The Roundup: Are "god complex" and "woke lunatic" defamatory? Plus, insurance companies and stolen data

Or interesting stuff we couldn't get to otherwise. Coming to you straight from the documents themselves!

Brief of appellant

Case no: 24AP876

Case name: Mary McCudden v Katy Scarlett Johnson

Court of Appeals District: I

Filing attorneys: Richard Esenberg, Luke Berg, Lucas Vebber, Natalie Burmeister

Law firm / agency: Wisconsin Institute for Law and Liberty 

Filing attorney: Thomas Kamenick

Law firm / agency: Wisconsin Transparency Project, Kamenick Law Office

Circuit Court: Milwaukee County

Judge: Kristy Yang

Issues presented

1. Whether statements like “woke,” “god complex,” “white savior,” “woke lunatic,” and “bully” are capable of being proved false, and, in turn, are actionable as defamation?

The Circuit Court held yes.

2. Whether Johnson’s posts are protected by the First Amendment from a defamation trial?

The Circuit Court did not directly conduct a First Amendment analysis, even though Johnson raised it.

Introduction

This lawsuit involves a defamation claim for run-of-the-mill social media posts on X (formerly Twitter) and Facebook. The posts in question criticized a school district for having a “social justice coordinator,” and described people who hold such positions as “woke,” “white savior[s]” with a “god complex,” “woke lunatics,” and “bullies.” Statements like these are pervasive on social media; indeed, they were more restrained than a lot of online speech. Nevertheless, Plaintiff MacCudden, who previously held the position, chose to respond with a defamation lawsuit.

The school district was Mequon-Thiensville. - AW

This case should have been promptly dismissed. It is well-established, black-letter law that, to be actionable for defamation, a statement must be “provably false.” That is, a comment must directly state or clearly imply an objective, binary truth claim that listeners would reasonably understand to be either true or false. Courts regularly hold that nebulous concepts like “woke” and “bully” that are routinely and indiscriminately thrown about in public discourse are not actionable precisely because their meaning depends on one’s opinion and viewpoint. The statements here fall squarely into the non-actionable, not-provably-false category.

Nevertheless, the Circuit Court denied both a motion to dismiss and a motion for summary judgment, and now intends to hold a trial on whether MacCudden really is “woke” or has a “god complex.” This is not only at odds with the law, it’s incoherent. How is one supposed to prove, at trial, whether MacCudden is “woke”?

Proceeding with this trial will subject Defendant Johnson to significant, unrecoverable expenses, and simultaneously violate her First Amendment rights. For this reason, “the Supreme Court has directed courts to expeditiously weed out unmeritorious defamation suits,” and appellate courts have done so, in part, by reversing denials of summary judgment. The Wisconsin Supreme Court has likewise directed the Court of Appeals to give “careful consideration” to appeals in defamation cases where constitutional rights are implicated. This Court should reverse the Circuit Court and direct the entry of summary judgment in Johnson’s favor.

Brief of appellant

Case no: 24AP1510

Case name: Alp Baysal, Sandra Italiano, Thomas Maxim, and Robert Park v American Family Life Insurance Company, Midvale Indemnity Company, and American Family Mutual Insurance Company

Court of Appeals District: IV

Filing attorneys: Jessica Servais, Kate Baxter-Kauf, Karen Hanson Riebel, and Maureen Kane Berg

Law firm / agency: Lockridge Grindal Nauen

Circuit Court: Dane County

Judge: Nia Trammell

Overarching issue:

Did the trial court err by ruling that Plaintiffs lacked standing to bring this case in the Wisconsin State Courts?

Statement of the case:

In February 2021, at the height of the pandemic, the New York State Department of Financial Services (“NYDFS”) issued an industry letter to insurance companies alerting them to “a systemic and aggressive campaign to . . . steal unredacted drivers’ license numbers [from insurers’ instant quote websites, and that], at least in some cases, this stolen information has been used to submit fraudulent claims for pandemic and unemployment benefits.”

NYDFS had learned from two auto insurers that cybercriminals were targeting their websites to obtain unredacted drivers’ license numbers as part of a growing fraud campaign targeting pandemic and unemployment benefits and so the NYDFS alerted the entire industry to the problem.

