Vol. 78, No. 5, May 2005

Supreme Court Digest

by Prof. Daniel D. Blinka & Prof. Thomas J. Hammer

Criminal Procedure Labor Law

Sexually Violent Persons Torts

Criminal Procedure

Parole Revocation - Revocation Based on Conduct Occurring During Earlier Period of Parole in Same Case

Wisconsin Dep't of Corrections v. Schwarz, 2005 WI 34 (filed 24 March 2005)

In 1994 the respondent, Dowell, was convicted of two counts of armed robbery and one count of operating a vehicle without the owner's consent. He was sentenced under the old indeterminate sentencing law to 90 months in prison. After serving nearly three years of his sentence, Dowell was paroled in May 1997. The Department of Corrections (DOC) revoked his parole in March 1998 and returned him to prison.

Dowell served three more years in prison and was paroled again in July 2001 because he had reached his mandatory release date. While Dowell was serving the second period of parole, the DOC became aware of evidence that his DNA matched DNA in semen found on the clothing of a victim of a sexual assault and armed robbery that was committed in May 1997 during Dowell's first period of parole. (The DOC was unaware of information linking Dowell to these crimes when it recommended revocation of Dowell's first parole.) Based on the new allegations, the DOC sought to revoke Dowell's second parole and force him to serve the final two years of his sentence in prison.

The Division of Hearings and Appeals (DHA) concluded that the DOC did not have jurisdiction under Wis. Stat. section 304.072(3) (2001-02) to revoke the second parole. This statute provides as follows: "Except as provided in s. 973.09(3)(b), the department preserves jurisdiction over a probationer, parolee or person on extended supervision if it commences an investigation, issues a violation report or issues an apprehension request concerning an alleged violation prior to the expiration of the probationer's, parolee's or person's term of supervision." (Emphasis added.)

The circuit court reversed the DHA's decision. In a published decision, the court of appeals reversed the circuit court. See 2004 WI App 136. In a majority opinion authored by Justice Crooks, the supreme court reversed the court of appeals.

The issue presented on appeal was whether section 304.072(3) provides the DOC with jurisdiction to revoke a person's parole for any violation that occurred after the offender's initial release on parole and before the date of discharge on the underlying sentence, or whether its jurisdiction is limited to revoking parole for violations that occurred during the offender's current period of parole.

The court held that "the phrase `term of supervision' in Wis. Stat. § 304.072(3) is ambiguous, since it can reasonably be interpreted to apply to both the current term of supervision and any time prior to the final discharge from an underlying sentence. We rely upon extrinsic sources such as the legislative history and relevant case law behind § 304.072(3), and the interplay among parole statutes to determine that the phrase `term of supervision' was intended to apply to all parole violations that occur before the offender's date of discharge from his or her entire sentence. We conclude that the legislature intended to promote offender accountability and, therefore, the DOC had jurisdiction to revoke Dowell's parole for a violation that he committed during his first period of parole supervision" (¶ 2). Any other interpretation of the statute, said the court, "could, in effect, create amnesty for a parole offender who committed a violation during an earlier period of parole, and reward such offender for successfully concealing the violation" (¶ 31).

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Labor Law

Timely Payment of Wages under Wis. Stat. section 109.03(1) - Impact of Collective Bargaining Agreements

Milwaukee Police Ass'n v. Hegerty, 2005 WI 28 (filed 22 March 2005)

Unions representing Milwaukee police officers brought this action seeking declaratory and other relief after overtime compensation payments allegedly were delayed. According to the unions, their collective bargaining agreements require that overtime wages be paid within 12 days after the end of the pay period in which overtime is earned. The city of Milwaukee responded that the 31-day payment frequency provided for in Wis. Stat. section 109.03(1) controls. The circuit court granted summary judgment in favor of the unions. A divided court of appeals reversed the circuit court. See 2004 WI App 148. In a decision authored by Justice Bradley, the supreme court reversed the court of appeals.

Section 109.03(1) addresses the general time period within which wages must be paid: "Every employer shall as often as monthly pay to every employee engaged in the employer's business ... all wages earned by the employee to a day not more than 31 days prior to the date of payment." The statute also provides, however, that this "default" period of 31 days does not apply when employees are "covered under a valid collective bargaining agreement establishing a different frequency for wage payments...."

