Wisconsin Governmental Immunity Law: The Times They Are A-changin’

WDC Journal Edition: Winter 2013
By: Catherine M. Rottier, Boardman & Clark LLP

If you thought you knew everything you needed to know about Wisconsin governmental immunity law, guess again. The times are definitely changing.

During a Spring 2013 term that produced few opinions on tort-related topics, the Wisconsin Supreme Court did issue a trio of important decisions on governmental immunity from suit. Overall, the decisions lessen the broad scope of immunity and make negligence and nuisance claims against governmental entities more viable. The three new decisions are Bostco, LLC v. Milwaukee Metropolitan Sewerage Dist.,[1] Showers Appraisals, LLC v. Musson Bros., Inc.,[2] and Brown v. Acuity.[3] All three of these decisions are significant. The one that generated the most heat and warrants the most analysis is Bostco.

A. The Bostco Decision

The slip opinion for this case features a 54-page majority opinion authored by Justice Roggensack, a 17-page concurrence by Justice Gableman, and a 60‑page dissent by Chief Justice Abrahamson, joined by Justice Bradley. Justice Prosser did not participate. At issue were claims first brought in 2004 by the owners of the Boston Store against the Milwaukee Metropolitan Sewerage District (MMSD) for its alleged negligent operation and maintenance of a sewer system called the Deep Tunnel. Its operation allegedly resulted in excessive groundwater seepage and significant damage to the wood pilings that held up the five interconnected buildings that housed the Boston Store.

Pretrial motions weeded out a number of legal theories and left only two common law claims—negligence and private nuisance—for jury trial. The jury found MMSD causally negligent in its maintenance of the Deep Tunnel near Bostco's buildings and awarded Bostco $3 million for past damages and $6 million for future damages. The jury also found Bostco to be 30% contributorily negligent. As a result, the $9 million damage award was reduced to $6.3 million.

With respect to the nuisance claim, the jury found that: (a) MMSD negligently interfered with Bostco's use and enjoyment of its property; (b) MMSD could abate the interference by reasonable means and at a reasonable cost; but (c) the interference did not result in "significant harm" to Bostco. This meant the nuisance claim failed.

The circuit court declined, on post-verdict motions, to reverse the jury answer finding "no significant harm" for purposes of Bostco's nuisance claim. Also, the court denied the request of MMSD for judgment notwithstanding the negligence verdict on the grounds of governmental immunity. However, the court agreed with MMSD that the $50,000 damage cap set forth in Wis. Stat. § 893.80(3) applied. Therefore, the court reduced the recoverable damages from $6.3 million to $100,000 ($50,000 each for Bostco and its co-plaintiff, Parisian).

In response to those determinations, Bostco reasserted its claim for equitable relief, arguing that a $100,000 damage award on $6.3 million of damages created an inadequate remedy at law. The trial court agreed. As a form of equitable relief, the court ordered MMSD to abate the nuisance caused by its maintenance of the Deep Tunnel.

Both sides appealed. In a published decision, the court of appeals reversed the trial court on the issue of "significant harm" and found that Bostco had proved its claim for private nuisance. However, while affirming the conclusion that MMSD was not entitled to immunity under Wis. Stat. § 893.80(4), the court of appeals reversed the order for abatement, concluding that Bostco's recoverable damages were capped by statute at $50,000 per claimant and equitable relief was not authorized. The court of appeals further held that the $50,000 cap was constitutional and it applied to Bostco's continuing nuisance claim.

After both sides successfully petitioned for review, the Wisconsin Supreme Court weighed in on the thorny issues of governmental immunity and the availability of equitable relief.

1. Issue #1: Was MMSD Entitled to Immunity?

The court's answer: No.

By its decision, the court sought to reel in the expansion of governmental immunity by earlier case law that seemed to afford immunity to all acts of governmental employees or agents that required some discretion in the manner of performance. Finding that standard too open-ended, the court majority returned to the language of Wis. Stat. § 893.80(4), which disallows suits against governmental entities and employees for "acts done in the exercise of legislative, quasi-legislative, judicial or quasi-judicial functions."

The court noted that this statutory language was intended to codify the decision in Holytz v. City of Milwaukee,[4] a case which famously said that, with respect to claims against governmental entities, "the rule is liability—the exception is immunity."[5]

In this case, the court acknowledged that the initial decision by MMSD to build and operate the Deep Tunnel was a quasi-legislative decision for which MMSD was immune from suit. However, that immunity did not extend to the manner in which MMSD chose to maintain the Deep Tunnel. Once MMSD had notice that excessive siphoning of groundwater from around Bostco's building supports was damaging the building foundation, MMSD had a duty to abate the private nuisance its manner of maintaining the Deep Tunnel had created. Having made the discretionary policy decision to install a sewerage system, the municipal entity is under a subsequent ministerial duty to maintain the system in a safe and working order that does not cause damage to the property of others.

