Civil Procedure

Long-arm Jurisdiction – Minimum Contacts – Due Process

CITGO Petro. Corp. v. MTI Connect LLC, 2020 WI App 57 (filed 18 Aug. 2020) (ordered published 30 Sept. 2020)

HOLDING: A circuit court lacked personal jurisdiction because a party lacked minimum contacts needed to satisfy due process under the long-arm statute, Wis. Stat. section 801.05.

SUMMARY: CITGO Petroleum Corp. sued mGage, a mobile messaging company organized under Delaware law with its principal place of business in Atlanta, Ga. mGage offers clients the means by which to create, manage, send, and receive text messages to and from their customers (see ¶ 5).

This lawsuit was a piece of a larger national class action by CITGO’s customers against CITGO for deficiencies in the operation of a nationwide sweepstakes. CITGO settled those claims by paying more than $8 million before suing MTI Connect (another text service provider) and mGage to recover those damages. MTI and mGage had a contractual relationship. mGage moved to dismiss the claims against it on grounds that Wisconsin courts lacked jurisdiction. The circuit court ruled that CITGO had established personal jurisdiction under the long-arm statute. See Wis. Stat. § 801.05(5).

The court of appeals reversed in an opinion authored by Judge Dugan. It concluded that mGage lacked sufficient minimum contacts with Wisconsin on which to base jurisdiction, as provided by the Due Process Clause of the U.S. Constitution, 14th Amendment (see ¶ 15). Putting the matter bluntly, “the principal reason that Wisconsin is involved in this lawsuit is because MTI is located in this State” (¶ 67).

The opinion reviews and applies the pertinent case law on personal jurisdiction, which requires three steps: “(1) identify the contacts the defendant has with the forum; (2) analyze whether these contacts meet constitutional minimums and whether exercising jurisdiction on the basis of these minimum contacts sufficiently comports with fairness and justice; [and] (3) determine whether the sufficient minimum contacts, if any, arise out of or are related to the causes of action involved in the suit” (¶ 21) (citation omitted).

The record revealed that mGage’s “sole contact with Wisconsin is its contract with MTI,” which was “not a viable basis upon which to hale mGage into Wisconsin’s courts” (¶ 23). The court then delved into the case-specific nature of the contacts, including the contract negotiations, the contract terms [for example, a choice-of-law and forum-selection clause (see ¶ 40)] and the “contemplated future consequences” (¶ 43).

The court also considered communications by mGage employees “with MTI in Wisconsin via phone or email while providing support services” (¶ 47). The record did not show that mGage (unlike MTI) “targeted Wisconsin” or sent defective text messages into Wisconsin (¶¶ 62, 64).

Criminal Procedure

Juvenile Offenders – Adult Court Jurisdiction

State v. Geyser, 2020 WI App 58 (filed 12 Aug. 2020) (ordered published 30 Sept. 2020)

HOLDING: The adult court properly had jurisdiction over a then 12-year-old defendant charged with attempting to murder a young acquaintance.

SUMMARY: This opinion involves the so-called Slender Man case, whose underlying events occurred in 2014. Defendant Morgan Geyser was one of two 12-year-old girls charged with attempted murder after they repeatedly stabbed another 12-year-old girl. Both attackers were tried and convicted as adults, despite their ages. In this appeal, the defendant claimed that the circuit court erred in binding her over for trial in adult court rather than discharging her from adult court so that she could be prosecuted in juvenile court.

The court of appeals affirmed the conviction, in an opinion authored by Judge Gundrum. The issue centered on whether the judge at the preliminary examination properly bound over the defendant for trial on a charge of attempted first-degree intentional homicide. By statute, adult courts have exclusive original jurisdiction over juveniles charged with first-degree or second-degree intentional homicide or attempted first-degree intentional homicide (see ¶ 21). When making the bindover ruling, the judge must expressly find probable cause for one of those three offenses.

“In this case, the court properly maintained adult-court jurisdiction and bound Geyser over for trial as it found that the State had established probable cause that she had committed the charged adult-court-jurisdiction-conferring offense of attempted first-degree intentional homicide. That was all that was needed to maintain adult court jurisdiction and bind Geyser over for trial” (¶ 24).

The bindover court did not have to rule on the existence of “mitigating factors,” such as Geyser’s fear of the fictional Slender Man (¶ 30). The court closely considered several cases that bore on the issue. See State v. Toliver, 2014 WI 85, 356 Wis. 2d 642, 851 N.W.2d 251; State v. Kleser, 2010 WI 88, 328 Wis. 2d 42, 786 N.W.2d 144.

The court of appeals declined to consider whether Geyser had validly waived her Miranda rights when interrogated about the offense because, the court said, any such error was harmless (see ¶¶ 40, 48).

Expungement – Violation of Conditions of Probation Imposed by Department of Corrections

State v. Lickes, 2020 WI App 59 (filed 20 Aug. 2020) (ordered published 30 Sept. 2020)

HOLDING: The circuit court erroneously ordered expungement of the defendant’s criminal convictions.

SUMMARY: Defendant Lickes was convicted of four crimes arising from his having had sexual intercourse with a 16-year-old girl when he was 19 years old. On counts 1 and 3, the court placed him on probation for two years and specified that he complete sex-offender treatment as a condition of probation. On count 4, the court imposed and stayed a sentence and placed the defendant on probation for three years with the same sex-offender-treatment condition. All probationary terms were to run concurrently.

