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Federal Appeals Court Rules on ACA Individual Mandate

Posted on by Hamilton

The federal Fifth Circuit Court of Appeals ruled on Dec. 18, 2019, that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. However, the court remanded the case back to the federal district court in Texas to decide how much of the rest of the ACA is unconstitutional.

In December 2018, the district court ruled the entirety of the ACA unconstitutional because it found the unconstitutional individual mandate was “essential” to the ACA. Congress set the tax penalty at zero dollars, yet left in place the ACA’s individual mandate in the federal tax reform bill in December 2017. 18 other states, led by Texas, argued that the remaining mandate, without an active tax penalty, violates the Commerce Clause of the U.S. Constitution, and Congress does not have the constitutional authority to compel citizens to purchase health insurance. (Wisconsin initially led the lawsuit, but Attorney General Josh Kaul removed the state from the lawsuit earlier this year.)

While the appeals court agreed with the district court that the individual mandate is unconstitutional, it declined to strike down the entirety of the law. Instead, the court directed the district court to determine which other specific ACA provisions are “inseverable from the individual mandate.” The appeals court ruling was 2-1, with judges appointed by President George W. Bush and President Donald Trump in favor, and a judge appointed by President Jimmy Carter dissenting.

It is expected that the case will ultimately be appealed to the U.S. Supreme Court, but likely not until after 2020.

PFAS Update: AG Holds Listening Session in Marinette, Foam Bill Passes Committee

Posted on by Hamilton

The Wisconsin Legislature and state agencies are continuing to address PFAS chemicals. Recently, Wisconsin Attorney General Josh Kaul held a listening session on PFAS in Marinette. Meanwhile, an Assembly Committee has passed a bill to address PFAS in firefighting foams.

PFAS (per- and polyfluoroalkyl substances) are man-made chemicals found in many everyday products, including nonstick pans, cleaning products, paints, and firefighting foam. The most extensively studied PFAS compounds are PFOA and PFOS, which have been phased out of domestic manufacturing over the past decade. Competing studies debate whether or not these chemicals have negative health effects and, if they do, at what level they are harmful.

 

AG Listening Session

AG Kaul travelled to Marinette for two public listening sessions on Dec. 18.

In the Marinette area, Tyco and parent company Johnson Controls International began investigating PFAS in groundwater from its PFAS-containing firefighting foams in 2017. The Wisconsin Department of Natural Resources (DNR) referred Tyco to the Department of Justice (DOJ) for civil prosecution in June 2019, alleging Johnson Controls failed to report the contamination when it first detected PFAS in 2013.

Johnson Controls/Tyco are currently working with DNR on developing a full remediation plan, but the company has already set aside $140 million to address the contamination, installed treatment systems, began removing PFAS in groundwater, and provided bottled water and treatment systems to affected residents.

At the listening session on Dec. 18, Kaul said he couldn’t comment on the ongoing Tyco investigation but noted that DOJ takes environmental cases like these very seriously. The AG focused the listening session on hearing from the public how PFAS contamination in the area has impacted them.

 

Wisconsin Legislation

The Assembly Committee on Environment voted on Dec. 11 to recommend passage of AB 323, which would prohibit the use of firefighting foams that contain intentionally added PFAS in training, unless the testing facility has appropriate containment and treatment measures. DNR would determine containment and treatment measures by rule. The Assembly Committee on Environment held a public hearing on the bill on Sept. 3.

The Senate Committee on Natural Resources & Energy has also scheduled an executive session to vote on the bill on Jan. 8. 

Authored by Rep. John Nygren (R-Marinette) & Sen. Rob Cowles (R-Green Bay), the bill passed the committee on a bipartisan 8-1 vote. Rep. Gary Hebl (D-Sun Prairie) voted no, arguing the legislation does not go far enough to address PFAS.

Supporters of the bill include American Chemistry Council, American Petroleum Institute, Wisconsin Manufacturers & Commerce, Wisconsin Paper Council, and Wisconsin Rural Water Association.

Meanwhile, Wisconsin Democrats have introduced a separate bill that would circumvent rulemaking processes and require DNR to establish and enforce PFAS standards by rule for drinking water, groundwater, surface water, air, solid waste, beds of navigable waters, and soil and sediment if DNR deems it harmful to human health or the environment. SB 302/AB 321, also known as the “CLEAR Act,” has not yet received a hearing.

