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Wisconsin’s Tort Reform

Product Liability, Toxic Tort and Personal Injury Litigation Law Update Jeffrey K. Spoerk, Khalaf M. Khalaf

Wisconsin's new pro-business state government has enacted perhaps the most sweeping tort reform in state history. These changes are numerous and will have a profound impact on business' exposure to personal injury liability. The new law takes effect immediately upon publication and will apply to all new cases filed after that date regardless of whether the injury occurred prior to the bill's enactment and publication. The new laws should help limit liability and reverse decades of anti-business court decisions.

The following is a general overview of the changes. In the interest of brevity, this summary is a simplification of the new provisions. We encourage you to consult a Quarles & Brady attorney for a more detailed explanation of the new laws and how they may affect your business.

1. Product Defect Defined.

Strict liability for defective products has existed in Wisconsin for over 40 years. What constitutes a "defect," however, has now been clarified. The most significant change appears in the definition of a design defect. A product is defective in design if the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the manufacturer, and the omission of the alternative design renders the product not reasonably safe. This definition is noteworthy because it now requires proof of a reasonable alternative design and eliminates the "consumer contemplation" standard that has been rejected in most other states.

2. Product Seller Liability.

Previously, an innocent product seller could be held liable for merely selling a defective product. The new law requires plaintiffs to proceed against the product manufacturer if possible. Furthermore, a seller or distributor of a product is not liable to a claimant for damages if the seller or distributor receives the product in a sealed container and has no reasonable opportunity to test or inspect the product.

3. Intoxicated Plaintiffs.

If a plaintiff is found to be legally impaired due to drugs or alcohol, a jury is required to presume that the plaintiff's intoxication caused the accident. A plaintiff can rebut this presumption only by proving that the plaintiff's intoxication did not cause the accident.

4. Compliance with Product Standards.

The new law also creates a rebuttable presumption that a product is not defective if it complies with relevant governmental standards or specifications.

5. Inherent Characteristics.

Courts are now required to dismiss a plaintiff's case if the injury was caused by an inherent characteristic of the product that would be recognized by an ordinary person who uses the product. This appears to represent a codification of a recent Wisconsin Supreme Court decision that held that lead pigments could not be considered to be defective merely because they contained lead.

6. Subsequent Remedial Measures.

Remedial measures taken after an accident - that would have avoided the accident - cannot be used as evidence to show that the product was defective in the first place. This change essentially reinstitutes Rule of Evidence 407 in Wisconsin product liability cases. As with Rule 407, however, such evidence can be introduced to show that a reasonable alternative design existed, along with other exceptions to the rule.

7. Statute of Repose.

The new law creates a 15-year statute of repose. Thus, if a product was manufactured more than 15 years before the plaintiff's injury, the manufacturer has no liability.

8. Joint and Several Liability.

In cases where more than one entity is at fault for an injury, the jury is typically required to allocate a percentage of fault to each entity. Under previous law, even if a particular defendant's fault was found to be only 1 percent of the total fault for an injury, that defendant could still be required to pay all of the damages. Under the new law, if a defendant's percentage of responsibility is assessed at less than 51 percent of the total fault, then the defendant is liable only for its percentage of fault. In other words, a defendant who is deemed to be only 1 percent at fault for the injuries would at most pay 1 percent of the damages.

9. "Hired Gun" Expert Witnesses and "Junk Science."

Previously, practically anyone could be deemed qualified as an expert under Wisconsin law and be allowed to introduce junk science and offer unsupported "expert" opinions. Now, expert testimony must satisfy the more demanding "Daubert" standard used in federal courts.

In addition, the new law provides that facts or data relied on by the expert and, which are inadmissible, may not be disclosed to the jury unless the court determines that the value of the jury evaluating the expert's opinion outweighs the prejudicial effect of the facts or data. Essentially, this makes it harder for a party to get inadmissible evidence in through the back door as expert "reliance materials."

10. Punitive Damages.

The legislature debated significant changes to the law governing punitive damages, but the only change enacted is a new cap on the amount of allowable punitive damages. Such damages are now limited to twice the amount of compensatory damages or $200,000, whichever is greater. This cap does not limit the allowable punitive damages against drunk drivers.

11. Damages for Frivolous Claims.

An aggrieved defendant may now have a slightly easier time recovering costs for defending a frivolous claim. A party or its attorney may be liable for a defendant's defense costs if the party maintains a claim solely for the purpose of harassing or maliciously injuring another party, and the party or attorney knew there was no basis in law for bringing the lawsuit.

If the court finds by clear and convincing evidence that a party has violated these provisions, it must do one of the following:

  1. Decide whether to award costs and fees if a party withdraws or corrects its conduct within 21 days of court's decision.
  2. Award costs and fees if the offending party does not withdraw or correct its conduct.

12. Liability Limited to a Manufacturer's Own Products.

In 2005, the Wisconsin Supreme Court ruled that if a plaintiff cannot identify who made the product that caused plaintiff's injury, the plaintiff can sue anyone who made or sold the same type of product. That case involved lead paint pigments sold during the past 100 years.

This "risk-contribution theory" will still exist under the new law, but its application will be limited to very narrow circumstances. Very generally, this kind of lawsuit will be limited to identically formulated products that cause
a type of injury that is unique to that product, and where the plaintiff is unable to identify exactly who sold the particular product that injured him. Furthermore, the plaintiff will need to include in the lawsuit manufacturers representing at least 80 percent of the geographic market where the injury occurred, and the products must have been sold no more than
25 years before the injury occurred.

13.  Limits on Noneconomic Damages for Nursing Homes.

Noneconomic damages are intended to compensate for pain and suffering, loss of companionship, mental distress, and loss of enjoyment of life. Current law limits noneconomic damages to $750,000 per occurrence of medical malpractice. Current law also limits damages for loss of society and companionship recoverable in a wrongful death action against a health care provider to $500,000 in the case of a deceased minor and $350,000 in the case of a deceased adult. The bill extends the same caps for noneconomic damages to actions involving injuries caused by the negligence of a long-term care provider, such as a nursing home, hospice or assisted living facility. The bill also applies the statute of limitations for medical malpractice claims to actions against a long-term care provider.

14. Confidentiality of Health Care Services Reviews.

The new law tightens up the confidentiality rules surrounding documents used or generated during a review or evaluation of services provided by a health care provider or facility. The bill ensures that these review records cannot be used in any civil or criminal action against a health care provider. The law also prohibits the use of health care provider reports to the Department of Regulation or Department of Health Service as evidence in a civil or criminal action.

For more details or if you have any questions, please contact Jeff Spoerk at (414) 277-5337 / [email protected], Khalaf Khalaf at (414) 277-5765 / [email protected] or your Quarles & Brady attorney.

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