Democrat Jim Doyle has announced that he will not seek a third term as governor of Wisconsin. We’ve followed Doyle for his 2008 plan to tax oil companies while blocking their ability to pass on increased costs to the consumers, and for his budget this year that included a proposal to restore full joint and several liability to the state. Both plans foundered as politically risky, and in the case of the oil tax, as unconstitutional.

For Shopfloor.org coverage of Doyle, click here.

Governor Jim Doyle signed the Wisconsin state budget into law on June 29 (news release), and in doing so agreed to higher taxes that will discourage business investment and job creation in the state. It’s a tough go for manufacturers in the Badger State, so maybe they’ll just go.

But first, one good thing, a topic we’ve written about repeatedly, the trial-lawyer backed effort to improve their cash flow by restoring full joint-and-several liability. The Governor included that delicious political treat in his budget, but wiser legislators of both parties killed it. As David Bretting, President and CEO, C.G. Bretting Manufacturing Co., Inc., wrote in an op-ed, “Wisconsin Dodges Liability Bullet – For Now,” “With our state’s economy struggling, one of the last things employers need is an expansion of liability, especially in the area of product liability.”

Bretting notes that Michigan and Indiana never apply joint and several liability, so no defendant is ever a deep pocket in those states. A change in Wisconsin’s law — and it’s still a priority for the legal lobbyists — would make those other states more attractive as homes to business.

Which brings us to this headline on an op-ed by Jeff Schoepke, diretor of tax and corporate politcy for Wisconsin Manufacturers & Commerce, “Taxpayers Can — and Will — Vote with their Feet.”

The budget recently signed by Governor Doyle creates a new top income tax bracket, increasing taxes by more than $285 million on those making over $300,000. Without question, the Governor chose this tax because it raised the maximum amount of revenue for a minimum amount of political backlash.

But is it good for Wisconsin? This new top rate will give Wisconsin the 11th highest in the nation. And, the Tax Foundation’s State Business Tax Climate Index ranks Wisconsin’s individual income tax 7th worst in the nation as it relates to business climate.

Sounds familiar, almost like it’s a strategy being tried in other states or at the federal level.

And from The Milwaukee Journal-Sentinel, “Business leaders decry tax increases in state budget“:

While providing a welcome boost to high-tech entrepreneurship, Wisconsin’s new budget on the whole solidifies the perception of the state as a tax-happy, business-unfriendly place, company owners and leaders of business groups say.

They credit the Legislature and Gov. Doyle for increasing incentives that already are luring promising young firms to Wisconsin. But those positives, they say, are far outweighed by such things as a bump in the personal tax rate on the highest earners and what amounts to a hefty increase in capital gains taxes.

“They’ve sure given a lot of people the impetus to get the hell out of here,” business owner Michael L. Hansen said.

Yes. And Indiana must start to look pretty good right around now.

From the State Bar of Wisconsin:

As with the Assembly, among the budget changes adopted by the Senate were amendments completely removing provisions that would have modified rules governing contributory negligence and joint and several liability, thereby retaining current law. However, the Senate – like the Assembly — kept budget provisions allowing the stacking of auto insurance policies and requiring increased coverage minimums. In addition, the Senate added a controversial provision requiring drivers in Wisconsin to purchase auto liability insurance.

Governor Jim Doyle had used the budget to propose the return to a “deep pockets” approach toward liability, encouraging the filing of more lawsuits based on the thinnest of speculative bases. It was a clear message to businesses to stay out of Wisconsin, which the lawmakers seemed to have realized.

Still a conference committee to go, though.

For more, see this piece by James Haney of Wisconsin Manufacturers and Commerce.

A “Insight Column” from James S. Haney as Wisconsin’s legislature prepares to debate Gov. Jim Doyle’s budget, Assembly Bill 75. He writes, persuasively, that the debate is indeed a, “Defining Moment in Wisconsin State Government.”

Leaders of Wisconsin State Government are rapidly approaching a generational defining moment when the full Legislature takes up the State Budget Bill, Assembly Bill 75. In addition to a myriad of tax Increases and earmarked pet projects sprinkled through key legislative districts, the budget continues to contain major policy changes, including a fundamental rewriting of Wisconsin’s negligence law.

If the Legislature votes to keep these negligence law changes in the budget, Wisconsin will have the most extreme liability laws in the United States. The damage this will wreak on Wisconsin’s economy is unfathomable, because there is no other liability system to compare to it. Businesses, their workers, and consumers through insurance costs, will pay a hefty price if these changes are approved.

At issue is “joint and several liability,” that is, the apportioning of culpability in liability lawsuits. Under current Wisconsin law passed in 1995, a plaintiff can collect all of the damages from a defendant only if the defendant is 51 percent or more responsible for the harm.

Gov. Doyle’s budget — and why is a tort issue even part of a budget bill? — guts this standard and instead encourages the hunt for “deep pocket” defendants to pay all the damages, even if their responsibility is just 1 percent. As Haney explains:

A budget priority for the Wisconsin Governor, during a time of the greatest economic turmoil in generations, was to return Wisconsin to a comparative negligence system where a defendant one percent at fault for an injury could be held jointly and severally liable for all of the other defendants’ liability in a claim. However, it gets worse, Wisconsin’s Chief Executive proposed changing the negligence rules further by creating a “combined fault” provision in the law under which a plaintiff could be at greater fault for his own injury than each defendant in a claim. But, so long as the combined liability of multiple defendants was greater than that of the plaintiff, the plaintiff could recover from each defendant to the degree of their fault, Thus, a plaintiff could be 40 percent at fault for their own injury, but could still recover individually from three defendants who were each 20 percent at fault.

