December 18, 2018

December 18, 2018

Subscribe to Latest Legal News and Analysis

December 17, 2018

Subscribe to Latest Legal News and Analysis

Wisconsin's New Tort Reform Law Provides Tools To Combat Class Action Lawsuits Filed In State Court

On Apr. 3, 2018, Governor Walker signed tort reform legislation into law which will significantly impact civil litigation in Wisconsin. The law makes numerous changes to Wisconsin’s rules of civil procedure — addressing the rules governing the scope of discovery; creating mandatory disclosures of third-party litigation financing; putting into place an automatic stay of discovery while motions to dismiss are pending; impacting discovery rules related to electronically stored information; and placing limits on the number of depositions and interrogatories allowed during lawsuits. In addition, the new law changes the statute of limitations for fraud claims, the statute of repose and interest rates on untimely payments of insurance claims. While each of these changes will impact litigation in Wisconsin, this alert addresses the specific aspects of the law related to class actions in Wisconsin. 

The law will bring Wisconsin’s class action rules in line with both federal and other states’ class action rules. The changes to the class action rules take effect on Jul. 1, 2018. On Dec. 21, 2017, in response to the Judicial Council’s Evidence and Civil Procedure Subcommittee’s evaluation of Wisconsin class action practice, the Wisconsin Supreme Court unanimously adopted the Council’s version of Federal Rule of Civil Procedure 23. (Supreme Court of Wisconsin Order No. 17-03; see also 2017 WI 108.) The Supreme Court’s order replaced the state’s previous one-sentence class action statue, Wis. Stat. § 803.08, with language that generally aligns the state’s class action procedures with Federal Rule of Civil Procedure 23. The state’s previous class action statute was 168 years old and provided little guidance on the rules applicable to class actions in state court. 

Wisconsin’s class action statue now sets forth the prerequisites for filing a class action, requirements that courts must follow in order to certify a class and describes how and when a class action may be appealed. The new rule adopts the numerosity, commonality, adequacy of representation, and predominance requirements contained in Federal Rule of Civil Procedure 23. In addition, notice of the class must be given to potential class members, and the law makes explicit that any class action settlement must receive court approval. 

Arguably the most notable aspect of the class action rule change, however, relates to the right to an interlocutory appeal of a class certification determination. Following the Wisconsin Supreme Court’s action in December 2017, the proposed legislation had initially included three additional provisions impacting class actions. Specifically, the bill sought to address “no injury” class actions which are cases in which a named plaintiff seeks to represent a class that includes individuals that have suffered no injury; sought to add an explicit requirement that class members be objectively verifiable; and sought to provide for interlocutory appeals of class certification decisions. Only the interlocutory appeal provision made it into the final version of the bill that was signed into law. 

Prior to the bill becoming law, appeals of class certification rulings were permissive — meaning that a party unhappy with a court’s class certification determination needed to seek leave from the court of appeals to challenge that ruling while the case was still pending in the trial court. Petitions for leave to appeal are traditionally granted only in rare circumstances. At the same time, a class certification decision is one of the most important aspects of the case. All too often, a class certification order forces a defendant to settle the lawsuit rather than incur the cost of defending and running the risk of enormous liability. With passage of the new law, parties have an automatic right to appeal class certification rulings. Equally important, during the pendency of an interlocutory appeal, all discovery and other proceedings must be stayed. 

Moreover, it is notable that the automatic stay of discovery provision in the new law, while not specific to class action litigation, will also provide defendants with a tool to combat meritless class action claims. Under the new law, upon the filing of a motion to dismiss, a motion for judgment on the pleadings or a motion for more definite statement, all discovery and other proceedings shall be stayed for a period of 180 days after the filing of the motion or the ruling of the court on the motion, whichever is sooner. Discovery in a class action lawsuit is often extremely expensive and burdensome. With the new automatic stay provision in place, defendants confronted with a deficient class action complaint will no longer be throttled with significant discovery costs while the court decides defendants’ dispositive motion. 

In sum, Wisconsin’s new tort reform law provides additional tools to class action defendants faced with meritless claims and/or carelessly certified classes that will ease, although not eliminate, the difficult decision as to whether to fight or settle class action claims.

Copyright © 2018 Godfrey & Kahn S.C.

TRENDING LEGAL ANALYSIS


About this Author

Erin Maggie Cook, multipractice litigator Godfrey Kahn legal practice, milwaukee
Member

Maggie Cook is a member of Godfrey & Kahn’s Litigation Practice Group and practices in the firm’s Milwaukee office.

Maggie represents a broad range of clients in a variety of complex commercial disputes including: labor and employment litigation, financial services litigation, real estate and construction litigation, contract actions, and business torts. Maggie has litigated in state and federal trial and appellate courts and before various administrative agencies.

Maggie maintains an active labor and employment...

414-287-9569
Kendall W. Harrison, Commercial Insurance Litigator, Godfrey Kahn, Law firm
Shareholder

Kendall Harrison is a commercial litigator who regularly handles insurance, reinsurance and class action matters. In recent years, his practice has taken him from California to New York and many points in-between. Whether in court or before an arbitration panel, Kendall strives to zealously represent his clients while recognizing that scorched-earth litigation is not necessarily the best solution to a dispute.
 
Kendall has tackled numerous reinsurance arbitrations and his insurance-related class action practice has ranged from defending against massive suits involving virtually the entire American insurance industry to cases brought against a single insurer. In the employment arena, Kendall has handled many wage and hour class actions brought under the Fair Labor Standards Act, representing clients in the Fortune 50 as well as those with only 50-some employees.

608-284-2627
Josh Johanningmeier, Godfrey Kahn Law Firm, Madison, Labor and Employment, Insurance Litigation Attorney
Shareholder

Josh is a shareholder in Godfrey & Kahn’s Products Liability & Torts Practice Group and a member of the firm’s Labor & Employment Litigation and Insurance Practice Groups.

Product Liability

Josh is the chair of the firm’s Products Liability and Torts Practice Group. In product litigation, Josh defends manufacturers in cases involving personal injury, wrongful death and property damage. In addition to litigation, Josh works with manufacturers to assess and develop on-product warnings as well as instruction...

608-284-2637
Brian Spahn, complex commercial litigation attorney, Godfrey Kahn, internal investigations lawyer, fraudulent transfer legal counsel
Member

Brian Spahn is a member of the litigation group of Godfrey & Kahn's Milwaukee office. Brian's practice focuses on complex commercial litigation and white collar defense and internal investigations. He has handled banking and financial services litigation, antitrust, insurance, employment and trade secret misappropriation matters as well as managed complex class action defenses. Before joining the firm, Brian practiced law for over three years as part of the Litigation team at Sutherland Asbill & Brennan LLP in Washington, D.C. Brian is licensed in...

414-287-9314