Supreme court will address conflict between federal law and Wisconsin’s pro hac vice rules

Sept. 27, 2011 – The Wisconsin Supreme Court will examine whether federal law preempts Wisconsin’s pro hac vice rules when it comes to a U.S. Department of Justice attorney appearing in the state’s courts without a Wisconsin license.

The case, Nickel v. U.S.A., is one of eight cases recently accepted for review. The supreme court will also determine whether annualized interest rates in excess of 1000 percent per year for a short-term loan are per se unconscionable under the Wisconsin Consumer Act, and whether court commissioners have the power to issue warrants, among other issues.

Nickel v. USA, 2011AP987

The issue arises from an underlying dispute involving a Wisconsin insurance company, Ambac Assurance, which received $700 million in tentative federal income tax refunds from its parent company in New York. The parent suffered large losses insuring risky mortgage debt.

With approval from the Wisconsin Insurance Commissioner, Ambac’s troubled policies were allocated to a segregated account to be rehabilitated by the Dane County Circuit Court. Ambac also allocated the tax liability amount to the segregated account.

Ambac was severally liable to pay the tentative $700 million refund if erroneously obtained. But a Dane County Circuit Court injunction prohibited the Internal Revenue Service from collecting.

The United States filed a notice of appeal, signed by an attorney from the tax division of the U.S. Department of Justice (DOJ) not licensed to practice law in Wisconsin.

The appeals court granted the Wisconsin Insurance Commissioner’s a motion to dismiss, concluding that Wis. Stat. section 802.05(1) requires all filings in the Wisconsin state courts to be signed by an attorney admitted to practice law in Wisconsin, and non-resident attorneys must appear under the sponsorship of a Wisconsin attorney under SCRs 10.03(4) and 23.02(2).

The U.S. argues that federal law preempts any state law or regulation that precludes DOJ attorneys from appearing in state court. Specifically, 28 U.S.C. section 517 provides that a DOJ attorneys “may be sent by the attorney general to any state or district in the United States to attend to the interests of the United States” in a suit pending in state court.

Payday Loan Store of WI v. Mount, 2010AP208

Jessica Mount entered in multiple contracts with Payday Loan Store (Payday Loans) for short-term personal loans at annualized interest rates that varied from 446 to 1,338 percent.

When Mount defaulted, Payday Loans filed a small claims action, and Mount counter-claimed for violations of the Wisconsin Consumer Act, Wis. Stat section 425.107. The circuit court granted summary judgment to Mount, concluding the loans were unconscionable.

Payday loans appealed, and the appeals court certified the case to the supreme court. Payday Loans argues that no interest rate is per se unconscionable under the WCA because there is no limit on finance charges.

Other cases for review

Whether court commissioners have the power to issue warrants under the Wisconsin Constitution is the subject of review in State v. Williams, 2010AP1551. Specifically, the appeals court certified the case to the supreme court to determine if the state constitution precludes the legislature from granting judicial powers to court commissioners.

In Fon du Lac Co. v. Helen E.F., 2010AP2061, the supreme court will examine whether a person who has Alzheimer’s or similar dementia may be found to have a mental illness for purposes of Wis. Stat. ch. 51 involuntary commitments.

Virtually every county in the state has filed proceedings under ch. 51 seeking the involuntary commitment of persons with dementia who exhibit attributes of mental illness in the form of a treatable mood or psychotic disorder.

The appeals court ruled that that Helen E.F., who suffers from Alzheimer’s disease, was not a proper subject for detainment or treatment under ch. 51. The county argues that the court of appeals’ decision will have far reaching implications on the liability of nursing homes that don’t have access to in-patient psychiatric treatment to address aggressive behavior.

In Aurora Consolidated Heathcare v. Labor and Industry Review Board, 2010AP208, the supreme court will examine whether worker’s compensation statutes require LIRC to allow an opportunity for cross-examination or rebuttal of an independent medical examiner.

The appeals court asked the supreme court to clarify an apparent case law conflict concerning the “collateral source rule” in Orlowski v. State Farm, 2009AP2848.

Specifically, the court will examine whether a plaintiff may recover from her insurer the reasonable value of the medical treatments she received or the lesser amounts actually paid by the insurer, the underinsured motorist, and his insurer.

In Zwiefelhofer v. Town of Cooks Valley, 2010AP2398, the supreme court will examine the factors that distinguish a zoning ordinance from an ordinance enacted under a town’s general police powers. A decision by the supreme court could help establish the test for determining whether a town ordinance constitutes a zoning ordinance that must be approved by the county board before it becomes valid under Wis. Stat. section 60.62(3).

And in the consolidated cases of State v. Gilbert, 2010AP594, and State v. Hunt, 2010AP1155, the supreme court will examine whether the state may bring a Wis. Stat. ch. 980 commitment petition to judgment when the subject of the petition is still in custody.

- Derived from full summaries posted on the Wisconsin Court System’s website.