The court further ordered that, if the defendant successfully completed probation, his convictions on counts 1, 3, and 4 would be expunged pursuant to Wis. Stat. section 973.015. (The court imposed a 90-day jail sentence on count 2, which was not at issue on this appeal.) After the terms of probation were completed, the circuit court ordered expungement of the three convictions for which the defendant had been placed on probation. The state appealed the expungement order, arguing that the defendant was not entitled to expungement because he had not “satisfied the conditions of probation” – a requirement of the expungement statute.

In an opinion authored by Judge Nashold, the court of appeals agreed with the state and reversed the order of expungement. With respect to counts 1 and 3, the defendant failed to complete sex-offender treatment within the two-year term of probation. As to counts 1, 3, and 4, the defendant failed to satisfy conditions of probation established by the Department of Corrections (DOC).

With respect to the latter, the court of appeals rejected the defendant’s argument that the term “conditions of probation” in Wis. Stat. section 973.015(1m)(b) only encompasses court-ordered conditions of probation – not conditions imposed by the DOC. Rather, the court of appeals concluded that the phrase “conditions of probation” in the expungement statute does indeed include DOC probation rules (see ¶ 26).

The defendant further argued that, even if the phrase “conditions of probation” includes DOC-imposed probation rules, the court of appeals should conclude that circuit courts have discretion to determine whether a DOC-imposed rule violation warrants denial of expungement. The court of appeals rejected this argument.

“Because we interpret ‘conditions of probation’ in the expungement statute to include DOC rules, and because the record indisputably shows that Lickes violated DOC probation rules, the circuit court was without discretion to expunge Lickes’ criminal record. Said otherwise, the legislature could have left this decision to the circuit court’s discretion but, instead, it has established clear objective standards that leave no room for the court’s exercise of discretion at that stage of the process” (¶ 36).

The court of appeals also rejected the defendant’s argument that once the circuit court received the defendant’s certificate of discharge from the DOC, expungement of his convictions was self-executing. Said the appellate court: “The circuit court’s receipt of the certificate automatically effectuates the expungement, provided that the record shows that the probationer meets all of the statutory criteria for the successful completion of the sentence” (¶ 20) (internal quotations omitted). See State v. Ozuna, 2017 WI 64, 376 Wis. 2d 1, 898 N.W.2d 20. In this case, because the defendant violated multiple DOC-imposed rules, he did not meet all the statutory requirements for “successful completion of the sentence” (¶ 45).

Torts

Claims for Damages and Attorney Fees Against the State – Sovereign Immunity – Mandamus

Klein v. Wisconsin Dep’t of Revenue, 2020 WI App 56 (filed 11 Aug. 2020) (ordered published 30 Sept. 2020)

HOLDINGS: 1) Sovereign immunity barred the plaintiffs’ claims against the Wisconsin Department of Revenue for damages and attorney fees. 2) With respect to the plaintiffs’ petition for a writ of mandamus to compel the department to comply with certain statutory obligations, they failed to demonstrate that the department had a “plain and positive duty” that could be compelled by a writ of mandamus.

SUMMARY: In response to a federal court decision, the town of Sanborn decided in 2007 to remove from its property tax rolls all land belonging to the Bad River Band of Lake Superior Tribe of Chippewa Indians and its members. The Wisconsin Department of Revenue later issued guidance encouraging municipalities to review, on a property-by-property basis, whether property owned by tribes and tribal members qualified under federal law for property tax exemption. Nonetheless, the town continued its blanket exemption for all Bad River Band tribal and member property until it was ordered to return those properties to the tax rolls as part of another lawsuit.

Plaintiffs Darrell Klein and other taxpayers commenced this action against the department after the Sanborn Town Board disallowed their claims regarding excessive and unlawful taxation. The taxpayers alleged the department had failed to act sufficiently to stop the town’s unlawful taxation policy. As a result, they claimed, the department allowed the nonuniform taxation of property.

The taxpayers asserted they were entitled to recover an alleged $1.5 million in excessive taxes from the department on behalf of themselves and other taxpayers in Ashland County. They also sought damages for the alleged diminution of their property values, a town-wide reassessment, a writ of mandamus compelling the department to comply with its statutory obligations under Wis. Stat. chapter 73, attorney fees, and declaratory relief. The circuit court granted summary judgment to the taxpayers.

In an opinion authored by Judge Hruz, the court of appeals reversed. It concluded that the department was entitled to summary judgment because sovereign immunity bars the taxpayers’ claims against it for damages and attorney fees as a matter of law. “When the action is one for the recovery of money from the State, as here, the State – including one of its agencies like the Department – may not be sued without its consent (i.e., an express directive by the legislature). The application of sovereign immunity here required the circuit court to dismiss all of the Taxpayers’ non-mandamus claims, including their request for attorney fees. Moreover, given the circumstances in this case, any claim for the recovery of unlawful taxes lies against the municipality that collected them, not with the Department” (¶ 3).

As for the taxpayers’ mandamus claim relating to various statutory obligations of the department, the appellate court concluded that “they have failed to demonstrate that the Department had a ‘positive and plain duty’ that it failed to perform. Rather, the duties the Taxpayers point to are investigative and prosecutorial functions that have long been treated as discretionary” (¶ 4).