2015 WI 77
SUPREME COURT OF WISCONSIN
CASE NO.: 2013AP1023
COMPLETE TITLE: Adam R. Mayhugh,
Plaintiff-Appellant-Petitioner,
v.
State of Wisconsin, Wisconsin Department of
Corrections and Redgranite Correctional
Institution,
Defendants-Respondents,
Gary Hamblin, Michael A. Dittmann, John A. Doe,
John B. Doe, ABC Engineering Company, DEF
Construction Company, GHI Insurance Company, JKL
Insurance Company, MNO Insurance Company and PQR
Insurance Company,
Defendants.
REVIEW OF A DECISION OF THE COURT OF APPEALS
(No cite)
OPINION FILED: July 10, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: March 10, 2015
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Waushara
JUDGE: Guy D. Dutcher
JUSTICES:
CONCURRED: GABLEMAN, J., concurs. (Opinion Filed.)
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-appellant-petitioner, there were briefs
by Nicholas Andrew Wagener and Bollenbeck Fyfe SC, Appleton, and
oral argument by Nicholas Andrew Wagener.
For the defendants-respondents, the cause was argued by
Karla Z. Keckhaver, assistant attorney general, with whom on the
brief was Brad Schimel, attorney general.
2
2015 WI 77
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2013AP1023
(L.C. No. 2012CV124)
STATE OF WISCONSIN : IN SUPREME COURT
Adam R. Mayhugh,
Plaintiff-Appellant-Petitioner,
v.
State of Wisconsin, Wisconsin Department of
Corrections and Redgranite Correctional
Institution, FILED
Defendants-Respondents, JUL 10, 2015
Gary Hamblin, Michael A. Dittmann, John A. Doe, Diane M. Fremgen
John B. Doe, ABC Engineering Company, DEF Clerk of Supreme Court
Construction Company, GHI Insurance Company,
JKL Insurance Company, MNO Insurance Company
and PQR Insurance Company,
Defendants.
REVIEW of a decision of the Court of Appeals. Affirmed.
¶1 ANN WALSH BRADLEY, J. Petitioner, Adam R. Mayhugh,
seeks review of an unpublished decision of the court of appeals
affirming an order of the circuit court that dismissed his tort
action against the State and the Department of Corrections
No. 2013AP1023
(DOC).1 The court of appeals agreed with the circuit court that
recovery was barred by the doctrine of sovereign immunity.
¶2 Mayhugh contends that sovereign immunity does not
apply to the DOC. He maintains that by granting the DOC broad
powers, the legislature established the DOC as an independent
going concern. Based on his determination that the DOC is
independent from the state, Mayhugh concludes that the DOC is
not entitled to the sovereign immunity accorded to the state.
In the alternative, Mayhugh asserts that the statutory grant of
power to the DOC to sue and be sued should be interpreted as an
express waiver of sovereign immunity.
¶3 We conclude that the DOC is entitled to sovereign
immunity. The DOC lacks sufficient attributes to render it an
independent going concern. Despite the breadth of its statutory
powers, the character of those powers reveals that the
legislature did not intend the DOC to be anything other than an
arm of the state.
¶4 We further conclude that the legislature has not
expressly waived the DOC's sovereign immunity. Wisconsin Stat.
§ 301.04 (2011-12),2 which permits the DOC to sue and be sued, is
not an express waiver of the DOC's tort immunity but rather
addresses the DOC's capacity to be sued. Accordingly, we affirm
1
Mayhugh v. State, No. 2013AP1023, unpublished slip op.
(Wis. Ct. App. June 3, 2014) (affirming order of the circuit
court for Waushara County, Guy D. Dutcher, Judge).
2
All subsequent references to the Wisconsin Statutes are to the 2011-12 version unless
otherwise indicated.
2
No. 2013AP1023
the court of appeals' determination that Mayhugh's suit against
the DOC is barred by sovereign immunity.
I
¶5 In 2011 Mayhugh, then an inmate at Redgranite
Correctional Institution (Redgranite), attended a baseball game
in Redgranite's recreational yard. Staff directed him to sit in
the bleachers to watch the game. While he was sitting there,
one of the players hit a foul ball, which flew into the
bleachers and hit Mayhugh in the head. As a result, Mayhugh
suffered a fracture to his right temporal lobe and a severed
artery that led to a blood clot, strokes, and acute respiratory
failure.
¶6 Mayhugh subsequently filed a complaint against the
state of Wisconsin, the DOC, Redgranite, unnamed construction
and engineering companies, and unnamed insurers. The complaint
alleged negligence in the design of the baseball field and
asserted that spectators were not protected from foul balls,
that Redgranite failed to remedy the situation, and that Mayhugh
was injured as a result.
¶7 The DOC moved for dismissal, arguing that as a state
agency it was entitled to sovereign immunity. It explained that
the state had not consented to suit and therefore the court
lacked personal jurisdiction.
