State is Separate from State Agencies: Sovereign Immunity Applies, Appeals Court Says

By Joe Forward, Legal Writer, State Bar of Wisconsin

Dec. 12, 2012 – A business sued the state, alleging one of its agencies negligently approved a construction project that caused the business property to flood. But an appeals court recently dismissed the case on sovereign immunity grounds, because the state “is a separate legal entity from its agencies.”

Hoops Enterprises III LLC named the State of Wisconsin in a lawsuit alleging that negligent decisions by Wisconsin Department of Transportation (DOT) agents caused flooding and damage to the business property. Hoops did not name the DOT as a party to the suit and did not serve the DOT with notice.

The Washington County Circuit Court ruled that Wis. Stat. sections 88.87 and 32.18 authorized the business’s claims, indicating the state’s consent to be sued under the circumstances alleged. But in Hoops Enterprises III LLC v. Super Western, Inc., 2012AP62 (Dec. 12, 2012), an appeals court disagreed.

“We reverse as the statutes relied upon by Hoops do not clearly and expressly constitute consent by the state to be sued and the legislature has not consented to tort claims against the State,” wrote Judge Paul Reilly for a three-judge panel, requiring dismissal upon remand.

Both sections 88.87 and 32.18 create causes of action against the DOT relating to damages caused by improper road or highway construction or grading. However, those provisions don’t create causes of action against the state, the actual party defendant named in the lawsuit.

“The State was not a proper party for claims against the DOT as the two are distinct legal entities,” Judge Reilly wrote. “Further, service on the State of a summons and complaint that named the State and not the DOT as a party does not constitute service on the DOT necessary to establish personal jurisdiction.”

The District II Appeals Court rejected the plaintiff’s claim that service on the state is enough to commence lawsuits against state agencies that consent to suit, and also noted that sections 88.87 and 32.18 don’t specifically authorize plaintiffs to bring negligence actions:

“As we have found that none of the statutes relied upon by Hoops clearly and expressly authorize suit against the State, we also find that none of the statutes authorize negligence claims against the State.”