Insurers’ instant online auto quoting websites were the primary entry point for cybercriminals to access consumers’. On the instant quote websites, “criminals entered valid name, any date of birth and any address information into the required fields” and then captured the full, unredacted drivers’ license numbers without going any further in the process and abandoned the quote. Drivers’ license numbers are protected information under the Drivers’ Privacy Protection Act t (“DPPA”), and insurers may obtain, use, or disclose them only for limited purposes under the Act – mostly to verify identities for underwriting purposes. Of course, insurers need not use drivers’ license numbers on a sales platform, or disclose this information to the public, to underwrite any auto insurance policy, but several insurers, including defendants, had added a “pre-fill” feature to their instant quote platforms in order to increase their sales, thus disclosing unredacted drivers’ license numbers to anyone who entered a bare minimum of publicly available information about that individual.

Several insurers were caught up in this scheme by which malicious actors obtained protected drivers’ license numbers from their instant quote websites and used them to commit unemployment and pandemic benefits fraud and other identity theft, including the three defendants here: Midvale Indemnity Company (“Midvale”), American Family Insurance Company, S.I. (“AmFam”), and American Family Life Insurance Company (“AFLIC”) (collectively “American Family” or “defendants”). Other insurers who disclosed protected drivers’ license numbers on their instant quote websites included GEICO, Travelers, USAA, and Farmers.

After members of the public experienced a variety of identity theft following this “systemic campaign,” including fraudulent unemployment applications and fraudulent financial accounts opened in their names, many of them brought suits against this array of insurers who had disclosed their drivers’ license numbers to cybercriminals and enabled that fraud.

The American Family defendants were particularly egregious insurers, because they permitted a series of three separate data disclosures on their instant quote websites. Plaintiffs Baysal, Italiano, and Maxim brought suit for the first two data disclosures (against Midvale and AmFam). Almost a year later, AFLIC enabled the third data disclosure by the very same mechanism, and plaintiff Park brought suit.

While several federal district courts around the country have found standing under these circumstances and litigation has proceeded against GEICO, USAA, Travelers, and Farmers, the federal courts hearing the cases against the American Family Defendants decided they lacked jurisdiction under Article III of the U.S. Constitution and dismissed these cases without prejudice, and without any evaluation of the merits.

Article III defines the roles and authority of federal courts. - AW

Plaintiffs therefore re-filed their (now consolidated) case in Wisconsin state court, where Article III of the U.S. Constitution does not apply. The trial court failed to apply the Wisconsin Court of Appeals’ binding precedent setting forth the application of state court “standing” principles in the data breach context, and instead wrongly restated and reapplied the reasoning of the federal courts and dismissed the case for lack of standing. Plaintiffs timely filed their notice of appeal.

In Brief: State joins defense in challenging special prosecutor appointment

The case: State v Pierson T. Leske

Case no.: 24AP565

Filed in: District IV, Court of Appeals

Circuit Judge: Vicki Clussman, Waupaca County

Filing Attorney: John Flynn

Title: Assistant attorney general

Law firm / agency: Wisconsin Department of Justice

"In brief" posts are shorter looks at interesting appellate filings. There are simply too many worthy cases to cover in full and these posts let me cover a few more. They lift a lot from the briefs themselves (expressing gratitude to lawyers who are decent writers). Those lifted parts are indented. My additions / summaries are not.

Please remember — these are generally taken from briefs and present the arguments of the parties appealing. They do not necessarily present the full story. 

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I first wrote about this case in July, when defendant Pierson Leske's attorneys appealed Waupaca Circuit Judge Vicki Clussman's appointment of a special prosecutor in his case.

That post is here. Now the state has weighed in, siding with the defense in challenging the appointment. This brief is about the state's argument.

Introduction

This appeal concerns the circuit court’s authority to appoint a special prosecutor sua sponte, without enumerating which, if any, of the statutorily enumerated reasons exist.

The state charged Leske with second-degree sexual assault of a victim who could not consent due to intoxication. To resolve the case, the state offered that Leske could plead no contest to third-degree sexual assault and substantial battery, and he would be offered a deferred prosecution agreement on the sexual assault.

At the hearing, V1 told the circuit court she did not agree with the proposed resolution. The circuit court adjourned the hearing so V1 could consult with her lawyer, who was not present. V1’s attorney sent a letter to the court asking for the appointment of a special prosecutor because V1 did not believe the district attorney would try the case.

The circuit court appointed a special prosecutor on its own motion. Leske sought leave to appeal, which this court granted.

