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Court decides three issues of first impression

A Dec. 2 opinion from the Wisconsin Court of Appeals decides three issues of first impression.

First, if a party has invoked his Fifth Amendment right against self-incrimination during discovery, the court can bar him from testifying after he waives the privilege during trial.

Second, the victim of an intentional tort has no duty to mitigate his damages.

And third, the double damages provision of the Wisconsin Organized Crime Control Act (WOCCA) is remedial, so the entire damage award should be doubled.

The case involved a lawsuit by S.C. Johnson & Son, Inc. against various employees and transportation companies. The complaint alleged that the employees invited bribes and kick-backs from outside companies and, in exchange, submitted inflated invoices to S.C. Johnson on behalf of the companies.

The jury awarded S.C. Johnson $203.8 million, and the Court of Appeals affirmed, in an opinion by Judge Richard Brown.

Fifth Amendment

The court first held that the trial court acted within its discretion in barring one of the parties, Tom Russell, from testifying, because during discovery he had invoked the Fifth Amendment.

Lacking any Wisconsin precedent on the issue, the court relied most heavily on the Second Circuit’s opinion in U.S. v. Certain Real Prop. and Premises Known as: 4003-4005 5th Ave., Brooklyn, N.Y., 55 F.3d 78 (2d Cir. 1995).

The Court of Appeals adopted the Second Circuit’s reasoning that, “Invoking the privilege during discovery only to later withdraw the privilege may give the invoking party a decided advantage in that he or she can delay having to answer questions until after having had the opportunity to watch the adverse party’s case develop. It allows the invoking party to conceal information and then tailor the invoker’s own version of the events to meet the opposition’s theory of the case and the evidence garnered in support of it.”

Intentional Torts

Second, the court held that victims of intentional torts have no duty to mitigate damages.

Under Wisconsin law, there is a duty to mitigate both breaches of contract and negligence. But no previous Wisconsin case addresses intentional torts.

Relying heavily on a federal case from New York, the court held that there is no such duty when the tort is intentional. (Morgan, Olmstead, Kennedy & Gardner, Inc., v. Schipa, 585 F.Supp. 245 (S.D.N.Y.1984).)

The court explained, “It makes no sense to us that an injured party should be held responsible for negligently failing to discover that someone else was intentionally harming them. Instead, if one party is intentionally harming another, logic would hold that the duty of the victim should be less than it would be for contractual breaches or negligence. So unless the victim, with actual knowledge of the danger, intentionally fails to act in the protection of his or her own interests or is heedlessly indifferent to them, there is no duty to mitigate an intentional tort.”

WOCCA

Finally, the court held that in an action under WOCCA, the entire damage award may be doubled.

Again lacking Wisconsin precedent, the court looked to federal cases interpreting the federal counterpart to WOCCA, the Racketeer Influenced and Corrupt Organizations Act (RICO).

The statutes are both remedial and penal, and thus provide for both multiple compensatory damages and punitive damages.

Because the double damage provision correlates to the remedial purposes of the statute, the court held that it is to be liberally construed. Thus, it is proper to double the entire damage award.

One comment

  1. Looks like this case should have been “certified” to the Wisconsin Supreme Court. Once again, we see the true nature of the Court of Appeals is making law mixed with a small dash of error correction. If they can decide this case, they can decide any of the countless cases they “certified” to avoid doing their job.

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