Attacks on Consumer Rights, 2011-2012
MADISON, WI – Wisconsin Governor Scott Walker is a national leader in attacking consumer rights. He was recognized in 2011 by an organization – the U.S. Chamber of Commerce – that has bankrolled the nationwide effort to limit Americans' right to a jury trial, and to represent large corporations and multinational interests against consumers, workers, and average citizens.
Governor Walker's agenda is to side with big corporate interests against the individual. Members and leaders of the U.S. Chamber of Commerce and Wisconsin Manufacturers and Commerce are working to ensure that Governor Walker is not recalled. Governor Walker’s “reforms” have broadened the distinction between Wisconsin consumers and the wealthy business interests that are driving the corporate takeover of the civil justice system.
Here is a list of legislative attacks against consumers:
PROTECTING WRONGDOERS AGAINST PUNITIVE DAMAGES
Wisconsin law allows people to collect punitive damages if a wrongdoer acts maliciously or intentionally disregards the rights of another, i.e., drunk driving cases. Governor Walker attempted to change the standard to only allow punitive damages when a person intended to cause injury to a particular person or persons or that injury was practically certain to result. This standard burden would have meant most drunk drivers would not be liable for punitive damages. The Legislature amended the Walker proposal and kept Wisconsin’s current legal standard – intentional disregard of a person’s rights – but capped punitive damages at two times compensatory damages or $200,000, whichever is greater, with an exception for those driving while intoxicated. With states that have caps on punitive damages, this cap is among the lowest in the United States.
ALLOWING THE SALE OF ILLUSORY AUTO INSURANCE COVERAGE
Governor Walker signed legislation allowing insurance companies to define underinsured motorist coverage (UIM) and then reduce the coverage by the amount of liability coverage possessed by the at-fault driver. UIM coverage protects people when the other driver has inadequate liability insurance. So, in a two-car collision, Driver A negligently caused the accident and carries the minimum amount of liability insurance, $25,000. Driver B is seriously injured and incurs $125,000 in medical expenses, lost wages, and other damages. Driver A pays his liability insurance limits of $25,000. This payment leaves $100,000 in uncompensated damages. Driver B has purchased $100,000 in UIM coverage. Can Driver B recover $100,000 in UIM coverage? No. The new law allows the insurance company to subtract the $25,000 paid by the Driver A from the $100,000 UIM coverage, reducing it to $75,000. If the reducing clause is applied, the insurance company will never pay the policy limits for UIM coverage.
TAKING AWAY RIGHT OF INJURED ELDERLY TO SEE ACCIDENT REPORTS OF NURSING HOMES
Under Governor Walker, nursing home residents and their families will be denied key information about what happened when someone was injured, such as incident reports, witness statements, dates/timeframes, and equipment details. This law protects bad conduct; thereby potentially placing people in nursing homes at higher risk for injury or death. The new law also broadly expands the instances when records become inadmissible, including criminal cases such as the sexual abuse of a resident.
RESTRICTING INJURED NURSING HOME RESIDENTS FROM RECEIVING FULL COMPENSATION
Governor Walker’s new law caps non-economic damages, including pain, suffering and disability, in cases involving long-term care residents at $750,000. Caps on non-economic damages inordinately discriminate against the elderly and disabled. Nursing home residents – 1 in 7 under the age of 65 – may deal with lack of care issues. Because residents to nursing homes do not work, often the only measure of damage is their pain and suffering. Caps legislatively restrict damages without comparison to a true measure of damages, which categorizes their suffering as less worthy of fair compensation.
MAKING IT MORE DIFFICULT FOR CONSUMERS TO FIND AND HIRE ATTORNEYS BY LIMITING ATTORNEY’S FEES
The award of attorney fees enforces important consumer protections by shifting the cost of enforcement to the wrongdoer rather than the individual who was harmed. Governor Walker proposed capping attorney fees in consumer cases to three times the amount of damages a person sustained. This cap would have been a tremendous barrier to people hiring attorneys to take cases with limited damages, such as landlords keeping security deposits, employment discrimination and lemon law cases. The Legislature modified the proposal to make it a presumption that legal fees may only be three times the amount of damages sustained, which will still make hiring an attorney very difficult. Those harmed by unlawful acts will face even more barriers on their path to receive justice.