¶8 After Mayhugh amended the complaint to include the
Secretary of the DOC, the warden of Redgranite, and two unnamed
officers as defendants, the DOC submitted another motion to
dismiss. It again claimed sovereign immunity. Additionally, it
3
No. 2013AP1023
asserted that Mayhugh had failed to comply with the notice
requirements for suits against state employees and therefore
failed to state a claim against them.
¶9 The circuit court granted the DOC's motion. The court
agreed with the DOC that it was entitled to sovereign immunity
under the Wisconsin Constitution unless the state had waived
such immunity by consenting to be sued. It observed that
although the legislature had provided that the DOC could "sue
and be sued," a number of authorities have declined to construe
such language as a waiver. It then concluded that the State had
not consented to suit. The court further determined that
Mayhugh failed to comply with the notice statute for suits
against state employees. Accordingly, it determined that it
lacked jurisdiction over the state employee defendants.
¶10 Mayhugh appealed the portion of the decision relating
to sovereign immunity. He contended that the defense of
sovereign immunity is unavailable because the DOC is an
independent going concern and not an arm of the state. In the
alternative, he advanced that the legislature waived sovereign
immunity for the DOC by enacting Wis. Stat. § 301.04, which
permits the DOC to sue and be sued.
¶11 The court of appeals summarily affirmed the circuit
court. Mayhugh v. State, No. 2013AP1023, unpublished slip op.
(Wis. Ct. App. June 3, 2014). It observed that in Lindas v.
Cady, 142 Wis. 2d 857, 861-63, 419 N.W.2d 345 (Ct. App. 1987),
aff'd in part, rev'd in part, 150 Wis. 2d 421, 441 N.W.2d 705
(1989), it determined that the phrase "sue and be sued" was not
4
No. 2013AP1023
consent for suit against the DOC's predecessor agency, the
Department of Health and Human Services. Id. at 2. Given that
holding, it concluded that the language in Wis. Stat. § 301.04
was not a waiver of sovereign immunity. Id. The court of
appeals further determined that the DOC was not an independent
political body or an independent state agency, and therefore was
not exempted from sovereign immunity. Id. at 3.
II
¶12 We are asked to determine whether the circumstances of
this case fall within either of the two asserted scenarios
rendering sovereign immunity inapplicable to a state entity.
Specifically, whether the legislature created the DOC in a
manner that renders it an independent going concern, which acts
neither as the state's arm nor its agent, and whether the
legislature has expressly waived the DOC's sovereign immunity.
Both of these issues present questions of law which we review
independently of the decisions rendered by the circuit court and
court of appeals. Canadian Nat'l R.R. v. Noel, 2007 WI App 179,
¶5, 304 Wis. 2d 218, 736 N.W.2d 900.
III
¶13 We begin with the first scenario rendering sovereign
immunity inapplicable: the creation of an independent state
entity. The sovereign immunity derived from Article IV, Section
27 of the Wisconsin Constitution protects the state from suit.
Lister v. Bd. of Regents, 72 Wis. 2d 282, 291, 240 N.W.2d 610
(1976). Generally, for purposes of sovereign immunity, an
action against a state agency or board is deemed an action
5
No. 2013AP1023
against the state. Bahr v. State Inv. Bd., 186 Wis. 2d 379,
387-88, 521 N.W.2d 152 (Ct. App. 1994). However, when the state
creates an entity independent from the state, which acts as
neither its arm nor its agent, such entity falls outside the
protection of sovereign immunity. Majerus v. Milwaukee Cnty.,
39 Wis. 2d 311, 315, 159 N.W.2d 86 (1968). Cases often refer to
such entities as "independent going concerns." See, e.g.,
German v. Wisconsin DOT, 2000 WI 62, ¶18, 235 Wis. 2d 576, 612
N.W.2d 50; Townsend v. Wisconsin Desert Horse Ass'n., 42 Wis. 2d
414, 424, 167 N.W.2d 425 (1969); Majerus, 39 Wis. 2d at 314.
¶14 This court first referred to independent going
concerns in Sullivan v. Bd. of Regents, 209 Wis. 242, 244 N.W.
563 (1932). There, the plaintiff brought suit against the Board
of Regents, asserting that the State had waived sovereign
immunity by creating the Board as a body corporate. The court
disagreed, stating that although the Board was a body corporate,
it was merely an arm of the state. Id. at 244.
¶15 To explain its conclusion, the court observed that the
Board lacked the following attributes: it had "no power to raise
money by taxation"; it could "not incur any liability beyond the
amount appropriated to it by act of the legislature"; "the title
to all property acquired by [the Board] is held by it in trust
for the state"; the Board "may not dispose of real property
without express authority from the state"; "[the Board's] power
to dispose of personalty is limited"; and "[a]ll funds belonging
to the institution, whether derived from appropriations or from
the sale of property, are in the custody of the state treasurer
6
No. 2013AP1023
and can only be disbursed on a warrant drawn by the secretary of
state." Id. at 244.
