Wisconsin Supreme Court hears arguments in lame duck law dispute over DOJ settlement funds

Attorney General Josh Kaul speaks with reporters outside the Wisconsin Supreme Court in February 2023. (Wisconsin Examiner photo)
The Wisconsin Supreme Court on Wednesday heard oral arguments in a case that centers on a dispute between state Attorney General Josh Kaul, a Democrat, and the Republican-controlled Legislature about who controls money the Department of Justice is awarded as part of lawsuit settlements.
The suit is yet another challenge to the lame duck laws Republican legislators and outgoing Gov. Scott Walker enacted in 2018 in the days before the end of Walker’s term and another instance of the Supreme Court stepping in to enforce the separation of powers between Wisconsin’s executive and legislative branches.
Under several provisions of the lame duck laws, the Legislature sought to limit the executive branch’s authority to spend money. The Supreme Court previously struck down provisions that required the approval of legislative committees before executive agencies could act.
The Legislature argues that under the law, the attorney general is required to put money from a financial settlement into the state’s general fund, which legislators control through the normal budget process. Kaul argues he can put the settlement funds in accounts controlled by DOJ but doesn’t have the authority to spend those funds without approval from the Legislature’s budget-writing Joint Finance Committee.
Initially filed in Polk County Circuit Court in 2021, when a conservative majority controlled the Supreme Court, the case appeared in the 2nd District Court of Appeals in 2024 where a 2-1 decision reversed the circuit court’s ruling that Kaul could direct settlement funds into DOJ accounts.
That majority opinion was authored by Judge Maria Lazar, a conservative judge now running for a seat on the Supreme Court.
“Despite the legislation expressly designed to bring all settlement funds under legislative control and despite the simple and plain language of that legislation, the Attorney General has continued to act precisely in the manner which the Legislature sought to end,” Lazar wrote.
Generally, conservative legal interpretations of the law involve strict adherence to the exact language of a statute while liberal legal interpretations take into account intent. In this case, that typical structure is flipped. The DOJ argues that it is following the exact language of the law by directing the settlement money into accounts for specific DOJ programs that fall under the umbrella of the general fund and not spending those funds without approval from JFC. DOJ also notes that historically, Wisconsin attorneys general have had broad authority to spend settlement money.
DOJ attorney Hannah Jurss argued to the Court Wednesday that it isn’t DOJ’s fault the Legislature wasn’t precise enough when crafting the law — though the law has effectively cut off Kaul’s ability to direct the expenditure of settlement funds.
“We now do not have discretion to expend those monies. So if the intention was to prevent the attorney general’s expenditure of settlement funds as properly understood, it did that,” Jurss said. “There are now monies sitting there that are left to the attorney general’s discretion that the attorney general cannot spend. Instead, I think what the court is seeing in the Legislature’s arguments are unsupported assertions about some sort of broader intent that, frankly, have no support whatsoever in the text of the statutes, in statutory history.”
Jurss added that a similar structure guides the budget statutes across state government, so if the Court sided with the Legislature, much of the existing budget framework would be affected. She noted programs in the Departments of Tourism and Military Affairs that would be hit.
“This Court should not cut the wire on the budget statute structure across Wisconsin statutes simply for the Legislature to accomplish its preferred outcome here,” she said.
Misha Tseytlin, the attorney for the Legislature — whose former position as state solicitor general was cut by the Legislature in the lame duck laws — argued the Court should side with the Legislature to stop Kaul from finding ways around the law.
“Because the attorney general had found his way around the Legislature’s prior attempt,” Tseytlin said. “I know there’s not a lot of sympathy for the Legislature from the courts, but imagine how frustrating it is. You’re trying to rein in the attorney general, you’re trying to get them to stop these practices, you enact this JFC provision, and they find a way around that.”
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