Midland Funding Highlights Peculiar Feature of Wisconsin's Statute-of-Limitations Law

The U.S. Supreme Court’s decision today in Midland Funding, LLC v. Johnson, 581 U.S. ___, No. 16-348, draws attention in passing to a peculiar feature of Wisconsin law on the effect of statutes of limitations. The 5-3 decision, in an opinion by Justice Stephen Breyer, holds that a debt collector that files a proof of claim in bankruptcy when collection is barred by a statute of limitations does not thereby violate the Fair Debt Collection Practices Act’s prohibitions on asserting any “false, deceptive, or misleading representation,” or using any “unfair or unconscionable means” to collect a debt. 15 U.S.C. §§ 1692e, 1692f. In reversing the Eleventh Circuit’s contrary holding, the Court agreed with all the other federal courts of appeals that have decided the issue, including the Seventh Circuit. See Owens v. LVNV Funding, LLC, 832 F.3d 726 (7th Cir., 2016). Owens involved cases from Indiana and Illinois, whose common law holds (like that of the majority of states) that the running of a statute of limitations only bars an action to collect but does not extinguish the claim. Id. at 731.

Wisconsin is different, at least on the surface. As Justice Breyer noted in his Midland Funding opinion, slip op. at 3, Wis. Stat. § 893.05 provides that “[w]hen the period within which an action may be commenced . . . has expired, the right is extinguished as well as the remedy.” The statute codifies Wisconsin’s common law. See Maryland Cas. Co. v. Beleznay, 245 Wis. 390, 14 N.W.2d 177 (1944). Nevertheless, the practical significance of Wisconsin’s minority view on extinction of debt as well as remedy is difficult to assess, for the statute of limitations is an affirmative defense that must be raised in an answer or motion, Wis. Stat. §§ 802.06(2)(a)9., 802.06(8)(b), and failure to raise it waives it. See Johnson v. Heintz, 73 Wis. 2d 286, 298-99, 243 N.W.2d 815 (1976).
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Wisconsin’s Supreme Court: Contractual Waivers of Civil Jury Trial Are Enforceable

Last year the Wisconsin Court of Appeals threw businesses a curveball when it held that a contractual waiver of the right to a jury trial was unenforceable.

The holding of the case, Parsons v. Associated Banc-Corp., 2016 WI App 44, 370 Wis. 2d 112, 881 N.W.2d 793, seemed at odds with long-settled case law and with principles concerning freedom of contract.

But the Supreme Court has now straightened the court of appeals’ pitch. In a 4-2 decision issued last week, it reversed the lower court. See Parsons v. Associated Banc-Corp., 2017 WI 37. Justice Annette Ziegler wrote for the majority; Justice Ann Walsh Bradley wrote a dissent, in which Justice Shirley Abrahamson joined; Justice Daniel Kelly did not participate.

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A Softer, Gentler Seventh Circuit Reconsiders “Substantial Compliance” under Rule 11

Those who practice regularly before the U.S. Court of Appeals for the Seventh Circuit know that the court has not been reluctant to punish a misbehaving lawyer.

So the court’s recent decision in Riffner v. PNC Bank, No. 15-2142 (7th Cir. Mar. 10, 2017), might come as a bit of a surprise. Unlike (apparently) all the other circuits that have considered the issue, the Seventh Circuit has long allowed “substantial compliance” with Rule 11’s requirement that the party seeking sanctions serve, but not file, its motion and wait 21 days before filing, to give the offending party a chance to back down.

In this case, however, the court, in an opinion written by Judge David Hamilton (joined by Chief Judge Diane Wood), while expressly declining to reconsider adherence to the court’s position on “substantial compliance,” reversed the district court’s imposition of sanctions because the letters that the moving party sent did not substantially comply with the rule.

Judge Richard Posner dissented from the majority opinion and accused his colleagues of being “enamored” with “legal technicalities” or of being “reluctant to punish misbehaving lawyers.”

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Seventh Circuit Explains Disclosure of Hybrid Witnesses under Fed. R. Civ. P. 26(a)(2)(C)

The Seventh Circuit’s recent decision in Indianapolis Airport Authority v. Travelers Property Casualty Co. of America, No. 16-2675 (7th Cir. Feb. 17, 2017), written by Judge David Hamilton, is one for civil litigators to take note of. It appears to be the first time the Seventh Circuit has used Federal Rule of Civil Procedure 26(a)(2)(C). That subsection, which was part of the Rule’s 2010 amendments, governs the disclosures required for “hybrid witnesses”—that is, witnesses not retained or specifically employed to provide expert testimony, but who have personal knowledge and offer both fact- and expert-opinion testimony. (The court has mentioned Rule 26(a)(2)(C) previously, but never has applied it.)

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Waiting for Gorsuch: SCOTUS Kicks Important Class-Action Waiver Case to Next Term

Last week, the United States Supreme Court informed litigants in Epic Systems Corp. v. Lewis that it is pushing the case to its October 2017 term. The lawsuit, which rose up through the Western District of Wisconsin and the Seventh Circuit, presents the High Court with a chance to resolve a robust circuit split on the question whether mandatory arbitration clauses in employment contracts may contain class action waivers without running afoul of the National Labor Relations Act (NLRA). Last spring, the Seventh Circuit ruled that such clauses were unenforceable, deviating from rulings by the Second, Fifth, and Eighth Circuits, and prompting the Supreme Court to grant certiorari on January 13, 2017.

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