¶16 The absence of these attributes indicated that if the
plaintiff were to recover a judgment against the Board, "there
would be no property out of which execution could be satisfied."
In other words, if the Board created liability, "it is a
liability of the state and must be enforced as other liabilities
against the state are enforced." Id. at 245. Accordingly, the
court determined that nothing in the statutes indicated any
intention that the Board be an independent going concern, and
sovereign immunity applied. Id. at 244.
¶17 As Sullivan suggests, the determination that a state
entity is an independent going concern is a narrow exception to
sovereign immunity. Canadian Nat'l R.R., 304 Wis. 2d 218, ¶7.
To date, our case law has identified only three entities that
fall into this category: the State Armory Board, the State
Housing Finance Authority, and the State Investment Board.
Majerus, 39 Wis. 2d 311; State ex rel. Warren v. Nusbaum, 59
Wis. 2d 391, 208 N.W.2d 780 (1973); Bahr, 186 Wis. 2d 379.
¶18 In Majerus, 39 Wis. 2d 311, the court considered
whether the State Armory Board was an independent going concern.
The legislature had designated the Armory Board as "a body
politic and corporate" with the power "to sue and be sued." Id.
at 315. It had also granted the Board the powers to convey real
estate, dispose of personal property, hold and disburse its own
funds independent of state warrants, borrow money, and issue and
sell bonds and other evidences of indebtedness to accomplish its
7
No. 2013AP1023
purposes. Id. at 314-15. The court acknowledged that an entity
need not have all of the powers enumerated in Sullivan in order
to be independent. Id. at 315. It determined that the
designation of the Board as a body politic and corporate,
combined with the Board's broad proprietary powers, rendered it
an independent going concern, outside the scope of sovereign
immunity. Id.
¶19 The court conducted a similar inquiry with regard to
the State Housing Finance Authority in Nusbaum, 59 Wis. 2d 391.
It noted that although the legislature had stated that the
Authority was "a public body corporate and politic," the court
must look beyond that denomination and independently consider
"the powers and structure conferred upon the entity in order to
determine its nature." Id. at 424.
¶20 The court reviewed the broad proprietary powers the
legislature granted to the Authority:
The Authority, pursuant to sec. 234.03, is granted all
the powers "necessary or convenient" to implement its
public purpose, including but not limited to the power
to sue and be sued; to have perpetual existence; to
make and execute contracts; to incur debt; to acquire
and dispose of mortgages or security interests; to
acquire leaseholds, real or personal property or any
interest therein; and, under certain conditions, to
own, hold, clear, improve and rehabilitate and to
sell, assign, exchange, transfer, convey, lease,
mortgage or otherwise dispose of or encumber the same.
Id. at 424. Turning its attention to the fiscal powers, the
court continued:
The Authority has the power to hold and disburse its
own funds independent of state warrants. It has the
power to borrow money and issue and sell bonds and
8
No. 2013AP1023
other evidences of indebtedness to accomplish its
purposes. Its debts thus created are satisfied out of
rents and interest the Authority receives from the
property the Authority acquires and the investments it
makes.
Id. Acknowledging that the proprietary and fiscal powers
supported the legislature's declaration that the Authority was
an independent entity, the court determined that the Authority
"is neither an arm nor agent of the state." Id. at 425.
¶21 Likewise, the State Investment Board was declared an
independent going concern in Bahr, 186 Wis. 2d 379. To support
this determination, the court identified the following statutory
features of the Board: its broad authority to manage and invest,
sell, reinvest, and collect income and rents, to employ outside
counsel and contractors, and to acquire, manage, and sell real
estate without Department of Administration (DOA) participation;
the power to sue and be sued; the legislature designated it as a
body corporate, and the legislature's stated intent that the
Board be an independent agency of the state. Id. at 396, 399.
Thus, the court determined that the Board was "ineligible to
raise the defense of sovereign immunity." Id. at 399.
¶22 Majerus, Nusbaum, and Bahr demonstrate that in
determining whether a state entity is an independent going
concern, courts should consider both the character and breadth
of the statutory powers granted to the entity. We observe that
the entities at issue in those cases shared some common
features: they were authorized to sue and be sued, they were
created as a body corporate or politic, they had powers
indicating budgetary autonomy, and they had the power to hold
9
No. 2013AP1023
and convey real estate. Although the presence of this
combination of features will generally weigh in favor of
independence and therefore ineligibility for sovereign immunity,
we caution that it is a totality of the circumstances analysis
and no one factor is determinative.
