Collateral-source change left by the wayside
One of the biggest legal stories of 2016 actually involves something that did not happen.
Going into the legislative session that started last year, tort reform advocates had set their sights on eliminating Wisconsin’s collateral-source rule. The rule generally prevents a defendant in a personal-injury case from introducing evidence showing that the plaintiff’s bills were negotiated down by an insurance company.
Critics of the collateral-source rule maintain that because insurance providers often pay medical providers less than the full amount on a bill, personal-injury defendants similarly should not be obliged to compensate plaintiffs for the full amount.
Defenders of the rule counter that, without collateral sources excluded, plaintiffs will gain an unfair benefit; that is, they will find themselves liable for less simply because they were lucky enough to have injured someone who has good insurance.
After a series of far-reaching tort changes were pushed through the state Legislature during Gov. Scott Walker’s first four years in office, the collateral-source rule was one of reform advocates’ few pieces of unfinished business. Once again in 2016, though, the proposed change died amid arguments that health-insurance premiums might skyrocket if plaintiffs’ ability to collect were reduced
With a new legislative session starting next year, tort-reform advocates’ mantra is likely to be “try, try again.”
Lead paint lawsuits
When Republicans took total control of Wisconsin’s state government in 2011, one of their first priorities was to set limits on a Supreme Court ruling that they argued could make paint manufacturers indiscriminately liable for lead-paint poisoning.
Five years later, the fight has still not ended.
In 2011, GOP lawmakers had been able to quickly pass a tort-reform law stipulating that the only way a plaintiff could receive compensation from a paint manufacturer would be to link that manufacturer’s product directly to an instance of lead poisoning. Questions soon arose, though, over whether the law would apply only to new cases or also to suits filed before the new standards had taken effect.
Republicans tried to provide an answer in 2013 by passing another law, one explicitly making the law from two years before apply retroactively. That, though, wasn’t the end of the perplexity.
What about lawsuits that had actually been filed before the retroactive law from 2013 was in effect? What, in particular, about Yasmine Clark, a Milwaukee who had filed a suit over harm she had suffered after being exposed to lead paint in at least two homes before she had turned 10?
Her lawsuit, filed in 2006, went before the state Supreme Court this year in a case that essentially asked if the Legislature should have unlimited ability to make laws retroactive. The high court deadlocked over that question in April, sending Clark’s dispute to the state court of appeals for resolution.
Court puts dead man’s statute to rest
With the Wisconsin Supreme Court’s decision in October to repeal the state’s dead man’s statute, the more-than-a-century-old statute will be officially put to rest next year.
The dead man’s statute prevents the admission of testimony about a transaction if one of the parties involved has died. The rule stems from the common-law notion that false testimony can more easily get into court if one of the people most capable of disputing it is no longer among the living.
Dead man’s statutes are now often considered antiquated, leading many states either to repeal or amended them.
In Wisconsin, the proposal to repeal the statute was brought forward by the Judicial Council.
In general, trusts and estates litigators are more likely than other sorts of lawyers to encounter the dead man’s statute in their practices.
Wisconsin’s dead man’s statute, which was codified in 1858, has long been among the most expansive in the country, even though state courts began restricting its use in 1970.
The Judicial Council, for its part, began calling for the statute’s repeal as early as 1973, when it petitioned the high court to adopt rules of evidence.
High-capacity wells and the DNR
One of the biggest debates in the Wisconsin Legislature in recent years has been over the state’s ability to regulate high-capacity wells.
Attorney General Brad Schimel stepped in with an opinion he hopes will make it clear the Department of Natural Resources and other agencies have only the regulatory powers that have been explicitly granted them by the state Legislature.
Republican lawmakers had tried to do the same with legislation passed five years before. Under a law from 2011, state officials were no longer to evaluate a newly proposed high-capacity well by its likely “cumulative impact;” that is, by how it would interact with existing wells and what the total effect on the environment would be.
Rather, regulators were to have the authority only to set conditions on the location, depth, pumping capacity, rate of flow and ultimate use of high-capacity wells. Legislators’ plans were complicated, though, by a ruling the state Supreme Court handed down the same year.
In Lake Beulah Management District v. Department of Natural Resources, the court found that the DNR does in fact have the authority to consider a proposed well’s cumulative impact. Hoping to clarify matters, Schimel released an opinion in May arguing that the Legislature’s law from 2011 had not been among the matters up for consideration in the Lake Beulah case. For that reason, the Supreme Court’s ruling had no effect on the law curtailing the DNR’s regulatory powers.
Unlike a court ruling, Schimel’s opinion does not set a binding precedent. Still, as the state’s law-enforcement official, Schimel holds great sway over the interpretation of statutes and rules.
Justice Dan Kelly’s appointment
Gov. Scott Walker surprised many in the legal profession when he chose a little-known Waukesha attorney to take the place of Justice David Prosser on the state Supreme Court.
