Generally speaking, unless a specific exception applies, any and all governmental records are open to public inspection.  That openness applies to records that are either created a public body, or that are “being kept” by a public body.  See Wis. Stats. § 19.32(2).  The “being kept” provision of the Open Records Law results in private companies’ records of their contracts with the government being subject to public disclosure.  That would encompass, for example, a private concrete company’s contract regarding the installation of a sidewalk in a public park.

A government-private company contract may also be subject to disclosure under Wisconsin Statutes Section 19.36(3).  Wisconsin Statutes Section 19.36(3) is commonly referred to as the “contractors’ records” provision of the Open Records law.  Whether or not the record is maintained by the public body, Section 19.36 states that “each authority shall make available for inspection and copying under s. 19.35(1) any record produced or collected under a contract entered into by the authority with a person other than the authority to the same extent as if the record were maintained by the authority.”

The Wisconsin Supreme Court will soon be deciding whether the “contractor records” provision requires disclosure of invoices of a law firm hired by a public agency’s insurer to defend the public agency.  In Juneau County Star Times v. Juneau County, 2010AP2313, 2011 WI App 150, a Juneau County newspaper sought the billing records generate by Crivello Carlson, a Milwaukee law firm, which had been hired to defend the Juneau County Sheriff’s Department in various matters in 2008, 2009, and 2010. 

The Court of Appeals ordered that all records, unredacted, be disclosed to the Juneau County Star Times.  First, the Court of Appeals found that the contractors records provision applied, noting that the statute did not specify who had to act to collect the records, and that in this case, the insurer acted as a representative of the government and the contracting party in collecting the billing records from the law firm.  Notably, the contract between the County and the insurer required that the County forward the insurer copies of any papers received in connection with the legal claims. 

The County argued against disclosure of the billing records because of an indirect relationship between the County, insurer and law firm.  It additionally argued against a public interest (in discovery the costs borne by the taxpayers) because there was not a “dollar-for-dollar son diction between the County funds and compensation to the law firm.” The Court of Appeals disagreed, noting that the billing records were produced because of the contract with the insurer and on the basis that the billing records dealt with “direct legal representation of the County in a matter of obvious potential public interest.” Accordingly, the Court of Appeals held that the billing records are subject to disclosure under the contractor records provision of the Open Records Law.

The final issue in the case deals with the circuit court having permitted redaction of the billing records.  Because of the Open Records Law’s strong presumption of openness, redactions must be supported by a showing that the presumption of openness is outweighed by public policy concerns.  The circuit court had concluded that the records were appropriately redacted because of attorney-client privilege. 

The Court of Appeals reviewed the unredacted billing records and stated the they included details like file numbers, federal tax identification numbers, billing numbers, photocopy dates and prices, outside printing dates and prices, the number of attorney hours (or portions of an hour) worked on a given date, attorney rates, total hours, and the identities of attorneys performing particular work.  The County had argued that because the billing information was detailed, it was therefore entitled to confidentiality, but the Court of Appeals disagreed.  The Court of Appeals instead concluded that the County had failed to establish that any of the billing records information would reveal privileged communications, and to the contrary, stated that “much of redacted information could not, under any stretch if the imagination, suggest anything of a privileged nature.”

The case concluded with the Court of Appeals remanding the case to the circuit court with an order that it disclose the unredacted billing records to the newspaper.  However, the County timely filed a petition for review with the Wisconsin Supreme Court, which accepted the case.  The parties are currently submitting briefs to the Wisconsin Supreme Court.  This will be the second occasion in which this Supreme Court has been faced with an Open Records case.

On December 6, 2011, the United States Court of Appeals for the Seventh Circuit released its opinion in the case Marr v. Bank of America, N.A.   In 2007, plaintiff-borrower (“Borrower”) decided to refinance his mortgage on his home in Wauwatosa, Wisconsin.  Borrower subsequently sought to rescind the loan and recover his interest payments, statutory damages for failure to rescind, and attorney’s fees.  Critical to the case was whether or not the Borrower had received two copies of a notice informing him of his right to rescind his loan within the three days (“Notice”), a requirement of the regulations implementing the TILA.  If the Borrower received two copies, he had three days to rescind the loan and his action was barred; if he received one copy, he had three years to rescind the loan and the action could go forward.

