Author: Hamilton

PSC Extends Utility Shut-Off Moratorium

Posted on by Hamilton

On July 24, the three-person Public Service Commission (PSC) voted 2-1 to extend the utility shut-off moratorium for only residential customers until September 1. In June, the Commission decided to lift the moratorium and utility disconnections were scheduled for delinquent customers starting on July 25. The moratorium was originally implemented by Governor Evers in March in response to the COVID-19 pandemic and high unemployment rates and originally applied to all customer classes, including commercial and industrial.

The Commission decided to revisit the issue again during their August 20 meeting. The PSC will continue to require utilities submit disconnection plans and other customer data including specifics on disconnection notices, arrears balances and deferred payment agreements. It is estimated that roughly 70,000 customers could have faced a utility shut-off if the Commission did not extend the moratorium.

The Commission will take comments from interested organizations regarding the utility shut-off moratorium in advance of their August 20 meeting.

COVID-19 Liability Update

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Wisconsin Civil Justice Council and its partners continue to push for liability protections for Wisconsin businesses as they reopen amid the COVID-19 pandemic. (See this column from WCJC President and National Federation for Independent Business Wisconsin State Director Bill G. Smith, which was featured on the U.S. Chamber Institute for Legal Reform blog and MacIver Institute.) 

Wisconsin’s Legislative Council recently issued a brief on businesses’ use of COVID-19 liability waivers. The report notes that Wisconsin courts are “generally skeptical of liability waivers” and would likely refuse to uphold them in future cases. With individual liability waivers likely off the table, it is even more important for Wisconsin to enact state level liability protections for Wisconsin businesses facing COVID-19 lawsuits.

As of early June, at least 2,700 COVID-19 related complaints have been filed across the U.S., according to JD Supra. Insurance complaints make up a large percentage of cases, as well as consumer complaints and labor and employment complaints. Meanwhile, mass tort advertising has increased amid the pandemic.

Stay tuned for more updates from WCJC on efforts to protect businesses from frivolous COVID-19 lawsuits.

WSBU v. Brennan & Bartlett v. Evers (Gubernatorial Vetoes)

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Released on the same day, WSBU v. Brennan (2020 WI 69) and Bartlett v. Evers (2020 WI 68) both involved challenges to gubernatorial vetoes. The court dismissed WSBU v. Brennan but declared 3 of the 4 challenged vetoe groupings in Bartlett v. Evers unconstitutional. 

Under the Wisconsin Constitution (Article V, Section 10), governors can partially veto provisions in appropriation bills, including biennial budget bills. Some limitations exist: a governor cannot partially veto individual letters to create a new word or create a new sentence by combining parts of two or more sentences. But otherwise, the Wisconsin Constitution gives the governor very broad veto authority.

WSBU v. Brennan

WSBU v. Brennan involved a challenge to two vetoes made by Governor Walker in the 2017-19 biennial budget. First, Governor Walker struck the “1, 2” from “December 31, 2018” (December 31, 2018), effectively delaying implementation of the provision to December 3018, or roughly a thousand years. In the second case, he struck a 1, 2, and 0, turning an implementation date of July 1, 2017 2018 to July 1, 2078, delaying it around 60 years.

Though it accepted it the Wisconsin Supreme Court declined to decide the case, choosing instead to dismiss it under “the equitable doctrine of laches”—which basically means WSBU waited too long to bring the case.

The court walked through a three-prong test where it considered the time it took to bring the case, the availability of notice that a lawsuit was coming, and potential reliance problems with overturning a completed budget. It concluded all these factors against WSBU.

Justice Rebecca Bradley, joined by Justice Kelly, dissented, arguing that the majority wrongly relied on the laches doctrine since the case involved a clear constitutional violation and that by taking the case, the court effectively agreed to decide it. No action previously implied budget veto challenges could only come while the budget was effective, and WSBU rightly expected the court to consider the merits of the case. Justice Bradley then went on to analyze the merits in her dissent, where she concluded that the vetoes were unlawful.

Bartlett v. Evers

Bartlett v. Evers involved challenges to four groups of vetoes by Governor Evers in the 2019–21 biennial budget. No majority opinion arose, but a majority of the justices did find three of the four vetoes unconstitutional. (They just did not agree why.)

Veto 1: The School Bus Modernization Fund
A series of vetoes changed a school bus modernization fund into an alternative fuel fund. Chief Justice Roggensack and Justices Ziegler, Rebecca Bradley, Kelly and Hagedorn found the vetoes unconstitutional.