¶23 Applying these factors to the DOC, we conclude that it
is not an independent going concern. The DOC has only one of
the attributes identified in Majerus, Nusbaum, and Bahr: the
ability to sue and be sued. The DOC was not established as a
body politic or body corporate. Additionally, it lacks
budgetary autonomy as it is funded by general state revenue,
has a budget controlled by the appropriation process and the
DOA, and cannot incur any liability beyond the amount
appropriated to it. Wis. Stat. §§ 16.50(1)(a), 20.410, 301.10.
Further, the DOC is subject to state controls in the purchase of
real estate, goods, and services. Wis. Stat. §§ 16.848,
301.235(2)(a). We could find no other statutory powers that
would suggest that the DOC is anything other than an arm of the
state.
¶24 The various statutory powers identified by Mayhugh do
not support his assertion that the DOC is an independent going
concern. Specifically, Mayhugh points to a number of the DOC's
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No. 2013AP1023
statutory powers relating to managing finances3; the DOC's
limited contracting power4; the DOC's limited powers with respect
to real estate5; and the DOC's general purpose, right to govern
3
Wis. Stat. § 301.10 (the power to audit bills and make
payments); Wis. Stat. § 301.075 (authorization to withdraw or
disburse moneys deposited in a public depository to the credit
of the DOC); Wis. Stat. § 301.085 (the power to make benefit
payments and charge counties for making those payments); Wis.
Stat. § 301.105 (the power to collect commissions from telephone
companies); Wis. Stat. § 301.12 (the power to enforce and seek
judgments, compel payments, charge interest, present documents
in court to seek payment, and appoint counsel to seek
enforcement of collection and deportation); Wis. Stat. § 301.05
(the DOC's ability to accept gifts, grants, or donations, and to
hold money in trust).
4
Wis. Stat. § 301.065 (power to contract with religious
organizations); Wis. Stat. § 301.07 (power to contract with the
federal government); Wis. Stat. § 301.031 (contracting powers
for youth programs); Wis. Stat. § 301.08 (power to contract for
the purchase of goods, care, and services for incarcerated
individuals and individuals supervised by the DOC).
5
Wis. Stat. § 301.235 (the authorization to construct and
refinance indebtedness for construction of new buildings, convey
title on property owned by the DOC, lease property and assign
revenues coming in from the properties); Wis. Stat. § 301.24
(condemnation power to acquire land, sell excess land, purchase
land and lease land); Wis. Stat. § 301.37 (design control and
approval authority over various facilities in Wisconsin).
11
No. 2013AP1023
and a number of powers relating to the care, custody, and
control of inmates6. We address each in turn.
¶25 First, the financial powers referred to by Mayhugh
must be considered in light of the fact that the DOC's funds are
controlled by the legislature through the appropriations
process. Wis. Stat. § 20.410. Additionally, the DOC cannot pay
its bills until they have been audited under the supervision of
the DOA. Wis. Stat. § 301.10. Further, all payments must be
made on the warrant of the DOA. Id. Thus, the overarching
character of the DOC's budget does not support a conclusion that
the DOC is independent of the state.
¶26 Likewise, the contracting powers identified by Mayhugh
do not convince us that the DOC is independent. These powers
are limited to contracts with specific parties and contracts for
specific purposes. Notably, the DOC's ability to contract for
youth programs is limited to available revenues and subject to
6
Wis. Stat. § 301.001 (purpose of avoiding sole reliance on
incarceration); Wis. Stat. § 301.03 (general corrections
authority); Wis. Stat. § 301.02 (power to maintain and govern
correctional institutions); Wis. Stat. § 301.055 (power to limit
the number of prisoners); Wis. Stat. § 301.29 (police powers);
Wis. Stat. § 301.025 (power to establish a separate division for
juveniles); Wis. Stat § 301.06 (power to set up its own
educational system); Wis. Stat. § 301.30 (power to setup an
independent wage scale for inmates). Wis. Stat. § 301.035 (the
establishment of a DOC division for hearings and appeals related
to parole and probation); Wis. Stat. § 301.045 (the DOC's power
to investigate, hold hearings, subpoena witnesses and make
recommendations to public or private entities).
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No. 2013AP1023
the review and approval of the legislature's joint committee on
finance. Wis. Stat. § 301.031(2g). Its ability to contract
with religious organizations is subject to DOA provisions. Wis.
Stat. § 301.065(2). Further, as noted above, payments for the
DOC's contracts must be made on the warrant of the DOA. Wis.
Stat. § 301.10. Overall, the limited contracting powers
identified by Mayhugh do not evince an independent character of
the DOC.
¶27 Additionally, contrary to Mayhugh's assertion, the
real estate powers he identifies reveal that the DOC is not
independent from the state. The DOC cannot sell land on its
own, but must first seek approval of the Building Commission or
the Joint Committee on Finance. Wis. Stat. § 301.24(4), (4m).
