Summer 2015 Legislative Update: WDC Continues to Advance Policies that Ensure Fairness in Our Civil Justice System.

WDC Journal Edition: Summer 2015
By: Robert I. Fassbender, Hamilton Consulting Group, LLC

At the time of this writing, the state's biennial budget is stalled in the Joint Finance Committee until there is a "consensus" on transportation funding. By the time you read this, it is hoped that the budget will be done, the legislature will have recessed for the summer, and lobbyists and their clients will be preparing for Act II of this three-act play formally known as the 2015-16 Legislative Session.

The Who and Where for this Legislative Session

The political context for this session is the 2014 November election, which ushered in one of the most conservative legislatures in Wisconsin history. The Assembly Republicans have a remarkable 63 – 36 majority, with the Senate GOP controlling 19 – 14. In addition, Governor Scott Walker was elected for the third time in four years, and at the time of this writing, is positioning himself for a run at the presidency.

Although questionably relevant to this article, probably the most fascinating election was that of Patience Roggensack as Chief Justice of the Wisconsin Supreme Court, which arose from voter approval of an amendment to the state constitution requiring the chief justice to be elected by his or her peers instead of by seniority. While the election of the new chief justice was swift, the controversy at the Wisconsin Supreme Court continues with former Chief Justice Shirley Abrahamson filing a lawsuit to block the implementation of the constitutional amendment during her term.

With the newly elected legislators sworn into office in January, we started the two-year legislative session with the legislature focusing on the budget, the only bill that has to pass and the one that generally sucks all the oxygen out of the Capitol this time of year. We are winding down part one.

Next up is the fall session, starting in September 2015. WDC hopes to advance several initiatives this fall. The floor periods for full Assembly and Senate actions are scheduled for September 15 to 24 and October 20 to November 5.1 While committees can set their own pace, their actions must be completed before floor votes.

The final stretch of the 2015-16 session has floor periods in January, February, March, and April, 2016. Things get frantic over this period as bills not passed and signed into law die; that is, all initiatives falling short of enactment start from scratch the next session, no matter how far they advance this session.

The summers in even numbered years are set aside for campaigns aimed at fall elections. So, during the summer of 2016, while the political volume will be high, the Capitol will be quiet.

WDC 2015-16 Legislative Agenda

A. Collateral Source Rule

Our previous attempts to modify Wisconsin's collateral source rule have failed, but this issue is once again a top legislative priority for WDC and other groups. Important hurdles have been addressed, but we expect another tough battle on what should not be a difficult policy change.

The current bounds of the collateral source rule have been previously discussed in this Journal.2Essentially, the collateral source rule holds that the amount charged 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 charged amount.3

In what may be fairly described as WDC's position, former Wisconsin Supreme Court Justice Diane Sykes—who now sits on the United States Court of Appeals for the Seventh Circuit—stated in her dissent in Koffman v. Leichtfuss:

The proper measure of medical damages is the amount reasonably and necessarily incurred for the care and treatment of plaintiff's injuries, not an artificial, higher amount based upon what the plaintiff might have incurred if he or she had a different sort of health plan or no health plan at all.4

Justice Sykes' guidelines describe well the law in California, where the plaintiff is only entitled to the amount actually paid to the medical provider, not the phantom damages reflected in the amount billed but seldom paid.5 WDC and its allies will continue to advocate for legislation that will allow the jury to determine the reasonable value of medical services provided by allowing the introduction into evidence of both the amounts billed and the amounts paid.

B. Parental Sponsorship Liability

A second priority for the 2015-16 session is another repeat attempt. Last session, WDC led efforts to enact a $300,000 liability limit on sponsors of minor drivers (AB 706/SB 592).6 Wisconsin Stat. § 343.15(2)(b), also known as "Sponsorship Liability," currently provides:

Any negligence or willful misconduct of a person under the age of 18 years when operating a motor vehicle upon the highways is imputed to the parents where both have custody and either parent signed as sponsor, otherwise, it is imputed to the adult sponsor who signed the application for such person's license. The parents or the adult sponsor is jointly and severally liable with such operator for any damages caused by such negligent or willful misconduct.

This law imposes unlimited liability upon parents or adult sponsors of a minor's driver's license. As former WDC president Arthur Simpson noted in an article in this Journal, "strangely, Wisconsin has a $5000 limit on damages 'for personal injury attributed to a willful, malicious, wanton act of a child.' On the other hand, if your child 'negligently' causes a vehicular accident, the parent faces unlimited liability."7 Adoption of the proposed damages cap would go a long way toward resolving this absurd disparity.

C. Other Efforts

WDC will undoubtedly take positions on other legislation. For example, we will support expected efforts to mitigate Wisconsin's "dog bite statute." Wisconsin Stat. § 174.02(1)(b) provides for double damages caused by a "dog injuring or causing injury to a person, domestic animal or property if the owner was notified or knew the dog previously injured or caused injury to a person, domestic animal or property." Under this scheme, if the first "injury" is minor property damage, and the second is serious harm due to a dog bite, the minor property damage event unfairly triggers double damages. The legislative change we support would require the first injury to be personal injury to a person in order for double damages to be triggered.