Veto 2: The Local Roads Improvement Fund
Another series of vetoes removed conditions from a local road improvement fund, effectively changing it into a fund for “local grants” or “local supplements.” Chief Justice Roggensack and Justices Ziegler, Rebecca Bradley, Kelly and Hagedorn found the vetoes unconstitutional.

Veto 3: The Vapor Products Tax
Yet another veto altered a section that imposed a tax on “vapor products” by expanding the definition of vapor product to include liquid heated by a vaping device. Justices Ziegler, Rebecca Bradley, Kelly and Hagedorn found it unconstitutional.

Veto 4: The Vehicle Fee Schedule
Finally, another series of vetoes altered a vehicle fee schedule by changing the amount truck owners must pay to register their vehicles. Chief Justice Roggensack and Justices Ann Walsh Bradley, Ziegler, Dallet and Hagedorn found it constitutional.

Chief Justice Roggensack wrote about the vetoes:

¶11 “I conclude that the part approved by the governor, i.e., the consequences of the partial veto, must not alter the topic or subject matter of the “whole” bill before the veto. Stated otherwise, such a veto does not alter the stated legislative idea that initiated the enrolled bill. Therefore, Governor Evers could not use his partial veto power to change the school bus modernization fund into an alternative fuel fund.”

Justice Ann Walsh Bradley dissented from this position, stating:

¶115 “I would instead turn to and uphold our well-established precedent. It recognizes, time and again, that the Wisconsin governor’s veto power is incredibly broad… I conclude that our precedent inexorably leads to the determination that all four vetoes at issue…are constitutionally permissible exercises of the partial veto power.”

Justice Kelly agreed with Chief Justice Roggensack’s premise but took it farther, arguing the legislative veto has been interpreted wrong almost from the start, and that the ¶180 “powers of amending and vetoing are different things.” Amending belongs only to the legislature. Any action to that effect using the veto was unconstitutional.

Justice Hagedorn echoed some of Justice Kelly’s arguments about legislative law making, but did not take it as far, stating instead:

¶234 “While the governor’s partial veto power is incredibly broad, it should not be read to fundamentally upend the overall structure of our government embedded in our constitution. The constitution’s placement of law-creation in the hands of the legislature means we cannot permit a practice that turns the governor into a one-person legislature.”

 

SEIU Local 1 v. Vos (Separation of Powers)

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In SEIU Local 1 v. Vos (2020 WI 67) the Wisconsin Supreme Court upheld provisions from 2017 Wis. Act 369 and 2017 Wis. Act 370 (including legislative involvement in litigation, legislative review of proposed changes to security in the capitol, temporary suspension of administrative rules, and the codification of the non-deference doctrine from Tetra Tech v. DOR, 2018 WI 75) as facially constitutional, with the exception of sections that attempted to give legislative control of guidance documents, which was found to be unconstitutional.

Facts:

After the 2018 election, and prior to the change in governor, the Wisconsin legislature passed 2017 Wis. Act 369 and 2017 Wis. Act 370. These bills limited the powers of the Attorney General, as well as administrative agencies, while giving the legislature more oversight over both. The bills were signed into law by Governor Walker and were challenged as facially unconstitutional.

Decision: 

This was a unique decision, as it had two separate majority opinions; one written by Justice Hagedorn, and the other by Justice Kelly. Justice Hagedorn’s opinion upheld the facial constitutionality of all the provisions that were properly challenged and briefed. It is important to note that the challenge to the statutes were facial only, which means that SEIU was responsible for showing that these statutes have no possible, legitimate constitutional application. This is a hard burden to meet, and as such the challenge to the statutes all failed with one exception.

Justice Kelly’s opinion struck down one portion of the statutes as unconstitutional. Focusing on the separation of powers, Justice Kelly found the Legislature’s attempt to regulate guidance documents from administrative agencies was a violation of the separation of powers. Justice Kelly makes clear that guidance documents have absolutely no force of law behind them, and therefore are only the executive’s thoughts about particular laws or applications of the law. Because they are simply “thoughts”with no power behind them, it violates separation of powers for the legislature to attempt to regulate the thoughts of the executive.

Concurrences and Dissents

As stated before, this was a unique decision. Hagedorn’s opinion was joined unanimously in small part, with the rest of his opinion joined by Roggensack, Ziegler, Rebecca Bradley, and Kelly,with Ann Walsh Bradley and Dallet dissenting. Kelly’s opinion was joined by Ann Walsh Bradley, Rebecca Bradley, and Dallet, with Roggensack and Hagedorn dissenting. Ann Walsh Bradley and Dallet would have held most all of the statutes as unconstitutional. While both Hagedorn and Roggensack took issue with Kelly’s finding of guidance documents as solely within the power of the executive.