In his concurrence, Justice Gableman added his voice to those of other justices in other cases (e.g., Justice Prosser in Umansky v. ABC Insurance Co.[6]) urging a reevaluation of municipal immunity guideposts. He called on the court to adopt a new test for determining whether governmental action is "legislative, quasi-legislative, judicial, or quasi-judicial" so as to warrant immunity. Under his formulation of the test, only upper level policy and planning decisions would be immunized and all other actions would not be shielded by governmental immunity.

In dissent, Chief Justice Abrahamson noted that the initial decision of MMSD to construct and operate the Deep Tunnel was exactly the kind of upper level policy and planning decision for which the legislature intended immunity. The dissent argued that the maintenance of the Deep Tunnel was in furtherance of the original policy decision to install the system in the first place, so its maintenance should be immunized as well.

The Take Away on Issue #1. The court is moving away from the discretionary/ministerial distinction in deciding questions of immunity. Going forward, fewer governmental actions will be found to be immune from tort claims.

2. Issue #2: Is the $50,000 Per Claim Cap Constitutional?

The court's answer: Yes.

The jury found past and future damages of $9 million. Plaintiffs were 30% causally negligent, so damages would be reduced to $6.3 million. The question was whether an award of $50,000 per plaintiff, pursuant to the damage cap in Wis. Stat. § 893.80(3), violated equal protection of the law and, therefore, was unconstitutional. On this issue, there was no disagreement. The court held that the legislature had a rational basis for imposing a $50,000 damage cap. The purpose was to protect the public fisc.

Caveat. In footnote 35 of Bostco, the court offers the worrisome prospect that multiple sequential damage caps might be available for multiple sequential actions based on the same continuing nuisance. The court observes that a continuing nuisance constitutes multiple, constantly recurring actions, each giving rise to a new cause of action. Other than to note this issue, however, the court does not address it, as the case before it presented only a single nuisance action.

3. Issue #3: Does the Damage Cap in Wis. Stat. § 893.80 Preclude a Court From Ordering the Equitable Relief of Abatement?

The court's answer: No.

After concluding that MMSD was not entitled to immunity and was subject to the $50,000 per claimant cap, the court of appeals further decided no equitable relief against MMSD was available because such a remedy would "render the damage cap set forth in Wis. Stat. § 893.80(3) superfluous." On this key issue, the supreme court reversed. Over the strong dissent of Chief Justice Abrahamson and Justice Bradley, the court majority concluded that the equitable remedy of abatement, even one costing millions of dollars, was available because it was not specifically prohibited by the language of the governing statute. The court noted that § 893.80(3) limited "the amount recoverable by any person" and observed that an order for abatement does not entitle "any person" to "recover" any "amount."[7]

The court acknowledged that the legislature provided in Wis. Stat. § 893.80(5) that the provisions and limitations set forth in the statute "shall be exclusive." The court of appeals read that language to mean that equitable remedies, like injunctions and abatement orders, were not available. The supreme court disagreed, holding that the failure of the statute to specifically mention equitable remedies meant that those remedies were not foreclosed. The court stated: "When a statute fails to address a particular situation, the remedy for the omission does not lie with the courts. It lies with the legislature."[8]

The court did not address the likely costs of abatement or the ability of the sewerage district to fund corrective action, an omission the dissent emphasized. Also left unanswered was the effect of plaintiff's 30% contributory negligence on the costs of the abatement remedy. Would Bostco end up having to pay 30% of an abatement remedy that might cost upwards of $10 million? The court does not say. The matter was remanded to the circuit court for a hearing on the proper means of abatement and, one suspects, its likely cost.

B. The Showers Decision

The issue here was the availability of immunity for a private business that contracted with a governmental entity to perform services in connection with a public works project. The overall impact of the court's decision is to limit those occasions on which governmental immunity will extend to private contractors.

Mark Showers and his businesses brought suit to recover for flood damage to property they owned in the City of Oshkosh. Showers claimed his property was damaged by actions taken by defendant Musson Brothers, Inc., a private company that provided sewer removal and installation services under contract with the Wisconsin Department of Transportation (DOT). Both the circuit court and the court of appeals had concluded on summary judgment that Musson Brothers was a governmental contractor entitled to immunity under Wis. Stat. § 893.80(4), as applied in Estate of Lyons v. CNA Insurance Companies.[9]

In a unanimous decision, the Wisconsin Supreme Court reversed. In so doing, it announced a new framework for deciding cases of governmental contractor immunity. To obtain immunity, the governmental contractor henceforth must show two things: (1) that the contractor meets the definition of "agent" under Wis. Stat. § 893.80(4); and (2) that the contractor's act is one for which immunity is available under the statute. A contractor is an "agent" for § 893.80(4) purposes only if the contractor is acting pursuant to "reasonably precise specifications" imposed by the governmental agency in charge of the project.

