Wisconsin Legislative Session Comes to A Close – Summary of Newly Enacted Civil Liability Laws

On April 1, the Wisconsin Legislature ended the 2013-14 legislative session. Once again, in the area of civil liability, it was another active legislative session.

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 Gov. Walker as 2013 Wisconsin Act 111. [2]

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 Gov. Walker as 2013 Wisconsin Act 105.[3]

Lemon Law Reforms (SB 182/AB 200): Prior to 2013 Wisconsin Act 101[4] 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 allow lawyers to win jackpot awards that have 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

• 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, Gov. 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 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 provides that if a claimant cannot identify the manufacturer of the specific product, and no other method of recovery is available, the court may 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 (see below) enacted by the Legislature applies Act 2’s language dealing with product 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 20[8] (budget bill) passed the Assembly and Senate in 2013. On March 25, 2014, Judge David Hansher of the Milwaukee County Circuit Court, struck down the retroactive application of the law as violating the plaintiff’s right to due process under Art. I, Section 1 of the Wisconsin Constitution.[9]

Asbestos Trust Fund Transparency (SB 13/AB 19): The 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,[10] some unscrupulous plaintiff attorneys are double-dipping by withholding evidence from courts whether the plaintiff has received a trust claim payment, or whether they are eligible to receive such compensation. This allows plaintiff attorneys to double dip by recovering once against a business, and then against the trusts.

Specifically, the legislation requires plaintiffs to disclose all evidence of compensation received from asbestos trust funds. If the defendant believes that the plaintiff could receive compensation from a trust fund, but has not yet filed a claim with the trust fund, the court is to stay the case until the plaintiff files with the trust fund.

The bill passed both houses and was signed into law by Gov. Walker as 2013 Wisconsin Act 154.[11]

Inadmissibility of A Statement of Apology or Condolence by a Health Care Provider (SB 129/AB 120): The bill 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, benevolence, compassion, condolence, fault, liability, remorse, responsibility, or sympathy to a patient or the patient’s relative or representative is not admissible into evidence 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.

The bill passed the Assembly on a voice vote (which signals overwhelming bipartisan support), and passed with bipartisan support in the Senate 19-14. Two Senate Democrats voted for the bill (Senators Kathleen Vinehout and Tim Cullen), while Republican Senator Glenn Grothman voted against the bill.

Gov. Walker signed the bill into law as 2013 Wisconsin Act 242.[12]

II. Bills that Did Not Pass

Placing a $300,000 Limit on Sponsors of Minor Drivers: (AB 706/SB 592): This legislation, introduced at the request of WDC, creates a limit for liability imputed to the parents or adult sponsor for damages caused by the minor’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. The bill passed the Senate (17-16), unfortunately did not pass the Assembly when the author of the bill (Rep. Jim Ott) decided to no longer support the bill.

Limiting Phantom Damages (Collateral Source Rule) (SB 22/AB 29): This legislation allows juries in personal injury cases to see all of 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,[13] 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 – rather than the amount that was billed by the medical provider. As a result, plaintiffs and their attorneys continue to receive windfalls in situations where the plaintiff did not pay the full amount of his or her medical expenses.

Unfortunately, the bill 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.