In this case, it was undisputed that the police organizations are covered under valid collective bargaining agreements. The question therefore was whether these agreements establish a different frequency for payment of overtime compensation than the one set forth in section 109.03(1).

The supreme court agreed with the unions that the city is required to pay overtime compensation within 12 days after the end of the pay period in which the overtime was earned. "[T]he collective bargaining agreements in question defer to the Milwaukee City Charter Ordinances. We interpret Milwaukee City Charter Ordinance § 5-06 as requiring the bi-weekly payment of overtime compensation. Moreover, custom and past practice of the parties indicate that the City of Milwaukee has historically paid overtime on the payday immediately following the period in which it was earned" (¶ 2).

The court recognized that "inevitably there are circumstances that prevent an employer from complying with the timely payment of wages such as overtime compensation. For example, computers may malfunction, payroll personnel may get sick, or data entry personnel may make mistakes. In such cases, circuit courts may exercise their discretion and choose not to award civil penalties or expenses to the employees" (¶ 35).

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Sexually Violent Persons

Standard of Review - Sufficiency of Evidence

State v. Brown, 2005 WI 29 (filed 22 March 2005)

Brown was ordered committed as a sexually violent person pursuant to Wis. Stat. chapter 980. The circuit court denied his petition for supervised release, and the court of appeals affirmed.

The supreme court, in an opinion authored by Chief Justice Abrahamson, reversed the court of appeals. The appeal presented two issues. First, the court addressed the appropriate standard of appellate review for an order denying a petition for supervised release under Wis. Stat. section 980.08(4). The court held that "a reviewing court undertakes independent review of the record under the sufficiency of the evidence standard of review" (¶ 5). Thus, the court of appeals erred when it construed case law as providing an "abuse of discretion" standard of review (¶ 19), although the supreme court colorfully conceded that "the case law is a cross-pollinated mish-mash" (¶ 31).

"Uniformity of application of facts to law, respect for circuit courts' reasoning, and recognition of circuit courts' observational advantage in evaluating evidence are desirable goals with respect to orders on chapter 980 petitions for supervised release. These goals are more likely to be achieved with the sufficiency of the evidence standard of review than with an erroneous exercise of discretion standard of review. Accordingly, we adopt the sufficiency of evidence standard of review when reviewing a circuit court's order denying a petition for supervised release under Wis. Stat. § 980.08(4)" (¶ 46).

Second, after examining the record, the court concluded that the state failed to meet its burden under Wis. Stat. section 980.08(4) to show, by clear and convincing evidence, that Brown's petition for supervised release should be denied. The discussion is necessarily fact-intensive.

Justice Butler concurred, joining the mandate and all but paragraph 59 of the majority opinion, in which the majority decided not to address the applicability of the rules of evidence. Justice Butler argued that the rules of evidence are applicable, and he would have found an expert's report to be inadmissible hearsay.

Justice Roggensack, joined by Justices Wilcox and Crooks, dissented. The dissenting justices argued that the expert's report was properly considered by the trial court, even though the expert never testified, and that the state had introduced sufficient evidence to defeat Brown's petition.

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Torts

Punitive Damages - Standard for Determining Intentional Disregard of Rights

Strenke v. Hogner, 2005 WI 25 (filed 18 March 2005)

The defendant, Hogner, turned his vehicle left into oncoming traffic and collided with Strenke's vehicle, injuring Strenke. Hogner, who had four prior convictions for operating while intoxicated (OWI), had a blood alcohol concentration of .269% at the time of the collision. Hogner was convicted of OWI and sentenced to a year in jail. Strenke then sued Hogner for negligence, seeking compensatory and punitive damages. The jury awarded Strenke $2,000 in compensatory damages and $225,000 in punitive damages.

