Court Rulings Threaten Jobs in Wisconsin
By James S. Haney and James E. Hough

Sweeping decisions by the Wisconsin Supreme Court promote lawsuit abuse and will seriously damage recent efforts to make our state business friendly.

In the last legislative session, Democrat Governor Jim Doyle and the GOP-controlled Legislature worked together to cut business taxes and reform regulations to help businesses grow and expand.

Our gains are now at risk, and seriously damaged, based on the series of rulings by the Supreme Court that could make Wisconsin a magnet for plaintiff lawyers.

The Supreme Court struck down reasonable limits on medical malpractice non-economic awards, expanded a novel product liability theory, and misconstrued statutory directives on punitive damage. Those three rulings harm our ability to attract good doctors and serve as a deterrent to business expansion.

The U.S. Chamber of Commerce recently broadcast to its members and the nation that these decisions make Wisconsin “ripe for lawsuit abuse, the effects of which can be devastating to a state’s economy.”

Beyond reversing the pro-jobs, pro-growth perceptions painstakingly nurtured these past years, with several strokes of their pens, the court is reversing significant polices carefully crafted by our elected officials. The court is legislating.

During the 1995 Legislative Session, the Wisconsin Legislature made great strides in adopting common sense civil justice reform, the goals of which were to promote fairness and a positive legal environment for business retention, expansion and location.

These civil justice advancements in Wisconsin made us a leader in recognizing the need to control an out-of-control litigious society, while not curtailing the ability for legitimately injured parties to seek recovery in appropriate cases and under rules fair to all.

The changes included elimination of joint and several liability, a heightened standard for punitive damages and the establishment of caps on the recovery of noneconomic damages in medical malpractice cases.

Wisconsin saw its ranking for “litigation atmosphere” developed by the U.S Chamber of Commerce climb to # 10 in the country in 2004. This ranking dropped to # 17 in 2005, reflecting the state’s failure to address other civil justice issues in which we are out of sync with most of the country.

We expect our “fairness ranking” will see another precipitous drop resulting from the recent Supreme Court decisions.

In March of this year, the Wisconsin Supreme Court overturned state law on the standards for determining punitive damages.

Last week, the Supreme Court held that Wisconsin’s caps on noneconomic damages in medical malpractice cases are unconstitutional as a violation of the equal protection clause. Depending on which Justices we are talking about, this case represents either a blatant attempt by the Court to legislate or a fundamental lack of understanding of the legislative process—or, probably, both. Both propositions are scary!

Then, the Wisconsin Supreme Court held lead pigment manufacturers liable even though it could not be established that the manufacturer produced the product or that the product caused the plaintiff’s injuries. The Court’s opinion was based on a “risk-contribution” theory. It’s a scary theory for businesses because it allows plaintiffs to sue companies even if their product did not cause the harm.

These cases will cause heartburn in the boardrooms of our state’s biggest businesses and across the kitchen tables of our smallest firms. Businesses will be sitting ducks in our state for plaintiff lawyers challenging legislative enactments and espousing new theories for recovery.

The Legislature and governor must act swiftly to enact broad lawsuit reforms to protect the jobs in our state. Because tax relief and regulation relief are worthless if you get sued out of business. It’s that simple. And jobs are at stake.

Jim Haney is president of Wisconsin Manufacturers & Commerce.

Jim Hough of the Hamilton Consulting Group has served as executive and legislative director of the Wisconsin Coalition for Civil Justice since the mid-1980s.

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Posted: July 26, 2005