Hamilton Political Tidbits - Aug. 10, 2010

Introduction

As we move through the "Dog Days" of summer, things will begin to heat up on the campaign trail, as Wisconsin is only about six weeks out from the September 14th primary.One of the few quantitative indicators revealing the strength of a candidate's campaign is the July continuing finance report.While a candidate's bank account doesn't always foretell success or failure, the partisans will certainly use them to spin the positions of candidates in the race.

Tidbits will take a look at how things shook out on the Wisconsin candidate's finance reports.In addition, we'll highlight the recent Supreme Court's ruling regarding the Injured Patient's Compensation Fund, and an employers liability for injuries sustained by an independent contractor's employee. The EPA recently announced that it will hold public listening sessions on potential changes to the water quality standards regulation, which you can read more about below.

Political Tidbits will provide continuous updates on election news and other government news. Also, please visit Hamilton Consulting Group's Blog for timely updates.

Money Talks

Those who watch the bank accounts of candidates (and yes, we are those), mostly look at two factors:First, the amount of money raised in the reporting period (in this case from January 2010 to June 30th 2010), and second, the cash the candidate has available to spend.

Tidbits will take a look through the U.S. Senate and Gubernatorial races individually, and break down trends we see in the legislature as well.

There is an interesting dynamic in play in the challenge to Feingold.  Feingold has out-raised, outspent and has considerably more money on hand than Ron Johnson, yet the polling and the pundits suggest this race continues to move in Johnson's direction.

Feingold has a solid fund-raising base, and will be able to keep adding to his account. It has been rumored that Johnson has been willing to put up to $10 million of his own money into this race.If he puts in anywhere near that amount, he'll be in a financial dead heat with Feingold.Washington is already viewing this race as a bell-weather for the country - an established, well known Democratic U.S. Senate candidate battling for his political life against a mostly unknown Republican political novice.

Both Barrett and Walker had healthy fundraising reports, with Walker edging out Barrett on the fundraising, but Barrett holding a bit more in reserve.Neumann's personal contribution to his campaign of $2.5 million has him showing the highest amount raised during the period, but he has the lowest amount to spend.

Barrett and Walker will likely continue to report similar fundraising numbers throughout the campaign.The only question that remains on the spending is how much Walker will have to spend specifically on defeating Neumann in the primary.To this point his advertising could be viewed as helpful to the primary and the general and he hasn't had to spend money specifically targeting Neumann.That may or may not change in the coming weeks.

State Senate

Democrats currently hold the Senate at an 18-15 margin, Republicans need a net pick up of two seats to take the majority.If fundraising is an indicator, the two seats where the battle for the majority could take place are the two where they out-raised the Democrats most dramatically, SD-5 where Rep. Leah Vukmir out-raised Jim Sullivan $85,000 to $42,000 and SD-31 where challenger Ed Thompson out-raised Sen. Kathleen Vinehout $62,000 to $27,000.

It should be noted that even though both candidates were out-raised by over 2-1, Sullivan and Vukmir are essentially even up with cash on hand at nearly $120K a piece and Vinehout has a $60K to $46K edge on Ed Thompson when it comes to money in the bank.

In the other targeted races both Incumbent Democratic Senators Pat Kreitlow and John Lehman have $50,000-plus advantages over their Republican opponents Terry Moulton and Van Wangaard.In Senate District 1, the open seat to replace retiring Republican Senator Al Lasee, Democrat Monk Elmer has a $35,000+ cash on hand advantage over Republicans Frank Lasee and Dave Hutchinson.

State Assembly

Democrats currently hold the Assembly at a 51-46-2 margin with Republicans needing a net gain of four seats to take back the chamber.  There are arguably a dozen-plus seats in play that could have a hand in the direction the Assembly takes in November, including many competitive open seats.

With many Assembly candidates emerging late or embroiled in a primary, the numbers on the latest report may not tell us much yet.  That said, there were some interesting numbers to take note of in the 5 open seats that insiders believe are most in play for a party switch:

Legislature's $200 Million Transfer from Injured Patients Compensation Fund Unconstitutional

The Wisconsin Supreme Court recently ruled in Wisconsin Medical Society, Inc., et al., v. Morgan, 2010 WI 94, that the legislature's $200 million transfer from the Injured Patients and Families Compensation Fund (Fund) to the Medical Assistance Trust Fund was unconstitutional. The provision was inserted into the 2007 biennial budget bill as a way to help balance the state budget.

The Wisconsin Medical Society (Medical Society) sued the Wisconsin Secretary of Administration, Michael Morgan, claiming that the transfer was an unconstitutional taking of private property without just compensation. The trial court dismissed the lawsuit, ruling that the Medical Society lacked a property interest in the Fund. The case was appealed to the Wisconsin Supreme Court.

