Assembly Bill 862, authored by Rep. Dana Wachs (D-Eau Claire), and Senate Bill 723, authored by Sen. Kathleen Vinehout (D-Alma), would have reversed a major liability reform priority from last session relating to fraud in asbestos lawsuits involving personal injury trusts.

On March 27, 2014, Gov. Scott Walker signed 2013 AB 19 into law as 2013 Wisconsin Act 154. The act provides for greater transparency by:

• Requiring asbestos plaintiffs to disclose any and all claims that they have filed or will file with asbestos trust funds, along with all of the documents and information that support the trust claims.
• Requiring judges to admit trust claims and supporting materials into evidence at trial; prohibiting plaintiffs from spuriously alleging that trust claims and their supporting documents are privileged.
• Providing defendants with a powerful tool to ensure that plaintiffs file and disclose all possible claims with asbestos trusts. Act 154 authorizes defendants to identify trust claims that the plaintiff could and should file. If a judge agrees, the case is stayed until that claim is filed and disclosed.

For more information on this issue go to the Wisconsin Civil Justice Council’s page on Limiting Double-Dipping in Personal Injury Cases.

Senator Frank Lasee (R-De Pere) and Representative Mary Czaja (R-Irma) introduced Senate Bill 286 to reform Wisconsin’s long standing “dog bite” statute. The legislation, supported by WDC, was signed into law on November 11, 2015, as 2015 Wisconsin Act 112.

Under prior law, Wis. Stat. § 174.02(1)(b), dog owners were liable for double damages for dogs that cause injury to people, domestic animals, or property if they have previously done so. The prior law did not take into account the severity or type of the damage done. For instance, a dog could cause minor property damage, which would count as the first bite, and then cause physical damage to an individual on the second bite. The owner would be liable for double damages for the second incident despite the innocuous nature of the “first bite.”

The most important change in this act is to the double damages provisions. Now, an owner may only be liable for double damages for injuries caused by their dog if a dog bites a person with “sufficient force to break the skin and cause permanent physical scarring or disfigurement” if the owner knew the dog had previously done so. That is, both bites must break the skin and cause permanent scarring or disfigurement and the owner must have known of the first bite.

Act 112 also increases the monetary forfeitures (i.e., penalties imposed by a governmental entity) for dog owners. Pre-Act 112, for first time damage to “a person, domestic property, deer, game birds or the nests of eggs of game birds” the maximum forfeiture was $500. Act 112 allows for up to $2,500. Pre-Act 112, the maximum penalty for subsequent injuries for owner with notice of the first injury was $1,000. Under Act 112, the maximum penalty is raised to $5,000.

Act 112 also changes who can request a court to order that a dog be killed. Under prior law only the state or a municipality may ask a court to order a dog be killed if the dog caused serious injury to a person or domestic animal on at least two separate occasions. Under Act 112, in addition to the state and municipality being able to make this request, a person injured by the dog or whose child was injured by the dog, or whose domestic animal was injured by the dog may also make this request.

In December 2015, Sen. Chris Kapenga (R-Delafield) and Rep. Mike Kuglitsch (R-New Berlin) introduced Senate Bill 405/Assembly Bill 539 relating to how a jury determines damages relating to medical costs arising from injuries. The bills would allow the introduction into evidence of both the amounts billed and the amounts paid for such services. WDC supported this legislation that failed to pass this session.

The current Wisconsin collateral source rule holds that the amount billed by medical providers is the measure of the reasonable value of medical expenses in personal injury actions, and the defendant may not introduce evidence of the amount actually paid by third parties, such as health insurers, even though the amount actually paid is often a fraction of the billed amount.

Both bills had a public hearing. The Senate Committee on Judiciary and Public Safety recommended SB 405 for passage on a party-line vote of 3-2. Neither bill made it to the floor and are dead for this session.

Strong opposition to the bills, in addition to the plaintiff’s bar, came from Wisconsin health insurers. Among other concerns, the health insurers’ fundamental problem was using paid medical expenses as the measure of damages could reduce the amounts they could recoup through subrogation for their health care coverage.

For a history of Wisconsin’s collateral source rule, go to Wisconsin Defense Counsel Journal (Spring 2013): Legislation Introduced Will Allow Juries to See Evidence of Collateral Source Payments When Determining Medical Expenses in Personal Injury Cases.

Earlier this session, WCJC accomplished one of its major objectives in the 2015-2017 state budget with the repeal of Wis. Stat. §20.931, Wisconsin’s “False Claims for Medical Assistance Act”. See WCJC’s letter to Gov. Walker.

The act allows private individuals, unaffiliated with the government, to sue private businesses alleging fraud against the state’s medical assistance program. The act rewards private individuals for filing these actions by providing that the person who brings a private cause of action may be awarded up to 30 percent of amounts recovered in addition to expenses, costs, and reasonable attorney fees. While the original intent of the act, to root out fraud, is admirable this law was ineffective and unnecessary.

The act, originally created in the 2007-2009 state budget act, is ineffective because the Department of Justice (DOJ) proactively prosecutes these claims on its own. Furthermore, DOJ has stated the repeal of the act could increase recoveries for the Medical Assistance program because the state will not have to pay the 30 percent “bounty” to the whistleblowers who bring a private cause of action.

The repeal of this act will not discourage legitimate whistleblowers from bringing information about fraud forward. There are already other avenues in place for whistleblowers to contact state officials, anonymously if need be, such as the governor or attorney general and report fraud. Studies have also shown that whistleblowers with legitimate claims do not have a profit motive and thus the lack of a financial award is unlikely to result in less whistleblowers coming forward. Thus the act is unnecessary.

Repeal of the act was included in the Joint Finance Committee motion #495, the committee’s omnibus motion on Medical Assistance. The motion was adopted by the committee on Thursday, May 21, 2015.

Assembly Bill 862, authored by Rep. Dana Wachs (D-Eau Claire), and Senate Bill 723, authored by Sen. Kathleen Vinehout (D-Alma), would have reversed a major WCJC priority from last session relating to fraud in asbestos lawsuits involving personal injury trusts. WCJC opposed AB 862/SB 723. Both bills died in committee.

On March 27, 2014, Gov. Scott Walker signed 2013 AB 19 into law as 2013 Wisconsin Act 154. The act provides for greater transparency by:

• Requiring asbestos plaintiffs to disclose any and all claims that they have filed or will file with asbestos trust funds, along with all of the documents and information that support the trust claims.
• Requiring judges to admit trust claims and supporting materials into evidence at trial; prohibiting plaintiffs from spuriously alleging that trust claims and their supporting documents are privileged.
• Providing defendants with a powerful tool to ensure that plaintiffs file and disclose all possible claims with asbestos trusts. Act 154 authorizes defendants to identify trust claims that the plaintiff could and should file. If a judge agrees, the case is stayed until that claim is filed and disclosed.

For more information on this issue go to WCJC’s page on Limiting Double-Dipping in Personal Injury Cases.