Similarly, before purchasing land, the DOC must obtain the
approval of and release of state building trust funds by the
Building Commission. Wis. Stat. § 301.24(5). Thus, the overall
character of the DOC's powers with respect to real estate
support the conclusion that it is dependent on rather than
independent of the state.
¶28 Considering the DOC's general purpose and the powers
granted to it to fulfill that purpose, we fail to see how they
support a conclusion that the DOC is an independent going
concern. Rather than suggesting independence, the statutory
statement of purpose reveals that the legislature intended the
DOC to be intertwined with other state programs:
The purposes of this chapter and chs. 302 to 304 are
to prevent delinquency and crime by an attack on their
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No. 2013AP1023
causes; to provide a just, humane and efficient
program of rehabilitation of offenders; and to
coordinate and integrate corrections programs with
other social services. In creating the department of
corrections, chs. 301 to 304, the legislature intends
that the state continue to avoid sole reliance on
incarceration of offenders and continue to develop,
support and maintain professional community programs
and placements.
Wis. Stat. § 301.001 (emphasis added). Further, by framing the
statement of purpose in terms of the purpose of the state, as
opposed to the purpose of the DOC, the statute suggests a
legislative intent that the DOC operate as an arm of the state,
rather than an independent agency.
¶29 The power to govern correctional institutions and the
powers relating to the care, custody, and control of inmates do
not weigh in favor of or against DOC independence. These powers
are akin to those granted to other governmental entities to
fulfill their purpose. The Board of Regents, for example, has
similar powers to govern its system, determine the educational
systems offered within that system, set admission policies,
police authority, fix salaries, and hold hearings for its
personnel. Wis. Stat §§ 36.09(1), 36.11(2), 36.115. Even with
these powers the Board of Regents is not an independent going
concern. Lister, 72 Wis. 2d at 292. These types of powers have
not been mentioned in our jurisprudence relating to independent
going concerns and say little about whether an entity is
independent from the state.
¶30 Finally, Mayhugh bases a significant portion of his
arguments on the statutes permitting the DOC to set up and
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No. 2013AP1023
regulate the Prison Industries Board. Wis. Stat. § 303 et seq.
However, that Board is but a segment of the DOC and is not
itself the entity being sued.
¶31 We acknowledge that the Prison Industries Board has
some budgetary autonomy. See George v. SC Data Ctr., 884 F.
Supp. 329, 330 (W.D. Wis. 1995) (explaining that revenues from
the sale of goods and services produced are applied to service
debt on any bonds issued under the authority of the state
legislature to finance Prison Industries programs). However,
there is no indication that the revenues produced by the prison
industries are the primary source of funding for the DOC as a
whole. To the contrary, the Prison Industries Board receives
appropriations from the state for prison industries costs that
are not covered by its revenues, suggesting that its revenues
may not even cover its own operations. Wis. Stat. §§ 20.410,
20.866(2)(uy). Therefore, the statutory powers of the Prison
Industry Board do not support a conclusion that the DOC is an
independent going concern.
¶32 In sum, the statutory powers granted to the DOC do not
render it an independent going concern. Courts must consider
both the character and breadth of the statutory powers granted
to the entity when determining whether it is an independent
going concern. Here, despite their breadth, the character of
the DOC's powers reveals that the legislature did not intend for
the DOC to be anything other than an arm of the state.
IV
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No. 2013AP1023
¶33 Having established that the DOC is not exempt from
sovereign immunity as an independent going concern, we turn to
consider whether the state has expressly waived the DOC's
sovereign immunity.
¶34 Article IV, Section 27 of the Wisconsin Constitution
provides: "The legislature shall direct by law in what manner
and in what courts suits may be brought against the state."
Courts have traditionally interpreted this language as meaning
that the state can be sued only with its consent. Holytz v.
City of Milwaukee, 17 Wis. 2d 26, 41, 115 N.W.2d 618 (1962).
¶35 "[C]onsent to suit may not be implied." Bahr, 186
Wis. 2d at 387. It must be express. See German, 235 Wis. 2d
576, ¶17 ("It is axiomatic that the state cannot be sued without
the express consent of the legislature."); Metzger v. Wisconsin
Dep't of Taxation, 35 Wis. 2d 119, 131, 150 N.W.2d 431 (1967)
("Well established in Wisconsin is the principle that in the
absence of express legislative permission the state may not be
subjected to suit."); State ex rel. Martin v. Reis, 230 Wis.
683, 685, 284 N.W. 580 (1939) ("it is an established principle
of law that no action will lie against a sovereign state in the
absence of express legislative permission.").
¶36 We can find no express waiver of the DOC's sovereign
immunity. The court of appeals addressed this issue in Lindas,
142 Wis. 2d 857. In that case, the circuit court dismissed on
sovereign immunity grounds the plaintiff's suit against the
DOC's predecessor, the Department of Health and Social Services.