In picking Dan Kelly to take the bench seat left open by Prosser’s retirement, Walker passed over various insider favorites like Mark Gundrum, a court of appeals judge who had served alongside the governor in the state Assembly. Kelly, in fact, had no judicial experience before becoming a Supreme Court Justice.
What he did bring to the position were his conservative credentials. His resume listed time spent both as president of the Milwaukee Lawyers Chapter of the Federalist Society and as a member of the litigation-advisory board of the Wisconsin Institute for Law and Liberty. Both of those groups are widely perceived to be right-leaning.
More than anything, Kelly’s appointment has reaffirmed the Supreme Court’s 5-2 conservative majority. Kelly, 52, is poised to be on the bench at least until 2020, when he will have to go before voters if he wants to keep his seat.
Death of Judge Randa
An influential position at the federal court for the Eastern District of Wisconsin was left vacant in September with the death of Judge Rudolph Randa.
Randa, who was 76 at the time, was a Milwaukee native who had earned his law degree from the University of Wisconsin Law School. His decisions over the years caused him to be viewed by many as an ally of conservatives and their causes.
In 2014, Randa handed down a ruling that placed a block on the secret John Doe probe that public prosecutors were conducting into Walker’s campaign from two years before to avoid being recalled from office. An appeals court overturned that decision and sent the case back to the Wisconsin courts.
Randa’s death means there are now two openings on federal benches for Wisconsin judges. Besides Randa’s former seat at the Eastern District of Wisconsin, there is an unfulfilled position at the 7th Circuit Court of Appeals.
How quickly those spots will be filled is an open question. With the Republican landslide in the recent election, the GOP could have a fairly easy time getting a candidate through the appointment process.
Still, with the often-rancorous partisan battles of recent years, it seems unlikely that Democrats are going to simply acquiesce in Republicans’ plans.
Rollout of e-filing requirements
Wisconsin began rolling out mandatory electronic filing for certain circuit court cases in May, starting in Dodge County. Twenty-three counties now require that cases involving paternity, civil, family and small-claims matters be filed electronically.
Some counties have started accepting electronic filing for criminal cases. To file electronically, attorneys must have an e-filing account with the state court system and a word processor that can convert files into PDFs.
Although the changes are now limited to certain counties, they or something like them will eventually be in place throughout the entire state. The Wisconsin Supreme Court in April approved a rule change requiring all state courts to require electronic filing by 2019. The new system is being phased in county by county.
In July, a rule change went into effect allowing attorneys to have trust accounts that accept certain electronic payments such as credit cards and PayPal.
One goal of the change was to prevent lawyers from being subject to burdensome recordkeeping requirements. Still, lawyers find themselves crossways with the Office of Lawyer Regulation if they fail to provide trust-account records when asked.
In those cases, the presumption will be that the requirement to hold money in trust was not met. Lawyers will then have the burden of proving that they are not in the wrong.
Before the change, the old rules had placed a blanket ban on electronic transactions, and lawyers were under an obligation to keep client ledgers, transaction registers and other specific types of paper records.
Koschnick named director of state courts
After a long wait, the Wisconsin Supreme Court got around to appointing someone to oversee the administrative duties required to run the state’s court system.
The justices appointed Jefferson County Circuit Judge Randy Koschnick in November as the new director of state courts. He will take over on Aug. 1, succeeding John Voelker, who left in 2014.
Denis Moran has served as interim director while the justices searched for a permanent replacement.
Koschnick has served since 2012 as chief judge of the Third Judicial Administrative District, which includes Jefferson, Ozaukee, Washington and Waukesha counties. He ran unsuccessfully against incumbent state Supreme Court Justice Shirley Abrahamson in 2009.
He was also in the running to fill Justice David Prosser’s spot after Prosser announced his retirement earlier this year.
Before becoming a judge, Koschnick was an assistant state public defender. He earned his law degree from Hamline University School of Law in St. Paul, Minn.
7th Circuit strikes class-action waiver
Can Verona-based Epic Systems Corp have employees sign away their right to band together and file a class-action lawsuit over unpaid overtime?
The 7th Circuit in May said “no,” handing a victory to workers’ rights advocates. The federal appeals court’s decision struck down an agreement that Epic had had its employees sign, forcing them to take employment disputes individually before specially appointed arbitrators.
The U.S. Supreme Court has recently found that such agreements are enforceable, expanding the interpretation of the Federal Arbitration Action to extend to agreements not just between commercial parties but also between companies and consumers.
However, those cases dealt with state laws that were meant to prohibit agreements forcing consumers to settle disputes with companies outside of court. The Epic case, instead, involves a federal labor law, specifically the National Labor Relations Act.
Epic has appealed the 7th Circuit’s ruling, so the ball is now with the U.S. Supreme Court. It is expected to discuss Epic’s appeal in January.
Wisconsin Law Journal associate editor Dan Shaw also contributed to this report.