Further, WDC is opposing AB 95/SB 76, which increases interest rates allowed in judgments in small claims actions.8 This legislation would roll back reforms WDC supported as 2011 SB 14, which was signed into law by Governor Walker as 2011 Wisconsin Act 69.9 This law changed Wisconsin's then high pre- and post-judgment interest rate from 12 percent to the prime rate set by the Federal Reserve Board, plus one percent. This ensures that plaintiffs do not receive a windfall, while also imposing a reasonable interest rate on defendants.

There is one certainty as any legislative session runs its course: there will be both unexpected opportunities and threats. By having lobbyists in Madison, WDC can quickly identify, assess, and react to such events, thereby advancing the interests of its membership and their clients.

WDC’s Lobbying Efforts Make a Difference

In 2010, Hamilton Consulting Group's founding partner Jim Hough penned an article in this Journal entitled "WDC Makes a Difference."10 The article noted that the basic reason for the existence of trade or professional associations is a desire to impact public policy decisions that affect members of the trade or profession.

The right to lobby is a constitutional right to petition the government. But communicating with public officials to influence public policy—the definition of lobbying—should also be considered a duty; that is, a duty owed to the public by professional organizations to ensure our elected officials have the best information which, in turn, allows them to make good policy choices. WDC members have fulfilled this charge each session, with results; indeed, without WDC's advocacy and expertise Wisconsin's litigation landscape would be unrecognizable.

For example, Jim recalled in his article from 2010 one of the more significant battles in recent years. Following the general election in November 2008, leaders of the plaintiffs' bar convinced then-Governor Doyle to bury in his budget joint and several liability law changes that would have required defendants as little as one percent at fault to pay 100 percent of the damages. These provisions were paired with concepts that would have allowed someone that is less at fault than the plaintiff to be sued if the combined fault of all the persons sued were equal to or greater than that of the plaintiff, as well as provisions to that would have required the court to explain to the jury how the percentage of negligence they find attributable to each party will impact liabilities and damages. WDC and others in the business and professional communities, from major manufacturers to associations representing CPAs, ski hills, and amusement parks, successfully defeated this effort and many other ill-advised initiatives that session that would have greatly worsened Wisconsin's litigation climate.

In subsequent years, WDC and its allies have not only opposed unfavorable legislative proposals, but have also successfully advanced numerous civil justice reforms that have improved Wisconsin's litigation climate to the point where we are now nationally recognized for our reforms. For example, the well-publicized reforms of the 2011- 12 legislative session, long sought by the Wisconsin business community and WDC, and which have been covered in more detail in previous issues of this Journal, included the following:

  • Product Liability (2011 Wis. Act 211) – Requiring proof of a "reasonable alternative design" in an alleged defective design of a product, moving Wisconsin away from the broad "consumer expectation" test. By adopting this provision, Wisconsin joined 46 other states.
  • Expert Opinion (Daubert) (2011 Wis. Act 2) – Adopting the Daubert12 standards limiting testimony of experts and evidence to that which is based on sufficient facts or data and is the product of reliable principles and methods.
  • Risk Contribution (2011 Wis. Act 2) – Overturning the Wisconsin Supreme Court's 2005 decision, Thomas v. Mallet,13 where the court adopted the deeply flawed "risk contribution" theory that imposed liability without proof that a defendant's product was a cause of the alleged injury.
  • Caps on Punitive Damages (2011 Wis. Act 2) – Setting a cap on punitive damages at $200,000 or two times compensatory damages, whichever is greater.
  • Frivolous Lawsuits (2011 Wis. Act 2) – Reducing frivolous lawsuits by holding a party liable for costs and fees for bringing a lawsuit or claim that is done solely for the purpose of harassing or maliciously injuring another party.
  • Interest on Judgments (2011 Wis. Act 69) – Amending Wisconsin's unjustifiably high interest rate on pre- and post-judgments from 12 percent to the federal prime rate, plus one percent.14
  • Trespasser Liability Act (2011 Wis. Act 93) – Preventing courts from adopting the new Restatement Third of Torts, which expands liability for injuries to trespassers. 15
  • Reasonable Attorney Fees (2011 Wis. Act 92) – Codifying 14 criteria that courts must consider when awarding attorney fees for the plaintiff. Also creating a rebuttable presumption that reasonable attorney fees can be no more than three times compensatory damages.16
  • Punitive/Compensatory Damages under Fair Employment Act (2011 Wis. Act 219) – Repealing 2009 Wisconsin Act 20, which for the first time imposed punitive and compensatory damages in lawsuits filed under the Wisconsin Fair Employment Act (WFEA).17

