STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

RACINE EDUCATION ASSOCIATION, Complainant

RACINE UNIFIED SCHOOL DISTRICT, Respondent

FAIR EMPLOYMENT DECISION
ERD Case No. 8650279

 


ORDER ON MOTION FOR BIFURCATION AND REMAND

On July 17, 1989, the Commission issued a decision in the above-captioned matter modifying and affirming the decision of the Administrative Law Judge for the Department of Industry, Labor and Human Relations, which found that Respondent violated the Wisconsin Fair Employment Act and which made remedial orders, including an order for payment by Respondent of Complainant's attorney's fees. On July 31, 1989, Complainant filed a Motion for Bifurcation and Remand seeking to have the Commission bifurcate the issue of whether an enhancement of the attorney's fee award should be allowed from all of the other issues in the case, remanding the attorney's fee enhancement issue to the Administrative Law Judge for taking of further evidence, and leaving the remaining aspects of the decision intact. Having considered the Complainant's motion, the Commission now makes the following:

ORDER

That the Complainant's Motion for Bifurcation and Remand is denied.

Dated and mailed August 11, 1989

/s/ Kevin C. Potter, Chairman

/s/ CArl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner

MEMORANDUM OPINION

In its Motion for Bifurcation and Remand, the Complainant asserts that Pennsylvania v. Delaware Valley Citizens' Council, 107 S.Ct. 3078, 45 FEP Cases 1750 (1987), on which the Commission's decision not to permit an enhancement in fees was based, was decided on June 26, 1987, after the hearing in the case at bar was concluded on May 11, 1987, and that the Delaware Valley decision had not been adopted by the Wisconsin courts as applying to cases under the Fair Employment Act at the time that the petition for fees and lodestar enhancement by the Complainant was prepared. The Complainant argues that, since it did not have reasonable notice that the standards articulated in the Delaware Valley decision would be those by which its prayer for a fee enhancement would be judged, it did not introduce the evidence which would be needed to establish a right to a fee enhancement under those standards. The Complainant asserts that it believes that it could have established an entitlement to a fee enhancement under the Delaware Valley standards had it known that they would be applied, and it urges the Commission to set aside its decision insofar as it denied the fee enhancement and to remand the matter to the Administrative Law Judge so that the Complainant could now put in the evidence which would be relevant under the Delaware Valley standards.

Section 111.39(5)(c), Stats., provides:

"On motion, the commission may set aside, modify or change any decision made by the commission, at any time within 28 days from the date thereof if it discovers any mistake therein, or upon the grounds of newly discovered evidence. The commission may on its own motion, for reasons it deems sufficient, set aside any final decision of the commission within one year from the date thereof upon grounds of mistake or newly discovered evidence, and remand the case to the department for further proceedings."

This section establishes the sole statutory authority of the Commission to modify or set aside decisions it has issued in the exercise of its jurisdiction to review orders of administrative law judges of the Equal Rights Division. Since the Commission's decision in this case is not yet final, the second sentence of this provision is not applicable. The only authority of the Commission, therefore, is to set aside, modify or change its decision within 28 days from the date thereof on the grounds of mistake or newly discovered evidence.

The Complainant has not asserted, and the Commission does not believe, that there is any "mistake" in its decision in this matter which would warrant setting aside or modifying the decision. Therefore, the only remaining ground upon which a decision to grant the Complainant's motion could be justified would be that of "newly discovered evidence." In Naden v. Johnson, 61 Wis. 2d 384 (1973), the Wisconsin Supreme Court enunciated the following guidelines for determining whether to grant a new trial for newly discovered evidence: "(1) the evidence must have come to the moving party's knowledge after the trial; (2) the moving party must not have been negligent in seeking to discover it; (3) the evidence must be material to the issue; (4) the testimony must not be merely cumulative to the testimony which was introduced at the trial; and (5) it must be reasonably probable that a different result would be reached on a new trial."

The evidence which the Complainant proposes to submit on remand would not be "newly discovered" under these standards. The Complainant seeks to submit evidence to establish the standards identified by the Commission as applicable under Delaware Valley to the question of a fee enhancement, those being that the rates of compensation in the relevant market for contingent fee cases as a class differ from the rate of compensation in non-contingent fee cases, and that the applicant for the fee enhancement would have faced substantial difficulty in finding counsel without an enhancement for risk. The Complainant has not asserted, and the Commission doubts that it could show, that this evidence only came to its knowledge after the proceedings before the Administrative Law Judge relative to the issue of attorney's fees. Furthermore, whether or not the Complainant could demonstrate that this evidence has only now come to its knowledge, the commission concludes that it could not demonstrate that it was not negligent in seeking to discover the evidence earlier.

