Pluck Policy from Budget (1)
Governor Doyle’s Proposed 2009 Budget Includes the Return of Pre-1995 Joint and Several Liability. Should it?
I am into my third title of this piece and well within my personal deadline and the State Journal gives me yet another title. After “Here We Go Again”, Déjà vu All Over Again” and “Back To the Future” this is it!
As I am sure many of you are aware, the Governor’s 2009 budget is not only long (1743 pages) but exceedingly heavy on what I will affectionately refer to as pay back to the tune of no less than 80 non-fiscal policy items. Now, while some of you more cynical readers may read that “pay back” one way, I assure you that I only meant that we, as taxpayers, are going to be the ones who will have to “pay back” for the extravagances of this budget. One of the pay backs will be in the form of almost certain increases in insurance premiums if his proposals become reality, as many seem to believe are inevitable with the Democrat controlled Executive and Legislative branches of state government. I hope to achieve two purposes with this article: (1) to offer my opinion on the fairness of these items in a budget in general; and (2) to specifically address the changes in joint and several liability that are proposed.
Should A Proposed State Budget Include Statutory Changes
Warning! This part is blatantly opinionated and possibly subject to rational and statutory contradiction. If this would bother you, please move on to the next part.
I submit to you that there is only great uncertainty that can occur when you allow a single individual (the governor), without pretense of need or demand, to dictate changes in statutory law in a proposed budget. I wish I could conclude it is unconstitutional but Article IV, Section 4 of the State Constitution may be broad enough to allow the governor to do what he has done here. Under this format, the legislature will create a bill to be signed by the same person that just told them what exactly to put in the bill. Where is the “representative government” in that equation? Where is the debate? Where are the unbelievable statistics that make such far reaching changes with a single swipe of a pen so necessary, that even a simple mind could not dare challenge it?
When was the last time you saw people march on the capital demanding higher insurance limits? Did I miss a news article decrying the huge number of people that have been deprived of fair compensation for their injuries? I must have missed seeing the 60 Minutes truck when it was in the state exposing all of the wrongs created by our present laws regarding insurance and the right to contract.
Why do we need a legislature? Where is the Republican side of the legislative equation? Shouldn’t they be screaming to high heaven about the usurpation of their responsibilities as duly elected representatives? And, if you’re on the Democratic side, shouldn’t you be just a little concerned about what is going to happen when the sides are flipped? And, most importantly, if you are a citizen of the state, shouldn’t you be getting just a little tired by your life and our laws being controlled by the special interest whims of the party in power? When I have expressed these inquiries to some of my brethren and friends, I either get this look or actually words along the lines that “Oh, your just sore because your folks aren’t in power.” Presumably, since Democrats hold the power now, they mean Republicans are my folks; while most certainly not conceding that Republicans are my “folks”, I will remind everyone that when the 1995 changes were made under a Republican governor and legislature, almost all were only done after open hearings where everyone got their say, compromises were made and everyone got a little less than we might have liked. That, my friends, is representative government and how the will of the people is designed to be controlling. Somewhere along the line we have lost that and I, for one, sure hope we find it soon.
Joint and Several Liability Returns
What Is It?
All states in the union have a specified way of dealing with liability. Most, if not all, fall within one of three different approaches: joint liability, several liability, or joint and several liability.
Joint liability holds that each defendant is liable up to the total amount of damages. For instance, if two people agree to be jointly liable, each is on the hook for the full amount. So, if one of the two dies or declares bankruptcy, the other is still on the hook for the full obligation. On the other side is several liability that holds that two or more liable people are only responsible for they’re respective portion of the damages.
You would think that the two would be mutually exclusive but, joint and several liability creates a scenario where each defendant in a suit is responsible for the entire amount of damages being pursued by the plaintiff, regardless of the individual share of damages actually caused by each defendant.
The plaintiff’s bar supports joint and several liability by arguing that it allows victims to be fully compensated, even if one of the defendants is unable to pay his or her share of the liability. If one defendant is not able to pay, the other defendant(s) are liable for the entire amount of damages. Critics often refer to this approach as the “deep pocket” rule because of the potential to quickly turn a lawsuit into a search for the defendant with the “deepest pockets.” Because of potential for an unfair result, and in response to tort reform efforts, several states have limited the applicability of joint and several liability.
