Wisconsin Legislative Update

WDC Journal Edition: Spring 2014
By: Andrew Cook, Hamilton Consulting Group, LLC

At the time of this writing, the Wisconsin Legislature was winding down the 2013- 14 session. For WDC and civil liability reform proponents, the session was a mixture of success and some disappointment.

WDC worked directly on two pieces of legislation: 1) collateral source or “Phantom Damages” (AB 29/SB 22); and 2) placing a limit of $300,000 on the liability of parents or sponsors of minor drivers (AB 706/SB 592). Due to opposition by the health insurance industry, the collateral source legislation is unlikely to pass this session.

Despite this setback, WDC and other business associations will continue to push this important legislation next session. At the time of this writing, the parent/sponsorship bill had received public hearings, passed the full Senate, and was waiting to be voted on in the Assembly.

Here is a summary of the bills that have passed and been signed into law, bills still pending at the time of this writing, and bills unlikely to pass.

I. Newly Enacted Civil Liability Reforms

Physician’s Duty of Informed Consent (SB 137/ AB 139): This legislation clarifies a Wisconsin Supreme Court decision, Jandre v. Wisconsin Injured Patients and Families Compensation Fund,1 dealing with a physician’s duty of informed consent. Specifically, the bill establishes a reasonable physician standard and rejects strict liability for a missed diagnosis by a physician. The bill passed the Assembly and Senate with bipartisan support and was signed into law by Governor Walker as 2013 Wisconsin Act 111.2 (Please see the article by Nadya Shewczyk contained in this issue for a more in-depth discussion of this legislation.)

Transparency in Private Attorney Contracting (SB 19/AB 27): This legislation provides greater transparency and oversight when the State of Wisconsin hires private plaintiff attorneys on a contingency fee basis. The bill also imposes caps on attorney fees for private plaintiff attorneys hired to represent the state on a contingency fee basis. The new law also requires the state to post all contracts on a state website for the public to view. The bill passed the Assembly and Senate with bipartisan support and was signed into law by Governor Walker as 2013 Wisconsin Act 105.3

Lemon Law Reforms (SB 182/AB 200): Prior to 2013 Wisconsin Act 1014 going into effect, Wisconsin was well known for having the worst lemon law in the nation. The law placed unreasonable requirements on vehicle manufacturers that allowed lawyers to win jackpot awards that had no nexus to fairness and the underlying goals of the law.

For example, in Marquez v. Mercedes-Benz USA, LLC,5 the cost of the vehicle was approximately $56,000. Had the owner provided the manufacturer the necessary bank account information in a timely manner, the owner would have been given a check for the vehicle, plus other costs. However, the law created a substantial incentive for owners and their lawyers to impede resolution of a lemon law claim. By delaying the process one day beyond the 30- day statutory deadline, vehicle owners and their attorneys hit the jackpot, which in the Marquez case was $700,000.

Act 101 makes a number of changes to current law, such as:

• removing automatic double damages (which includes the cost of the vehicle);

• clarifying what it means for a vehicle to be “out of service”;

• providing a more reasonable time period for providing a comparable vehicle; and

• establishing a more reasonable statute of limitations.

Act 101 passed the Assembly and Senate with overwhelming bipartisan support.

Retroactive Application of 2011 Act 2’s Lead Paint Provisions (AB 40): Many readers will recall that in 2011, Governor Scott Walker introduced and the Legislature passed the omnibus civil liability reform bill (2011 Wisconsin Act 2).6 One of Act 2’s provisions overturned Thomas v. Mallet,7 which had established the “risk contribution” theory in lead paint cases.

Specifically, Act 2 required the claimant to prove that the manufacturer made the specific product responsible for the injury. Act 2 further provided that if the claimant could not identify the manufacturer of the specific product, and no other method of recovery was available, the court could apportion the liability to more than one manufacturer of the specific product liable for the injury. Act 2 was originally drafted to apply prospectively.

The 2013-15 budget amendment enacted by the Legislature applies Act 2’s language dealing with products liability retroactively to all cases, whenever filed or accrued. The legislation also includes a“Legislative Findings and Intent” section, which explains the purpose of the law change:

895.046 (1g) LEGISLATIVE FINDINGS AND INTENT. The legislature finds that it is in the public interest to clarify product liability law, generally, and the application of the risk contribution theory of liability first announced by the Wisconsin Supreme Court in Collins v. Eli Lilly Company, 116 Wis. 2d 166 (1984), specifically, in order to return tort law to its historical, common law roots. This return both protects the rights of citizens to pursue legitimate and timely claims of injury resulting from defective products, and assures that businesses may conduct activities in this state without fear of being sued for indefinite claims of harm from products which businesses may never have manufactured, distributed, sold, or promoted, or which were made and sold decades ago. The legislature finds that the application of risk contribution to former white lead carbonate manufacturers in Thomas v. Mallet, 285 Wis. 2d 236 (2005), was an improperly expansive application of the risk contribution theory of liability announced in Collins, and that application raised substantial questions of deprivation of due process, equal protection, and right to jury trial under the federal and Wisconsin constitutions. The legislature finds that this section protects the right to a remedy found in article I, section 9, of the Wisconsin Constitution, by preserving the narrow and limited application of the risk contribution theory of liability announced in Collins.