The Bank moved for summary judgment.  In support of its motion, the Bank cited an acknowledgment signed by the Borrower that he had been given two copies of the Notice (“Acknowledgment”).  The Bank also submitted an affidavit signed by the closing agent in which she did not discuss specific events that took place at Borrower’s closing but provided information about her closing practices and procedures, including that agents are required to present and review the Notice with the borrower at the end of the closing and put at least two copies of the Notice in the borrower’s document pile.  The agent was confident that she had given the Borrower two copies of the Notice because she stated she could not recall a time when she did not follow the above practices.  The Borrower testified that at the closing he was given a folder in which to put the documents he was given, after the closing he put the folder in a filing cabinet, it was not disturbed for two years (Borrower lived alone), at which time his attorney inspected it and they discovered there was only one copy of the Notice in it.  Borrower admitted that documents which post-dated the closing and which were unrelated to it had been added to the folder, but he was certain that none of the closing documents had been removed, even if other documents had been added.   The Borrower also submitted an affidavit in which he stated that his closing did not follow the standard practices and procedures outlined in the agent’s affidavit – the agent did not review anything at the end of the closing and she did not present the Notice at the end but somewhere in the middle.     

The District Court granted summary judgment to the Bank, primarily based on the rebuttable presumption that the Borrower had received two copies of the Notice created by the Borrower’s signing of the Acknowledgement.  See 15 U.S.C. § 1635(c) .  The District Court was worried about the possibility that the presumption of delivery could be rebutted by nothing more than the borrower’s say so.  Accordingly, it ruled that the Borrower had not overcome the presumption primarily because of the Borrower’s inability to identify with any certainty which documents and how many of those documents he had received and the fact that the folder had been accessed following the closing contradicted the Borrower’s testimony that he had not removed documents from it.

The Court of Appeals reversed.  It emphasized that for summary judgment purposes, the non-moving party does not bear the burden of proving their case; the opponent of summary judgment need only point to evidence that if believed by a fact-finder could support judgment in their favor.  The Court of Appeals noted that the TILA states that a signed acknowledgment of receipt of two copies of the Notice “does no more than create a rebuttable presumption of delivery thereof” (15 U.S.C. § 1635(c);  emphasis added), strongly suggesting that Congress was warning courts not to overrate the importance of the acknowledgment.  Citing the Third Circuit Case Cappuccio v. Prime Capital Funding LLC, 649 F.3d 180, 189 (3rd Cir. 2011) , which described the borrower’s burden to overcome the presumption as “minimal,” the Court of Appeals concluded that Borrower’s own testimony that the envelope was undisturbed and that his closing experience differed from the agent’s standard procedures were sufficient to permit a reasonable jury to rule in his favor.  The Court noted that it had previously held that, although the Borrower had more in this case, even “uncorroborated, self-serving testimony” can provide evidence of disputed facts and prevent summary judgment against the non-moving party and the TILA is remedial statute designed to protect borrowers which unequivocally demands that the borrower receive two copies of the notice of the right to rescind and within which there is no room for some kind of substantial compliance on the part of the lender. 

Rabine is an unpublished court of appeals decision, but it may be cited for its persuasive value.  In Rabine, the circuit court in the divorce matter issued a non-final memorandum decision on January 29, 2010 concerning the placement of the children and the property division.  The nonfinal decision also stated that the issue of child support would be addressed at a later date. 

On May 24, 2010, Gaylan filed a motion requesting child support in reconsideration of the court’s mandate to sell the house.  On June 2, 2010, after a hearing, the circuit declined to award child support or issue a new decision on the sale of the house.

In August 2010, a CHIPS action was started in Shawano Court which placed the four minor children with Gaylan.  On August 5, 2010, Gaylan filed a motion with the divorce court (Sauk County) to reconsider the prior ruling in light of the CHIPS proceeding.  On August 20, 2010, the court issued a final decision regarding in the divorce matter which was consistent with the prior non-final decisions. Gaylan appealed.

