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Mar. 27, 2009

The Joint Finance Committee began public hearings throughout the state to address the 1,743-page budget bill (AB 75). The JFC began its statewide tour in Sparta on Monday, with hearings on Wednesday and Friday in West Allis and Eau Claire. The JFC will finish public hearings next week when it travels to Racine, Appleton, and Cambridge.

On top of an estimated $5.4 billion budget deficit, the state is now contending with unemployment rates not seen since the early 1980s. According to a Wisconsin Department of Workforce Development report issued this week, the state’s unemployment rate in February hit 8.8 percent. Unemployment rates increased in 71 of 72 counties, with the cities of Beloit (16.9%), Racine (15.6%), and Janesville (14.6%) hardest hit.

Wisconsin Developments

Joint Finance Committee Hears Testimony on Budget

Hundreds of people turned out at the Joint Finance Committee’s (JFC) hearings this week as the Committee began statewide public hearings.

Protestors wore T-shirts that said, “I’m Not Big Oil,” in reference to a budget provision that would tax oil companies. The group of owners of small gasoline stations opposed the provision, known as the “oil franchise tax,” which taxes oil companies’ gross revenues and prohibits the tax from being passed on to consumers. Those who testified argued that the provision will likely affect the supply of fuel in Wisconsin and dramatically increase the cost of gasoline. 

In addition, they argued that the law is unconstitutional and will not likely be upheld in court. Others at the hearings opposed increased taxes, early release of prisoners, and the proposed statewide smoking ban.

Statewide Papers Begin to Question Policy Provisions in Budget

A number of statewide papers this week criticized policy provisions hidden in the budget that would alter Wisconsin’s civil justice system.

The La Crosse Tribune, for example, this week in an editorial called on the Legislature to remove the joint and several liability provision from the budget. According to the Tribune, removing the item is a “slam dunk.”

Similarly, the Green BayPress- Gazette this week took issue with legislators attempting to hide policy in the budget. In its editorial, the Gazette argued that, “at the very least, these matters should be introduced as separate bills.”

The Joint Finance Committee has the power to remove policy provisions from the budget. After the public hearings, the JFC will begin deliberating over specific issues in the budget. Whether the Committee will remove such policies from the budget will remain to be seen.

Assembly Passes SB-9; Goes to Governor for Signature

The Assembly passed Senate Bill 9, authored by Senator Jon Erpenbach (D-Waunakee), which adds a tort claim for intentional misrepresentation in the sale of an existing home. The bill will give a buyer who alleges that the seller committed fraud or intentional misrepresentation the ability to recoup not only the economic value of the home, but also punitive damages. The bill was in response to the Wisconsin Supreme Court’s decision in Below v. Norton.  SB 9 passed the Assembly 69-28.

The Wisconsin Defense Counsel (formerly the Civil Trial Counsel of Wisconsin) and the Wisconsin Civil Justice Council (WCJC) opposed the bill. The two groups explained that buyers already have statutory and contractual remedies under current law. WCJC and WDC also expressed concern that the bill will provide an incentive for plaintiffs to use the threat of punitive damages against buyers who have not committed fraud as a way to seek a higher settlement.

The WDC and WCJC also argued that the law is an erosion of Supreme Court’s application of the economic loss doctrine, which seeks to preserve the distinction between contract and tort claims. The economic loss doctrine prohibits a party from bringing a tort claim when the transaction is based on a contract.

SB 9 will now go to the Governor for his signature.

Wisconsin Supreme Court Rules that Land Owner Can Receive Double Damages for Forest Fire Caused by Adjacent Landowner

In a 5-2 decision, the Wisconsin Supreme Court ruled in Heritage Farms, Inc. v. Markel Insurance Co. that an owner whose property was damaged by a forest fire started by an adjacent property owner could receive double the amount of compensatory damages.

A fire intentionally started on the Lake of Woods Campground spread onto Heritage Farms’ property, burning 572 acres.

Both the circuit court and the appellate court ruled that Heritage Farms was not allowed to receive double compensatory damages under Wis. Chap. § 26.21(1). The lower courts ruled that the statute only applied to railroad companies, and because none of the defendants were a railroad corporation, none had violated the statute allowing double damages.

Writing for the majority, Justice Annette Ziegler - joined by Chief Justice Abrahamson, and Justices Bradley, Crooks, and Prosser - reversed the lower court. The majority determined that the double compensatory damages statute did indeed apply to the adjacent property owner, even though they were not a railroad corporation. The court ruled that § 26.21(1) is not limited to railroad companies, and that a violation under Wis. Chap. § 21.20 is not a prerequisite for the application of the double damages award under § 26.21(1).

The Court further ruled that the term “negligence” under § 26.31 does not require a showing of “gross negligence.”

Justice Patience Roggensack, joined by Justice Gableman, argued in her dissent that the lower court was correct in ruling that in order for a party to receive double compensatory damages under the statute, the person causing the fire had to be a railroad company. According to Justice Roggensack, the legislative history showed that the Legislature, when it enacted the damages provision, intended for double compensatory damages to apply only to railroad corporations.

Related News

Changes don't serve state budget's function (opinion): Green Bay Press-Gazette, Mar. 26, 2008. More and more questions are arising about why certain policy changes are even in the budget — and why the governor didn't mention some of them in the first place.

Get non-budget items out of the budget (opinion): La Crosse Tribune, Mar. 25, 2009. They’re important enough to the future of our state to be debated separately and openly, not as add-ons to a state budget that’s being debated in the most economically challenging time in decades.

State budget panel seeks local input: Eau Claire Leader-Telegram, Mar. 26, 2009. Legislature's Joint Finance Committee is scheduled to hold a public hearing on the proposed 2009-11 state budget at UW-Eau Claire.

Don't raise tax on beer to punish all drinkers (opinion): Eau Claire Leader-Telegram, Mar. 25, 2009. Resist the pressure that all beer drinkers should pay more because some abuse the privilege.

Citizens lobby lawmakers on smoking, early-release measures: Milwaukee Journal Sentinel, Mar. 19, 2009. Convenience store owners wore red shirts that said "I'm not big oil" as a way to ask the committee to kill a proposed tax on gas revenue to pay for roads.

GOP hopes to reinvent itself with 'young guns' such as Ryan: Milwaukee Journal Sentinel, Mar. 25, 2009. Program is designed to really identify future leaders in the Republican Party.

Lawyers divided over proposal: Wisconsin Law Journal, Mar. 19, 2009. Doyle seeks to alter current joint and several liability standards that require a defendant be found at least 51 percent negligent to be liable for full damages. The proposed change would only require that a defendant’s negligence be equal to or greater than that of the person seeking recovery. 

Doyle budget leaves $1.5 billion deficit in 2011-'13, report says: Milwaukee Journal Sentinel, Mar. 19, 2009. Even after raising taxes by almost $3 billion and using hundreds of millions of federal stimulus dollars.

All the markings of political payoff (opinion): Beloit Daily News, Mar. 16, 2009. Politics collides with reality in competition for development.

A bad state mandate (opinion): Milwaukee Journal Sentinel, Mar. 12, 2009. Why should the state be able to impose wage conditions on projects that are not its own? We fear fewer projects and fewer jobs in this recession.

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