Latest AG Actions: AG Kaul Opposes Trump Administration Education Proposals, Infrastructure Permitting Deregulation

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Wisconsin Attorney General Josh Kaul recently joined multistate coalitions opposing moves by President Trump’s administration amid COVID-19.

On June 29, Kaul joined a coalition of 15 state attorneys general in a letter opposing President Trump’s executive order on expediting infrastructure investments during COVID-19. Trump issued Executive Order 13927 on June 4, instructing federal agencies to use emergency authority to bypass some regulations to speed up infrastructure projects and facilitate economic recovery. In their letter of opposition, the AGs argue that agencies cannot use their emergency powers to bypass the environmental reviews unless there is an immediate threat to public health. As such, the AGs request the withdrawal of the executive order.

On July 7, Kaul joined five attorneys general in a multistate lawsuit challenging the U.S. Department of Education’s promulgation of a rule allow private schools to utilize federal corona virus relief funding in the CARES Act. The AGs argue that the Department misinterpreted CARES Act requirements and thus the rule should be permanently enjoined

On July 13, Kaul joined a coalition of 18 attorneys general in a lawsuit challenging U.S. Immigration & Customs Enforcement’s (ICE) directive that international students may not live in the U.S. and take all their classes online.The lawsuit claims the directive is arbitrary and capricious, is in violation of the Administrative Procedure Act, and imposes significant economic harms and health risks on international students and universities. UW System President Tommy Thompson said he fully supported Kaul’s actions on the ICE rule. The Trump administration withdrew the rule on July 14.

Papa v. DHS (Act 21 Explicit Authority Requirement)

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In Papa v. DHS (2020 WI 66), the Wisconsin Supreme Court ruled that DHS’s practice of recouping wages from Medicaid providers for minor documentation errors fell outside the boundaries of its explicit statutory authority.

Facts

In Wis. Stat. § 49.45(3)(f)1.-2, the Wisconsin Legislature authorizes the Department of Health Services (DHS) to audit in-home Medicaid providers for fraud or overpayment and recoup any funds paid in error. But under a DHS policy dubbed the “Perfection Rule,” auditors began recouping payments for minor imperfections in documentation.

For example, one in-home Medicaid providerdid not bill a minor patient’s parent’s insurance since it was previously established the insurance would not cover her services. Even though she indisputably did the work and received payment for it, DHS recouped her payments.

The Perfection Rule led to many providers declaring bankruptcy and leaving the profession altogether after DHS demanded hundreds of thousands of dollars in previously paid wages.

Decision

A unanimous court (Justice Hagedorn did not participate) found DHS exceeded the boundaries of its explicit authority when it recouped funds for documentation errors for work with no evidence of fraud or overpayment. Under Wisconsin law, administrative agencies can only act with the authority explicitly granted to them by the Wisconsin legislature. Wis. Stat. §227.10(2m).

In this case, the court established clearly for the first time that all inquiries into the lawfulness of an agency’s action must begin with its explicit authority. Wis. Stat. §49.45(3)(f)1.-2 allows DHS to recoup where the Medicaid provider cannot prove the work was done. The statute did not specify that payments could be recouped for less than fraud or overpayment, nor did any administrative rule. Accordingly, the court held the Perfection Rule fell outside DHS’s explicit authority

Commercial Docket Pilot Project Expands

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The Wisconsin Supreme Court recently ordered the extension and expansion of the state’s Commercial Docket Pilot Project. The order extends the length of the pilot for two additional years and expands the project to District 10, District 2 and Dane County. These regions, in addition to existing regions District 8 and Waukesha County, will now have commercial docket judges assigned to commercial docket cases.

Wisconsin’s Commercial Docket (a.k.a. Business Court) Pilot Project began in July 2017. The Commercial Docket allows parties filing large claim and commercial cases to transfer their cases to specific judges with business experience for expedited resolution.An April 2019 expansionof the pilot project allowed parties filing commercial cases in any Wisconsin county to transfer their cases to the Commercial Docket.
 
 
 

Town of Delafield v. Centra Transport Kriewaldt (Federal Preemption of Weight Limits)

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In Town of Delafield v. Centra Transport Kriewaldt (2020 WI 61), the Wisconsin Supreme Court held that federal transportation law does not preempt the town’s seasonal weight restriction on certain roads.