History In Wisconsin
The Wisconsin Supreme Court first addressed joint and several liability in Richardson v. Emerson, a trespass case. Richardson owned some land in Dane County, through which ran a portion of Catfish Creek. There was a dam across the creek, some 20 or 30 feet of which was on Richardson’s property. Mr. Richardson endeavored to remove the part of the dam on his property. With the aid of some friends he started to dismantle the part of the dam on his property. During this, two unknown individuals opened the flume of the dam and all the water ran out. It is not clear who Emerson was but it is presumed that he was an adjoining land owner who suffered some sort of damage as a result of the water run off. The defense objected to the following jury instruction:
That if the jury find that the two persons unknown to the witness, who went to the flume and raised the gates, had been engaged with others in removing the east end of the dam, by the direction of Richardson, and did so raise the gates to aid that work, the Richardson and the other persons engaged in removing the dam, were jointly liable, with the two persons who actually raised the gate.
This is, of course, an instruction on concerted action. The Supreme Court held that, under the circumstances, this was an improper instruction saying:
We cannot hold the instruction correct as a proposition of law. It is true, when several persons are engaged in the doing of an illegal act, acting for a common illegal purpose, then the acts of any, become the acts of all, and all are equally and severally liable for the acts of each and all. But where several persons are engaged in the accomplishment of a lawful object, if one or more shall become a tortfeasor, even with a view to aid such purpose, the others, who neither direct nor countenance such tortious acts, are not liable.
The Court indicated that, only when the concerted action is for some unlawful purpose should persons acting in concert be presumptively held jointly and severally liable. Where acting for a lawful purpose, a jury is charged with specifically holding that all acted in concert. This issue of fact was not done in this case and there was no unlawful purpose so Richardson could not be held accountable for the acts of the strangers.
For a number of years, our courts struggled with the concept of joint and several liability and its application, often because of other archaic laws we lived by. For instance, in Cook v. Minneapolis & St. Paul Railroad, the court reversed a lower court finding that held the railroad liable for all damage to a landowner caused by the merging of two fires, one allegedly caused by the railroad and another by some unknown cause. The jury had held that 50% of the damage was the result of the railroad fire. The Supreme Court said that when two causes, one traceable to a responsible origin and one not, converge to cause damage to another, there can be no legal liability because the traceable wrongdoing is, the court said, “...superseded by the other cause or condition…” In Zutter v. O’Connell, the defendant’s claim for contribution from the plaintiff’s father, in whose car the plaintiff was a passenger at the time of the accident, was properly dismissed the Court said because there was no “common liability.” Why wasn’t there common liability? Because, back then, as a matter of law there could be no recovery by the son from his father. Remember also, that prior to 1931, a plaintiff could not recover anything if he/she were negligent at all.
In 1931 however, Section 331.045 was enacted as the states first statutory comparative negligence law. It took away the plaintiff 1% rule and allowed a plaintiff to collect from any defendant he/she was not equal to or more negligent than, subject to a reduction by the plaintiff’s amount of negligence. Subsequent case law, interpreted the statute to “…increase [the plaintiff’s right to recover] in that, even though there was contributory negligence [by the plaintiff] recovery is not barred if such negligence was not as great as the negligence of the person against whom recovery is sought. … every remaining tortfeasor, whose negligence was greater than that of the person seeking to recover, …there exists a right to recover, subject, however, to the limitation….that the damages be diminished in proportion to the negligence attributable to the person recovering.
Two things come to light from the changes. One, at one time, the plaintiffs were saddled with a 1% rule that precluded them from recovering any damages if they were only 1% at fault. Second, the state’s law makers still did not feel it was fair for a plaintiff, who is at least as at fault as the person from whom they want to recover from, to be able to collect.
A later change allowed plaintiff’s to recover all of their damages even if they were as much at fault as the person against whom they wanted to recover but not if they were greater. Additionally, the statute was interpreted to allow the plaintiff to combine the negligence of several tortfeasors. This interpretation was especially important in the area of products liability. That was the law most of us practiced under until 1995.