On appeal, Gaylan argued that the circuit court erred when it issue a final divorce judgment without addressing the topics he raised in his pre-judgment motions.  The court of appeals disagreed.  Gaylan argued that placement should have been revisited because a CHIPS action had been started which awarded him placement of the children, which conflicted with the divorce judgment that had shared placement.  Gaylan argued that under §802.01(2), the court of appeals must reverse the circuit court’s ruling because it failed to consider his motions  The court of appeals stated that §802.01 says nothing about a right to an order, or more particularly, that a court must grant or deny all motions in a written order.  Further, case law has set forth the rule that “a motion which is not acted on by the trial court is deemed denied.”  See Berna-Mork v. Jones¸ 173 Wis.2d 733, 496 N.W.2d 637 (Ct.App. 1992). 

Gaylan further argues that the court applied the wrong standard of review because it did not apply the relevant facts in this case.   Gaylan argues that the court should not have required that the house be sold because it did not consider what the children needed under the CHIPS action.  Additionally, Gaylan argues that the facts involving the costs of rent/mortgage and the net proceeds were mistaken.

The court of appeals rejected Gaylan’s first argument that the divorce judgment conflicted with the CHIPS action which required an examination of the “basic needs” of the children.  Section 48.15 does require that the jurisdiction of the juvenile court take precedence over divorce court, and that the divorce court avoid taking action which conflicts with juvenile court.  However, the case law further states that the divorce court retains jurisdiction over anything not conflicting with the juvenile court.  In this case, Gaylan failed to show that the court’s divorce order ran afoul of §48.15 of the children’s code. 

Lastly, Gaylan argues that the numbers on which the divorce court based its decision were wrong, and therefore the facts are mistaken.  Pursuant to LeMere v. LeMere, there is a presumption of equal division of property.  The court may deviate after considering statutory factors.  In this case, the circuit court stated that the sale of the house was based upon an equal division.  Gaylan states that the court should have let him keep the house because the numbers set forth at trial were incorrect.  However, Gaylan provided no legal argument to the court as to why the property division should be delayed for any period of time. Even assuming that Gaylan’s argument is correct, the court did not misuse its discretion in determining the lesser of two evils. 

            The Supreme Court of the United States effectively ended such use in June, when it handed down its opinion in J. McIntyre Machinery, Ltd. v. Nicastro.  Robert Nicastro severely injured his hand while using a metal-shearing machine.  Nicastro injured his hand while using the machine in New Jersey.  The machine had also been purchased in New Jersey.  While the machine had been purchased from a U.S. distributor who had, in turn, purchased the machine from the manufacturer, McIntyre, McIntyre actually manufactured the machine in England.  Further, McIntyre was also both incorporated and operated in England.  Despite never having advertised in or sent goods to New Jersey, the New Jersey Supreme Court, applying the stream of commerce theory, found that the sale of the machine to the U.S. distributor subjected McIntyre to jurisdiction in New Jersey. 

                 In a four-justice plurality, Justice Kennedy held that because McIntyre did not engage in any activities that revealed intent to benefit from the protection of New Jersey’s laws, McIntyre had not purposefully availed itself to jurisdiction in New Jersey.  In a concurrence, Justice Alito joined Justice Breyer in declining to adopt the plurality rule, noting that an isolated sale, even if accompanied by efforts to sell goods within the state, is not sufficient for personal jurisdiction.  

            Where does that leave us?  After Nicastro, what is purposeful availment?  Justice Kennedy noted that McIntyre did sell its goods to a U.S. distributor but that “it is (McIntyre’s) purposeful contacts with New Jersey not with the United States, that alone are relevant.”  How one can sell into the American market but not into particular states is unclear.  The importance of settling this issue is increased given the rapid growth of the selling of goods through the internet. 