Likewise, last session (the 2013-14 session) included the following important reforms:

  • Physician's Duty of Informed Consent (2013 Wis. Act 242) – Clarifying a Wisconsin Supreme Court decision, Jandre v. Wisconsin Injured Patients and Families Compensation Fund,18 dealing with a physician's duty of informed consent.19
  • Transparency in Private Attorney Contracting (2013 Wis. Act 105) – Providing transparency and oversight when the State of Wisconsin hires private plaintiff attorneys on a contingency fee basis.20
  • Lemon Law Reforms (2013 Wis. Act 101) – Overhauling what was considered the worst lemon law in the nation.21
  • Asbestos Trust Fund Transparency (2013 Wis. Act 154) – Preventing doubledipping in personal injury cases that also involve potential compensation from trust funds created under the federal bankruptcy law, such as asbestos trust funds.22
  • Inadmissibility of a Statement of Apology by a Health Care Provider (2013 Wis. Act 242) – Providing that a statement or act of a health care provider that expresses an apology or condolence is not admissible as evidence of liability or as an admission against interest.

Not every one of these initiatives has been a WDC priority, but some, such as the product liability reforms and expert witness changes, are reforms that had been sought by WDC for many years. Often, WDC members have played a vital role in crafting these legislative changes, providing testimony in support of them, and even just walking the halls of the Capitol to meet with legislators and educate them. The bottom line is that, in recent years, and indeed, over the past three decades, WDC has made a clear difference in advancing the interests of its members and their clients, and ensuring fairness in the civil justice system. As Jim Hough wrote, it is a civic duty of WDC members to continue those efforts in the future.

Robert I. Fassbender is the Managing Partner of the Hamilton Consulting Group, a lobbying firm in Madison that has represented the Wisconsin Defense Counsel (and the Civil Trial Council of Wisconsin as it was previously known) for over 30 years.

Bob is also the Executive Director of the Wisconsin Civil Justice Council, a nationally recognized legal reform association. In addition, Bob is President of the Great Lakes Legal Foundation, a non-profit legal foundation where he focuses on regulatory reform issues. From 1983 to 1997, Bob held various legal and lobbying positions. He was a partner with the Wisconsin law firm of Godfrey & Kahn; Director of Environmental Policy with Wisconsin Manufacturers & Commerce; environmental counsel with McDonnell Douglas Corporation; and an attorney with the U.S. Air Force, Office of Judge Advocate General. Bob received his law degree from the University of San Diego, and a Bachelor of Science degree in civil engineering from Michigan Technological University.

References

1 2015 Senate Joint Resolution 1. The schedule for the 2015-16 legislative session can be viewed at: http://legis. wisconsin.gov/session.
2 Andrew Cook, Legislative Update—Legislation Introduced Will Allow Juries to See Evidence of Collateral Source Payments When Determining Medical Expenses in Personal Injury Cases, Wis. Civil Trial J., Vol. 11, No. 1, at 6 (Spring 2013).
3 2000 WI 63, 235 Wis. 2d 678, 611 N.W.2d 764.
4 2001 WI 111, ¶ 69, 246 Wis. 2d 31, 630 N.W.2d 201.
5 Howell v. Hamilton Meats and Provisions, Inc., 257 P.3d 1130 (Cal. 2011).
6 http://docs.legis.wisconsin.gov/2013/relatedpropos... ab706.
7 Arthur P. Simpson, President's Message: Wis. Stat. § 343.15—"How About a Cap for the Silent Majority ... Parents?," Wis. Civil Trial J., Vol. 11, No. 3, at 4 (Winter 2013).
8 http://docs.legis.wisconsin.gov/2015/related/propo... ab95.
9 https://docs.legis.wisconsin.gov/2011/related/acts/69.pdf.
10 Jim Hough, WDC Makes a Difference, Wis. Civil Trial J., Vol. 8, No. 3, at 17 (Summer 2010).
11 https://docs.legis.wisconsin.gov/2011/related/acts/2.
12 Daubert v. Merrell Dow Pharmaceuticals, 508 U.S. 579 (1993).
13 2005 WI 129, 285 Wis. 2d 236, 701 N.W.2d 523.
14 https://docs.legis.wisconsin.gov/2011/related/acts/69.pdf.
15 https://docs.legis.wisconsin.gov/2011/related/acts/93.pdf.
16 https://docs.legis.wisconsin.gov/2011/related/acts/92.pdf.
17 https://docs.legis.wisconsin.gov/2011/related/acts/219.pdf.
18 2012 WI 39, 340 Wis. 2d 31, 813 N.W.2d 627.
19 https://docs.legis.wisconsin.gov/2013/related/acts/242.pdf.
20 https://docs.legis.wisconsin.gov/2013/related/acts/105.pdf.
21 https://docs.legis.wisconsin.gov/2013/related/acts/101.pdf.
22 https://docs.legis.wisconsin.gov/2013/related/acts...