Even if the contractor gets past the requirement of showing reasonably precise specifications, the contractor is not home free. To benefit from immunity, the contractor must clearly allege in his pleadings why the injury-causing conduct falls within a legislative, quasi-legislative, judicial or quasi-judicial function for which immunity is available under the statute. An allegation of negligently performed work will almost never generate immunity unless the contractor is able to show that the alleged negligent performance was nothing more than the implementation of a policy decision on how the public works project would be built and operated.

In setting forth its new construct for evaluating claims of governmental contractor immunity, the supreme court was intent on limiting the circumstances in which immunity would lie. The court's purpose was to "avoid extending blanket immunity for claims of negligently performed work against governmental contractors when the sole basis for immunity is that the work was performed pursuant to a contract with a governmental entity."[10]

In this case, Showers' property was damaged when two severe rainstorms in June 2008 inundated the street where Showers' property was located, the same street where a sewer project was underway. During the course of the project, Musson had disconnected the storm sewers in the area and this allegedly compromised the City's ability to manage storm water.

The contract DOT entered into with Musson made Musson, as contractor, "solely responsible for the means, methods, techniques, sequences, and procedures of construction."[11] Thus, Musson was not subject to reasonably precise specifications imposed by DOT. As a result, Musson was not an "agent" of DOT for purposes of Wis. Stat. § 893.80(3).

Because Musson failed the first part of the test for immunity, the court could have ended its decision without discussing the second part of the test. That was definitely not what the court had in mind, however. The court went out of its way to make clear that there can be no immunity even for a contractor working pursuant to reasonably specific and government-imposed requirements unless the work itself is in furtherance of a governmental policy decision for which immunity is granted by the statute.

In an interesting paragraph, the court says it is not changing the standard for the immunity inquiry under Wis. Stat. § 893.80(4), but then goes ahead and changes the standard anyway. The court writes:

This immunity inquiry under § 893.80(4)—examining whether a governmental entity's conduct was an exercise of a "legislative, quasi-legislative, judicial or quasi-judicial function"—gives effect to the legislature's prerogative regarding the circumstances in which immunity may be available under § 893.80(4). Although some of our cases have equated § 893.80(4)'s "legislative, quasi-legislative, judicial or quasi-judicial" standard with the term "discretionary," see, e.g., Olson, 143 Wis. 2d at 710, n. 5; Lifer, 80 Wis. 2d at 511-12, and although our decision is not intended in any way to alter that standard, we do emphasize that the legislatively selected policy decision regarding immunity under § 893.80(4) is best honored by applying the legislature's chosen plain language, rather than a judicial distillation thereof.[12]

Justice Crooks wrote a concurrence in Showers in which Chief Justice Abrahamson and Justice Bradley joined. The concurring justices were concerned that the majority opinion not be read as endorsing the type of fundamental change in governmental immunity analysis that Justice Gableman had advocated in his Bostco concurrence. Even the concurring justices, however, agreed that some change in the case law was necessary. Justice Crooks wrote:

While I share Justice Gableman's dismay with some aspects of this court's immunity jurisprudence, I favor an incremental approach to correcting the problems. A good place to start would be to recognize that our prior cases have construed the ministerial duty exception to immunity too narrowly.[13]

C. The Brown v. Acuity Decision

The first of two issues in this case was whether Parnell Burditt, a volunteer fireman operating his own private car in responding to a fire call on June 8, 2008, was acting within the scope of his employment by the municipality when he caused an accident en route to the fire station. If so, the claims against him would be subject to the damage cap in Wis. Stat. § 893.80(3). Assuming he was subject to the statute, the second issue was whether he had immunity for his decision to enter an intersection on a red light when his vehicle had an emergency light but no audible signal activated.

The trial court and the court of appeals both held that: (1) the firefighter was acting within the scope of his employment when the collision occurred; and (2) he was shielded from liability by public officer immunity. The Wisconsin Supreme Court agreed on point one, but reversed on point two. The court held that the firefighter was not entitled to immunity because he had violated a ministerial duty to stop for a red light while operating an emergency vehicle that did not have both audible signal and emergency lights activated.

The court's result was only partially helpful to the two plaintiffs who sued to recover for personal injuries from the intersection collision. They were allowed to proceed with their claims against the firefighter, but the $50,000 per claimant damage cap of Wis. Stat. § 893.80(3) applied to preclude a more substantial recovery.