Hogner appealed, contending that there was insufficient evidence to allow the issue of punitive damages to go to the jury and that the amount of punitive damages was unconstitutionally excessive. The court of appeals certified the case to the supreme court. In its certification the court of appeals identified the following issues: 1) What proof is required for a plaintiff to recover punitive damages under the phrase "in an intentional disregard of the rights of the plaintiff" in Wis. Stat. section 895.85(3) (the punitive damages statute)? (The certification on this issue included the sub-issue of whether there were sufficient facts from which a jury could conclude that the defendant was aware that his acts were "practically certain" to cause injury.) 2) Must a defendant's conduct that gave rise to a punitive damages claim have been directed at the specific plaintiff who is seeking punitive damages? 3) If there was sufficient evidence in this case to submit a punitive damages question to the jury, was the jury's punitive damages award excessive or in violation of the defendant's due process rights?

In a majority opinion authored by Justice Bradley, the court first analyzed Wis. Stat. section 898.85(3), which provides as follows: "Standard of Conduct. The plaintiff may receive punitive damages if evidence is submitted showing that the defendant acted maliciously toward the plaintiff or in an intentional disregard of the rights of the plaintiff."

The court concluded that "a person acts in an intentional disregard of the rights of the plaintiff if the person acts with a purpose to disregard the plaintiff's rights, or is aware that his or her acts are substantially certain to result in the plaintiff's rights being disregarded. This will require that an act or course of conduct be deliberate. Additionally, the act or conduct must actually disregard the rights of the plaintiff, whether it be a right to safety, health or life, a property right, or some other right. Finally, the act or conduct must be sufficiently aggravated to warrant punishment by punitive damages" (¶ 38). The object of the intent referred to in the statute is the disregard of the plaintiff's rights (see ¶ 21); the plaintiff is not required to prove an intent to cause injury. (The court held that the "intent to injure" interpretation of the statute, as articulated by the court of appeals in Wischer v. Mitsubishi Heavy Industries America Inc., 2003 WI App 202, ¶40, 267 Wis. 2d 638, 673 N.W.2d 303, was erroneous, and therefore the supreme court overruled this aspect of Wischer (see ¶ 34).)

The supreme court articulated its expectation that circuit judges will serve as gatekeepers before sending punitive damages questions to the jury. It quoted from Bank of Sun Prairie v. Esser, 155 Wis. 2d 724, 735, 456 N.W.2d 585 (1990): "The circuit court should not submit the issue of punitive damages to the jury in the absence of evidence warranting a conclusion to a reasonable certainty that the party against whom punitive damages may be awarded acted with the requisite ... conduct." The supreme court reminded trial judges serving in the gatekeeper capacity that "punitive damages are not recoverable if the wrongdoer's conduct is merely negligent. Furthermore, not every drunk driving case will give rise to punitive damages. Only when the conduct is so aggravated that it meets the elevated standard of an `intentional disregard of rights' should a circuit court send the issue to a jury" (¶ 42).

With regard to the second certified question, the court concluded that "a defendant's conduct giving rise to punitive damages need not be directed at the specific plaintiff seeking punitive damages in order to recover under the statute" (¶ 51).

Lastly, the court considered whether there was sufficient evidence to submit punitive damages to the jury and whether the amount awarded was excessive. It concluded that the evidence warranted submission of punitive damages to the jury for several reasons. First, Hogner's acts of drinking 16 to 18 twelve-ounce beers and then driving while intoxicated were deliberate (see ¶ 55). Second, Hogner's act of drinking and driving disregarded the plaintiff's right to safely use the highway with other motorists in sober command of their vehicles (see ¶ 56). Third, Hogner's conduct was sufficiently aggravated to warrant punishment by punitive damages, because he had four prior OWI convictions and consumed 16 to 18 beers in five hours on the night of the accident (see ¶ 57). However, the court was evenly divided on the question of whether the amount of punitive damages awarded to the plaintiff was excessive. Accordingly, it remanded this question to the court of appeals (see ¶ 58).

Justice Wilcox filed a concurring opinion.

Justice Prosser did not participate in this case.

