Wisconsin Lawyer
Vol. 78, No. 7, July 2005

Letters

• Cease Electric Negatively Affects State's Economic Growth
• Anecdote Illustrates Public Image Message

Cease Electric Negatively Affects State's Economic Growth

I read with interest Judge Cane's and Ms. Sullivan's scholarly article in the May 2005 Wisconsin Lawyer on the history of the economic loss rule in Wisconsin following the recent Wisconsin Supreme Court decision in Cease Electric. As I read it, I was reminded of Palsgraf and its ilk in the discussion of public policy considerations, privity, etc. The article and Cease Electric, in other words, recalled an earlier, simpler era of common law responding to a different economic time. Unfortunately, however, those earlier, simpler times do not provide incentive to businesses to locate initially in Wisconsin or, if given an opportunity to relocate, to remain here, in no way a desirable result for our state.

What the article's discussion misses completely, and where Cease Electric crossed the line from being a simplistic decision about poor electrical work on a chicken coop to having a hugely serious policy impact on economic growth (including job growth) in Wisconsin, is in the "bright line" rule Cease Electric gratuitously added that the economic loss doctrine does not apply to contracts for services. Such a "bright line" rule ignores and inappropriately obviates the difference between relatively unsophisticated consumer service engagements and complex, long-term commercial services agreements negotiated and entered into between sophisticated business entities.

Wisconsin has a very significant and growing business sector that is providing extremely sophisticated services to knowledgeable clients nationwide and worldwide by written contract. Those contracts virtually always contain highly negotiated and detailed representations and warranties, limitations of liability, indemnities, and other provisions designed to balance the economic and other risks of both parties - the services provider and the client. Generally excepted for public policy reasons from the limitations of liability provisions of such contracts are liabilities resulting from personal injury or property damage. And, at least in cases I am familiar with, until Cease Electric Wisconsin law, with its strong economic loss rule, governed construction of these contracts, although sometimes that term may be negotiated as well. After Cease Electric, though, for Wisconsin corporations Wisconsin law has become problematic to govern complex contracts.

While the Cease Electric bright-line rule may be fine for services situations in which there is no written contract, just as the UCC substitutes for written agreements in the sale of goods (where the economic loss rule was originally grounded), the bright-line rule established by Cease Electric for all services agreements went far too far. It betrayed on the part of the supreme court both a lack of understanding of modern Wisconsin business and almost, one senses from the Cease Electric decision, a yearning for a less complicated time. Unfortunately, those failings have potentially done real damage to Wisconsin economic development and once more provide business interests a reason not to locate in Wisconsin initially or to leave at an appropriate opportunity, neither of which is a good result.

Charles W. Sprague
Brookfield

Anecdote Illustrates Public Image Message

I read with interest George Brown's column in the May 2005 Wisconsin Lawyer, concerning his mother's positive experience with her estate planning attorney. The column noted how the lawyer anticipated the client's needs by finalizing the documentation in one meeting so Brown's elderly mother didn't need to make another trip. The article also indicated that although the hourly rate charged was not insignificant, the total cost was less than expected because the matter was concluded efficiently. Brown's article exemplifies many of the components of the State Bar Public Image effort and displays how getting the right message to the public and our members can make the effort more effective.

When people ask me why the State Bar is involved in a Public Image effort, I explain that it is not intended to be a glitzy ad campaign, but rather a grassroots effort to inform the public about the value Wisconsin lawyers provide. We are experts who solve problems for our clients and who serve our communities in a variety of ways. As a group, it is important to specify how we can assist those who may otherwise act pro se and the value we provide that is different from other professions. This effort includes directing the public to resources that can be efficient and economical - such as living will and health care power of attorney forms that can be completed without an attorney - and to encourage the public to seek out a Wisconsin lawyer when the circumstances warrant one.

Many of the individual lawyers and groups of lawyers featured in the Public Image effort are providing pro bono services, but the intrinsic message about all the attorneys is that the services and problem solving skills they provide are valuable enough to justify payment for their legal expertise. Brown's anecdote is precisely the type of public awareness the Public Image effort wants to promote. It is just one example of good lawyering; other clients may require more time and the charges may be substantially higher. The theme, though, is the same - Wisconsin lawyers use their expertise to solve their clients' problems.

Although I'm sure we did not need to convince Brown or Wisconsin Lawyer readers of the value of attorneys, Brown's personal experience makes for a much more effective message. As an association, we should be responsible for making sure this message is delivered. I thank Brown for sharing his mother's experience.

Kevin Palmersheim, chair
Public Image Committee

Wisconsin Lawyer