In 1995 hearings were held in the state legislature on what some have labeled “sweeping” tort reform. The changes to 895.045 at that time seemingly brought some fairness back to the tort system under what is called a “modified joint and several liability” approach. The changes retained the old language but now required the plaintiff’s negligence to be measured “…separately against the negligence of each person found to be causally negligent.” More importantly, a defendant would only be jointly and severally liable for all damages if that person’s negligence was 51% or more of the total negligence. Under this rule, a person only 20% at fault could only be held liable for 20% of the damages. So, in a scenario where the plaintiff was 20% at fault, one defendant 20% and another defendant 60% the damages would be reduced by 20% (the plaintiff’s fault) and he could collect 20% from one defendant and 60% from another. If the 20% person could not pay, the plaintiff could collect all of his damages from the 60% at fault defendant. Granted, if the 60% at fault could not pay the plaintiff could only collect the 20% from the other tortfeasor. However, why should someone be able to collect all their damages from someone who had no greater fault than they did?
The proposed changes would take us back to pre-1995 comparative negligence law and require combining of defendant negligence and merely a reduction for plaintiff’s fault. A plaintiff could collect all damages from anyone who has greater fault no matter how small the difference.
Why change the law? If you ask your legislator you get some interesting answers. None of the letters I have seen even address joint and several liability but only talk about minimum limits. One writes to a constituent:
Wisconsin and New Hampshire are currently the only two states in the country that do not require drivers to carry automobile insurance. Due to this, Wisconsin’s automobile insurance rates have historically been amongst the lowest in the country. It is my understanding that the current minimum coverage amounts have been in place for nearly thirty years, and proponents of the this proposal argue that purchasers of automobile insurance are simply not getting the same level of coverage they have in the past.
In fairness to the legislator, he assured the constituent that he would keep his concerns in mind. But let’s explore his reasoning; first, he is arguing that insurance rates in Wisconsin are too low. I am not sure of the connection between mandatory insurance and higher rates but I assume it has something to do with the fact that, in mandatory states, even bad drivers have to have insurance. Okay, if your goal is to have higher rates, make insurance mandatory! That way the bad drivers will have more accidents and rates will go up. Secondly, he suggests that consumers are somehow not getting what they bargain for because the minimums are too low. Doesn’t the consumer have some bargaining power and can obtain higher limits if he wants and can afford them.
There are many proposals in the budget that are bothersome, I have chosen to speak about joint and several liability because it is one that bothers me the most from a fairness perspective. I am not trying to be unfair to anyone but if 1% liability was deemed unfair when it precluded the plaintiff from recovering anything (and I agree it was), doesn’t it follow that 1% liability on a defendant rendering him liable for all damages is a bit unfair as well. The system in place now is as fair as you can be short of a pure comparative negligence standard where everyone pays for only the percentage of their negligence.
 Id. at B2.
 Why joint and several liability? If the proposed changes occur, we will again have some of the most unfair law of liability in the area, if not the country. Even as a young plaintiff attorney, I could never see the fairness in requiring a person 1% at fault to pay the entirety of the damages.
 I leave the academic challenges of that analysis to some other more enterprising mind.
 Some of you may have seen the statistics that some where around 90% of all personal injury cases settle under the present minimum limit. A statistic that would seem to leave open to debate some legislators’ argument that current levels of coverage are inadequate.
 My many thanks to Erica Brumm for her research into the history of Wisconsin’s adoption of joint and several liability. It saved me many hours of doing it myself. Erica is a law clerk in our legal department, and soon to be a graduate of the University of Wisconsin Law School.
 3 Wis. 319 (1854).
 I believe that party names may have been reversed when an appeal was taken by the defendant.
 98 Wis. 624, 74 N.W. 561 (1898).
 200 Wis. 601, 229 N.W. 74.
 Walker v. Kroger Grocery & Baking Company, 214, Wis. 519, 252 N.W. 721 (1934).
 See discussion in, Reiter v. Dyken, 95 W2d 461, 290 N.W. 2d 510 (1980).
 This terminology is taken from The Personal Injury Lawyer web cite. According to this cite, 27 states other than Wisconsin have modified joint and several in effect, including most of our surrounding states. Only 8 states have pure joint and several liability laws in effect and the remaining 14 have pure several liability laws.