on a whistleblower complaint in deference to a parallel court action, and then resume the processing of the complaint once the court action has ended. Rather, the statute expressly and permanently ends all administrative processing of the complaint, regardless of the outcome in the alternative court forum. In short, the Commission lost all power to adjudicate Albrechtsen’s complaint on October 5, 2000, and nothing in sec. 230.88(2)(c) permits the Commission’s jurisdiction to be resurrected at a later time

After declining to address whether or not the administrative forum is the exclusive forum for litigating whistleblower claims, as the University argued in the federal court (which agreed), the court declined to find that the University should be either equitably or judicially estopped from challenging the Commis-sion’s jurisdiction.

Noting that Albrechtsen filed his federal action before the Commission granted the request to hold the administrative proceeding in abeyance, the court concluded, on the issue of equitable estoppel, “even if a lack of subject matter jurisdiction could be cured by a claim of [equitable] estoppel, we agree with the Commission’s determination that the record establishes Albrechtsen could not have reasonably relied on either its or the University’s actions when he commenced his federal action.”

Turning to judicial estoppel, the court found it also inapplicable, because the issue on which the University obtained dismissal in federal court — the administrative proceeding is the exclusive forum — was not the same issue as that before the Commission — whether the Commission lost jurisdiction. The court reasoned, “Regardless of whether the University’s position [in federal court] has merit, its arguments in support of its motions to dismiss both actions are not irreconcilably inconsistent.”

Accordingly, the court affirmed.

The Dissent

Judge Vergeront dissented, concluding that the statute is ambiguous, and that the purpose of the statute is served by exercising jurisdiction.

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Case Analysis

Vergeront reasoned, “When, as here, a claim ‘alleging matters prohibited under s. 230.83(1)’ is dismissed in the court action before adjudication in that forum because the parties believe that it must be adjudicated by the Commission, no duplication occurs if the Commission vacates its earlier dismissal order and adjudicates the claim.

Indeed, if the Commission does not do so, the employee never has his or her claim adjudicated at all. That is inconsistent with the express policy behind Wis. Stat. secs. 230.80-230.88: ‘to encourage disclosure of information [as defined in those sections] and to ensure that any employee employed by a governmental unit is protected from retaliatory action for disclosing information under [those sections].’ Wis. Stat. sec. 230.01(2). The legislature has expressly directed that we construe Wis. Stat. ch. 230 ‘liberally in aid of the purposes declared in s. 230.01.’ Wis Stat. sec. 230.02. I therefore conclude that, had the Commission dismissed Albrechtsen’s claim when he filed the federal action, the Commission would have had the authority to vacate that order after dismissal of the sec. 230.83(1) claim in the federal action.”

Vergeront continued, “Because in my view the Commission would have had the authority to vacate the dismissal order that it should have entered and to adjudicate Albrechtsen’s claim, I see no reason that it does not have the authority to adjudicate Albrechtsen’s claim after having ordered the claim held in abeyance rather than dismissing it.”

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David Ziemer can be reached by email.

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