This court should reverse the circuit court’s order appointing the special prosecutor. This court should clarify the state of the law on appointing a special prosecutor. The earliest case from this court interpreting the statute on appointing a special prosecutor held that the statute requires that one of the listed reasons for appointing be present. A subsequent case, also from this court, held that when a court makes an appointment on its own motion, it need only state the cause to do so. Our Supreme Court has called that second case into question — if not overruling it. If the Supreme Court did not overrule this second case, then this court should clarify that the first case controls because this court lacked the power to modify or overrule the first case.

If the circuit court’s order withstands statutory scrutiny, then this court should hold that the appointment of a special prosecutor does not remove the elected district attorney from the case — that would be a violation of the separation of powers. The elected district attorney is accountable to the voters, and, absent a refusal to prosecute at all, a circuit court cannot remove them.

Statement of the case

Pierson Leske was charged with second-degree sexual assault of a person under the influence of an intoxicant, Assistant Attorney General John Flynn wrote. A plea agreement was reached that called for Leske to plead no contest to third-degree sexual assault and substantial battery. The court would withhold judgment, Leske would enter upon a deferred prosecution agreement, and upon successful completion, the case would be dismissed.

V1's lawyer sent the court a letter stating V1 was aware of the offer and participated in a victim conference, Flynn said.

The circuit court asked the sate for V1’s “position regarding the [c]ourt’s acceptance of this particular plea agreement.” The state indicated that it had “also spoken with [V1’s attorney], who expressed that the victim was satisfied with the agreement.”

V1, in addressing the court, acknowledged she spoke with the state. but said she did not think she fully understood the agreement at the time. She wanted jail time for Leske, she said. Clussman, after asking V1 if she would be willing to testify at a trial, rescheduled the hearing.

Clussman later sent a letter to the lawyers involved saying she would not accept the plea agreement unless V1 did.

By letter, V1’s attorney informed the circuit court that V1 conferred with the state alone and was not given a written copy of the plea agreement. V1’s attorney claimed that she had not told the state that she explained the plea agreement to V1 “in detail.”

V1’s attorney also claimed that the state, by District Attorney Kat Turner, “claimed that V1’s father had threatened to kill members of her staff and to bring a firearm to the courthouse” and that District Attorney Turner, Leske, and Leske’s counsel “had to seek shelter in the District Attorney’s Office from V1’s mother.” V1’s attorney also claimed that the state threatened to refer charges for V1’s father if another incident took place. V1’s parents denied the claims.

V1’s attorney stated she had obtained a police report “that the District Attorney’s Office had received a threatening phone call from V1’s father indicating he was coming tomorrow (2/10/23) to bang on some door and to create a disturbance.” The sheriff’s deputy wrote that the one message that had not been deleted “did not contain a statement that V1’s father was coming down to the office and in the message, V1’s father was not using vulgar words or threats.” The deputy contacted V1’s father and “[h]e stated he was really mad because he was denied to be in on a zoom meeting with his daughter in regards to a victim impact panel and that he had received information that the case was being plead down from a 2nd degree which was really upsetting to him.” V1’s father denied threatening to create a disturbance, and the emails that the deputy saw did not contain threatening language.

V1 said she lacked confidence in the DA's office to try the case and said she felt "alone and vulnerable throughout this process." She requested the appointment of a special prosecutor.

By letter, the circuit court could not “imagine why the District Attorneys office would require any victim (especially a young victim of sexual assault) to meet with them alone.” The court felt that, despite the allegations of threatening behavior, V1’s parents “should have been allowed to accompany their daughter.” The court called the state’s position “cruel.”

The circuit court also criticized the state’s policy that it does not provide victims with written copies of the plea agreement. It mused that “[i]t seems like a bad policy.”

The court accepted V1’s attorney’s statement that she did not tell the state that she had explained the plea agreement to V1 in detail. The court found it “particularly disturbing” because V1’s attorney appeared to be “alleging that the District Attorney’s office may have violated the rules of professional conduct.” The court considered several possibilities. The transcript of the hearing was accurate, so the error was not the court reporter’s. If the state misspoke, it asked the state to correct that. It considered that V1’s attorney could have, in fact, told the state that it had explained the plea agreement to V1, but was now telling the court she had not. It also considered the possibility that the state made a false statement on the record.

With no additional explanation, the circuit court also granted V1’s request for a special prosecutor. The circuit court filed an order appointing a special prosecutor; the form indicated that it was on the court’s own motion but did not check any of the reasons for the appointment.

