In their Feb. 22 session, the Assembly passed AB 773, which contains a number of important civil litigation reforms, including discovery and class action rules. The bill passed the Assembly on a voice vote and has been messaged to the Senate.

AB 773 aligns Wisconsin’s civil procedures for discovery and class actions to the corresponding federal rules. The modernization of these court procedures, mostly aimed at costly discovery practices, will reduce litigation costs for businesses, as well as state and local governments who must spend taxpayers’ dollars responding to abusive discovery practices.

Common-sense reforms under the bill will:

• Prevent litigants from abusing the discovery process to leverage a higher potential settlement or engage in a “fishing expedition.”
• Require notice of third-party litigation financing. Such third-party finance can increase the cost of litigation and cause suits to be brought that would not otherwise have been financially justified.
• Limit discovery of electronically stored information (ESI) to address the escalating volume of ESI that is now one of the most significant discovery-related costs.
• Allow parties to appeal a trial court’s decision to certify a class in a class action lawsuit.
• Lower the statute of limitations for certain claims.
• Prohibit the Department of Revenue from entering into contingency fee arrangements with third parties in unclaimed property audits. Working under contingency fee arrangements incentivizes aggressive approaches to audits that unfairly increase costs for businesses in Wisconsin.

The Substitute Amendment passed by the Assembly makes the following changes to the original bill, while keeping the rest of AB 773 intact:

• Removes lawsuit lending.
• Removes two of the class action provisions (“no-injury” class actions and “ascertainability”) but keeps the third provision allowing an interlocutory appeal of the trial court’s decision to certify a class.
• Amends the five-year “lookback” provision by exempting medical records, vocational records, and educational records.
• Amends language dealing with proportionality of discovery requests to directly mirror language contained in the federal rules.

Unfortunately, the legislation has met some resistance in the Wisconsin Senate. Specifically, Senator Van Wanggaard (R-Racine) has voiced his opposition to the legislation, going so far as to call the bill “unethical” in an interview with Wispolitics.com. Yet, as explained in a WCJC “Myths v. Facts” memo responding to the plaintiff attorneys’ arguments, AB 773’s language is a common-sense reform that does not give parties free rein to destroy evidence in a lawsuit.

WCJC is urging the Wisconsin Senate to take up and pass AB 773 when it returns for what is likely to be their last day in session on March 20.

The bill is supported by over 30 Wisconsin business organizations.