On review, the court of appeals reiterated that "[i]n the
16
No. 2013AP1023
absence of express legislative authorization, the State of
Wisconsin may not be sued." Id. at 861. It examined whether a
statute providing that the department could sue and be sued
provided such authorization and determined that it did not. Id.
¶37 The court reasoned that the "sue and be sued" statute
was created "at a time when Wisconsin enjoyed governmental
immunity from tort suits." Id. It observed that governmental
immunity was subsequently eliminated in Holytz, 17 Wis. 2d 26.
It then determined that the fact that Holytz "removed the
defense of tort immunity" did not permit it to put more meaning
into the sue and be sued statute. Id. at 862 (quoting Townsend,
42 Wis. 2d at 420-21). Accordingly, the court concluded that
there was no express consent for tort suit against the
Department of Health and Social Services. Id. at 863.
¶38 The court of appeals subsequently clarified that
Lindas did not set forth "a blanket rule that legislative
consent for an agency to sue and be sued [could not] be
considered a waiver of sovereign immunity." Bahr, 186 Wis. 2d
at 392-93. Rather, the holding in Lindas was limited to tort
actions. Id.
¶39 Because we are considering a tort action against the
DOC, we determine that Lindas governs. We acknowledge that
unlike the statute at issue in Lindas, the statute permitting
the DOC to sue and be sued was enacted after Holytz. However,
the current DOC statute was based on the statute discussed in
Lindas. It contains identical language. See Wis. Stat.
§ 301.04 ("The department may sue and be sued."); Wis. Stat.
17
No. 2013AP1023
§ 46.017 (1987-88) ("The department may sue and be sued.").
Considering this background, we determine that the "sue and be
sued" language in Wis. Stat. § 301.04 does not constitute an
express waiver of sovereign immunity for tort suits.
¶40 As our statutes recognize, not every entity has the
capacity to sue and be sued. Wis. Stat. §§ 802.03, 802.06. In
other words, not every entity can be named as a party in a
lawsuit. See, e.g., Peirick v. Ind. Univ.-Purdue Univ.
Indianapolis Athletics Dep't, 510 F.3d 681, 694 (7th Cir. 2007)
(observing that the Athletics Department "is merely a division
of the University that is not capable of being sued"). For
example, Wis. Stat. § 775.01 provides a procedure for the state
to be sued in contract. The "sue and be sued" language in Wis.
Stat. § 301.04 clarifies that the DOC could be named in such a
suit.
¶41 Other jurisdictions have determined that "sue and be
sued" can refer to the capacity to be named in a lawsuit. See
Ransom v. St. Regis Mohawk Educ. & Community Fund, 658 N.E.2d
989, 995 (N.Y. 1995) ("statutory power to sue and be sued
contained in the D.C. and New York nonprofit corporation laws
did nothing more than recognize the Fund's status as an entity
with the capacity to enter our courts"); Self v. Atlanta, 377
S.E.2d 674, 676 (Ga. 1989) (sue and be sued "should be read as
providing an entity with the status and capacity to enter
courts, and not as waiving sovereign immunity"); Town of
Highland Park v. Iron Crow Constr., Inc., 168 S.W.3d 313, 318
(Tex. App. 2005) (sue and be sued speaks to an entity's
18
No. 2013AP1023
"capacity to sue and its capacity to be sued when immunity has
been waived").7 We agree and conclude that in the context of
Wis. Stat. § 301.04 the "sue and be sued" language clarifies
that the DOC is a legal entity with the capacity to sue and be
sued once immunity has been waived.
¶42 We acknowledge that there is conflicting federal case
law regarding the import of "sue and be sued" provisions. In
Federal Deposit Insurance Corp. v. Meyer, 510 U.S. 471, 480
(1994), the United States Supreme Court determined that "sue and
be sued" clauses are presumed to waive the sovereign immunity
absent a showing that the clause was intended to have a more
narrow purpose. However, Meyer was addressing sovereign
immunity under federal common law and not the sovereign immunity
derived from Article IV, section 27 of the Wisconsin
Constitution. Accordingly, the federal law on this point is not
7
See also A. Craig Carter, Is Sue and be Sued Language a
Clear and Unambiguous Waiver of Immunity?, 35 St. Mary's L.J.
275, 277 (2003-04) (asserting that the "more[] plausible"
interpretation of "sue and be sued" is "that it is simply a
grant of capacity to be a party to a lawsuit").
19
No. 2013AP1023
persuasive.8 Cf. Federal Housing Admin. v. Burr, 309 U.S. 242,
246-47 (1940) ("State decisions barring garnishment against a
public body though it may 'sue and be sued' are not persuasive
here as they reflect purely local policies concerning
municipalities, counties and the like, and involve
considerations not germane to the problem of amenability to suit
of the modern federal governmental corporation.").
