Legal Newsline

Tuesday, February 25, 2020

In Wisconsin legal reform debate, GOP lawmakers split from party while lobbyist firm with corporate clients stumps for trial lawyers

By John Breslin | Feb 9, 2018

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MADISON, Wis. (Legal Newsline) – As Wisconsin Republicans and their governor push a legal reform agenda that includes a bill that would reform the state’s electronic discovery and class action rules, a lobbying firm seeking to derail it on behalf of the state's trial lawyers may be at odds on this one with other clients it has represented.

In opposing AB 773/SB 645, The Firm Consulting is lobbying for the interests of the state’s trial lawyers group – the Wisconsin Association for Justice. Yet, according to its website, The Firm Consulting also has lobbied in the past for several companies that find themselves the targets of these trial lawyers’ lawsuits, including Union Pacific, CVS, Dish Network, AT&T, Tesla, Uber and Aetna.

The Firm Consulting also has lobbied for associations like the Greater Madison Chamber of Commerce, the Association of Dental Service Organizations and the National Restaurant Association.

"We’re known for our bipartisan relationships and ability to influence public policy, but we’re valued for our big picture thinking, problem-solving and ability to get the job done," the firm's website reads.

While it may seem odd that a lobbying firm that routinely represents business interests would take up a fight for a group that routinely works against business interests, it's not the only challenge to getting the bill out of the Senate Judiciary and onto the full Senate, where it would likely pass.

Republican Gov. Scott Walker, who flagged the importance of the reforms in his recent state of the state address, has members of his own party working against the bill in the Assembly.

State Reps. Ron Tusler and Cody Horlacher, who are both personal injury lawyers and members of the Assembly Committee on Judiciary, are proposing an amendment that would essentially gut the reforms. 

As drafted, though, AB 773/SB 645 would also regulate lawsuit lending and lower interest charged to insurers for overdue claims, and it has plenty of support from business interests and legal reform groups.

The Wisconsin Civil Justice Council says the proposals outlined in the bill are fair and reasonable to all parties and provide efficiency to the state's civil litigation process. 

It says proposed discovery reforms will save litigation costs for both parties and would be in line with what already has been adopted by federal court. Regarding class action reforms, the current proposal also would align with procedures followed in federal court, particularly with Rule 23 in providing needed specificity, clarity and consistency, and would make Wisconsin the 48th state to adopt the federal rule.

Business leaders and legal reform organizations are overwhelmingly supportive of the bill and gathered to voice that support at a Jan. 30 meeting of the Senate Committee on Judiciary and Public Safety.

But the previous day, Tusler and Horlacher filed an amendment to the bill, eliminating three legal reform aspects of the bill while keeping the Rule 23 suggestion..

The Wisconsin Association for Justice also filed testimony through the group's president-elect, Edward Robinson.

"WAJ hopes to work with members of this committeeto adopt amendments that will strengthen this bill to achieve greater commonality with the Federal rules governing civil procedure," Robinson wrote.

"The best approach to achieve this goal (is) adopting the federal rules, where desired, without alteration."

Travis Rhoades, a Milwaukee-based attorney, primarily defense, said there are some parts of the legislation to like and some elements about which he is ambivalent.

"Those on the plaintiffs' side will say this type of bill exists to limit their client's access to the courts," Rhoades told Legal Newsline. "Defendants say it brings better order to the process and more predictability."

Rhoades, who mainly works toxic tort and product liability defense for Crivello Carlson, added, "I would not call any of the proposals earth-shattering."

The Wisconsin Supreme Court in December adopted a proposal from the state's Judicial Council that makes federal Rule 23 the guiding principle for courts in the state. The legislation would make it law, plus add three other legal reforms.

The bill would require the type and scope of injury of the representative class members be typical of the injury being alleged by the absent class members, a representative told the committee.  It also bans “no-injury” class actions and requires class members be verifiable "by reliable and feasible means."

Under the Born-Nygen bill, it is proposed to cut the penalty interest rate for late payment from 12 percent to prime plus one, which would work at around three to four percent. The amendment argues for a cut to 10 percent.

"On the interest charges for insurance companies, I certainly always thought the 12 percent was a bit punitive," said Rhoades, adding that a reduction to 10 is "not significant" and a much larger number than what is in the original bill.

The amendment would remove the proposals other than the Rule 23 suggestion, including the provision changing the construction statute of repose, which the bill proposes to cut from 10 to six years. Under the current law, a contractor cannot be sued for personal injuries 10 years or after the completion of a project.

Changes to discovery rules and lawsuit lending are also included in the bill.

Limits to the "frequency or extent of discovery if it determines that the discovery sought is cumulative or duplicative" would be imposed under the bill.

Further, information should be obtained, if possible, from "some other source that is more convenient, less burdensome, or less expensive."

The American Tort Reform Association told the committee that, from 2006 to 2008, companies paid average discovery costs per case of $600,000 to $3 million.

The association was citing figures from a 2010 paper compiled by three tort reform groups that includes multimillion-dollar litigation involving, and between, major companies.

And on consumer lawsuit lending, which is a growing business across the country, the lender may charge interest at a rate of no more than 18 percent per year, the consumer may prepay the transaction at any time, and lender may not charge fees of more than $360 per year

At the Senate hearing, the Wisconsin Defense Council, a statewide organization of defense attorneys, said the discovery provisions would prevent unnecessary “fishing expeditions.”

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Organizations in this Story

Union Pacific HQWisconsin Supreme Court