Legislature's lawyers: Some provisions in Wisconsin's Foxconn law could be unconstitutional

MADISON - GOP lawmakers and Gov. Scott Walker may have gone too far in dictating how courts should handle any potential litigation over a massive flat-screen factory planned for Racine County, the Legislature's nonpartisan attorneys have found.

The memo from the Wisconsin Legislative Council didn't come to definite conclusions but found several provisions of the legislation for Foxconn Technology Group of Taiwan and its plant may be unconstitutional.

The provisions could give opponents of the Foxconn deal more lines of attack in litigation — and potentially drive up the cost to taxpayers for defending the state in court.

The law signed by Walker on Monday changes how environmental challenges and other potential legal cases over the factory would be handled, including automatically suspending any lower court orders until a higher court has weighed in.

The eight-page analysis highlights this provision among the areas of concern, saying the decision on whether to suspend rulings could be seen as a core power of the court system.

"A court could hold that the provision is unconstitutional if it finds that this provision violates the judiciary's independence in the fulfillment of its constitutional responsibilities," the memo reads.

Senate Minority Leader Jennifer Shilling (D-La Crosse), who requested the memo, said in a statement that Wisconsin shouldn't give preferential legal treatment to a foreign company, saying it is eroding public trust in the court system.

“Rather than putting Wisconsin businesses and families at a legal disadvantage, Democrats want to make sure everyone is treated fairly and equally under the law," Shilling said in a statement.

Spokesmen for both Walker and GOP Attorney General Brad Schimel said they had no concerns about whether the law is constitutional.

"DOJ is confident that the portion of the Foxconn bill related to the courts will pass constitutional muster," Schimel aide Johnny Koremenos said.

Walker spokesman Tom Evenson said the provisions offer protections that the plant and state incentives will create the promised opportunities for workers.

"We believe this is a constitutional measure which will provide prompt resolution of disputes and prevent frivolous lawsuits from stonewalling thousands of good-paying jobs," Evenson said.

Under the legislation, state taxpayers would pay up to $2.85 billion in cash to Foxconn over the next 15 years in exchange for the company building an up to $10 billion plant and hiring up to 13,000 workers.

The legislation would exempt the Foxconn project from a state environmental impact statement and from some state rules to protect wetlands and waterways. That has raised the possibility that environmental groups may sue over the law and project in the near future.

To head off delays from that potential litigation, GOP lawmakers and Walker added special requirements on the courts system for handling any Foxconn lawsuits.

First, the legislation would expedite appeals of Foxconn-related lawsuits, creating a path that would likely get any case more quickly to the state Supreme Court, where conservatives have a solid majority.

Second, the measure requires higher courts to take appeals of a trial court order in a Foxconn case even if the order is not final. In general, appellate courts have to take appeals of the final judgments and orders made by trial courts but get to decide whether to take appeals of preliminary orders.

Finally, the trial court rulings in that litigation would be automatically stayed until the higher court decided what to do.

When determining how courts will rule, the Legislative Council typically keeps its predictions cautious and that was the case with this latest memo. The analysis noted that it was possible that courts would uphold the Foxconn court provisions.

"It is difficult to predict with certainty how a court may rule regarding the act's constitutionality," the memo reads.

Koremenos, the Schimel spokesman, said that the state constitution gives the Legislature the authority to adjust the jurisdiction of the courts and in general gives state lawmakers more authority in these matters than the federal constitution gives to Congress.

At the federal level, courts have upheld automatic stays in bankruptcy cases, Koremenos said.

When the provisions were first added to the bill on Sept. 6, Koremenos declined to comment on them.

"I cannot discuss details of any work product or confidential advice our office may have provided to our clients (the governor and Legislature) about this pending litigation, especially because we have an obligation to defend state law from any legal challenges," he said then.

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Groups on both the right and left such as the liberal One Wisconsin Now have raised constitutional concerns about the provisions in the Foxconn bill.

Rick Esenberg, president of the conservative Wisconsin Institute for Law and Liberty, focused his concerns in particular on the automatic suspension of lower court orders.

"It might be a separation of powers problem. ... I think that's a close question," he said.