Hamilton Political Tidbits - Dec. 9, 2011
Introduction
While the legislature slowly winds down for the year, a busy January awaits the legislators when they return. Dozens of new bills have been introduced, including the recently unveiled mining legislation. Gov. Scott Walker was busy this week, signing over 20 bills (some of which are detailed below) while touring the state. Recall efforts have hit their halfway point, but Democrats seem far from settled on who will oppose Governor Walker in an election.
Hamilton Consulting Group will continue to provide updates throughout the upcoming legislative floor period and the recall efforts.
Recall Effort Moving Forward
The recall effort against Governor Walker and four state senators has been active now for nearly a month.
While the organizers aren't providing daily totals, it appears they will not have any problem gathering enough signatures to trigger a recall election against the Governor, and at a minimum three of the four state senators.
The most recent available number that has been put out to the public was the total of 300,000 in the first 12 days. Signature collection ends on January 17, where some estimate the total number collected calling for a recall will exceed 700,000.
After the signatures are turned in they will need to be certified by the Government Accountability Board (GAB). The signatures, as well as how they were collected, will receive great scrutiny and could be challenged legally. The process that ensues following submission of the signatures to the GAB contains enough ambiguity that estimates on when elections are held have ranged from late March until June. It is also unknown at this point as to whether or not the Senate recall elections will occur on the same day as the gubernatorial election.
Ambiguity not only exists on the timing of the elections but as to who will be challenging Gov. Walker as well. Oft heard names to fill out the Democratic ticket include Milwaukee Mayor Tom Barrett, Dane County Executive Kathleen Falk, Congressman Ron Kind and State Senator Tim Cullen. No one has announced as of yet, although Sen. Cullen has indicated interest in running if enough signatures are collected.
In the state Senate races, the speculation surrounds current and former Democratic elected officials as the challengers in recall efforts against sitting Republican Senators Van Wanggaard from Racine, Pam Galloway from the Wausau area, and Terry Moulton from Chippewa Falls region.
Governor Walker Signs Special Session Tort Reform Bills
On Wednesday, Dec. 7, Gov. Scott Walker signed into law two of the remaining special session tort reforms bills recently passed by the Legislature. The two bills the Governor signed were:
TRESPASSER LIABILITY – SPECIAL SESSION SB 22/AB 22 – 2011 WISCONSIN ACT 93
Previously, trespasser liability law was based solely on common law, which adopted provisions of the Restatement (Second) of Torts. At common law, a land possessor is liable for intentional or willful injury against a trespasser and is required to warn known trespassers of dangerous conditions on the premises. This legislation codifies the traditional common law regarding trespasser liability and prevents the implementation of a newly rewritten Restatement of the Law (Third) Torts: Liability for Physical and Emotion Harm (Section 51). This new Restatement would have imposed a duty on land possessors to exercise reasonable care to all entrants, including unwanted trespassers, unless the trespasser is “flagrant,” which has yet to be defined. This bill codifies current case law and protects landowners from potential liability due to injury to trespassers.
AWARDING REASONABLE ATTORNEY FEES – SPECIAL SESSION SB 12/AB 12 – 2011 WISCONSIN ACT 92
This legislation provides certainty for businesses by creating new factors for a court must weigh in determining reasonable attorney fees in fee-shifting cases. The bill also places a cap on attorney fees.
The bill lists the following criteria a court must consider when setting reasonable attorney fees: 1) the time and labor required by the attorney; 2) the novelty and difficulty of the questions involved; 3) and the complexity of the case; 4) the skills needed to perform the legal service properly; 5) the likelihood that the acceptance of the particular case prevented the attorney from accepting other work; 6) the fee customarily charged in the locality for similar legal services; 7) the amount involved in the legal dispute and the results obtained; 8 ) the fees granted in similar cases; 9) the time limitations imposed by the client or by the circumstances; 10) the nature and length of the professional relationship with the client; 11) the experience, reputation, and ability of the attorney performing the services; 12) whether the fee is fixed or contingent; and 13) the legitimacy of any defenses raised in the case.
The bill also limits attorney fees to three times the amount of compensatory damages awarded, except in cases of nonmonetary relief, or in cases involving both compensatory and nonmonetary relief. Senate Amendment 2 modified the provisions of the bill regarding the “three times” limitation. Under the amendment, the court must presume that reasonable attorney fees do not exceed three times compensatory damages, but this presumption may be overcome if the court determines, after weighing the above factors, that a greater amount is reasonable.
Mining Legislation Introduced
This post was authored by Emily Kelchen, the Hamilton Consulting Group.
