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Lawsuits on hold as budget committee delays action
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Lawsuits on hold as budget committee delays action

From the Fave 5: Reporter Riley Vetterkind shares his top stories of 2019 series
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More than a dozen lawsuits are on hold as a result of the lame-duck laws Republicans passed in December to limit Democratic Attorney General Josh Kaul’s authority to resolve cases on his own.

Several cases with pressing deadlines that could award the state millions of dollars are awaiting approval from the Legislature’s Republican-controlled budget committee, which has newfound oversight authority over the Department of Justice.

So far, Republicans on the committee have been unable to agree on a way to approve the cases for which Kaul, under the new law passed after Democrats swept statewide offices last November but before they took office, is required to seek their approval. Under the new law, Kaul is required to seek the finance committee’s approval to reach settlement agreements in certain cases.

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The law, which Republicans say puts the Legislature on a level playing field with the executive branch, has been criticized by Democrats, who say it’s simply a mechanism for GOP lawmakers to micromanage the attorney general.

The cases pending before the budget committee are outlined in a July memo from the Department of Justice to the Joint Finance Committee included in documents obtained by the Wisconsin State Journal.

One of the cases is UW Board of Regents v. Sonnleitner and Wells, in which former UW-Oshkosh Chancellor Richard Wells and former Vice Chancellor Tom Sonnleitner were accused of illegally transferring $11 million in funds to a private foundation.

“The parties have worked for some time to negotiate the resolution of this matter,” the DOJ memo states. “They are now waiting on this Committee’s approval before finalizing an agreement.”

Of the several cases requiring action, at least three involve personal injury. Another case needing review from the budget committee, State v. Andy Mancini, involved a Medicaid dental provider accused of fraudulently overbilling the Wisconsin Medicaid program who could have to pay the state as much as $8 million.

Yet another case, Wisconsin Department of Employee Trust Funds v. Vitech Systems Group, involves a claim from the state alleging Vitech Systems was in breach of its contract to provide a new software system to the Department of Employee Trust Funds. Vitech in turn sued the state for breach of contract. More than $14 million is involved in the case, which could have “a limited time window for settlement.”

The disclosure of pending cases before the committee comes a day after Republicans declined to take action Kaul said is required for him to settle an unknown lawsuit that could involve other states. Kaul told lawmakers they would need to sign a nondisclosure agreement for him to discuss details and move forward with the case, but they have so far refused. Republicans who control the committee argued that discussing legal matters in closed session would suffice.

But the state’s open meetings law does not prohibit committee members from discussing matters from closed session after the meeting is over.

The showdown between the Department of Justice and Joint Finance Committee has left many settlements in limbo as lawmakers have failed to reach an agreement on how to review the cases the committee is now required to review.

The development comes after Purdue Pharma, the maker of OxyContin, has reportedly proposed a $10 billion to $12 billion nationwide settlement that would resolve more than 2,000 lawsuits brought against it for devastation caused by opioids.

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Documents show back-and-forth correspondence since March between DOJ officials and the heads of the budget committee, Sen. Alberta Darling, R-River Hills, and Rep. John Nygren, R-Marinette, related to establishing a process for the DOJ to seek approval of lawsuits and settlements under the new law.

They illustrate a rocky relationship between the two parties. Republicans accused Kaul of breaking the law while Kaul and the DOJ complained about a slow response from Republicans and, in Kaul’s view, poorly written laws.

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“They use inconsistent language, fail to define key terms, and plainly did not contemplate — or provide guidance for — scenarios that arise in real disputes,” Kaul wrote in a letter to Darling and Nygren July 15.

After Tuesday’s debacle over signing confidentiality agreements, there’s still no established procedure for the state to approve some settlements.

According to the documents, Republican lawmakers at one point over the summer appeared open to signing nondisclosure agreements.

“We are open to signing a confidentiality agreement even though we are under no obligation to do so,” Darling and Nygren wrote in a letter to Kaul July 12.

But they later backed away from that position, arguing a confidentiality agreement is unnecessary because most legal information shared with them would not be confidential.

Spokesmen for Darling and Nygren didn’t respond to a request for comment.


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