Wisconsin Lawyer: Wisconsin Lawyer July 1999: 1998 Significant Court Decisions:

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July 01, 1999

Wisconsin Lawyer July 1999: 1998 Significant Court Decisions

Constitutional Law

Jackson v. Benson,¹ a highly publicized "school choice" case, upheld the constitutionality of the Amended Milwaukee Parental Choice Program (MPCP). The Amended MPCP made direct payments to parents who sent their children to sectarian schools. The parent was required to endorse the check for use of the private school.

Columns The court upheld this "school choice" program. The court held that the program did not violate the establishment clause of the First Amendment because it had a secular purpose, did not have the primary effect of advancing religion, and will not lead to excessive entanglement between the state and participating sectarian schools. The purpose of the program is to provide low-income parents with an opportunity to have their children educated outside the embattled Milwaukee public school system. Providing educational opportunities for children of poor families is unquestionably a state concern. The program does not have the primary effect of advancing religion. Indeed, state programs that are wholly neutral offer educational assistance without reference to religion. Amended MPCP provides a religious neutral benefit to eligible pupils and parents who participate - that is, the opportunity to choose educational opportunities parents deem best for their children.

Finally, the program does not involve excessive entanglement between the state and religion. Under the program, the state need not and is not given the authority to impose any comprehensive, discriminating, and continuing state surveillance over participating sectarian private schools. Although participating schools are subject to performance, reporting, and auditing requirements, as well as to applicable nondiscrimination, health, and safety obligations, enforcement of these minimal standards does not create an excessive entanglement. This oversight already exists in that the Superintendent of Public Instruction currently monitors the quality of education at all sectarian private schools.

The court also upheld Amended MPCP under the "benefits clause" of article I, section 18 of the Wisconsin Constitution, which provides "nor shall any money be drawn from the treasury for the benefit of religious societies or religious or theological seminaries." This is Wisconsin's equivalent of the establishment clause. Both clauses are intended and operate to serve the same dual purpose of prohibiting the establishment of religion and protecting the free exercise of religion. Unlike the Wisconsin Court of Appeals, which focused on whether sectarian private schools were "religious seminaries" under article I, section 18, the issue is whether the aid provided by Amended MPCP is for the benefit of religious institutions. The question is not whether some benefit accrues to a religious institution, but whether the principal or primary effect of the program advances religion. In this context, public funds may be placed at the disposal of third parties as long as the program on its face is neutral between sectarian and nonsectarian alternatives, and the transmission of funds is guided by the independent decisions of third parties. Amended MPCP does not require a single student to attend class at a sectarian private school. A qualifying student only attends a sectarian private school under the program if a student's parent so chooses.

In Flynn v. Department of Administration² the court upheld the validity of 1993 Wis. Act 16, section 9253 (the Act), which caused the lapse of $2,898,000 to the general fund of unexpended program revenues designated for court automation. These funds were derived from court filing fees and court automation fees previously provided by the Wisconsin Legislature. Plaintiffs challenged executive and legislative action in lapsing these funds as violating public policy grounded in the constitution, statutes, common law, public expectations, and the separation of powers doctrine.

Although noting that it emphatically disagreed with the public policy underlying the Act, the court refused to hold the Act unconstitutional. Article VII, sections 2 and 5 of the Wisconsin Constitution do not prohibit the Legislature from enacting legislation to reallocate previously appropriated funds. These provisions empower the Legislature, not the judiciary, to make policy decisions regarding taxing and spending. Cases that require appropriated funds be spent as appropriated are applicable to refusals of the executive branch to spend money that the Legislature appropriated. In this case, the Legislature changed the appropriation. It is the Legislature's role to determine whether to reallocate limited resources. Each legislative session may reassess the needs of the public and provide for the allocation of scarce public resources.

The Act did not violate the separation of powers doctrine. The Act involved "shared powers" of the Legislature and the judiciary. Although the judiciary has superintending power as broad and as necessary to ensure the due administration of justice, the judiciary is not vested with constitutional superintending authority over the legislative budget process or determinations. Under the shared powers doctrine, the statute cannot be held unconstitutional unless it unduly burdens or substantially interferes with the judiciary. Since unconstitutionality must be proven beyond a reasonable doubt, the fact that the Act had an adverse impact upon the courts is not, by itself, proof of an undue burden or substantial interference.

Attorney Fees

Gorton v. Hostak, Henzl & Bichler S.C.³ concerned the interpretation of a contingency fee agreement and a statutory award of reasonable attorney fees under Wis. Stat. section 100.18. The law firm contended that it was entitled to recover the statutory award of reasonable attorney fees in addition to the contingent fees based upon damages recovered in the underlying action. The contingent fee contract provided that the law firm was entitled to 40 percent of the gross amount of any recovery obtained after a lawsuit that involves an appeal. Gorton recovered $200,000 in damages. In addition, the court awarded $307,000 in reasonable attorney fees, making the total judgment $507,000. The law firm argued it was entitled to 40 percent of $200,000 plus $307,000 awarded for reasonable attorney fees, for a total of $387,000. The court disagreed, holding that the entire judgment of $507,000 belonged to Gorton, and the law firm was entitled to 40 percent of that judgment, or $202,800.

Wis. Stat. section 100.18 provides that any person suffering pecuniary loss shall recover such pecuniary loss, together with costs, including reasonable attorney fees. Under the statute, an award of reasonable attorney fees belongs to the client and not the attorney who represents the client. The terms of the contingent fee contract provided that the law firm would recover 40 percent of the gross amount recovered. Therefore, the firm was not entitled to recover the attorney fees awarded by the court but only 40 percent of those fees. The attorney who drafted the contract had the responsibility of drafting an unambiguous contract.

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