REDUCING THE INCENTIVE FOR BUSINESS TO PAY INJURED CONSUMERS BY LOWERING INTEREST RATES ON SETTLEMENTS AND VERDICTS
Wisconsin law previously allowed an injured person to recover interest on a settlement or judgment at an annual rate of 12 percent. Governor Walker proposed to reduce that percentage to the Prime Rate plus one percent, currently 4.25 percent, for only tort and consumer cases. This change would have meant that a healthcare facility that sued a person injured in a traffic collision for payment of his or her medical bills could have recovered a judgment against the injured person and received 12 percent interest. At the same time, the injured person could only recover 4.25 percent in a judgment for those same medical bills from the automobile insurance company. This inequitable treatment was rectified by the Legislature. The lower interest rates will apply to all civil judgments and settlements.
TAKING AWAY THE JURY’S POWER TO EVALUATE EXPERT TESTIMONY
For more than 30 years, Wisconsin had a standard for court evidence that allowed jurors to determine the reliability of witnesses’ testimony. Now under Governor Walker, judges are asked to make that assessment. Wisconsin courts previously considered and rejected this federal standard, which has caused mini-trials on the admissibility of expert testimony in some courts, absorbing valuable judicial resources and increasing the cost of litigation. The new evidentiary rule already is making it more challenging to prosecute some drunken driving cases.
TAKING AWAY RIGHT TO SUE IF PRODUCT IS OLDER THAN 15 YEARS
Under Governor Walker, after 15 years have passed, the State prohibits strict product liability lawsuits against product manufacturers except those caused by latent diseases, like exposure to asbestos. This new law has significant implications for equipment used in manufacturing, farm machinery and airplanes. This new law puts at risk farmers and their families, since many tractors on Wisconsin farms are over 20 years old.
MAKING IT MORE DIFFICULT TO SUE A FOREIGN MANUFACTURER
For over 40 years, Wisconsin allowed people injured by a defective product to sue the manufacturer, distributor or seller of the product. No longer. Under Governor Walker, the law now requires the injured party to locate and serve a manufacturer before including the seller and distributor in the lawsuit. This law change has implications for consumers who buy a defective product in a local big box store, which causes an injury. In today’s world that probably means trying to find a manufacturer in China or another foreign country before being allowed to sue the big box store that sold the defective product.
ALLOWING INSURERS TO PROHIBIT "STACKING" OF AUTO INSURANCE
If a legislator introduced legislation limiting coverage to a single life insurance policy - no matter how many were bought and paid for - consumers would be outraged, especially if the insurer was permitted to continue to take premiums for the coverage that was no longer allowed. Most people purchase uninsured motorist (UM) and underinsured motorist (UIM) policies to protect themselves and their family when they are injured by a driver with either no insurance or inadequate insurance. The benefit of UM and UIM coverage is that is covers a person whether driving a car, as a vehicle passenger or as a pedestrian. The new law Governor Walker signed allows the prohibition of stacking of UM and UIM policies. By limiting available coverage, Wisconsin consumers may not receive the automobile insurance coverage for which they have paid.
ERASING DRUG AND MEDICAL DEVICE MAKERS’ ACCOUNTABILITY
Governor Walker proposed that Wisconsin residents injured as a result of a defective drug or medical device, in certain cases, not be allowed to sue drug and medical device makers for their injuries if the FDA approved the product. The legislation only limited the rights of injured Wisconsin citizens, not citizens in other states. This change would be devastating to anyone injured by a defective drug or medical device, particularly women. History shows that many FDA-approved drugs and devices that have caused some of the most serious injuries and death have been marketed specifically for women: DES, Thalidomide, Dalkon Shield IUD, Ortho Evra and now vaginal meshes. The Legislature did not even hold a hearing on Governor Walker’s bill.