Not to be harsh, but not only is this debate a “defining moment” for legislators and government, passage of the bill would be a defining idiocy for any state seeking to maintain a competitive business environment.

It’s difficult to see how this could be a priority for any politician who wasn’t beholden to campaign contributors in the plaintiff’s bar.

• Text of Assembly 75, Joint Finance Committee substitute
• “Business Community United: WMC Delivers Over 2,100 Petitions Against Budget,” Wisconsin Manufactures and Commerce.
• Herald Times, “Wisconsin budget debate may start Thursday”
• Kenosha News, “Sparks fly over liability shift,”
• Chippewa Herald, “AP NewsBreak: Speaker says no major budget changes

UPDATE (4:05 p.m.): The Assembly Democrats, meeting in closed caucus, have voted to remove the provision from the budget. The Senate Democrats will probably resist the effort, our sources tell us.

The Wisconsin Assembly is expected to begin debating the state’s budget Wednesday, and along with billions of dollars in increased taxes and fees are very non-budgetary provisions that would encourage litigation against businesses. Governor Jim Doyle wants to rewrite the state’s handling of liability, in the process invigorating the lawyers’ pursuits of deep pockets.

As Wisconsin Manufacturers and Commerce puts it, the budget would expand liability by returning to joint and several liability that allows a defendant found to bear 1 percent of fault to pay 100 percent of the damages.

How’s that for a competitive selling point around the country: Deep pockets? Come to Wisconsin! We’ll sue the hell out of you!

Wisconsin Manufacturers and Commerce — the NAM’s ally in Wisconsin — has been leading a petition campaign against the budget. From a news release, “Wisconsin Business Community United Against State Budget“:

MADISON – In a massive outpouring of opposition, more than 2,100 business executives signed petitions urging the Legislature to reject a state budget with $3 billion in higher taxes and expanded liability, WMC announced Tuesday.

“The business community is united in urging the Legislature to reject the $3 billion in higher taxes and joint and several liability,” said James S. Haney, WMC president. “The budget under consideration will hamper job creation in our state and prolong the recession.”

Last Wednesday, WMC emailed petitions to businesses throughout the state asking executives to announce their opposition to the $3 billion tax hikes, joint and several liability and other anti-growth measures.

Here’s the WMC’s web alert on the issue: “State Budget - Eliminating Joint & Several Liability Changes and Jury Instructions.”

We’ ve paid little attention to the political goings on in Wisconsin since 2007, when Gov. Jim Doyle tried to pass a tax on oil company revenues, prohibiting them from passing the tax onto consumers. The tax grab eventually died for many reasons, including its obvious violation of the Commerce Clause.

The governor is once again sending business a message: Stay away! Attempting to undo the civil justice reform measures of the 1990s, Gov. Doyle included a major expansion of business and individual liability in his budget (Assembly Bill 75). According to Wisconsin Manufacturers and Commerce’s fact sheet:

It eliminates current joint and several liability rules that compare a plaintiff’s liability to each person who negligently caused the plaintiff’s injury.  Under the budget bill provisions a plaintiff could collect damages even when he or she is more at fault for the injury than any individual defendants, as long as the plaintiff’s liability is not greater than the combined negligence of all the persons against whom recovery is sought.

Further, it repeals current law where the liability of a person who is less than 51 percent negligent for an injury is limited to that person’s percentage of the total negligence.  Finally, it repeals current law that limits joint and several liability to a person whose negligence for the injury is 51 percent or more of the total liability.  Assembly Bill 75 provides that any person whose negligence is equal to or greater than the negligence of the person seeking recovery is jointly and severally liable for all the damages award to the person seeking recovery.

Inclusion of policy provisions in fiscal bills is generally frowned upon, but it’s not clear whether the Legislature will remove the language as in years past. Democrats took control of the Assembly in the 2008 elections and expanded their control of the Senate, so trial lawyers are seeing an opportunity for major policy gains. See also:

• Wisconsin Civil Justice Council Fact Sheet
• Wisconsin Civil Justice Council Memo to Legislature
• Wisconsin Law Journal, “Lawyers divided over proposal”
• Legislative Analysis, via Hamilton Consulting Group.

Unfortunately, Wisconsin is just one state of many where the trial lawyers are trying to expand the opportunities to cash in on the litigation lottery. Sherman “Tiger” Joyce of the American Tort Reform Association summarizes the activity in the state legislature in the April issue of Metropolitan Corporate Counsel, “Rampant “Litigation Legislation” (Except Southeast) Threatens Recovery.”

UPDATE (1:05 p.m.): The Capital Times of Madison reports today, “Legislature set to change limits in personal injury cases.” Cutting to the chase…

“This is simply about the trial lawyers seeking out those who have the deepest pockets,” said Bob Fassbender of the Wisconsin Civil Justice Council Inc., a coalition representing Wisconsin employers that was formed earlier this year to fight such legislation. “But it’s going to have a chilling effect on the state’s business climate at exactly the wrong time.”