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Wisconsin Supreme Court Requires Abatement if a Municipal Entity Had Notice that a Private Nuisance Was Maintained Negligently by the Municipal Entity

Real Estate Law Update David P. Muth, Eric J. Van Schyndle

The Wisconsin Supreme Court recently held that a municipal entity is not immune from abatement claims of a private nuisance that it negligently maintained and caused significant harm that it had notice of, and which could be abated by reasonable means at a reasonable cost. The court also reiterated the constitutionality of the cap on damages permissible against the government pursuant to section 893.80, Wis. Stat., but significantly limited that cap by permitting the equitable remedy of abatement.

In, Bostco, LLC v. Milwaukee Metropolitan Sewerage District, 2013 WI 78, Bostco (i.e. "Boston Store") experienced large structural column movement as the result of the operation by the Milwaukee Metropolitan Sewerage District ("MMSD") of the Deep Tunnel in Milwaukee. In a trial to the jury, the jury verdict found that MMSD's operation of the deep tunnel was a private nuisance, negligently maintained, that caused Boston Store past and future damages. Specifically, the jury awarded Boston Store $3 million for past damages, and $6 million for future damages. However, the circuit court limited the $9 million award to the statutory cap of $50,000 in section 893.80. Further, the circuit court ordered that MMSD fix the private nuisance so it is no longer on-going. Both Boston Store and MMSD appealed to the Wisconsin Supreme Court.

Boston Store argued on appeal that, as a matter of constitutional law, its damages should not be capped at $50,000, while MMSD argued that it was immune from liability, and that abatement was not a permissible remedy. The Wisconsin Supreme Court held that Boston Store's damages were capped at $50,000 despite the $9 million award; that MMSD, having notice of, and continuing a private nuisance was not immune; and that the equitable remedy of abatement is permitted despite the statutory cap on damages so long as abatement can be completed with reasonable means and at a reasonable cost.

Final Thoughts: Bostco may represent a potential sea-change in government liability. While it reiterates the long-standing precedent that tort damages caused by a governmental body will be capped at $50,000 under Section 893.80(3), Wis. Stat., Bostco now permits equitable remedies which may expose government bodies to significant costs. For example, in Bostco, while MMSD will pay $50,000 in monetary damages, the injunctive relief to "fix" the private nuisance is estimated to be around $10 million. And, at the same time, the majority opinion potentially expands when and how a governmental decision is not immune from tort liability. In Bostco, the majority held that the operation of the Deep Tunnel, though done to plan, was not a legislative, quasi-legislative, judicial or quasi-judicial function to which immunity applies. This potential shift further away from governmental immunity likely opens the door to future expansion.

If you have any questions concerning governmental immunity, please contact David Muth at (414) 277-5621 or david.muth@quarles.com, Eric Van Schyndle at (414) 277-5155 or eric.vanschyndle@quarles.com, or your Quarles & Brady attorney.