In Need of a Tune Up: Wisconsin’s Court of Appeals Considers Personal Jurisdiction in the Internet Age

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Last year, we wrote about the Seventh Circuit’s interpretation of the emerging issue of personal jurisdiction in the context of internet activity. Courts understandably have been wary of subjecting businesses to broad jurisdiction in all 50 states based solely on an internet presence. The Wisconsin Court of Appeals continued this trend with its decision last week in Carlson v. Fidelity Motor Group, LLC, No. 2014AP695 (Jan. 14, 2015), a decision written by Judge Gundrum.

Eric Carlson, a Wisconsin resident, saw an advertisement for a used BMW from Fidelity Motor Group on the cars.com website, called Fidelity and discussed the car briefly, and Fidelity followed up with another call. The same day, Carlson traveled to the Fidelity dealership in Illinois and bought the car. He later sued Fidelity, claiming the car sustained damage due to Fidelity’s failure to change the car’s oil as he and his wife had requested.

Carlson filed his suit in Ozaukee County, Wisconsin. He submitted screenshots of Fidelity’s website and its advertisements on 14 other websites (including cars.com), along with evidence of the phone calls. For its part, Fidelity averred undisputed facts as to its lack of any other business in or contacts with Wisconsin, “except to the extent that [Fidelity’s] website is accessible to Wisconsin residents.” The circuit court dismissed the suit for lack of personal jurisdiction.

The Court of Appeals, District II, affirmed. It found that it was “clear” that due process was not satisfied under the analysis for minimum contacts and thus skipped any consideration of Wisconsin’s long-arm statute (Wis. Stat. § 801.05).

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The Seventh Circuit Interprets Wisconsin Exemption Law on College Savings Accounts and Retirement Annuities, but Did It Have Jurisdiction? (Part 2 of 2)

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As we explained in a post yesterday, the Seventh Circuit in In re Bronk (Cirilli v. Bronk), No. 13-1123 (7th Cir. Jan. 5, 2015), made some new law on Wisconsin’s college savings account (Edvest) and annuity exemptions for debtors.

But in deciding that it had jurisdiction to decide the annuity issue on the merits, despite the trustee’s failure to cross-appeal the bankruptcy court’s decision in the debtor’s favor to the district court, the Seventh Circuit seems to have missed the jurisdictional boat. As we noted, the court relied entirely, slip op. at 7 n.2, on its decision in Luevano v. Wal-Mart Stores, Inc., 722 F.3d 1014 (7th Cir. 2013), an employment discrimination case under Title VII, not a bankruptcy case.

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The Seventh Circuit Interprets Wisconsin Exemption Law on College Savings Accounts and Retirement Annuities, but Did It Have Jurisdiction? (Part 1 of 2)

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In re Bronk (Cirilli v. Bronk), No. 13-1123 (7th Cir. Jan. 5, 2015), resolved a couple of “questions of first impression,” slip op. at 1, under Wisconsin’s exemption statute in a case where a bankruptcy trustee sought to upset a debtor’s pre-filing “exemption planning.” The debtor shifted the equity in his previously unmortgaged home into Edvest college savings accounts for his grandchildren and $42,000 from a certificate of deposit into an annuity.

The first question: who may claim the exemption, Wis. Stat. § 815.18(3)(p), for an Edvest account – the debtor-owner who set it up (and retained significant control over it, including the right to receive distributions from the account and even to remove funds from it), or only the beneficiaries? The court said the debtor-owner could claim the exemption, disagreeing with both the Western District’s bankruptcy court (Utschig, B.J.) and district court (Conley, D.J.).

Second: which exemption applies to the annuity – the unlimited one for retirement benefits, § 815.18(3)(j), or the annuities benefit under sub. (3)(f), limited to $4,000 for contracts (like this one) issued within two years of the bankruptcy filing? The court said the debtor could claim the broader exemption because this annuity included a death benefit, one of the triggers in the definition of a retirement benefit under sub. (3)(j)1. This holding for the debtor upheld the holdings in the lower courts, though on different reasoning than either of them had followed.

But the far more interesting issue in the case (to us) is how the Seventh Circuit got jurisdiction over the trustee’s appeal of the adverse decision on the annuity. It is axiomatic that the court of appeals has no jurisdiction to decide the merits if the district court lacked jurisdiction. This case had gone from the bankruptcy court to the district court on initial appeals by both debtor (on the Edvest issue) and trustee (annuity). The district court had affirmed the ruling for the trustee on Edvest but modified the bankruptcy court’s pro-debtor ruling on the annuity and vacated its judgment and remanded for further proceedings on that issue. At that point, neither party could have appealed to the Seventh Circuit (and neither tried), because the remand deprived the district court’s decision of finality. See In re Holland, 539 F.3d 563, 565 (7th Cir. 2008).

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Undocumented Workers Are Protected by Wisconsin's FMLA

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Wisconsin’s court of appeals, in a published opinion written by Judge Reilly, recently decided that undocumented workers are protected by Wisconsin’s Family and Medical Leave Act (FMLA). Burlington Graphic Systems v. DWD, 14AP762. The decision has no practical effect on employers who comply with Wisconsin’s FMLA (and federal immigration law), but the lesson from the decision is that, if an undocumented worker alleges a violation of Wisconsin’s FMLA, federal immigration law is not a defense to employer liability.

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Seventh Circuit Offers No Relief for United Airlines' "Million Milers"

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For years United Airlines has asked its customers to “Fly the Friendly Skies,” but a dispute with one of its frequent flyers turned decidedly unfriendly and became the subject of a recent case before the Seventh Circuit in Lagen v. United Continental Holdings, Inc., No. 14-1375 (7th Cir. Dec. 22, 2014).

The case has an interesting exposition of the law that governs airlines’ frequent-flyer programs, but what was unusual was the stinging dissent written by Judge Hamilton, in which he called out United’s CEO and general counsel by name and accused the airline of failing to “defend[] this lawsuit honorably.” Fly the friendly skies, indeed.

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