          Although NLRA issues are commonly raised in union settings, the NLRA applies to non-union settings and non-union member employees who collectively raise issues of the terms and conditions of their employment.  More specifically, “Section 7” of the NLRA provides that employees have the right to self organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.  See 29 U.S.C. § 157.[1]  Section 7 activity includes non-unionized employees’ “concerted” efforts at addressing complaints about the terms and conditions of their employment and extends to “concerted” efforts through social media outlets. 

          Because of the informality of social media postings, when employers are challenged for making adverse employment decisions because of an employee’s social media communications, a defense is often the informality and personal insults (usually directed at supervisors) included in the communications.  For Section 7 activity to lose its protections under the NLRA, however, it must be determined to be “opprobrious,” which is not satisfied merely because of swearing, sarcasm, or name-calling, in the context of a conversation that is otherwise related to the terms and conditions of employment or supervisory actions.  For example, an employee’s reference to her supervisor being a “scumbag” remained protected activity since it was made in the context of objecting to supervisory action.  Also, an employee’s reference to her employer company’s owner as an “asshole,” made in the context of objecting to faulty tax withholding (that resulted in multiple employees owing money for tax that was not properly withheld), was protected as both a “group complaint” and contemplated future group activity.  (Amusingly, the NLRB responded to the employer’s contention that the reference to the owner being an “asshole” was defamatory by stating that a statement “will not lose its protected status unless it is not only false but maliciously false,” and indicating that the employee’s Facebook postings “to the extent that they constituted statements of fact that could be alleged as defamatory, were not even false, much less maliciously false.”)  

          The context of the social media “conversation” was also significant.  The conversations that called for (and received) coworker comments and support, that were conducted in preparation for a meeting with supervisors, or that succeeded related discussions with supervisors were significant to the determination that the conversations constituted “concerted activity” for employees’ “mutual aid and protection,” and were not merely expressions of individual interests.  For example, where luxury car salespeople expressed concern about their employers’ decision to serve “inexpensive food,” e.g., hot dogs, chips, etc., at an automobile launch event and the impact it would have on their commissions, an employee’s Facebook photograph album, with accompanying descriptive criticisms, was found to be concerted activity related to the terms and conditions of employment.

          On the other hand, a bartender was permissibly terminated by his employer restaurant/bar because of a Facebook conversation he had with a non-employee, in which the bartender was critical of the employer’s tip-sharing policy.  The NLRB explained that the bartender’s complaints were not protected, because the topic of his posts (which the NLRB conceded would constitute “terms and conditions” of his employment) were never discussed with his coworkers, before or after his posting, and as a result, had not constituted “concerted activity.”  (In fact, at least three of the NLRB’s summarized cases were found to not involve “concerted activity,” because the speaker never had addressed his or her complaints with co-workers in an attempt to initiate group action.) 

          A union was found to have violated the NLRA by videotaping “interviews” of non-union laborer worksite crews about the workers’ immigration statuses and later posting the videos on You Tube and the union’s Facebook page.  The NLRB found that the union had engaged in a host of errors, including interfering with their performance for a nonunion employer, threatening to call immigration authorities, by videotaping/photographing the exchanges, and by posting the videos to Facebook and You Tube. 

          Perhaps the most practical lessons for employers are ensuring that their social media policies are not overly broad.  Many of the employers at issue in the NLRB’s example cases were guilty of having crafted policies that were too-broad in their prohibitions and failed to make necessary exceptions for conduct that would constitute concerted activity entitled to the NLRA’s protections.

          The NLRB was definite in striking down many of the subject employers’ social media policies, including those that prohibited employees from using social media outlets to:

           (1)  discuss or make disparaging remarks about the employer or supervisors;

           (2)  engage in “inappropriate” discussions about the company, management, and/or coworkers;

           (3)  violate, compromise or disregard the rights and reasonable expectations as to privacy or confidentiality of any person or entity;

           (4)  constitute embarrassment, harassment or defamation of the employer or its personnel;

          (5)  make statements that lack truthfulness or that might damage the reputation or goodwill of the employer or its personnel;

          (6)  talk about company business, make any post that they would not want their manager/supervisor to see or that would put their job in jeopardy, or from disclosing inappropriate or sensitive information about their employer.