The state responded in a letter to the court. The state maintained that it had not been intentionally false or misleading. The state’s recollection was that V1’s attorney, during their conversation, “indicated that she would take responsibility for explaining the plea agreement to her client.” The state “took for granted that would occur prior to the plea hearing.” The state took issue with V1’s attorney’s failure to inform the court that, after the hearing, they had spoken and came to understand their miscommunication.

The circuit court, by letter, accepted the state’s correction of the inaccurate statement made on the record.

After Leske filed his petition for leave to appeal, the circuit court filed a document explaining why it appointed a special prosecutor. It noted the allegations of threats by V1’s parents to the state, their denial of those allegations, the allegation that the state did not allow V1’s parents to be present for a conference with V1, and the allegation that the state would not provide a written copy of the plea agreement. It found that Leske “would not be harmed by having a special prosecutor appointed.”

Argument

State law, Flynn wrote, allows judges to appoint special prosecutors only under certain circumstances: to assist a DA, at the DA's request, in prosecuting a person; when there is no DA for the county; the DA is absent from the county; when the DA, deputy DA, or assistant DA is on parental leave; the DA has represented a party in a matter related to the the charge the accused faces; the DA is a close relative to the accused; the DA is physically or mentally unable to perform their duties; the DA is serving in the armed forces; the DA is facing criminal charges; or the DA determines there is a conflict of interest regarding the DA or staff. The judge or the requesting DA also must submit a sworn affidavit to the Department of Administration.

The state Court of Appeals has treated special prosecutor appointments inconsistently, Flynn wrote. First, In re Commitment of Bollig, it said that the judge could act only when one eight reasons listed above existed. Just four years after that 1998 decision, however, the appeals court said in State v Carlson that a judge could appoint a special prosecutor as an act of discretion without giving a reason.

In 2015, however, the state Supreme Court called the Carlson decision "problematic to the point of being suspect” because it ignored the criteria listed in the statute. T

That means that there are two conflicting appellate decisions governing special prosecutor appointments, the Flynn said.

When conflicting precedents cannot be reconciled, this court is obligated to apply the earlier decision, because this court had no authority to overrule the prior decision.

Clussman should be reversed because she failed to state the statutory justification for appointing the special prosecutor and because her actions violated the separation of powers, Flynn said.

With reference to prosecutorial discretion, Wisconsin case law has repeatedly held that the discretion whether to charge and how to charge vests solely with the district attorney.

District attorneys are elected officers, normally accountable only to the electorate by recall or losing reelection.

There is no mechanism in which a court can remove the elected district attorney from a case for a violation of victim’s rights. Normally, victims alleging a rights violation may make a complaint to the crime victim’s rights board. While victims have standing to assert their rights in court, removal of the elected district attorney has not been established as an available remedy.

Therefore, the appointment of a special prosecutor does not, and cannot, effect the removal of a district attorney actively prosecuting the case. Neither the court, nor the victim, nor the defendant get to choose who prosecutes a criminal case —the voters do.

Take on a News Take: Evers crossed the line with veto

It was evident from yesterday's state Supreme Court argument in Jeffrey A. LeMieux v Tony Evers that the governor got too cute and went too far when he used a veto to change a two-year school revenue limit increase to a 402-year hike.

Both liberal and conservative justices were critical of the move. There is good coverage by AP and The Cap Times so I won't rehash it here. A remaining issue for the justices is whether to remand the issue back to the governor or, as has been past practice, let the two-year revenue limit increase take effect.

If the governor thought a more progressive Supreme Court would do his bidding, he was wrong. Evers' 2023 veto power play created an opening for the court to re-examine more broadly the scope of the governor's extensive veto power and rein it in, as some justices suggested doing. He may live to regret his move for that reason.

On the other hand, the court may do public education a favor by rejecting the governor's 402-year, $325-per-pupil revenue limit increase. The limit governs how much districts can raise through property taxes and general state aid.

The Wisconsin Association of School Business Officials (WASBO) said in a presentation last month that the $325 increase was not a windfall, considering the rate of inflation. The $325 boost is still below the Legislative Fiscal Bureau's estimated inflationary per-pupil adjustments of $393 in 2023-24 and $403 in 2024-25, WASBO said.

That $325 will be worth far, far less in 100 years, much less 400 years, than its lagging-behind-inflation value now. By 2048, just 24 years from now, it will take more than twice as much - $660.66 - to purchase what $325 buys now, assuming a fairly modest 3% annual inflation rate.

It's not clear what Evers was thinking when he decided on his veto, but it's apparent he wasn't thinking it through.