Looking ahead, Assembly Speaker Robin Vos (R-Rochester) told the Wheeler Report in December that bills from the Speaker’s Task Force on Water Quality will be announced in January. This bill package could include measures to address PFAS chemicals.

Continue reading about PFAS regulation in Wisconsin.

 

Supreme Court Candidates Debate at Forum

Posted on by Hamilton

On Nov. 19, all three candidates running in the spring Wisconsin Supreme Court election met for the first forum of the campaign. The winner of the spring election will serve a ten-year term beginning in 2020. Two candidates – Dane County Circuit Court Judge Jill Karofsky and Marquette University Law School professor Ed Fallone – are challenging incumbent Justice Daniel Kelly for the seat. Read more about the candidates.

Voters will narrow the race from three to two candidates in a primary on Feb. 18, 2020. The general election will be held on April 2, 2020. After this spring, the next Supreme Court election will not be until Chief Justice Roggensack is up for reelection in 2023. With Justice Brian Hagedorn sworn in in August, the Wisconsin Supreme Court currently sits at a 5-2 conservative majority.

At the November forum, candidates discussed their judicial philosophy. Fallone rejected broad judicial theories in general, arguing that “the law can’t be reduced to abstract principles.” Kelly said his judicial philosophy centers around the Constitution and the limited authority of the judicial branch, highlighting his use of rigorous logic to come to judicial conclusions. Karofsky touted her experience in the courtroom every day as a circuit court judge and said her judicial philosophy is treating everyone fairly and respectfully in the courtroom.

Candidates also discussed recusal rules, when justices should overrule precedent, individual rights at the state and federal level, impartiality, and how public opinion should influence judicial decision making.  

Watch the full Supreme Court candidate forum here.

WCJC Submits Comments on PFAS Scope Statements

Posted on by Hamilton

The Wisconsin Department of Natural Resources (DNR) held a preliminary public comment period in November seeking feedback on three scope statements that would regulate PFAS chemicals at the state level. Scope statements are the first step in the Wisconsin rulemaking process.

 

PFAS Background

PFAS (per- and polyfluoroalkyl substances) are man-made chemicals found in many everyday products, including nonstick pans, cleaning products, paints, and firefighting foam. The most extensively studied PFAS compounds are PFOA and PFOS, which have been phased out of domestic manufacturing over the past decade. Competing studies debate whether or not these chemicals have negative health effects and, if they do, at what level they are harmful.

Gov. Tony Evers approved the three scope statements on PFAS in August. The scope statements would:

  1. Adopt groundwater standards. (SS 090-19). Under this scope statement, DNR would likely promulgate the Department of Health Services’s (DHS) recommended standards of 20 ppt combined for PFOA and PFOS and a 2 ppt preventive action limit. This rule would apply to all regulated facilities that may impact groundwater.
  2. Adopt surface water quality standards for PFAS. (SS 091-19). Under the scope statement, DNR could also change Wisconsin Pollution Discharge Elimination System (WPDES) permit implementation procedures related to PFAS chemicals, including additional monitoring and new effluent limitations. Currently, DNR can address PFAS discharges in WPDES permits on a case-by-case basis. The proposed rule would set a uniform standard and procedures.
  3. Adopt maximum contaminant levels (MCLs) for drinking water. (SS 089-19). MCLs for drinking water would mostly affect municipal water systems.

 

Public Hearing & Comments

DNR held a public hearing on Nov. 12 to address all three scope statements. Testifying in support of the scope statements were Clean Wisconsin, Wisconsin Conservation Voters, and an individual from De Pere, Wis.

MEG Wastewater, an organization of owners and operators of wastewater facilities in Wisconsin, provided comments in support of the advisory committee to DNR as the department continues with the rulemaking process. MEG noted their support for regulations based on credible science. MEG is part of the Municipal Water Coalition, an alliance of groups representing both municipal water and wastewater utilities.

Also providing comments was Scott Manley, Executive Vice President of Wisconsin Manufacturers & Commerce, on behalf of the Water Quality Coalition, a coalition of industries, job creators, and taxpayers in the state, as well as scientists and legal scholars, which supports balanced, science-based environmental standards to regulate PFAS. WCJC is a participating member of the Water Quality Coalition.

The Water Quality Coalition recommended that DNR narrow the scope statements to regulate PFOA and PFOS only. As drafted, the scope statements provide DNR broad discretion to regulate any of the over 4,000 PFAS compounds in a single rulemaking process. Not all of these PFAS compounds are health hazards, and some are even federally approved for use by the Food & Drug Administration.