At the very least, in light of the NLRB’s report, social media policies should specifically carve out an exception in the instances of application to “Section 7” activity. 

          Additionally, multiple employers in the NLRB’s example cases had policies prohibiting employees from depicting, in their personal social media accounts, photographs or videos of the employer (or other visual evidence of an employer, its brand, products, etc.).  The Board explained that the policies were overly broad because they would, as an example, unlawfully prohibit an employee from posting pictures of the employees picketing (labor matters) in front of the employer’s store.

          Consequently, although Facebook, Twitter, and other social media outlets are thought to be exclusively personal, they also represent employees’ modern-day method of discussing their collective employment interests, as well as their perceptions of their employer’s violations of those interests.  Employers should exercise caution in responding to an employee’s social media posts about their employment to ensure that any resulting disciplinary action does not violate the NLRA’s protections of concerted activity.  Moreover, in crafting social media policies, if an employer chooses to do so, an employer should just as carefully navigate around Section 7 rights to ensure that otherwise well-intentioned policies do not run afoul of the NLRA. 

Ferris concerned Ferris’ purchase of real property in Muskego from Location 3 Corporation.  After closing, Ferris discovered that the landfill next to his property was a Superfund site.  Ferris filed a complaint against Location 3 as well as three agents of Location 3 individually, alleging that they knew about the Superfund site but failed to disclose it on the real estate condition report.  The defendants moved for partial summary judgment alleging (in addition to other arguments) that the three named individuals should be dismissed because there were no facts pled to support piercing the corporate veil.  The trial court granted summary judgment against the three individuals on the grounds that there was nothing in the record indicating that they acted outside the scope of their authority as agents of Location 3. 

The Court of Appeals reversed the trial courts’ dismissal of the three individuals, noting that “Wisconsin case law has firmly established that individuals are liable for their own tortious conduct” and that the individual defendants could not hide behind the corporate veil.  In so ruling, the Court of Appeals relied on three Wisconsin Supreme Court cases which addressed the issue:  Oxmans’ Erwin Meat Co. v. Blacketer, 86 Wis. 2d 683, 273 N.W.2d 285 (1979), Hanmer v. DILHR, 92 Wis. 2d 90, 284 N.W.2d 587 (1979), and Stuart v. Weisflog’s Showroom Gallery, Inc., 2008 WI 22, 308 Wis. 2d 103, 746 N.W.2d 762.  The Court of Appeals quoted from Hanmer:

The general rule is that the agent, as well as the principal for whom he is acting is responsible for the tortious acts of the agent.  In such situations the corporate shield protects only those who would otherwise be vicariously liable, not those whose own conduct is called into question.

Based on the above cases, the Court of Appeals concluded that it was not necessary for Ferris to show that the Location 3 agents acted outside of the scope of their authority in order to hold them personally liable.  The Court ruled that they may held personally liable if a fact finder finds that the engaged in tortious conduct, regardless of whether or they acted on behalf of Location 3 when they did so.  Accordingly, the Court of Appeals reversed the trial court’s ruling to the contrary.

Wohlers is a grandparent visitation case involving the special grandparent visitation provision set forth in sec. 767.43(3) Wis. Stats.  The special grandparent visitation statute applies when  a) there is a non-marital child whose parents have not subsequently married; b) the paternity of the child is established in this state, or another, if the grandparent filing the petition is a parent of the child’s father; and c) the child has not been adopted.

In Wohlers, the mother of E.B. was in jail and the maternal grandparents had assumed the care of the child for approximately 5 years.  Steve Wohlers was adjudicated E.B.’s father when the child was approximately 3 years old.  Once adjudicated the father, Wohlers was granted periods of physical placement with E.B.  The grandparents filed a motion allowing them to intervene and establish vistitation with E.B.  The parties subsequently entered into a stipulation granting sole custody to the Wohlers and visitation to the grandparents.  In a two-week period, Wohlers would have placement with E.B for nine days and the grandparents would have placement for five days. 