Contrary to the implication of the Complainant's motion, the Delaware Valley case was decided prior to any of the proceedings before the Administrative Law Judge relating to a determination of attorney's fees The Complainant's petition for attorney's fees was filed in October 1987, four months after the Delaware Valley decision was issued. The proceedings before the Administrative Law Judge concerning the amount of attorney's fees, which involved the submission of affidavits and supplementary materials, the exchange between Complainant and Respondent of information and data relating to the attorney's fee issue, and the holding of two prehearing conferences, extended from late 1987 well into 1988. The REA was presumably aware of the fact that the Delaware Valley decision had been issued. Indeed, the decision was cited by the Respondent in its brief to the Administrative Law Judge in opposition to the Complainant's fee petition, expressly as authority for the contention that no fee enhancement should be awarded.

Complainant argues that the Delaware Valley decision had not been adopted by the Wisconsin courts at the time of the proceedings before the Administrative Law Judge relating to attorney's fees. However, the Commission does not consider that this establishes that the Complainant had no reasonable basis to suspect that the case might be relevant to the question of what evidence it ought to offer. The Commission and the Wisconsin courts have traditionally looked to decisions of federal courts interpreting federal anti-discrimination statutes for guidance in interpreting the Wisconsin Fair Employment Act. Puetz Motor Sales, Inc. v. LIRC, 126 Wis. 2d 168, 172, 376 N.W.2d 372 (1985), Wilbert v. City of Sheboygan (LIRC, 4/15/86). This has been particularly true in the area of determining attorney's fees. Watkins v. LIRC, 117 Wis. 2d 753 (1984), Benson v. Bumper and Auto of Milwaukee (LIRC, 2/10/86), Wetzel v. Clark County (LIRC, 6/5/87). Indeed, the Commission and the Wisconsin courts have generally followed quite closely the interpretations of the United States Supreme Court in respect to anti-discrimination laws. There has been no significant divergence between Wisconsin's interpretations of the Fair Employment Act and the federal courts' interpretations of federal anti-discrimination statutes since the 1970's, when Wisconsin differed from the United States Supreme Court in concluding that discrimination on the basis of pregnancy constituted discrimination because of sex. Ray-O-Vac v. DILHR, 70 Wis. 2d 918 (1975), Goodyear Tire & Rubber v. DILHR, 87 Wis. 2d 56 (Ct. App. 1978). As of the time that the Complainant filed its petition for fees in this case, there had been no decision issued by the Commission or any Wisconsin court, reported in any official reporter or in the Equal Rights Division's Decision Digest, concerning the issue of the appropriateness of an enhancement of fees, which post-dated the Delaware Valley decision. Clearly, the Complainant had every reason to suspect that the standards articulated by the Supreme Court in the Delaware Valley decision might be adopted by the Administrative Law Judge (or, subsequently, by the commission) as the standards by which its prayer for an enhancement of attorney's fees would be judged.

Generally, under Wisconsin law, a decision that changes prior case law is given retroactive effect. Pagelsdorf v. Safeco Insurance Co. of America, 91 Wis. 2d 734, 284 N.W.2d 55 (1979); Fitzgerald v. Meissner and Hicks, Inc., 38 Wis. 2d 571, 157 N.W.2d 595 (1968). Although retroactivity is the general rule, Wisconsin recognizes a number of exceptions, see Laabs v. Tax Commission, 218 Wis. 414, 261 N.W. 404 (1935). Foremost among these are the exceptions that apply (1) where particular persons have acted in reasonable reliance on the former rule of law and retroactivity would defeat their reliance interests, and (2) where retroactivity would unduly burden the administration of justice. See Fitzgerald, 38 Wis. 2d at 576, 157 N.W.2d at 597. Even assuming that the Commission's decision in this case to follow the standards set forth in the Delaware Valley decision constituted the articulation of a new rule of law under the Wisconsin Fair Employment Act, the general rule would be that this enunciation of a new rule of law would have retroactive effect. Such retroactivity would not unduly burden the administration of justice. The only contention which the Complainant could conceivably make here is that it had a reasonable reliance on the continuation of previously articulated standards for evaluating prayers for fee enhancements, and that applying the new rule of law to its case would defeat its reliance interests. However, for the reasons discussed above, the Commission would consider that any reliance the Complainant had on the continuation of previously articulated standards for determining the appropriateness of a fee enhancement, was unreasonable. As noted, the Delaware Valley decision had been issued, no contrary decision had subsequently been issued by the Commission or any Wisconsin court, the Commission and the Wisconsin courts have traditionally followed developments in federal law on the question of determination of attorney's fees, and the Delaware Valley case had been expressly cited to the Administrative Law Judge by the Respondent as grounds upon which the request for a fee enhancement should be denied. The Complainant ignored the Delaware Valley case at its peril; there is no reason now to allow it to go back and retrace its steps so as to offer the evidence relevant to the Delaware Valley standards which it could have offered to the Administrative Law Judge when the issue was before her.

For these reasons, the Commission has determined that the Complainant's Motion for Bifurcation and Remand should be denied.

110


[LIRC Decision on the Merits, July 17, 1989]

Appealed to Circuit Court.  Affirmed.  Appealed to the Court of Appeals.  Affirmed September 11, 1991 sub nom. Racine Unified School Dist.v. LIRC, 164 Wis 2d 567, 476 N.W.2d 707 (Ct. App. 1991).

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