 

Facts

Delafield posted signs identifying a seasonal weight restriction prohibiting vehicles over six tons from driving on designated town roads. A Central Transport delivery truck over six tons was subsequently issued a citation for driving on one of the designated roads while making a delivery to a Delafield resident.

Federal law (U.S. Code Title 49 s. 31114(a) and Title 23 s. 658.19) requires towns provide “reasonable access” between the interstate and terminals. Central Transport argued that the federal transportation law preempts the town’s weight limit because it did not allow Central Transport reasonable access between the interstate and the place of delivery in the town. Furthermore, Central Transport said federal law requires town weight limits be based solely on safety considerations, and Delafield’s limits were based on protecting roads during spring weather.

 

Decision

The court found that Delafield did grant “reasonable access” because it provided adequate notice and a permit to exempt certain uses of the road from weight limits.

The court further found that Delafield’s weight limit did not need to be grounded solely in safety considerations. Federal law does provide an exemption for towns to impose additional safety-based weight limits for certain vehicles, but towns can impose limits for other reasons as long as they provide reasonable access.

 

Concurring Opinion

 In a concurring opinion, Justice Kelly (joined by Justice R. Bradley) agreed with the court’s outcome but criticized its failure to define a uniform standard of “reasonable access.” The concurring opinion would have instead ruled against Central Transport because its destination in Delafield was not a “terminal” to which the federal law at issue requires access.

 

U.S. Chamber Institute for Legal Reform Brief Examines COVID-19 & Public Nuisance Lawsuits

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The U.S. Chamber Institute for Legal Reform (ILR) recently released a new brief examining the potential for plaintiff attorneys to use creative “public nuisance” theories to seek damages against businesses for COVID-19.

With the widespread nature of the global pandemic, it is likely that plaintiffs will seek extensive damages through traditional tort claims and contract breaches. But the ILR paper points out that litigators could also turn to the less common, but growing, public nuisance theory to seek compensation from businesses. Plaintiffs bringing these types of claims argue businesses are responsible for spread of the virus and related injuries.

Lawsuits using public nuisance theory in the context of the COVID-19 pandemic have already been filed against defendants including Smithfield Foods and McDonalds. The ILR paper suggests that state and local governments could be future defendants for these types of public nuisance lawsuits.

ILR argues that COVID-19 public nuisance claims are outside the traditional scope of the public nuisance theory, and therefore these types of cases should be dismissed. The brief argues that legislators, executives, and agencies – not courts – are better positioned to address the public policy challenges of COVID-19. The international scale of the pandemic prevents courts from being able to address the problem comprehensively, and policymakers can provide alternative relief for plaintiffs seeking damages.  

ILR and American Tort Reform Association are both closely watching the use of public nuisance theory in COVID-19 and in other areas of litigation, such as climate change, opioids, PFAS chemicals, and lead paint. Read more about previous ILR and ATRA public nuisance research.

Leg Council Memo on Worker’s Comp & COVID-19

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Wisconsin Legislative Council recently released an issue paper overviewing employer liability for employees diagnosed with COVID-19 after returning to work.

The paper explains that Wisconsin’s Worker’s Compensation Act provides that employee injuries sustained from an illness or infection are coverable by Worker’s Compensation, but employees must prove they became ill in the course of their employment. Employees seeking Worker’s Compensation coverage for a COVID-19 diagnosis must prove their illness was caused by exposure at work. Injuries including COVID-19 are covered whether or not the employer was negligent.

The Worker’s Compensation Act provides an exclusive remedy for employees who are injured in the course of their employment, meaning that employees may not bring separate actions outside of the Worker’s Compensation system against their employer for an employment-related injury. However, employees may still bring actions against third parties other than their employer, if the third party is at least partially responsible for their injury. Employees must prove that the third party’s negligence led to their injury, which could include COVID-19 exposure.

The widespread COVID-19 pandemic leaves employers and third parties – even those following government recommended best practices – open to significant liability if their employees or customers contract the virus. A recent poll showed that one-third of employees would sue their employer over contracting COVID-19.

To protect employers from civil claims filed outside of the Worker’s Compensation system, Wisconsin Civil Justice Council, Wisconsin Manufacturers & Commerce, the Wisconsin Chapter of the National Federation of Independent Business, and other business associations are seeking COVID-19 liability protections for Wisconsin businesses as the state continues its economic restart. Read more about efforts to enact state level liability protections at https://www.wisciviljusticecouncil.org/.