¶43 Finally, Mayhugh advances that a determination that
the DOC is immune from suit would violate Article I, Section 9
of the Wisconsin Constitution, which states that "[e]very person
is entitled to a certain remedy in the laws for all injuries, or
wrongs which he may receive in his person, property, or
character. . . ."
¶44 The argument that Article I, Section 9 is violated by
the application of sovereign immunity has been consistently
rejected by courts. See, e.g., Forseth v. Sweet, 38 Wis. 2d
676, 688, 158 N.W.2d 370 (1968) (declining to find a violation
of Art. I, Sec. 9 because "[t]here is no 'right' of a citizen to
8
This analysis is distinct from that of Bahr v. State
Investment Board, 186 Wis. 2d 379, 393-94, 521 N.W.2d 152 (Ct.
App. 1994), in which the court referred to language from Federal
Deposit Insurance Corp. v. Meyer, 510 U.S. 471, 480 (1994), to
support its conclusion that the investment board was an
independent going concern. The Bahr court did not separately
consider whether the legislature expressly waived sovereign
immunity for the board. We are not convinced that Bahr's
determination that a "sue and be sued" clause supports a
conclusion that an entity is an independent going concern should
be extended to an analysis of whether there was an express
waiver of sovereign immunity.
20
No. 2013AP1023
hold his sovereign substantively liable for a tort");
Apfelbacher v. State, 160 Wis. 565, 577, 152 N.W. 144 (1915)
("The immunity from suit is a privilege which a sovereign may
waive or refuse to waive at its pleasure. No constitutional
right of its residents is violated whatever its action in that
regard may be."); Erikson Oil Products, Inc. v. State, 184 Wis.
2d 36, 55, 516 N.W.2d 755 (Ct. App. 1994) ("In Cords, 62 Wis.2d
at 52, 214 N.W.2d at 411, the court specifically rejected the
argument that Wis. Const. art. I, § 9, gave an injured party the
right to sue the State and concluded there is no right of a
citizen to hold the sovereign liable."). We decline to diverge
from this precedent.
V
¶45 In sum, we conclude that the DOC is entitled to
sovereign immunity. The DOC lacks sufficient attributes to
render it an independent going concern. Despite the breadth of
its statutory powers, the character of those powers reveals that
the legislature did not intend the DOC to be anything other than
an arm of the state.
¶46 We further conclude that the state has not expressly
waived the DOC's sovereign immunity. Wisconsin Stat. § 301.04,
which permits the DOC to sue and be sued, is not an express
waiver of the DOC's tort immunity but rather addresses the DOC's
capacity to be sued. Accordingly, we affirm the court of
appeals' determination that Mayhugh's suit against the DOC is
barred by sovereign immunity.
21
No. 2013AP1023
By the Court.—The decision of the court of appeals is
affirmed.
22
No. 2013AP1023.mjg
¶47 MICHAEL J. GABLEMAN, J. (concurring). At issue in
this case is whether the legislature has waived sovereign, that
is state immunity, in tort for injuries sustained by Mayhugh
while, as an inmate, he attended a baseball game in Redgranite's
recreational yard. I join the majority opinion affirming the
court of appeals. The majority correctly determines that the
Department of Corrections ("DOC") is not an independent going
concern, and that the legislature has not waived the state's
sovereign immunity in tort actions.
¶48 I cannot, however, join the majority's reliance on
Lindas v. Cady, 142 Wis. 2d 857, 419 N.W.2d 345 (Ct. App. 1987),
aff'd in part, rev'd in part, 150 Wis. 2d 421, 441 N.W.2d 705
(1989). Majority Op., ¶¶36-39. Simply put, the majority's
reliance on Lindas for its conclusion that "sue and be sued" is
not a waiver of sovereign immunity is misplaced because Lindas
examined the "sue and be sued" language in Wis. Stat. § 46.017
(1979-80) which applied to the Department of Health and Social
Services ("DHSS"), the DOC's predecessor. Here, we examine Wis.
Stat. § 301.04,1 which the legislature passed into law after the
decision in Lindas and well after our decision in Holytz v. City
of Milwaukee, 17 Wis. 2d 26, 115 N.W.2d 618 (1962), which
abrogated the doctrine of governmental immunity for tort
actions.
A.
1
All subsequent references to the Wisconsin Statutes are to
the 2011-12 version unless otherwise indicated.
1
No. 2013AP1023.mjg
¶49 The rule of governmental immunity, that is municipal
immunity, is distinct from sovereign immunity, that is state
immunity. Governmental immunity grew out of "English law" and
"expanded to the point where the historical sovereignty of kings
was relied upon to support a protective prerogative for
municipalities." Id. at 30. Governmental immunity was first
adopted in Wisconsin in Hayes v. The City of Oshkosh, 33 Wis.
