Archive | April 2014

Estranged wife entitled only to 2.5% of husband’s lottery winnings

Married couple was physically separated in June, 2006. The husband then won $2,000,000 in the lottery in January, 2011 and coincidentally decided that a final divorce decree was long overdue. Trial Court found that wife was entitled to only 2.5%

Of note was that wife sent requests for admissions that husband did not answer. By these admissions, husband admitted that a 70/30 split to the wife was a just and equitable distribution. The Court of Appeals agreed, affirming that requests for admissions may be used to establish legal conclusions, but stated that husband only admitted that it was “a” just and equitable distribution and not “the only” such distribution. The trial court was still obligated to decide of the distribution was fair and reasonable. See Ind. Code § 31-15-7-5. In so holding, the Court noted: Discretion signifies choice, and a decision-maker exercising discretion has the ability to choose from a range of permissible conclusions. Johnson v. U. S., 398 A.2d 354, 361 (D.C. 1979).

7th Circuit reaffirms Wisconsin’s controversial Act 10 collective bargaining law as constitutional

Wisconsin’s Act 10 (Wis. Stat. § 66.0508) made significant changes to public employee unions in that it prohibited government employers from collectively bargaining with their general employees over anything except base wages, made it more challenging for general‐employee unions to obtain  certification  as  exclusive  bargaining  agents, and precluded  general‐employee unions from using  automatic  payroll deductions  and  fair‐share agreements.

The plaintiffs,  two  public‐employee  unions  and an individual union member, argue that these changes infringe their First Amendment petition and association rights. While one case already decided that the Act was constitutional (Wisconsin Educ. Ass’n Council v. Walker, 705 F.3d 640 (7th Cir. 2013)), the plaintiffs pled other First Amendment and Equal Protection Clause theories unique to this case. The District Court dismissed the complaint pursuant to Fed. R. Civ. P. 12(c), granting judgment on the pleadings. Plaintiffs appealed.

The Court first had to determine how to interpret provision 1M of the Act (“Except as provided under subch. IV of ch. 111 [the amended, post–Act 10 MERA], no local governmental unit may collectively bargain with its employees”). Wisconsin surprisingly argued to the effect that provision 1m merely prohibited a local government from being “obligated” to negotiate with a labor union rather than preventing local governments from negotiating altogether outside of the issue of base wages. Were this the case, there would be no controversy. However, the 7th Circuit ultimately made its own interpretation of the provision since the Wisconsin Supreme Court had not yet done so despite several pending cases in the state. The 7th Circuit interpreted the provision “to prohibit municipal employers from reaching binding agreements with their general employees on a collective basis, if the agreement concerns anything other than the employees’ base wages.”

The Court then turned to the main arguments, which were threefold: 1) 1st Amendment – Petitions Clause; 2) 1st Amendment – Association; and 3) Equal Protection.

1.  Petitions Clause

The unions acknowledged the applicability of the Supreme Court case of Smith v. Highway Employees, 441 U.S. 463, 99 S. Ct. 1826, 60 L. Ed. 2d 360 (1979) (per curiam). In that case, the Court ruled that simply because employees had unionized, the employer did not have to hear out what the union had to say (i.e., the right to free speech does not necessarily obligate the State to listen). More specifically, the State Highway Commission could hear grievances from individuals and choose not to hear the same from unions.

In the instant matter, the unions argued that the Act’s effect took it one step further in that it removes a government’s option of whether or not to listen to a union on any issue other than base wages. However, the 7th Circuit noted another Supreme Court case on point, Minnesota State Bd. for Community Colleges v. Knight, 465 U.S. 271, 104 S. Ct. 1058, 79 L. Ed. 2d 299 (1984). In that case, the Supreme Court was faced with the issue where faculty instructors who did not wish to join the union serving as their bargaining representative argued that Minnesota’s “restriction on participation in the nonmandatory- subject exchange process” violated their First Amendment rights. Id. at 273. The Supreme Court upheld its application in Smith and held that there was “no constitutional right to force the government to listen to their views.” Id. at 283. Notably, the Knight Court and the 7th Circuit here underscored that there was nothing preventing less formalized meetings – just collective bargaining – and that some Wisconsin municipalities already had less formal meeting procedures with unions.

The 7th Circuit thus reaffirmed that there is no right to collectively bargain as it would in essence recognize a constitutional right to government policymaking. “Public officials at all levels of government daily make policy decisions based only on the advice they decide they need and choose to hear. To recognize a constitutional right to participate directly in government policymaking would work a revolution in existing government practices.” Knight, 465 U.S. at 284.

2.  Association

This portion was more straightforward since the 7th Circuit already held that nothing in the Act prevented unions from forming or associating. “An  organization  cannot  come  up  with  an  associational purpose—even a purpose that involves speech—and then require support from the  state in  order to realize its goal.”

3.  Equal Protection

Here, the unions argue that they are treated differently than the individuals who make up such unions in that local governments may negotiate with individual employees but not employee unions. Analyzing this argument under a rational basis lens, the unions would concede this point. However, they argued that the Act’s effect infringes upon rights to associate (the State’s favoring individuals over unions punishes the right to associate) and thus invokes strict scrutiny. The 7th Circuit repeated its position that the freedom to associate was not infringed upon and thus upheld the rational basis review.

What does it all mean? It is an interesting case since similar legislation may foreseeably be implemented in other States. It will also be interesting to see whether the Wisconsin Supreme Court interprets the statute differently or adopts the 7th Circuit’s approach, since that issue remains open. It seems reasonable that the fight over this will move there.

Bad faith finding reversed where there was no obligation to produce evidence detrimental to Plaintiff

At trial on a UIM claim, GEICO’s counsel found out days before the trial that one of the plaintiffs, a doctor, had been charged with obtaining controlled substances by fraud in Florida. The information was raised on cross examination of that plaintiff.  After a verdict for one of the other plaintiffs, plaintiffs moved for a finding of bad faith for not presenting the evidence before trial, pursuant to Ind. Code § 34-52-1-1. The trial court granted the motion and GEICO appealed.

The Court of Appeals reversed on the basis that there was no discovery request for the information compounded by the fact that the plaintiff doctor knew of the information and elected not to disclose it to his attorney.

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