The long anticipated mining bill was released by Assembly Republicans on Thursday, Dec. 8. The 183-page bill would create new statutes to govern ferrous (iron) mining, which is currently regulated in the same manner as non-ferrous (non-iron minerals like gold or copper) mining.
This bill comes at the request of Gogebic Taconite, a company which is proposing to build Wisconsin’s largest ever iron mine. Proponents of the bill point to the job creation potential of the mine, while opponents worry environmental standards will be sacrificed to gain those jobs. Proponents counter that the text of the bill is the best indication so far that it is possible to retain Wisconsin’s strong environmental standards while still taking advantage of the state’s rich natural resources.
The bill will be formally introduced and receive a public hearing Wednesday, December 14 at 10 a.m. during a public hearing held by the Assembly Committee on Small Business, Jobs and the Economy. The committee will meet in Milwaukee at State Fair Park.
This article breaks the mining bill requirements into stages and provides a brief discussion of the proposed changes at each stage.
Application
The bill makes very few changes to the existing pre-application and application processes. For the most part, current statutes and rules are simply moved to the new ferrous mining statute as is. One notable change is the availability of early data collection. The current mining process prevents a person who intends to apply for a mining permit from collecting and analyzing data, such as water quality information, and presenting that data to the DNR as part of its pre-application. The bill would allow data collection and analysis to occur before a person seeking a mining permit makes the decision to apply for a permit, saving time and giving both the applicant and the DNR more information to make decisions from.
Permitting
The bill will require all applicants, rather than only those the DNR determines should, to prepare an environmental impact report (EIR), and to submit that report with their application. EIRs are used by the DNR to prepare environmental impact statements (EIS). The bill requires the DNR work with other state and federal agencies to draft one joint EIS. This differs from current law, which permits, but does not require, the DNR to coordinate with other agencies. The bill permits the DNR hold a hearing covering both the EIR and the EIS, rather than requiring two separate hearings. Any hearing the DNR holds must be conducted as a public hearing rather than contested case hearings under the bill, allowing public participation without having to swear an oath or understand the rules of cross-examination.
Current law does not include a timeline for completeness determinations and DNR actions. The bill remedies this, providing clear timelines for both the applicant and the DNR. The bill also modifies the circumstances where the DNR can deny a mining permit.
One major change the bill proposes is the incorporation of other permits into the overall mining permits by consolidating the mining permit process with all of the other incidental environmental permits that may be required. Incorporating other required permits, such as air quality and water withdrawal or wetlands permits, into the larger mining permit ensures the permit includes clear standards and expectations. Moving these standards from the administrative rules to the statutes gives the legislature additional oversight over the mining process, while providing greater certainty to the applicant since it is clear the mining law is the controlling statute.
Review of DNR Decisions
The bill modifies the current appeals process by skipping the contested case stage and providing for initial review in the circuit court.
Reclamation and Liability
The bill maintains the requirement that mining companies post a financial bond to cover the cost of complying with Wisconsin’s mining law. The bill, like current law, also requires the operator of a mining waste facility to provide proof of financial responsibility for the costs of the care, maintenance, and monitoring of the facility after it is closed (long−term care). The obligation to provide proof of financial responsibility for long−term care continues until DNR terminates that requirement. In addition, the company is perpetually liable for any spills or contaminations.
The bill also incorporates the current requirement that the mining site be fully reclaimed and restored consistent with a DNR-approved plan. This plan must be outlined in the original application.
Fees and Taxes
The bill requires DNR to assess a fee equal to its costs for evaluating a mining project or $1,100,000, whichever is less. An applicant must pay $100,000 with the bulk sampling plan or, if no bulk sampling plan is filed, with the notice of intent to file a mining permit application and then must make $250,000 payments when DNR shows that the previous payments have been fully allocated against actual costs.
Under current law, the state imposes a net proceeds occupation tax on the mining of metallic minerals in this state. The tax is based, generally, on a percentage of net income from the sale of ore or minerals after certain mining processes have been applied to the ore or minerals.
Under the bill, 50 percent of the revenue collected from the net proceeds occupation tax on extracting ferrous metallic minerals in this state is deposited into the investment and local impact fund and 50 percent of the revenue is deposited into the general fund.
Legislation Would Limit "Double Dipping" by State Employees
By Lane Oling, Intern, The Hamilton Consulting Group
The Assembly Committee on Insurance held a hearing November 17, on two bills that would limit the ability of public employees who retired, and were later rehired to collect a salary and a pension simultaneously.
Currently, under Chapter 40, this practice is legal. State workers can retire, start collecting their pensions and then go back to work 30 days later to earn a salary in the new position.
This practice is sometimes called "double dipping." Double dipping is often alleged when a public employee retires from one public sector job, receives their pension, and then is rehired into another public sector job and receives a salary in addition to the pension.