In a 5-2 opinion authored by Justice Prosser (joined by Justices Roggensack, Crooks, Ziegler and Gableman), the Court ruled that that health care providers have a protectable property interest in the Fund. Specifically, the Court ruled that:

• Health care providers have a right to the security and integrity of the Fund;
• Health care providers have a right to realize the Fund's investment earnings to moderate, and even lower, their assessments; and
• Health care providers and proper claimants have rights to have excess judgments paid to the proper claimants.

Therefore, because the health care providers have protected property interests in the Fund, the 2007 budget bill (Wis. Act. 20) provision transferring $200 million from the Fund was unconstitutional.

The dissenting opinion, authored by Chief Justice Abrahamson (joined by Justice Bradley), argued that health care providers do not have a protected property interest in the Fund. Instead, the "Fund is a government trust account in the sense that the Fund's governing entity is required to manage the monies in a particular way, but future legislatures may change the applicable statutes."High Court Rules Employer Not Liable Injuries Sustained by Independent Contractor’s Employee

In Tatera v. FMC Corp., et al., 2010 WI 90, the Wisconsin Supreme Court was asked to determine whether a corporation is liable for injuries sustained by an independent contractor's employee.

The lawsuit was filed by Vicki Tatera and the Estate of Walter Tatera, her late husband. Walter Tatera died in 2004 from malignant mesothelioma, a rare form of cancer. Tatera worked for a company (B&M) that machined asbestos-containing friction disks to achieve a desired size and shape. B&M, an independent contractor, performed this work for a corporation (FMC Corp.) that manufactured industrial electric brakes. FMC Corp. was the principal employer, but it did not have control over the work performed by B&M's employees.

After Tatera's death, a lawsuit was filed against FMC Corp. and several other defendants alleging negligence and strict liability. As to the negligence claim, the lawsuit stated that FMC Corp.: 1) had a duty to exercise reasonable care for the safety of Walter and those who worked with or were exposed to the asbestos-containing products, or 2) should have known that exposure would cause disease or death.

The trial court ruled in favor FMC Corp. on both the negligence and strict liability claims. The court of appeals upheld the lower court's decision regarding the strict liability claim, but reversed the portion of the decision dismissing the negligence claim against FMC Corp.

In a 4-3 decision authored by Justice Ziegler (joined by Justices Prosser, Roggensack and Gableman), the Wisconsin Supreme Court reversed the court of appeals' decision regarding the negligence claim and ruled that FMC Corp. was not liable in tort. The Court ruled that under Wagner v. Continental Casualty Co., a principal employer is not liable in tort for injuries sustained by an independent contractor's employee while he or she is performing the contracted work.

The Supreme Court noted that there are two exceptions to this rule. The first exception requires a comprehensive analysis determining whether the principal employer committed an affirmative act of negligence. In this case, the Court was to determine whether FMC Corp., the principal employer, negligently:

• Failed to warn Walter and his employer of the health hazards associated with asbestos;
• Failed to warn them of the danger and harm of asbestos after the products were supplied;
• Failed to investigate or test for the health effects of asbestos prior to supplying the products;
• Failed to instruct Walter and his employer in the use of precautionary measures relating to asbestos-containing products; or
• Supplied unsafe asbestos-containing products.

After analyzing the facts of this case, the Court ruled that FMC Corp. was not negligent with respect to any of the foregoing, and therefore the first exception did not apply.

The Court further found that the second exception, which required the Court to determine whether the activity of machining an asbestos-containing friction disk is extrahazardous, did not apply in this case. In reaching its decision, the Court ruled that machining an asbestos-containing friction disk does not qualify as an extrahazardous activity because steps may be taken to minimize the risk of injury.

The Court also upheld the court of appeals' decision finding that FMC Corp. was not strictly liable.

The dissenting opinion authored by Chief Justice Abrahamson (joined by Justice Crooks and Justice Bradley) argued that "at a minimum [the plaintiffs] established their right to a trial on their claim for negligence based on an affirmative act of the defendant, FMC, in which it supplied Walter Tatera's employer with asbestos-containing friction disks for grinding without warning the employer of the disks' dangerous content."

Phosophorous Rules One Step Closer to Taking Effect

Two state Senate panels recently heard testimony on the phosphorus rules that were adopted by the Wisconsin Natural Resources Board in June.

The proposed rules impose phosphorus limits for Wisconsin rivers, streams and lakes. The rule provides a two-pronged approach, by setting water quality standards and placing new limits on municipal wastewater treatment plants and factories that have their own treatment systems.

The rule is the most restrictive in the Midwest, and will force businesses and municipalities to bear the brunt of the costs. Complying with the regulations is estimated to cost somewhere between $1.13 billion and $4 billion.

The legislature could decide to make changes to the plans based on the testimony they heard, or they could decide to do nothing and let the rules automatically take effect in September.

