Court Opinion

ID: 9654543
Source: CourtListenerOpinion
Date Created: 2023-08-23 18:25:26.015959+00
Date Added: 2024-06-11T18:13:10.409129
License: Public Domain

FINE, J.
(concurring). I concur in the majority opinion, and write separately merely to point out what we do not, in my view, decide.
As the majority notes, First Bank and the Milwaukee Economic Development Corporation perfected their security interests before Gary G. Pfister started to work for Precision Analytical Laboratory. Majority op. at 250-51 n.4. Thus, at the time they obtained protection for their extension of credit to Precision, they had no way of knowing that their security was at the *271mercy of Pfister's potential wage-claim lien. I thus question whether First Bank or Milwaukee Economic Development had sufficient knowledge "of the potential impact" (majority op. at 260) of Pfister's wage-claim lien on their perfected security interests to defeat their impairment-of-contracts argument. As the majority also notes, however, neither First Bank nor Milwaukee Economic Development makes this argument. Majority op. at 557 n.4. Accordingly, whatever merit it may have, that argument is waived in this case.
Under existing precedent, those who enter into economic arrangements that are already subject to state regulation or modification have no basis to complain that the state has impaired contractual relations if the state changes the rules so long as there is sufficient notice that and how the rules might change. Veix v. Sixth Ward Bldg. & Loan Ass'n, 310 U.S. 32, 38 (1940). Veix held that a person who purchased shares in a New Jersey building and loan association did not assert a valid impairment-of-contracts claim when, subsequent to the purchase and in response to the economic disruptions of the 1930s, the New Jersey legislature restricted his right to redeem those shares:
It was while statutory requirements were in effect that [Veix] purchased his shares. When he purchased into an enterprise already regulated in the particular to which he now objects, he purchased subject to further legislation upon the same topic.
Ibid. Here, as the majority points put, First Bank and Milwaukee Economic Development were on notice that their security interests could be swallowed by wage-claim liens, and a subsequent change in the enforcement mechanism did not unconstitutionally impair *272either their contracts with Precision or their perfected security interests. There may be situations, however, where a party extends credit to an employer in return for a security interest in that employer's property knowing that although its security interest can be subject to superpriority liens for unpaid wages, the employer's work force at the time is sufficiently small so that there is little risk that, given value of the property subject to the security interest, wage-claim liens will consume the security. Under such circumstances an unexpected jump in the employer's work force, which leads to wage-claim liens that were not anticipated (whether legitimate or a ruse to defeat the security) may raise impairment-of-contract considerations. As I understand it, we leave this issue for another day.