The headline that sparked the new legislation concerned a University of Wisconsin - Green Bay employee who had retired with a $40,000 - $70,000 pension, and then later returned to that same public sector job with a $131,000 salary in addition to the annuity.
Under current law, when a participant in the Wisconsin Retirement System (WRS) terminates employment and begins to receive an annuity, he or she may return to public employment, continue the annuity, as well as earn wages from the new public sector employment.
Newly introduced legislation, Assembly Bill 318, provides that if a participant in the WRS who is receiving an annuity takes another public sector position where he or she is expected to work at least one-half of what is considered full time employment, the annuity must be terminated until after employee terminates covered employment.
Those who maintain the Wisconsin Retirement System, and more specifically, the state Employee Trust Fund, are concerned that this "loophole" actually threatens the solvency of the fund itself, especially in light of the fact that over the next 19 years a large majority of baby-boomers will be reaching the age of 65, the normal retirement age. A companion bill, Assembly Bill 352, would extend the waiting period between retiring and returning to work from 30 days to 180 days. The purpose of this bill is to discourage premature retirement, even if double dipping is eliminated.
Related Links:
Watch the hearing on AB 318 and AB 352 brought to you by WisconsinEye.
Wisconsin Supreme Court Hears Oral Arguments in Case Deciding Default Judgments
By Andrew Cook, The Hamilton Consulting Group
The Wisconsin Supreme Court heard oral arguments in Johnson v. Cintas Corp. No. 2, et al., 2011 WI App 5, 2009AP2549, which is the latest in a number of recent cases accepted by the Court dealing with default judgments.
The issue is whether a default judgment is void because the summons and complaint names the wrong corporate defendant and thus personal jurisdiction is not obtained over the correct corporate entity.
Facts
Robert Johnson, an employee for Cintas Corporation No. 2 (“Cintas No. 2”), was injured in a car accident resulting in permanent injury. Johnson was a passenger in the vehicle, which was being driven by a friend. Johnson was required to use his vehicle during the course of his employment and held auto liability insurance through Cintas No. 2. Johnson sought treatment coverage from Cintas No. 2 through its health insurance provider. When Cintas No. 2 refused to pay benefits, Johnson filed suit.
Johnson’s attorney filed the original summons and complaint naming “Cintas Corporation” as the defendant, instead of Cintas Corporation No. 2. Cintas Corporation No. 2 is a wholly-owned subsidiary of Cintas Corporation. Cintas Corporation No. 2 is a foreign corporation registered with the State of Wisconsin, whereas Cintas Corporation is a foreign corporation not registered in Wisconsin and does not do business within the State of Wisconsin.
Neither Cintas Corporation No. 2 nor Cintas Corporation responded to the complaint, and Johnson moved for default judgment. Cintas Corporation filed an Emergency Motion to Strike and Dismiss for Lack of Personal Jurisdiction. At the default judgment hearing Johnson was allowed to amend the summons and complaint. The trial court then granted default judgment against Cintas Corporation No. 2.
Cintas No. 2 then contacted the trial court and filed its answer to the original and amended complaints, but the court refused to hear Cintas No. 2’s motions because it had already granted default judgment against Cintas No. 2.
Cintas No. 2 filed a motion for relief from judgment, which the court granted and then vacated the default judgment. Johnson filed a motion for reconsideration and argued that newly obtained information proved that Cintas No. 2 effectively held itself out as Cintas Corporation. The trial court granted Johnson’s motion and reinstated the default judgment.
Court of Appeals Decision
The court of appeals reversed the trial court. The court held that because Johnson’s summons failed to accurately name the proper defendant (Cintas Corporation No. 2), the service of process failed to confer personal jurisdiction over that defendant.
The court further explained that regardless of how Cintas Corp. No. 2 held itself out to the public, the amendment of the summons and complaint had the effect of bringing a new party into the action. According to the court, added parties must be served with the summons or voluntarily appear. The court further noted that strict compliance with the rules of statutory service upon amendment naming a new corporate entity is consistent with Wisconsin’s policy viewing default judgments with disfavor.
A decision by the Wisconsin Supreme Court is expected before it ends its current term in July 2012.
EPA Proposes Changes to Clean Air Act Standards for Boilers and Incinerators
By Emily Kelchen, The Hamilton Consulting Group
After facing criticism from industry and lawmakers, the Obama administration on Friday, December 02, 2011, proposed easing rules aimed at reducing toxic air pollution from industrial boilers and incinerators.
Background
The Clean Air Act (CAA) requires the EPA to develop and adopt New Source Performance Standards (NSPS) for solid waste incineration units including Commercial/Industrial Solid Waste Incinerators (CISWI).
