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Brian Blanchard
Dane County District Attorney
523 City-County Building
Madison, WI 53709.0001
Dear Mr. Blanchard:
The Attorney General has asked me to respond to your letter of October 12, 2001, regarding the legality of the use of state funds for the legal defense of state employees who are being investigated with regard to allegations of improper use of state resources and related violations of state law. These employees are associated with or employed by the four legislative caucuses. The investigation is being conducted by the Dane and Milwaukee County District Attorney offices, with assistance from the Department of Justice. The facts available to our office indicate that the Senate and Assembly Organization Committees have authorized state reimbursement of attorneys' fees for legislative caucus employees who are currently under investigation. Based upon the information publicly available, I believe that the procedure followed by the Senate and Assembly Organization Committees for the reimbursement of legal fees in connection with the above investigations is contrary to state law.
State law as enacted by the Wisconsin Legislature establishes a process by which state officers and employees may be indemnified for attorneys fees incurred as result of acts growing out of or committed in the lawful course of an employee's duties. Wis. Stat. ~ 895.46(1 )(a) provides as follows:
If the defendant in any action or special proceeding is a public officer or employee and is proceeded against ill an official capacity or is proceeded against as an individual because of acts committed while carrying out duties as an officer or employee and the jury or the court finds that the defendant was acting within the scope of employment, the judgment as to damages and costs entered against the officer or employee in excess of any insurance applicable to the officer or employee shall be paid by the state or political subdivision of which the defendant is an officer or employee. ... Regardless of the results of the litigation the governmental unit, if it does not provide legal counsel to the defendant officer or employee, shall pay reasonable attorney fees and costs of defending tile action, unless it is found by the court or jury that the defendant officer or employee did not act within the scope of employment ? Failure by the officer or employee to give notice to his or her department head of an action or special proceeding commenced against the defendant officer or employee as soon as reasonably possible is a bar to recovery by the officer or employee from the state or political subdivision of reasonable attorney fees and costs of defending the action. The attorney fees and expenses shall not be recoverable if the state or political subdivision offers the officer or employee legal counsel and the offer is refused by the defendant officer or employee?
Other statutory provisions set out a framework that must be followed before the state may reimburse state employees for legal fees.
First, the state must have declined to provide legal representation to the employee. Representation of state employees in civil matters is typically provided by the Attorney General's office. The legal authority for such representation in a civil or administrative matter is set forth in Wis. Stat. § 165.25(6)(a) and (6m). Under these provisions, representation by the Attorney General may only be provided in civil, not criminal, matters. The Attorney General may provide legal representation for a state employee in a criminal matter only upon the request of the Governor or either house of the Legislature. See sec. 165 (25)(1). To date, there have been no requests to the Attorney General's office to provide legal representation with regard to the caucus investigation.
If the Attorney General is unable to provide representation because of a conflict of interest or because the requirements of sec. 165.25 have not been met, the Governor has the option of appointing special counsel if the appointment of special counsel is deemed in the public interest. See Wis. Stat. § 14.11 (2)(a). Only after these procedures have been followed and legal representation has been declined is a state employee eligible for reimbursement of attorneys fees under sec. 895.46(1)(a).
Second, the matter must be civil in nature. In Bablitch & Bablitch v. Lincoln County, 82 Wis. 2d 574, 263 N.W.2d 218 (1978), a sheriff claimed entitlement to attorneys fees which he incurred in defending a criminal charge. The Supreme Court rejected the argument on the ground that the statute is confined to civil actions.
We conclude the legislature chose to use the word "litigation" in this narrow sense and intended that it apply only to civil cases. The conclusion that [it] applies only to civil proceedings is buttressed by other language or the section requiring the employee to give notice of the proceeding to tile department head al1d the reference to payment of judgments. The legislature here recognized that the governmental unit should be entitled to supply counsel where an adverse result wou1d involve the payment of a judgment out of County funds.
Id., 82 Wis. 2d at 581.
The court later said the statutory language required "reimbursement of attorney's fees and costs only in those situations where the expenses were incurred while defending civil damage actions." Thuermer v. Village of Mishicot, 95 Wis. 2d 267,271,290 N. W.2d 689 (1980).
When the Legislature has provided exceptions to the general rule that state law does not allow the payment of criminal defense costs of state employees, it has done so specifically and in very limited circumstances. For example, sec. 775.11 provides for reimbursement of attorney fees and costs of state employees who are charged with abusing inmates, but only if the person is found not guilty. Similarly, the Legislature has limited the applicability of sec. 895.46 to only those criminal actions involving hazardous waste violations under state or federal law. See sec. 895.46(6), Stats.
Third, reimbursement of attorneys' fees under sec. 895.46(1)(a) must also meet the requirement that the civil matter involved an act that the employee committed in the scope of his or her state employment. Before any state funds can be paid, an affirmative determination must be made that the conduct at issue occupied in the scope of employment. Such a determination must be made on a case by case basis after the facts have been determined, and not under a general pronouncement of blanket coverage under the statute. See Crawford Y. City of Ashland, 134 Wis. 2d 369, 396 N. W.2d 781 (Ct. App. 1986). The courts have interpreted 895.46(1) consistent with the legislature's intent to offer the broadest protection reasonably available to public officials and to public employees..." Crawford at 373-374, quoting Schroeder Y. Schoessow, 108 Wis. 2d 49, 67, 321 N.W. 2d 131, 140 (1982). See also Beane v. City of Sturgeon Bay, 112 Wis. 2d 609, 611, 332 N. W. 2d 235,236 (1983). However, despite the broad coverage of the statute in the civil context, the Supreme Court has also determined that "good faith" remains an implicit element of "acting within the scope of employment" under sec. 895.46(1). Crawford at 375, footnote 3, quoting from Schroeder, at 108 Wis. 2d 49, 69, 321 N. W. 2d 131, 141 (1982).
Wisconsin statutes provide a mechanism for reimbursing state employees who qualify for indemnification under the analysis set forth above. After the final resolution of a matter involving a state employee's conduct for which the employee obtained legal counsel, whether or not formal legal action is taken against the employee, the employee may submit a claim for reimbursement of attorneys' fees to the Department of Administration. Under sec. 20.865(1)(fm), stats., the Department of Administration is authorized to pay judgments and settlements incurred by state employees under sec. 895.46(1), assuming that all of the prerequisites for reimbursement under that section have been met. In addition, under sec. 20.865(1)(g), the Department of Administration is authorized to pay legal expenses incurred under sec. 895.46(1). .
Alternatively, the employee may make a claim to the Claims Board, under sec. 16.007, Stats., after the final resolution of the matter. The Claims Board has broad discretion under sec. 16.007(5) Stats. to reject or pay claims. A recommendation by the Claims Board that a claim should be paid must be submitted to the Legislature and approved by the Joint Finance Committee, unless the dollar amount of the claim is under $5000. Pursuant to sec. 16.007(6)(a),stats., amounts under $5000 may be approved by the Claims Board without further approval by the Joint Finance Committee.
I am providing a copy of this response to the Senate and Assembly Chief Clerks. It is my understanding that legal invoices have been or wilt be submitted to the Clerks for reimbursement.
Sincerely,
Matthew J. Frank
Assistant Attorney General
Administrator, Legal Services
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Don Schneider
Chief Clerk, Senate
John Scocos
Chief Clerk. Assembly
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