President’s Column

WDC Journal Edition: Summer 2005
By: James S. Naugler - Moen Sheehan Meyer Ltd.

If you like sausage and the law, you don’t want to see how either one is made. In Strenke v. Hogner, 205 WI 25; 694 N.W.2d 296, the Wisconsin Supreme Court peeked at legislative rule making.

In the process of interpreting the punitive damage statute, Wis. Stat. §895.85(3), the supreme court pulled back the drapes on the legislative process. While examining the legislative history of 895.53(3), the court referred to a transcript of a floor debate on the change in 895.85(3) contained in Senate Bill 11. Id. at 23, 24.

As part of the appellate record, the trial court presumably took judicial notice of the floor debate. Courts can take judicial notice of any fact “[g]enerally known within the territorial jurisdiction of the trial court”, Wis. Stats. §902.01(2)(a) and “[c]apable of accurate and ready determination by resorting to sources whose accuracy cannot reasonably be questioned.” Wis. Stats. §902.01(2)(b).

The problem is that the Wisconsin State Assembly keeps no official records of floor debates and no official verbatim records exist. How then are floor debates in the State Assembly which are scrupulously not recorded, going to be generally known within the territorial jurisdiction of a Barron County trial court that decides Strenke? And what official verifiable source could the trial court compare for accuracy, completeness or context in which the statements were made?

Arguably, the dubious use of the State Assembly floor debate falls under the “no harm, no foul” rule. The facts inStrenke are not just bad but ugly. Even Justice Wilcox, who construes Wis. Stats. §895.85(3) based on the plain language of the statute, concurs with the “[u]ltimate result the majority reaches …” . Id. at 62.

Briefly, Hogner, a serial drunk driver, turns left at an intersection in front of Strenke’s oncoming vehicle. Hogner’s blood alcohol content is a robust .269%. Hogner pleads no contest to operating a motor vehicle while intoxicated, fifth offense.

The first issue confronting the supreme court is the change in statutory language that makes it harder to recover punitive damages. Specifically, “[t]he legislature replaced the common law language of ‘wanton, willful and reckless’ with ‘intentional’ to modify ‘disregard of the plaintiff’s rights. Thus, the question before this court is how much harder did the legislature make it?” Id. at 22, 23.

The short answer is “not much”. Justice Wilcox, in his lone concurring opinion, is more blunt. He writes that the majority “[a]dopts an interpretation of §895.85(3) that is virtually identical to, if not lower than, the common-law standard for punitive damages.” Id. at 62.

Another issue facing the court is whether the jury’s punitive damage award is excessive or violates Hogner’s due process rights. The trial court bifurcates compensatory damages from punitive damages. In the compensatory phase, the jury awards the Strenkes $2,000.00. In the punitive damage phase, the Strenkes ask for $25,000.00. The jury ignores the Strenkes and awards $225,000.00. The Strenkes have just won the lottery.

With Justice Prosser not participating, the court divides equally on the question of whether the jury’s punitive damage award was excessive and violated Hogner’s due process rights. Chief Justice Abrahamson, Justice Bradley and Justice Roggensack conclude that a punitive damage award approximately 112 times greater than a small claims compensatory award is not excessive. Justices Wilcox, Crooks and Butler conclude that damages $200,000.00 above the Strenkes’ demand is a bit over the top.

The supreme court remands this issue to the court of appeals to decide the question of excessive damages based on the principles in Trinity Evangelical Lutheran Church v. Tower Ins. Co., 203 WI 46.

The six factors the court of appeals must consider in determining whether a punitive damage award is excessive are (1) the grievousness of the act; (2) the degree of malicious intent; (3) whether the award bears a reasonable relationship to the award of compensatory damages; (4) the potential damage that might have been caused by the act; (5) the ratio of the award to civil or criminal penalties that could be imposed for comparable misconduct; and (6) the wealth of the wrongdoer. Trinity at 53.

So will the court of appeals find the punitive damage award excessive? If so, by how much? For complete details on the outcome, consult your office pool.