314, 318 (1873). However, applying the doctrine resulted in
"some highly artificial judicial distinctions"2 which led this
court to re-examine governmental immunity in 1962. Holytz, 17
Wis. 2d at 32. In Holytz we abrogated the doctrine of
governmental immunity such that, for municipalities, "so far as
governmental responsibility for torts is concerned, the rule is
liability—the exception is immunity." Id. at 39.
¶50 However, our decision in Holytz did not go so far when
it came to the State and its agencies. Rather, we made a
"careful distinction . . . between the abrogation of the
[governmental] immunity doctrine and the right of a private
party to sue the state." Id. at 40. Thus, following our
decision in Holytz, "there will be substantive liability on the
part of the state, but the right to sue the state" can be waived
2
"For example, the municipality may be immune or liable
depending upon whether we determine that the particular function
involved is 'proprietary' or 'governmental'." Holytz v. City of
Milwaukee, 17 Wis. 2d 26, 32, 115 N.W.2d 618 (1962).
2
No. 2013AP1023.mjg
only by the legislature pursuant to article IV, section 27 of
the Wisconsin Constitution.3 Id. at 41.
B.
¶51 In Lindas a former employee of DHSS, Lindas, sued the
department for wrongful discharge and discrimination. Lindas,
142 Wis. 2d at 860. The circuit court dismissed Lindas's claim
as barred by sovereign immunity. Id. Lindas appealed, arguing
that by enacting Wis. Stat. § 46.017 (1979-80) the legislature
waived DHSS' immunity as the text of § 46.017 (1979-80) stated
that "the department [DHSS] may sue and be sued." The Lindas
court reasoned that this "sue and be sued" language could not be
considered a waiver of sovereign, that is state, immunity in
tort because the statute was enacted "at a time when Wisconsin
enjoyed governmental immunity from tort suits." Lindas, 142
Wis. 2d at 861.
C.
¶52 However, Wis. Stat. § 301.04, the statute at issue in
the instant case, was not enacted "at a time when Wisconsin
enjoyed governmental immunity from tort suits." Id. Instead,
Wis. Stat. § 301.04 was enacted in 1989, when the DOC was
created, nearly three decades after the doctrine of governmental
immunity was abrogated by this court in Holytz. As a result,
the reasoning of Lindas cannot apply to Wis. Stat. § 301.04. If
it did, then the interpretation of statutory language would be
frozen in time at the moment a court first interprets it.
3
"The legislature shall direct by law in what manner and in
what courts suits may be brought against the state."
3
No. 2013AP1023.mjg
¶53 This does not mean, however, that the majority's
ultimate interpretation of "sue and be sued" in § 301.04 is
incorrect, only that its reliance on Lindas is misplaced and
unnecessary. Rather, the majority's conclusion that "sue and be
sued" refers to "the capacity to sue and be sued" is well-
reasoned and gives full effect to the language of § 301.04.
Majority Op., ¶40 (emphasis added). For instance, in Boldt v.
State, 101 Wis. 2d 566, 305 N.W.2d 133 (1981), we explained that
Wis. Stat. § 775.014 "has been interpreted as giving the state's
consent to suit in some causes of action but not in others."
Id. at 572 (emphasis added). Specifically, Wis. Stat. § 775.01
waives the state's immunity for actions in contract, and sets
forth the manner in which a claim may be brought. See
Trempealeau Cnty. v. State, 260 Wis. 602, 605, 51 N.W.2d 499
(1952) (explaining that a contract claim may be brought under
Wis. Stat. § 285.01, the predecessor statute to Wis. Stat.
§ 775.01). Thus, the state's sovereign immunity is waived by
the "procedural implementation" of a statute which sets forth
4
The full text of Wis. Stat. § 775.01 is:
Upon the refusal of the legislature to allow a claim
against the state the claimant may commence an action
against the state by service as provided in s. 801.11
(3) and by filing with the clerk of court a bond, not
exceeding $1,000, with 2 or more sureties, to be
approved by the attorney general, to the effect that
the claimant will indemnify the state against all
costs that may accrue in such action and pay to the
clerk of court all costs, in case the claimant fails
to obtain judgment against the state.
4
No. 2013AP1023.mjg
the "manner and in what courts suits may be brought against the
state." Forseth v. Sweet, 38 Wis. 2d 676, 684, 158 N.W.2d 370
(1968).
¶54 The legislature has not implemented a procedure by
which the DOC or the state may be sued in tort, as it has in
contract, and therefore, the DOC may not be sued in tort. As a
result, the "sue and be sued" language in Wis. Stat. § 301.04 is
not a waiver of sovereign immunity, but rather identifies the
DOC as an entity that can be named in suits for which the
legislature has waived sovereign immunity.
¶55 For the foregoing reasons, I respectfully concur.
5
No. 2013AP1023.mjg
1