Oct. 22, 2014 – A state appeals court has ruled that a “mass action” filed by teachers against the Neenah Joint School District was not barred by a statute that requires a notice of claim against a government entity to be filed by the claimants.
In April 2013, six teachers filed a complaint “on behalf of themselves and all other persons similarly situated” claiming damages of more than $61 million based on changes to the district’s retirement plan for district employees.
Wisconsin’s “class action” statute, Wis. Stat. section 803.08, allows class actions lawsuits to be brought by representatives of a group of similarly situated persons. State statute does not require all class members in a class action to be named.
But when the defendant is a government entity, such as a school district, the claimants must also serve the defendant with a “notice of claim” under section 893.80.
The notice of claim must identify the injury and all claimants. Thus, class actions with unnamed claimants are not allowed against government entities.
But in Townsend et al. v. Neenah Joint School District, 2013AP2839 (Oct. 22, 2014), a three-judge panel for the District II Court of Appeals clarified that so-called “mass actions” of named claimants that bring similar claims are allowed.
“Nothing in Wisconsin law bars the other type of class action against a governmental body, a mass action of named claimants bringing similar claims, provided that each claimants has complied with Wis. Stat. § 893.80,” wrote Chief Judge Richard Brown.
The panel questioned an explanatory note in the official statutes under section 803.08, which cites Hicks v. Milwaukee Cnty., 71 Wis. 2d 401, 238 N.W.2d 509 (1976). It says “the class action statute has no application to making claims against a county.”
The three-judge panel explained that this note “has created confusion” and said the “record supports that the annotation affected the courts analysis.” The circuit court dismissed the claims of all claimants besides the two teachers who filed the notice.
The appeals panel clarified that the class action statute does apply to actions against government units so long as the notice of claim identifies all claimants by name.
“What matters is not whether the notice was labeled a ‘class action’ but whether the claimants satisfied § 893.80,” wrote Judge Brown, noting that Hicks dealt with unnamed claimants and a different statute that allows counties to require that notices be verified.
“We think what may have led to confusion is the failure to recognize that not every ‘class action’ is the type in which representatives sue on behalf of unnamed persons.”
Teachers “Substantially Complied” with Notice Statute
The district argued that the notice of claim did not comply with section 893.80, because it did not show the two teachers who filed it had authority from the other claimants.
The appeals panel explained that a notice is sufficient if it “substantially complies” with section 893.80, which requires the notice to describe the injury and identify the claimants’ identity and address, along with the relief sought in an itemized statement.
“These two notice requirements give the governmental entity a chance to investigate potential claims, and to compromise and budget for settlement,” Brown noted.
The district argued that “substantial compliance” applies when determining if the notice of injury is adequate, but “strict compliance” applies when determining if the notice properly identified the claimants. The appeals court panel disagreed.
The panel said the attached list that identified the “class” claimants by name and address was sufficient, even though the body of the notice only named two teachers.
In addition, the panel rejected the district’s argument that the notice of claim was deficient because it did not show it was made by the authority of all claimants.
“No court of which were are aware has ever dismissed on ‘authority’ grounds the claims of claimants whose names, addresses and claim amounts were itemized in a notice of claim,” wrote Brown, noting that an attorney signed the notice. “The class actions dismissed by Hicks and its progeny were claims by unnamed, unidentified claimants.”