Punitive Damages - Standard for Determining Intentional Disregard of Rights

Wischer v. Mitsubishi Heavy Indus. Am. Inc., 2005 WI 26 (filed 18 March 2005)

The plaintiffs brought this action individually and as special administrators of the estates of their deceased husbands, who died when a crane collapsed during the construction of the retractable roof at the Miller Park baseball stadium in Milwaukee. At the time of the accident the crane was being used to lift a large and heavy roof panel into place. The task of building the roof was contracted to defendant Mitsubishi Heavy Industries America Inc.

At the conclusion of the trial, the jury awarded the plaintiffs $5.25 million in compensatory damages. It also found that Mitsubishi had acted "in an intentional disregard of the rights of the plaintiffs" within the meaning of the punitive damages statute, Wis. Stat. section 895.85(3), and awarded $94 million in punitive damages. The circuit court entered judgment against Mitsubishi, but it reduced the punitive damages award to $84 million as the result of a settlement agreement.

In a published decision, the court of appeals reversed the judgment on punitive damages. See Wischer v. Mitsubishi Heavy Indus. Am. Inc., 2003 WI App 202. The court of appeals concluded that language in the punitive damages statute requiring proof that the defendant acted "in an intentional disregard of the rights of the plaintiff" means that the plaintiff must prove that the defendant intended to cause injury to the plaintiff or had knowledge that his or her conduct was practically certain to do so.

In a majority decision authored by Chief Justice Abrahamson, the supreme court reversed the court of appeals. The first issue considered by the court was whether the court of appeals was correct in interpreting section 895.85(3) to mean that a defendant must intend to cause injury to the plaintiffs or have knowledge that his or her conduct was practically certain to cause the accident or injury to the plaintiffs. The supreme court concluded that the court of appeals erroneously interpreted the statute.

In reaching this conclusion, the supreme court relied on its decision in Strenke v. Hogner, 2005 WI 25 (digested above), in which it held that the requirement of the punitive damages statute that the defendant act "in an intentional disregard of the rights of the plaintiff" necessitates that the defendant act with a purpose to disregard the plaintiff's rights or be aware that his or her conduct is substantially certain to result in the plaintiff's rights being disregarded. "Accordingly, we conclude that Wis. Stat. § 895.85(3) requires a plaintiff to show that a defendant acted maliciously to the plaintiff or intentionally disregarded the rights of the plaintiff, not that a defendant intended to cause harm or injury to the plaintiff" (¶ 7).

The supreme court further concluded that there was sufficient evidence to submit a punitive damages question to the jury. Said the court, "The jury could have believed that the crane collapsed, as the plaintiffs claimed, because it was used in high winds, no wind-speed calculations were made, and the crane's load chart limitations were exceeded; without wind calculations the 45-stories-high crane was lifting a billboard-size load of nearly one million pounds on a windy afternoon. One need not be an engineer or have heard all the evidence about the maximum safe wind speed and load limitations for operating this gigantic crane as it lifted this gigantic load on a windy day to know that wind plays an important factor in maneuvering objects outdoors. Anyone who has hung wet laundry, set up an outdoor art display, or driven a motor vehicle on a high bridge knows the havoc wind can play with items light or heavy. A reasonable jury could find that the plaintiffs had proved by the middle burden of proof, `clear and convincing evidence,' that [Mitsubishi] acted in an intentional disregard of the rights of the plaintiffs, that is, that [Mitsubishi] was aware that its conduct was substantially certain to result in the plaintiffs' rights being disregarded"(¶ 8).

Lastly, the court declined to address the constitutionality of the punitive damages award, because numerous issues that were not before the court had not been resolved. Some of those issues may implicate a constitutional analysis under Trinity Evangelical Lutheran Church v. Tower Insurance Co., 2003 WI 46, 261 Wis. 2d 333, 661 N.W.2d 789; State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003); and BMW of North America Inc. v. Gore, 517 U.S. 559 (1996) (see ¶ 59).

Accordingly, the supreme court reversed the decision of the court of appeals and remanded the case to the court of appeals for determination of the unresolved issues.

Justice Crooks filed a concurring opinion in which he joined the majority opinion but also stated that he would have reviewed the constitutionality of the punitive damages award at this juncture. Justice Roggensack also filed a concurring opinion.

Justice Wilcox dissented.

Justice Prosser did not participate in this case.

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