On March 21, 2011 the EPA released its latest proposed standards. However, at the same time final rules were issued, the EPA also announced that it would "reconsider" certain aspects of the boiler and commercial/industrial solid waste incinerator (CISWI) rules in order to fully address technical issues raised during the comment period.
On May 18, 2011 the EPA announced it would delay the effective date for the final rules titled "National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters" and "Standards of Performance for New Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units" until the proceedings for judicial review of the rules was completed or the EPA completed its reconsideration of the rules.
The agency received more than 4,800 comments from businesses, communities and other key stakeholders concerned about the high projected cost and rigorous compliance schedule. The Republican-controlled House passed a bill in October seeking to delay the boiler regulation and lower the threshold that boiler operators would have to meet from "maximum achievable" pollution control to the "least burdensome." The White House has said President Barack Obama would veto the measure lowering standards. A bipartisan bill pending in the Senate would give the EPA additional time to rewrite the rule and for industry to comply.
December 2011 Proposal
The EPA released its latest version of the boiler emission standards on December 2, 2011. The changes cut the cost of implementation by nearly 50 percent from the original 2010 proposed rule while maintaining health benefits. Some of the key changes the EPA is proposing include:
Boilers at large sources of air toxics emissions: The major source proposal covers approximately 14,000 boilers – less than one percent of all boilers in the United States – located at large sources of air pollutants, including refineries, chemical plants, and other industrial facilities. The EPA is proposing to create additional subcategories and revise emissions limits. The EPA is also proposing to provide more flexible compliance options for meeting the particle pollution and carbon monoxide limits, replace numeric emissions limits with work practice standards for certain pollutants, allow more flexibility for units burning clean gases to qualify for work practice standards and reduce some monitoring requirements. The EPA estimates that the cost of implementing these standards remains about $1.5 billion less than the April 2010 proposed standards. Health benefits to children and the public associated with reduced exposure to fine particles and ozone from these large source boilers have increased by almost 25 percent and are estimated to be $27 billion to $67 billion in 2015.
Boilers located at small sources of air toxics emissions: The proposal also covers about 187,000 boilers located at small sources of air pollutants, including commercial buildings, universities, hospitals and hotels. However, due to how little these boilers emit, 98 percent of area source boilers would simply be required to perform maintenance and routine tune-ups to comply with these standards. Only 2 percent of area source boilers may need to take additional steps to comply with the rule. To increase flexibility for most of these sources, the EPA is proposing to require initial compliance tune-ups after two years instead after the first year.
Solid waste incinerators and revisions to the list of non-hazardous secondary materials: There are 95 solid waste incinerators that burn waste at a commercial or an industrial facility, including cement manufacturing facilities. The EPA is proposing to adjust emissions limits for waste-burning cement kilns and for energy recovery units.
The EPA is also proposing revisions to its final rule which identified the types of non-hazardous secondary materials that can be burned in boilers or solid waste incinerators. Following the release of that final rule, stakeholders expressed concerns regarding the regulatory criteria for a non-hazardous secondary material to be considered a legitimate, non-waste fuel, and how to demonstrate compliance with those criteria. To address these concerns, the EPA’s proposed revisions provide clarity on what types of secondary materials are considered non-waste fuels, and greater flexibility. The proposed revisions also classify a number of secondary materials as non-wastes when used as a fuel and allow for a boiler or solid waste operator to request that the EPA identify specific materials as a non-waste fuel.
The full versions of the proposed rule are available here:
Proposed Emissions Standards for Area Source Industrial, Commercial, and Institutional Boilers
The EPA will accept public comment on these standards for 60 days following publication in the Federal Register. The EPA intends to finalize the reconsideration by spring 2012.
Daubert Summit - CLE Seminar: Jan. 11, 2012
The Wisconsin Civil Justice Council (WCJC), in partnership with the Wisconsin Defense Counsel (WDC) and the Wisconsin Association of Manufacturers and Commerce (WMC), is presenting a comprehensive education and training event regarding the recently enacted rules governing expert opinion testimony in Wisconsin (2011 Wisconsin Act 2). The major sponsors of this event are the Wisconsin Insurance Alliance (WIA) and The Wisconsin Hospital Association (WHA).
Titled "Daubert Comes to Wisconsin-CLE Summit on Expert Opinion Evidence," the program is primarily for in-house counsel and trial lawyers who are engaged in the defense of civil litigation as well as those lawyers who represent businesses and professionals, and whose litigation fate relies heavily on the admissibility - or non-admissibility - of expert testimony.
The Summit will be held on Jan. 11, 2012 at the Milwaukee Marriott West. For event and registration information, click here.