To reach the conclusion that Burditt was acting within the scope of his employment as he drove to the fire station in response to the emergency call, the supreme court had to distinguish those cases holding that a person in transit to a job site is generally not then acting within the scope of employment.[14] The court noted that Burditt, as an on-call volunteer firefighter, could be called to any number of work locations at any time. Thus, he was not a typical commuter with a fixed place of employment as described in DeRuyter v. Wisconsin Electric Power Co.[15] As a result, the "general maxim" of DeRuyter did not apply. Instead, the court's focus was on whether Burditt was actuated by a purpose to serve his employer when the accident occurred. The court had no difficulty finding from the undisputed facts that he was.

On the second issue, the supreme court reversed the decision below and found no immunity available to Burditt under Wis. Stat. § 893.80. By entering an intersection on a red light without having both emergency lights and audible signal activated, Burditt violated a ministerial duty imposed by Wis. Stat. § 346.03, one of the rules of the road.

The ministerial duty in Burditt's situation was easy to understand. The statute requires an emergency vehicle to have an audible signal activated before entering an intersection on a red light. Burditt had no audible signal, so he could not enter the intersection in compliance with the statute governing operation of authorized emergency vehicles.

A more difficult question arises when the operator of an authorized emergency vehicle gives both visible and audible signal before entering an intersection but nonetheless is involved in a collision there. To comply with Wis. Stat. § 346.03 and lawfully proceed through a red stop signal, an authorized emergency vehicle must slow down as may be necessary for safe operation, give both a visual and an audible signal, and proceed "with due regard under the circumstances for the safety of all persons." So, is there a ministerial duty to proceed with due regard? Is immunity ever available to the operator of an authorized emergency vehicle involved in an intersection collision? That is an argument for another day. That said, the Wisconsin Court of Appeals certified precisely these issues to the Wisconsin Supreme Court on October 2, 2013, in Legue v. City of Racine, Case No. 12-AP-2499, so we may see appellate guidance very soon.

D. Legislative Changes

1. Effective April 12, 2012, the legislature amended § 893.80 to make clear that a "volunteer" subject to the control of a fire company or other governmental entity is an "agent" for purposes of governmental claim requirements.[16] Thus, the first issue in Brown is unlikely to recur.

2. The recent amendment of Wis. Stat. § 893.80 has changed some of the statutory numbering, so be careful in citing the statute. For example, the notice of claim requirements are now found in § 893.80(1d), not § 893.80(1), which no longer exists.

3. 2011 Wisconsin Act 132

In 2011, the Legislature enacted 2011 Wisconsin Act 132 to remove statutory language holding governmental entities liable for highway defects. The amended statute, Wis. Stat. § 893.83 (2011-12), now authorizes only an action against a municipality to recover damages for injuries sustained because of an accumulation of ice or snow that has existed for three weeks or more upon any bridge or highway.

The statute was likely amended to overrule legislatively the result in Morris v. Juneau County.[17] Morris had construed the statute making municipalities liable for highway defects as an exception to the general grant of immunity in Wis. Stat. § 893.80(4). The former statute, then Wis. Stat. § 81.15 and later renumbered Wis. Stat. § 893.83, created a right to recover from a governmental entity for want of repairs of a highway.

By removing that statutory authorization entirely, the legislature probably intended to bring claims against municipalities for highway defects back within the general immunity analysis of Wis. Stat. § 893.80(4). What remains to be seen is how that analysis will now apply, given the court's recent decisions in Bostco and Showers.

This article is based on an outline and CLE presentation the author provided at the State Bar of Wisconsin's September 2013 PINNACLE Annual Torts Update seminar.

[1] 2013 WI 78, ___ Wis. 2d ___, ___ N.W.2d ___.

[2] 2013 WI 79, ___ Wis. 2d ___, ___ N.W.2d ___.

[3] 2013 WI 60, ___ Wis. 2d ___, ___ N.W.2d ___.

[4] 17 Wis. 2d 26, 115 N.W.2d 618 (1962).

[5] Id. at 39.

[6] 2009 WI 82, 319 Wis. 2d 622, 769 N.W.2d 1.

[7] Bostco, 2013 WI 78, ¶ 55.

[8] Id., ¶ 61.

[9] 207 Wis. 2d 446, 558 N.W.2d 658 (Ct. App. 1996).

[10] Showers, 2013 WI 79, ¶ 3.

[11] Id., ¶ 12.

[12] Id., ¶ 35 (emphasis added).

[13] Id., ¶ 63 (Crooks, J., concurring).

[14] See DeRuyter v. Wisconsin Electric Power Co., 200 Wis. 2d 349, 546 N.W.2d 534 (Ct. App. 1996).

[15] 200 Wis. 2d 349.

[16] See 2011 Wis. Act 162.

[17] 219 Wis. 2d 543, 579 N.W.2d 690 (1998).