(This article was authored by Hamilton Consulting Group's intern, Emily Kelchen, a third year law student at the University of Wisconsin Law School. For more information on this issue, contact Emily or Andy Cook.)

Potential Revisions to Water Quality Standards Regulation

Proposed changes to the rules governing water quality and conservation in Wisconsin have generated interest from all corners of the state. Wisconsin, however, is not the only place where water quality is an issue for debate. The EPA recently announced that it will hold public listening sessions on potential changes to the water quality standards regulation on August 24 and 26, 2010.

Water quality standards are the foundation of the water quality-based approach to pollution control, including Total Maximum Daily Loads and National Pollutant Discharge Elimination System permits. Standards are also a fundamental component of watershed management.

The current regulations:

• define when and how designated uses may be revised;
• require criteria to protect those uses be based on sound science;
• require the EPA and states to prevent the degradation of water quality, except under certain circumstances;
• require states/tribes to review their water quality standards at least every three years and engage the public in any revisions to water quality standards; and
• specify the roles of states, tribes, and the EPA and provide administrative procedures for the EPA's review.

The EPA's proposed changes will impose stricter standards and increase the EPA's oversight power.

You can easily monitor changes in water quality regulation at both the state and national level with Hamilton Consulting's Regulatory Watch Water Tracking Report.

(This article was authored by Hamilton Consulting Group's intern, Emily Kelchen, a third year law student at the University of Wisconsin Law School. For more information on this issue, contact Emily or Andy Cook.) 

EPA Rejects Claims of Flawed Climate Science

On July 29, 2010 the EPA re-affirmed its 2009 determination that climate change is real, is occurring due to emissions of greenhouse gases from human activities, and threatens human health and the environment by rejecting 10 petitions for reconsideration.

The petitions raised questions about the validity of the data relied on by the EPA in light of emails released to the public by hackers. The emails, from scientists at a climate-research center at Britain's University of East Anglia, seemed to show climate scientists discussing problems with their own data, and scheming to silence their critics. The EPA cited several investigations that have cleared the researchers involved, and found that the emails revealed only "a candid discussion of scientists."

The EPA did concede that errors had been found in a landmark United Nations report on climate change relied on by the EPA, but determined that none of the errors raised doubts about the overall direction of climate science. The EPA claims its "review shows that climate science is credible, compelling, and growing stronger."

The 2009 "endangerment finding" paves the way for the agency to begin regulating greenhouse gases as harmful air pollutants under the Clean Air Act.

(This article was authored by Hamilton Consulting Group's intern, Emily Kelchen, a third year law student at the University of Wisconsin Law School. For more information on this issue, contact Emily or Andy Cook.

Related News Articles

Chuck Raasch column: Midwest looking like election battleground: Appleton Post-Crescent, Aug. 10, 201. After decades in which the center of American political gravity has moved south and west, the Great Lakes have become the fresh battleground in the 2010 election.

Energy bills rise 66% with heat, humidity: Milwaukee Journal Sentinel, Aug. 9, 2010. We Energies customers pay for running AC more this year.

Dysfunction in Milwaukee teachers' union (opinion): Racine Journal Times, Aug. 9, 201. One of the minor reasons for its major troubles showed up again last week when the Milwaukee teachers' union filed suit: it wants to get the taxpayers to pay for Viagra, again.

Gubernatorial candidates support revamping state Commerce Department: Milwaukee Journal Sentinel, Aug. 2, 2010. A radical overhaul of the Wisconsin Department of Commerce, the agency meant to play a central role in the state's economy, became a more realistic possibility Monday as three gubernatorial candidates lined up behind a new study that calls the agency archaic and ineffective.

Report says Wisconsin needs new economic development agency: WisPolitics, Aug. 2, 2010. A new report recommends that economic development functions be carved out from the Wisconsin Department of Commerce and be centralized in a new agency in order to help turn around the state's sluggish economy.

Can Wisconsin compete? Beloit Daily News, Aug. 2, 2010. Study shows state ‘must be bold’ to build economy. Local and state economic development officials are hoping a new study will raise awareness of the need to improve Wisconsin’s business environment.

Competitors play to win (opinion): Beloit Daily News, Aug. 2, 2010. Study indicates Wisconsin needs to step up its game.

Phosphorus rules needed to protect Wisconsin lakes (opinion): Wisconsin State Journal, Aug. 2, 2010. Some business groups have raised concerns about added cost. But the DNR has improved its proposal for business based on feedback from organizations such as the Wisconsin Paper Council and Wisconsin Cranberry Growers.

Report: State's business development needs a boost: Wisconsin State Journal, Aug. 1, 2010. Wisconsin needs a new economic development organization, armed with at least $500 million in bonding authority and authorized to steer a unified strategy to boost the state, a new study says.