According to the Water Quality Coalition, the scope statements lack the required detail and specificity to comply with the administrative rulemaking requirements in Ch. 227. Furthermore, proposed rules seeking to regulate such a wide variety of compounds would make it unworkable for the public and Legislature to provide meaningful feedback on the practical application of the regulations.

WCJC individually provided written testimony outlining the liability issues associated with setting too strict of standards for such a broad array of chemicals. If DNR regulates under the scope statements as written, Wisconsin businesses, utilities, hospitals, and farmers could face millions of dollars in cleanup costs, legal enforcement action by state agencies, and lawsuits by plaintiff attorneys for the existence of potentially thousands of chemicals that have not yet been shown by federal or state agencies to cause negative human health effects. Setting any enforcement standards creates legal evidence of a significant public health threat, giving plaintiff attorneys the opportunity to successfully sue industry based on these standards without proving any actual occurrence of illness. Read WCJC’s full written comments.

Read all written comments here.

 

Next Steps

After the comment period, the DNR Board can approve the scope statements. DNR plans to ask the board for approval in January 2020. Once the board approves the scope statements, DNR can begin work on drafting the rules and economic impact analyses before sending the rule to the Legislature for review. At the Nov. 12 hearing, DNR estimated rules would be finalized and enforceable by 2022.

There will be multiple opportunities for public comment during the rulemaking process. WCJC and the Water Quality Coalition intend to continue advocating for balanced, science-based regulation of PFAS chemicals in Wisconsin.  

 

AG Kaul Joins Emissions Standards Lawsuit

Posted on by Hamilton

Wisconsin Attorney General Josh Kaul has joined a coalition of states and cities seeking judicial review of the federal Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) rules related to vehicle emissions standards.

The rules amend greenhouse gas and corporate average fuel economy standards and repeal California’s waiver for its state greenhouse gas and zero emission vehicle programs. Currently, some other states also have the option to follow California’s standards. The NHTSA rules would specifically implement the agency’s statutory authority to set national fuel economy standards that preempt state programs.

The attorneys general filed a petition for review of the agency actions in federal court on Nov. 15. Read the filing.  

Other recent multistate actions from Kaul include:

  • Joining a bipartisan coalition of states urging Congress to pass legislation establishing a veteran treatment court program in the federal Department of Justice.
  • Joining an amicus brief supporting Public Service Loan Forgiveness program borrowers seeking eligibility for loan forgiveness.

Read about previous AG multistate actions.

Christus Lutheran Church of Appleton v. DOT (Condemnation of Property)

Posted on by Hamilton

In Christus Lutheran Church of Appleton v. DOT (2018AP1114), the Court of Appeals District III held that when the Department of Transportation (DOT) independently decides to include additional items of compensation in a jurisdictional offer for property condemnation, DOT must obtain a new appraisal supporting the new items in the offer.

DOT sought to take several acres of Christus Lutheran’s land to expand a state highway. DOT provided Christus Lutheran with an initial offer of $133,400 for the land, supported by an appraisal. The appraisal considered but did not include severance damages, which cover the loss of value to the remaining property after the taking.

After Christus Lutheran did not accept the offer, DOT sent a revised offer of $403,000, which did include $159,574 in severance damages. Christus Lutheran did not accept the revised offer and advised DOT to proceed with the acquisition by eminent domain. 

Finally, DOT provided Christus Lutheran with a jurisdictional offer similar to the revised offer, and the property was transferred to DOT. Christus Lutheran filed this lawsuit seeking to void the offer and prohibit the acquisition because DOT failed to provide an appraisal supporting the jurisdictional offer.

2017 Wisconsin Court of Appeals case Otterstatter v. City of Watertown found, based on Wis. Stat. § 32.05(2)(b) and (3)(e), that an appraisal must be a “supporting part or fundamental ingredient of the jurisdictional offer.” In this case, the court found in favor of Christus Lutheran that the initial appraisal did not support the offer because the initial appraisal did not include the severance damages. Because DOT decided to include the severance damages independently of an appraisal, DOT violated the statutory requirements and intent that the state provide the property owner with a transparent, narrative appraisal of the taking.

Thus the court found that DOT must obtain a new appraisal in jurisdictional offers where it believes additional compensation beyond the bounds of the initial appraisal is warranted.

Hughes v. Allstate Indemnity Co. (Coverage Exclusion)

Posted on by Hamilton

In Hughes v. Allstate Indemnity Co. (2019AP1234), the Court of Appeals District IV held that homeowner’s insurance policy exclusions precluded coverage for water damage to the plaintiff’s basement.