2013 Wisconsin Act 208 (budget bill) passed the Assembly and Senate in 2013.

II. Legislation Still Pending

Placing a $300,000 Limit on Liability for Parents and Sponsors of Minor Drivers (AB 706/SB 592):This legislation, introduced at the request of WDC, creates a limit for the liability that can be imputed to the parents or adult sponsor of a minor driver for damages that are caused by that minor driver’s negligent or willful misconduct. Under the bill, liability is limited to a total of $300,000 for all parents or adult sponsors to all parties arising from any one accident.

WDC President Arthur Simpson and Treasurer/ Secretary Jeffrey Leavell testified in support of the bill in front of the Senate and Assembly Judiciary Committees. At the time of this writing, this bill had passed the Senate and was waiting to be voted on in the Assembly.

Personal Injury Trust Claims Transparency (SB 13/AB 19): This legislation will prevent double-dipping in personal injury cases that also involve potential compensation from trust funds created under the federal bankruptcy law. The most common types of lawsuits that also include potential compensation from federal trust funds are those involving asbestos exposure.

As highlighted in a recent bankruptcy decision,9 some unscrupulous plaintiff attorneys are double- dipping by withholding evidence from courts regarding whether the plaintiff has received a trust claim payment or is eligible to receive such compensation. This allows plaintiff attorneys to double dip by recovering once against a business and then again against the trusts.

The legislation was amended in the Assembly to address some concerns raised by opponents of the legislation. The bill passed the full Assembly and as of this writing appears likely to pass the Senate.

Inadmissibility of a Statement of Apology or Condolence by a Health Care Provider (SB 129/ AB 120): The original bill language provides that a statement, gesture, or the conduct of a health care provider or a health care provider’s employee or agent that expresses apology or sympathy to a patient or the patient’s relative or representative is not admissible into evidence or subject to discovery in any civil action or administrative hearing regarding the health care provider as evidence of liability or as an admission against interest.

The bill was amended to specify that the bill’s provisions apply only to statements or gestures that are made, or conduct that occurs, before the commencement of a civil action, administrative hearing, disciplinary proceeding, mediation, or arbitration regarding the health care provider.

As of this writing, the bill had passed the Assembly and was waiting to be voted on in the Senate.

III. Bills Not Likely to Pass this Session

Limiting Phantom Damages (Collateral Source Rule) (SB 22/AB 29): This legislation allows juries in personal injury cases to see all the evidence when determining the amount required to compensate the plaintiff for his or her past medical expenses.

Due to a number of negative Wisconsin Supreme Court decisions,10 civil defendants are precluded from introducing into evidence the amount of past medical expenses actually paid by the plaintiff’s health insurer or medical assistance. Instead, only the amount that was billed by the medical provider may be introduced. As a result, plaintiffs and their attorneys continue to receive windfalls in situations where the amount billed does not reflect an amount that any party has paid or ever actually will pay.

The bill unfortunately has been stalled in the Senate due to the Senate author’s opposition to his own bill after concerns were raised by health insurance subrogation attorneys.

IV. Conclusion

While this legislative session has been successful in the area of civil liability reform, more needs to be done. This is especially the case when it comes to passing legislation amending Wisconsin’s collateral source law to mirror the same protections afforded to medical providers. WDC will continue to work on the collateral source legislation in 2015-16 in the event the bill does not pass this session.

Limiting Phantom Damages (Collateral Source Rule) (SB 22/AB 29): This legislation allows juries in personal injury cases to see all the evidence when determining the amount required to compensate the plaintiff for his or her past medical expenses.

Due to a number of negative Wisconsin Supreme Court decisions,10 civil defendants are precluded from introducing into evidence the amount of past medical expenses actually paid by the plaintiff’s health insurer or medical assistance. Instead, only the amount that was billed by the medical provider may be introduced. As a result, plaintiffs and their attorneys continue to receive windfalls in situations where the amount billed does not reflect an amount that any party has paid or ever actually will pay.

The bill unfortunately has been stalled in the Senate due to the Senate author’s opposition to his own bill after concerns were raised by health insurance subrogation attorneys.

IV. Conclusion

While this legislative session has been successful in the area of civil liability reform, more needs to be done. This is especially the case when it comes to passing legislation amending Wisconsin’s collateral source law to mirror the same protections afforded to medical providers. WDC will continue to work on the collateral source legislation in 2015-16 in the event the bill does not pass this session.

References

1 2012 WI 39, 340 Wis. 2d 31, 813 N.W.2d 627.
2 https://docs.legis.wisconsin.gov/2013/related/acts/111.
3 https://docs.legis.wisconsin.gov/2013/related/acts/105.
4 https://docs.legis.wisconsin.gov/2013/related/acts/101.
5 2012 WI 57, 341 Wis. 2d 119, 815 N.W.2d 314.
6 http://docs.legis.wi.gov/2011/related/acts/2.
7 2005 WI 129, 285 Wis. 2d 236, 701 N.W.2d 523.
8 https://docs.legis.wisconsin.gov/2013/related/acts/20.
9 Garlock Sealing Technologies, LLC, No. 10-31607, (W.D.N.C. Bkcy. Jan. 10, 2014) (unpublished).
10 Ellsworth v. Schelbrock, 2000 WI 63, 235 Wis. 2d 678, 611 N.W.2d 764; Koffman v. Leichtfuss, 2001 WI 111, 246 Wis. 2d 31, 630 N.W.2d 201; Leitinger v. DBart, 2007 WI 84, 302 Wis. 2d 110, 736 N.W.2d 1; Orlowski v. State Farm Mut. Auto. Ins. Co., 2012 WI 21, 339 Wis. 2d 1, 810 N.W.2d 775.