Wisconsin Court of Appeals Issues Important Decision under “Borrowing” Statute

If your work involves civil litigation in Wisconsin, you’ve likely run across Wis. Stat. § 893.07, the state’s borrowing statute, which governs the application of foreign statutes of limitations to cases filed in Wisconsin. And, if you’ve had the occasion to consider § 893.07, you should make a note to remember Paynter v. ProAssurance Ins. Co., No. 2017AP739 (Mar. 27, 2018), a recent decision from District III of the Court of Appeals written by Judge Lisa Stark. The decision reached a number of important holdings related to the statute and, if we had to make a prediction, is likely to be reviewed by the Wisconsin Supreme Court.

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Wisconsin Court of Appeals Reinstates Tort Claims Against Operator of Firearms-Classifieds Website

The federal Communications Decency Act of 1996, in what is commonly referred to as “Section 230,” absolves from liability the “provider” of “an interactive computer service” when the plaintiff uses a theory of liability that “treat[s]” the provider “as the publisher or speaker of any information provided by another information content provider.” 47 U.S.C. § 230(c)(1) and (e)(3) (Oct. 1998). The law in this area has been evolving, but, as at least one commentator has noted, operators of websites with online classifieds have been relatively successful with their use of Section 230 as a shield from liability.

Daniel v. Armslist, No. 2017AP344 (Wis. Ct. App. Apr. 19, 2018), a recent decision issued by District I of the Wisconsin Court of Appeals, written by Judge Brian Blanchard of District IV, is a notable exception. The court held that the defendant Armslist LLC, which operated Armslist.com, a website with classifieds for private-firearms sales, could be held liable for tort claims filed by the family of a mass-shooting victim. Section 230, according to the court, did not “protect a website operator from liability that arises from its own conduct in facilitating user activity.” Id. ¶ 3.

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Seventh Circuit Returns to Full Strength

As Wisconsin lawyers well know, the U.S. Court of Appeals for the Seventh Circuit has been working with less than its fully authorized complement of eleven active circuit judges since Judge Terence Evans took senior status in January 2010.  The court continued with 10 active members until February 2015, when Judge John Tinder of Indiana retired. Then, in rapid succession last year, Judge Ann Claire Williams took senior status in June, and Judge Richard Posner retired in September, leaving two Illinois vacancies on the court and reducing the number of active judges to seven.
The work of the court continued, of course, with Senior Judges William Bauer, Kenneth Ripple, and Daniel Manion sitting regularly and the court calling on many district judges from the three states to sit with the court from time to time.  But the personality and character of a federal court of appeals inevitably derive over time from its active judges, who sit together year after year in randomly selected panels of three and who, sitting together en banc, are the only organ of the court authorized to overrule published panel decisions.
Given the long unfilled vacancies in Wisconsin and Indiana, the speed with which the court has been returned to its full strength of eleven judges seems astounding.
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Citing Failure to Request Leave to Amend, Seventh Circuit Affirms Dismissal with Prejudice Under Rule 12(b)(6)

Federal district courts are supposed to grant leave to amend a complaint “freely … when justice so requires.”  Fed. R. Civ. P. 15(a)(2).  The Seventh Circuit has construed this directive to require, in most cases, that a plaintiff whose complaint has been dismissed under Fed. R. Civ. P. 12(b)(6) be given at least one opportunity to amend the complaint.  See Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. & Nw. Ind., 786 F.3d 510, 519 (7th Cir. 2015).  Dismissal with prejudice may be appropriate when it is clear from the face of the complaint that amendment would be futile, but the Seventh Circuit has emphasized that “[s]uch cases of clear futility at the outset of the case are rare” and denial of leave to amend at least once “will be reviewed rigorously on appeal.” Id. at 520.

The court’s recent decision in Haywood v. Massage Envy Franchising, LLC, No. 17-2402 (7th Cir. Apr. 10, 2018), is noteworthy for its seeming less-than-rigorous review of the dismissal with prejudice of a complaint alleging violations of Illinois and Missouri consumer fraud statutes. The plaintiffs in Haywood claimed that the defendant had violated both acts by advertising and selling one-hour massages that in fact lasted only 50 minutes.  The defendant moved to dismiss the complaint for failure to state a claim, and the district court granted the motion with prejudice.

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Seventh Circuit Explains the Standard for Certification of a Question of State Law

Seventh Circuit Rule 52 allows the U.S. Court of Appeals for the Seventh Circuit, when faced with “questions arising under the laws of [a] state which will control the outcome of a case pending in the federal court” to “certify such a question to the state court in accordance with the rules of that court” and to “stay the case . . . to await the state court’s decision.” 

The Seventh Circuit has explained in Cleary v. Philip Morris Inc. that certification of a question of state law is appropriate only if the court is “genuinely uncertain about a question of state law that is vital to a correct disposition of the case.” 656 F.3d 511, 520 (7th Cir. 2011).

Don’t confuse “novel” or “unresolved” with “genuinely uncertain,” however. Federal courts frequently answer questions of state law in the absence of controlling authority—making what is sometimes referred to as an “Erie guess.” (Erie Railroad Co. v. Tompkins is the landmark decision issued by the Supreme Court in which it required federal courts to apply the law of the state’s highest court when hearing state-law claims under their diversity jurisdiction. 304 U.S. 64 (1938).) 

The Seventh Circuit’s recent decision in In re: Zimmer NexGen Knee Implant Products Liability Litigation, No. 16-3957 (7th Cir. 2018), written by Judge Diane Sykes, is illustrative of the standard and the high bar for certification. 

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