Opinion ID: 2045142
Heading Depth: 1
Heading Rank: 3

Heading: Fiduciary Breach

Text: ¶ 37. The circuit court determined that the ETF Defendants violated their fiduciary duties as WRS trustees when they implemented Act 27. The court reasoned that the ETF Defendants' duty to administer the trust for the benefit of all annuitants required them to seek court guidance prior to implementing legislation of doubtful constitutionality. See State ex rel. Morse v. Christianson, 262 Wis. 262, 266, 55 N.W.2d 20 (1952). ¶ 38. The court of appeals reversed, concluding that the ETF Defendants did not breach their fiduciary duties. We agree, and adopt the court of appeals' reasoning as our own. When the ETF Defendants perceived a potential conflict between the Act 27 provisions and the existing trust instrument, they sought and received the opinion of the attorney general. They then fully implemented the Act in good-faith reliance on the attorney general's opinion that the legislation was constitutional. By implementing the SIPD legislation, the trustees were complying with the statute as written. Retired Teachers Ass'n, 195 Wis. 2d at 1041. [7] ¶ 39. In addition, the court of appeals noted that Morse does not require resort to a court where the attorney general has already rendered an opinion. Id. at 1043. The Morse court stated that before making expenditures, trustees must seek judicial interpretation of unclear laws. 262 Wis. at 266. However, the court provided no further analysis or support for the proposition. We take this opportunity to supplement the Morse decision, concluding that on these facts, the trustees upheld their fiduciary duties by implementing Act 27 in good-faith reliance on the opinion of constitutionality rendered by the attorney general. Accordingly, we determine that the ETF Defendants did not breach their fiduciary duties by implementing Act 27 without first obtaining a court determination that the statute was constitutionally valid. [21]