Wohlers then sought to amend the stipulation and filed a motion to establish or eliminate grandparent visitation starting with the 2007 – 2008 school year.  Wohlers, at a status conference on the matter, requested a hearing to determine whether the grandparents even had standing to assert visitation rights because there was no “significant triggering event” justifying intervention in the parent-child relationship under Holtzman v. Knott, 193 Wis. 2d 649, 533 N.W.2d 419 (1995).  After briefing the issue, the court denied Wohler’s motion regarding the grandparent’s lack of standing to assert visitation.  At trial, Wohlers submitted a plan outlining his proposed visitation schedule beginning with the school year.  Wohlers’s schedule allowed the grandparents one weekend per month with E.B., one mid-week evening visit per week upon his approval, and one vacation of up to seven days per year.  The Dane County Family Court Counseling Service (DCFCCS) and the GAL recommended every other weekend visitation during the school year.  The court only addressed school year placement.

The trial court found that the DCFCCS and the GAL’s recommendations of alternate weekend visitation to the grandparents was in E.B.’s best interest.  Wohlers appealed, stating that 1) the trial court erred by declining to require the grandparents to prove the existence of a “significant triggering event” under Holtzman; 2) the trial court failed to give “special weight” to Wohler’s proposal as required by Troxel; and 3) the trail court erred in failing to address placement for non-school year time.

The court of appeals held that Holtzman did not apply because in that case, the party seeking visitation with the child was a woman who had been in a relationship with the child’s biological mother.  The Holtzman court held that in determining whether to grant a third-party visitation with a child, there must first be a parent-like relationship with the child, and there must be a “significant triggering event” warranting intervention into the parent-child relationship.  The Holtzman court noted that the legislative intent of the third-party visitation statute was that it would apply in situations of marriage dissolution.  In Holtzman, there was no marriage so the two factors did not apply.

Applying that reasoning, the court of appeals in Wohlers stated that since there was no marriage, Holtzman factors were not applicable.

Secondly, Wohlers argued that under Troxel, there was a rebuttable presumption that Wohlers’s proposed placement schedule was in E.B.’s best interest.  Under Troxel, it is presumed the fit parents act in their child’s best interest.

The Wohlers court of appeals held that the record clearly indicated that the court considered that there is a rebuttable presumption that Wohlers is acting in E.B.’s best interest, but that the GAL’s recommendations were appropriate.  The Wohlers court stated that “the court’s decision reflects an analytical process that shows the court applied the correct legal standard.”  First, the court rejected the idea that the experts’ opinions were entitled to any special weight.  The court found that E.B. was attached to both Mr. Wohlers and the grandparents. 

Lastly, the court of appeals held that the trial court erred in limiting the scope of the issues before the court to only the school year visitation.  The record is clear that Wohlers intended for any order to reflect school, as well as non-school visitation.  The issue was mentioned in correspondence and briefing to the court.

Olsen’s Mill, one of Wisconsin’s largest grain mills, entered into a Chapter 128 Receivership in 2009 by entering a written agreement for assignment for the benefit of creditors. The assignment was approved by the Green Lake Circuit Court and an interim Receiver was appointed with authority to sell any and all of Olsen’s property free and clear of all liens, with all liens attaching to the proceeds of the sale, subject to prior consent of the creditors holding perfected liens of the assets sold and the approval of the court.

Olsen’s largest creditor was a French bank, BNP Paribas, which had provided Olsen’s Mills with an 80 million line of credit, of which $58 million was due and owing. It’s clear that Paribas had a properly perfected security interest in various assets of Olsen’s Mill, that Olsen’s Mill defaulted on its obligations, but it was unclear what part of the amount owed represented a secured interest. The Receiver moved the Court to sell certain assets of Olsen’s Mill under terms proposed by the Receiver and consented to by BNP Paribas. These terms were explicit that the court not approve a bid over a secured creditors objection to the sale of collateral.

