Archive for October, 2012

Supreme Court Answer Narrow Question Whether a Contracted Attorney may Receive Governmental Immunity

Wednesday, October 31st, 2012

While I generally write only about Wisconsin Municipal Law topics, a recent U.S. Supreme Court case concerning a matter from California confirms what most of us working in this area had cautiously believed – that a private attorney who is contracted by a local government to serve as their attorney may claim the same level of immunity as an attorney who is an employee of the municipality. 

In Filarsky v. Delia, the U.S. Supreme Court held that an attorney hired by a city on a temporary basis to carry out an employment investigation was entitled to the same immunities that would be afforded a city employee.  This overturned a 9th Circuit decision which had granted qualified immunity to a group of city employees involved in the investigation, but not the attorney they had contracted to help in the investigation.  There had been a circuit split on this question, as the 6th Circuit had allowed a private contractor immunity in Cullinan v. Abramson, 128 F. 3d 301, 310 (1997).

Justice Roberts, writing for a unanimous Court, said “At common law, those who carried out the work of government enjoyed various protections from liability when doing so, in order to allow them to serve the government without undue fear of personal exposure.”  And those common law principles and immunities are still valid and, as in this case, available to a person carrying out government work who is sued under §1983.  Citing numerous examples and historic principles, Justice Roberts said there was no reason to differentiate and leave a contracted person “holding the bag” to face liability when government employees would “enjoy immunity for the same activity.”

Writing concurring opinions, two Justices pointed out that while they agreed with the narrow holding that there is no reason to treat contractors differently them employees for the same acts, they wrote separately to note while qualified immunity may be claimed by a contractor under some circumstances, it should also only be granted when the individual satisfies “our usual test for conferring immunity.”  (Sotomayor).  This “usual test” is found in Harlow v. Fitzgerald, 457 U.S. 800, 818, where Justice Powell held “government officials performing discretionary functions, generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.”

Municipal Bankruptcy

Friday, October 19th, 2012

You may have read in the news in the last few months about some fairly large cities in California “declaring bankruptcy.”  San Bernadino, Stockton, Compton, and some smaller California Cities have taken this option.  Certainly cities in other states have also faced severe financial difficulties.   Is your City bankrupt? 

Not in Wisconsin it’s not.  In Wisconsin, bankruptcy is not available to municipalities.  Federal authority over bankruptcy law is authorized by Article 1, Section 8 of the U.S. Constitution.  Thus bankruptcy law is primarily a creature of Federal law regulated by Congress, (although it is inextricably linked to various state laws as well).  As a matter of Federal law, Congress also has to take into consideration the Tenth Amendment which guarantees certain powers to the sovereign states.  So, although Chapter 9 of the Bankruptcy Code technically creates a mechanism for a county, city, village, school district, municipal utility, et al, to file for bankruptcy, Chapter 9 is only available in those states which specifically and explicitly authorize it.  Wisconsin has not done so.

Follow the rules or you may lose! Proper Service is Fundamental.

Tuesday, October 16th, 2012

In another case of follow the rules or you may lose no matter the merits of your case, the Halls filed a lawsuit against the Village of Ashwaubenon, apparently because they were unhappy with their property taxes.  See: Hall, v. Village of Ashwaubenon.   They mailed a copy of the lawsuit to the clerk, and the Halls also personally gave a copy to a Village employee.  To begin with, service by a party (the Halls in this case) is usually not permitted.  Secondly, service must be on the clerk or the village president.  It should be noted that they were acting without the benefit of an attorney. 

Whatever the actual merits of their lawsuit, the circuit court dismissed their lawsuit for improper service.  Serving the defendant in a lawsuit is a critical part of beginning a lawsuit, and without proper service, the suit will almost certainly be dismissed.  Even if the Halls had the best case in the world, they lost at step one.  They appealed, and the appeals court upheld the circuit court’s dismissal, saying “When a statute provides for service that confers jurisdiction over a party, there must be strict compliance with statutory service requirements even though the consequences for failure to do so may appear to be harsh.”  Although it may appear harsh on the surface in some cases, if you are going to sue someone, letting them know is a fundamental aspect of our legal system – no secret trials, no secret verdicts.  Defendants have a fundamental right to be made aware of the claims against them, and to be given a reasonable opportunity to respond.

Town’s Insurance Company Not Required to Defend Town

Thursday, October 11th, 2012

Oemig et al vs. Town of Lowell et al (not recommended for publication)

The Town of Lowell, in Dodge County undertook a road construction project.  As is very typical, they apparently hired an engineering company, and a construction company, and the project was designed and constructed.  The Oemigs, neighboring property owners, sued the Town, the engineering company, the construction company, and the construction company’s insurance company for various claims of damage to their property allegedly caused by the road project.  (The first lesson here is that when someone wants to sue someone, it is often a scatter gun approach – sue everyone you can think of and see if anything sticks).

The Town had a “business owners” insurance policy with Rural Mutual Insurance.  However, this insurance policy contained a “professional services” exclusion.  Essentially, the gist of the court case was that if the Town “constructed” the roads, then the insurance company would defend them, but since the Oemigs’ allegations against the Town were based on the fact that the Town “negligently approved the design of the project,” the insurance company had no duty to defend the Town.  Negligently construct the road = duty to defend.  Negligently approve the design of the road = no duty to defend.

The circuit court found that the Oemigs’ claim against the Town was based on the “negligent design” not negligent construction.  The appeals court affirmed.  To be sure, the Oemigs were also making claims based on the actual construction of the project, but not, apparently, against the Town, only against the construction company and maybe the engineering company.  Thus the narrow holding in this appeals case was that Rural Mutual Insurance does not have to defend the Town against allegations of negligent design of the project.  It appears the litigation will continue, with the Town paying the bill for its defense.