Hughes’s basement sustained water damage after someone turned on a spigot and left it running without Hughes’s knowledge or permission. Hughes filed this lawsuit seeking coverage from his Allstate insurance policy for the damage.

The Allstate policy covered damage to Hughes’s home, with some exceptions. The policy specifically excluded coverage for water damage. The policy also provided no coverage for instances where there are two or more causes of loss to the property and the predominant cause of the loss is excluded.

The court agreed with Allstate that these two provisions precluded coverage for the water damage to Hughes’s home. The court found that the water itself, not the act of turning on the spigot, was the predominant cause of the loss. Because water damage was excluded from the policy, the policy did not provide coverage in this case.

Haynes v. LIRC (Discrimination Claim)

Posted on by Hamilton

In Haynes v. LIRC (2018AP1581), the Court of Appeals District IV upheld a Labor & Industry Review Commission (LIRC) decision dismissing a discrimination claim.

Plaintiff Sharon Haynes filed this claim alleging race and sex discrimination against Blain’s Farm & Fleet. Haynes claimed that Blain’s technicians intentionally failed to secure a tire on her vehicle and intended to cause her harm because she is an African-American woman.

LIRC found there was no evidence of race-based or gender-based discrimination. The court upheld LIRC’s decision.

The court found substantial evidence supporting LIRC’s determination that the technicians were not aware of Haynes’s race or gender and that the technicians had no race-based or gender-based discriminatory animus.

The court also upheld LIRC’s decision denying Haynes’s motion to present new video evidence, finding that the proposed new video clip would not have changed LIRC’s determination that no discrimination occurred.

Finally, the court rejected Haynes’s argument that the LIRC commissioners should have recused themselves due to bias.

Brenner v. National Casualty Co. (Excess Coverage)

Posted on by Hamilton

In Brenner v. National Casualty Co. (2018AP2252), the Court of Appeals District I held that Amerisure’s policy was in excess to the primary National Casualty policy covering the Milwaukee World Festival, where an injury to a contractor occurred.

National insured the Milwaukee World Festival. Amerisure insured Hunzinger Construction Co., which was contracting with Milwaukee World Festival, and the Amerisure policy included Milwaukee World Festival as an additional insured.

When an employee of Hunzinger sustained an injury on the Milwaukee World Festival premises, he filed this personal injury suit against both National and Amerisure. At issue in this case was the extent of Amerisure’s coverage.

Brenner settled his claim for an amount less than National’s personal injury limits. National argued Amerisure should share the defense and indemnification costs because both National and Amerisure were primary insurers of the Milwaukee World Festival. Amerisure argued it was an excess insurer.

The court agreed that Amerisure was an excess insurer liable for coverage only beyond the National policy limit. The National policy provided that its coverage was primary except when other primary insurance is available. The Amerisure policy provided that its coverage was excess unless a written contract requires it to be primary. Since no such contract existed, the Amerisure policy was excess coverage. Therefore, no other primary insurance was available, so National’s coverage was primary.

Superior Water, Light & Power Co. v. London Market Insurers (Environmental Contamination Coverage)

Posted on by Hamilton

In Superior Water, Light & Power Co. v. London Market Insurers (2018AP1926), the Court of Appeals District III found that an insurance policy’s provision on coverage for environmental contamination was ambiguous.

Several insurance companies (referred to by the court as London Market Insurers, or LMI) issued excess liability policies to Superior Water in 1970. In 2001, the Wisconsin Department of Natural Resources claimed that Superior Water was liable for cleanup of chemicals contaminating groundwater surrounding Superior Water’s site. In this lawsuit, Superior Water argues that the 1970 policies obligated the insurers to cover those cleanup costs.

The policy in question covered any “occurrence” of damage or destruction to third-party property, with “occurrence” defined as “one happening or series of happenings arising out of or caused by one event taking place during the term of this contract.” Superior Water and the insurers disputed whether the continuous exposure of groundwater to chemicals from the Superior Water site was an “event” that occurred under the policy period. Superior Water said the exposure of different groundwater to the chemicals was a new “event.” The insurers said an “event” would be a new release or spill that caused the contamination. According to the insurers, without a new release during the policy period, the contamination would not be covered.

The court found that the policy language was ambiguous. The court’s custom is to interpret ambiguous policy language against the contract drafter. In this case, it was unclear which party drafted the policy, so the court remanded for further proceedings.