The Receiver held an auction on April 7, 2009. The highest bid was ultimately submitted by PRM Wisconsin LLC, an affiliate of Paribas. The second highest bid was submitted by Olsen’s Mill Acquisition Corporation (OMAC), affiliated with Olsen’s Mill’s prior management. At the hearing to approve PRM’s bid, Olsen’s Mill’s attorney objected saying that PRM’s bid was not in the best interest of the creditors as it would be difficult to operate the mill as a going concern under their bid and urged the court to accept OMAC’s bid. The Receiver objected stating Paribas had not consented to OMAC’s bid, and that under Ch. 128 if a secured creditor is to receive less than the full amount due and owing they must consent, further pursuant to the Auction Terms they must consent. The hearing was ultimately put on hold when Olson’s Mill announced it would file federal bankruptcy. After the federal court dismissed Olsen’s bankruptcy petition, the hearing was resumed on April 14^th where the Green Lake Circuit Court ultimately, after ignoring objections from Paribas, the Receiver and Baylake Bank, a second secured creditor, allowed for an adjournment during which OMAC negotiated a new handwritten bid and reconvened to accept OMAC’s handwritten bid. The Receiver upon receipt of the new bid again objected stating that not only had Paribas not consented to this sale but the new offer would disrupt the priority scheme for distribution as laid out in Wis. Stat. §128.17.  Paribas’ attorney again made his objections on the record.

The Green Lake Circuit Court, without citing any statutory text, approved OMAC’s revised offer stating it “works for the balanced interest of those who are entitled to be protected.” Paribas then appealed to the Wisconsin Court of Appeals, which upheld the Circuit Court in a roundabout rationale stating that Chapter 128 allows a circuit court to value a secured creditor’s security interest and the circuit court valued Pariba’s collateral at 9 million and because Paribas had been paid 9 million for their interest in the inventory under OMAC’s purchase, Paribas’ arguments were moot. Paribas then appealed to the Supreme Court of Wisconsin which overturned the Court of Appeals and remanded to the Green Lake Circuit Court for a determination of what remedy is available under the circumstances.

In overturning the Court of Appeals, the Supreme Court noted the significant lack of case law with respect to Chapter 128 proceedings. In coming to its conclusion, the Supreme Court relied upon the significant difference in treatment of secured and unsecured creditors under Chapter 128, and cited to an earlier case, Wisconsin Brick & Block Corporation v. Vogel, which held that without a secured creditor’s consent the court does not have the power under ch. 128 to sell property that is collateral, free of the creditor’s mortgage. [1]The Supreme Court rejected OMAC’s assertion that by consenting to the 128 voluntary assignment, Paribas had consented to the sale. In their rejection they noted the specific requirements of the Auction Terms, which required Paribas’ consent, as well as the multiple objections that Paribas made on the record. Further, the circuit court did note Paribas objection as a finding of fact. The Supreme Court held that by ignoring this objection, the circuit court erred by ordering a sale of the property without Paribas consent. OMAC then tried to offer the theory accepted by the Court of Appeals that the circuit court valued Paribas security interest at 9 million and since they received 9 million they were not injured by the sale.

This assertion was also rejected by the Supreme Court, because while they acknowledged it was unclear how much of Paribas claim was secured, even if Paribas secured interest had been satisfied as OMAC contended their remained a significant unsecured claim. Under the order of distribution approved by the Circuit Court, the order circumvented the mandatory order of distribution under Wis. Stat. §128.17(1) and provided for payment of certain unsecured claims, ignoring others, ultimately allowing $10 million to be paid for specified unsecured creditors as opposed to being distributed on a pro-rate basis among all unsecured creditors. The Supreme Court after rejecting OMAC’s arguments and reversing the Court of Appeals, ultimately remanded to the circuit court to decide what remedy would be appropriate. As two years has now passed since the circuit court had approved the sale, even Paribas has acknowledged reversing the sale at this point would not be feasible. On remand, the Court ordered that the circuit court take all necessary and appropriate actions to determine the existence of a remedy that is fair to all parties under the circumstances. It remains unclear at this point, what that remedy will be.

Joseph Casias was terminated from Wal-Mart Stores, Inc., in Michigan state, after he tested positive for marijuana.  See Casias v. Wal-Mart Stores, Inc., 764 F. Supp.2d 914 (W.D. Mich. 2011).  Michigan is one of the states that permits medical marijuana use (pursuant to the “Michigan Medical Marijuana Act”), and Mr. Casias was an approved user, as the result of his inoperable brain tumor. 

Mr. Casias prosecuted his wrongful termination claim under the theory that Wal-Mart illegally applied its drug policies to him.  To support the wrongful termination claim, Mr. Casias argued that the MMMA provided him a private cause of action, but the Michigan district court dismissed the claim, noting that a private right of action cannot be inferred without evidence of legislative intent to create the cause of action. 

Consequently, Mr. Casias alternatively argued that his termination violated public policy of Michigan vis-à-vis the MMMA.  The court also dismissed the public policy claim, stating that the purpose of the MMMA was to create an “affirmative defense” (the legislation did not effectuate any “de-criminalization”) to prevent the arrest of those who are “seriously ill who have a medical need to use marihuana.”   Id. (citing to M.C.L. § 333.26422(b)).

Finally, the court noted that the MMMA did not purport to regulation or mention private employment, and accepting Mr. Casias’ theory would “create a new protected employee class in Michigan and mark a radical departure from the general rule of at-will employment in Michigan.”  Id. (citing to Lytle v. Malady, 458 Mich. 153, 163, 579 N.W.2d 906 (1998)). 

What Mr. Casias did not argue, however, is that Wal-Mart, under either state disability discrimination legislation or the federal Americans With Disabilities Act, had any obligation to accommodate his prescribed cancer treatment.  That argument was, however, asserted in the case of Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, Case No. SC S056265 (Oregon April, 14 2010).

The Emerald Steel case similarly involved Oregon’s “Medical Marijuana Act,” which authorizes persons holding registry identification cards to use marijuana for medical purposes and similarly exempts those individuals from state criminal prosecution.  See ORS § 475.306(a).  The employee in the Emerald Steel case obtained a registration card for the use of marijuana for anxiety, panic, and associated physical ailments.  The employee advised his supervisors of his prescription for medical marijuana, and a week after that notice was given, the employee was terminated.  The employee contested the termination under Oregon’s anti-discrimination statute.

After a convoluted discussion of the interplay between the federal Controlled Substances Act and Oregon’s Medical Marijuana Act, the Oregon court concluded that the federal law preempted the state law.  Id. (stating that “whatever the wisdom of Congress’s policy choice to categorize marijuana as a Schedule I drug, the Supremacy Clause requires that we respect that choice when, as in this case, state law stands as an obstacle to the accomplishment of the full purposes of the federal law”). 

While states are seeming to lead toward decriminalizing or authorizing of medical marijuana use, that “approval” has not been extended into private employment regulation.  Consequently, in these states, an individual who uses marijuana may be protected from criminal prosecution, but his or her employment will not similarly be protected.

In October of 1993, officers from the Rock and Walworth County sheriff’s departments executed a search warrant for the premises occupied by Juan Martinez.  During a pat down of Martinez, one of the officers found a “Dr. Grabow” pipe in Martinez’s pocket.  The pipe contained THC residue and Martinez was charged with possession of drug paraphernalia.  The trial court found Martinez guilty and Martinez appealed. 

Wis. Stat. § 961.573 provides “No person may use, or possess with the primary intent to use, drug paraphernalia to…inhale or otherwise introduce into the human body a controlled substance…”  Drug paraphernalia is defined, by Wis. Stat. § 961.571(1)(a), as “…all equipment, products and materials of any kind that are used, designed for use or primarily intended for…inhaling or otherwise introducing into the human body a controlled substance…”  Subsection (b)(2), however,  excludes from drug paraphernalia “Any items, including pipes, papers and accessories, that are designed for use or primarily intended for use with tobacco products.”

Like many pipes, the pipe found in Martinez’s pocket, the “Dr. Grabow” pipe, could be legally purchased in Wisconsin stores because it was intended for use with tobacco products.  The Court of Appeals ruled that a pipes actual use is irrelevant.  Thus, subsection (b)(2) excluded the pipe found in Martinez’s pocket from the definition of drug paraphernalia regardless of the fact that  it was being used for THC and had THC residue in it.