Court Opinion

ID: 9669827
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:09:46.18406+00
Date Added: 2024-06-11T18:16:00.564168
License: Public Domain

ANN WALSH BRADLEY, J.
¶ 86. (dissenting). What happened on June 21, 1995, that transformed the Previant firm's action from a meritorious case into a frivolous claim? The majority fails to clearly answer the question. It nevertheless concludes that on that date, only six weeks after the case was commenced, the Previant firm's suit was so completely lacking merit that "no reasonable basis exist[ed] for a claim."
¶ 87. Could it be, as the majority seemingly suggests, that the filing of a request for the production of documents in this case renders it devoid of merit? Is the majority really contending that it is frivolous for a party to pursue formal discovery without first "avail[ing] itself of information that was available without discovery?" Majority op. at 571. The majority's answers to both questions appear to be "yes."
¶ 88. At the outset, it is important to remember that the entire life of this action spanned nine months: the Previant firm filed the action on May 9, 1995, and indicated that it wished to dismiss the action on Febru*581ary 28, 1996. Prior to filing the action, the Previant firm knew that several female employees of JFI had given birth to children with birth defects, that the JFI plant had frequent ammonia leaks, and that excessive amounts of carbon dioxide often existed in the work environment. It knew that the physician of one of the pregnant employees had indicated that the chemicals at JFI could well have caused the birth defects of that employee's child. The Previant firm was informed that a management employee of JFI had indicated that the company knew of the dangers at the plant and attempted a cover up. A consultant advised the Previant firm that in order to prove that the toxic chemicals caused the birth defects it needed to obtain information concerning the employees' level of exposure to the chemicals.
¶ 89. The Previant firm filed suit and six weeks later requested documents. JFI would not release the requested documents without a confidentiality agreement. After months of wrangling with JFI over the confidentiality agreement, on December 8, 1995, the court signed the order and the Previant firm had access to'those documents numbering well over 200,000.1 On January 31 and February 1, 1996, the Previant firm inspected those documents.
¶ 90. Through that discovery, the Previant firm found documents suggesting that JFI suspected that its chemicals might adversely affect pregnancy. It discovered that almost two years prior to the commencement of the suit, JFI had hired a researcher *582at the University of Minnesota to run a computerized "Med-line" search of articles related to "Spina Bifida and Carbon Dioxide Exposure or Teratogenic Effects of Carbon Dioxide." The documents revealed that JFI produced a "Safety Facts Sheet" indicating that "Concentrations [of carbon dioxide] over 50,000 [parts per million] can deplete oxygen levels which could impact the health of unborn children." It discovered that after an ammonia leak, a JFI supervisor kept any pregnant employees "out of the area for the rest of the evening as a precautionary measure." Significantly it found that a doctor of another pregnant employee had written to JFI informing it that the pregnant employee should discontinue working because ammonia is "harmful to adults" and "is similarly harmful to fetuses whose mothers breathe excessive amounts of the gas."
¶ 91. The Previant firm also learned, after talking with two consultants, that in order to establish causation it would need to obtain very expensive epidemiological studies. The clients did not have the desire to pursue this massive undertaking. Recognizing that without the epidemiological studies, the chance of ultimate success was slim, they instead chose to voluntarily dismiss their suit.
¶ 92. I conclude that an independent review of these facts demonstrates that the suit was not frivolous.2 JFI, by its actions, apparently agrees with me.
*583¶ 93. JFI expended nearly $1 million to defend against the Previant firm's action. Quite simply, it is incongruous for JFI to assert that it is reasonable to spend that amount of money defending the action while at the same time claiming that the claim has no merit. As the Eighth Circuit stated, "On the face of it, there is something very inconsistent with the assertion that the plaintiffs filed a patently frivolous complaint meriting sanctions. . .and contending that it took 279.10 or even 179.10 hours of legal work in order to reveal what defendants contend is obvious." Kirk Capitol Corp. v. Bailey, 16 F.3d 1485, 1491 (8th Cir. 1994) (cited by majority op. at 579). Hours of 179 to 279 constitute only pocket change in comparison to the total number of hours billed by JFI's attorneys in this case — over 2,500. The "inconsistency" increases exponentially as the hours increase arithmetically.
¶ 94. JFI now contends that as of July 1995, two months after the action was filed, it was of the opinion this action was frivolous. Yet, it never raised that issue in its answer or any responsive pleadings. Instead, it waited until the plaintiffs announced their intent to voluntarily dismiss this action before it raised the specter of seeking sanctions. All the while, it continued to spend seemingly unlimited resources to defend an action that it deemed frivolous.
¶ 95. JFI cannot spend unlimited resources to defend a frivolous action without those expenditures becoming frivolous as well. Just how does one rack up over $750,000 in bills in nine months? The attorneys fees claimed by JFI exceeded $45,000 for the pleadings alone. It claimed $43,000 in LEXIS and Westlaw research expenses, over and above the $107,000 in attorneys fees for research.
*584¶ 96. As further detailed below, I agree with the majority that the fees and expenses submitted by JFI are excessive. Majority op. at 579-80. However, the fees and expenses reveal that JFI took this claim seriously because the claim was serious. JFI attacked this case as if it had merit because the case was meritorious. This case was not commenced frivolously; it was not continued frivolously.
¶ 97. The majority agrees with part of that statement. On the one hand it determines that the suit was not frivolous when filed on May 9, 1995. On the other hand it determines that it was frivolous.on June 21, 1995 — 43 days, or a little over six weeks, from filing.
¶ 98. Six weeks disappear with the blink of an eye in ordinary civil litigation. Complex toxic tort cases with multiple defendants only elongate this process. See 1 A Guide to Toxic Torts, § 2.01 (Matthew Bender 1999). Such cases are expensive to litigate and, as a necessary corollary, typically of long duration. See, e.g., In re Joint E. & S. Dists. Asbestos Litig., 52 F.3d 1124 (2d Cir. 1995) (six years); In re Agent Orange Prod. Liab. Litig., 611 F. Supp. 1223 (E.D.N.Y. 1985), aff'd 818 F.2d 187 (2d Cir. 1987) (six years); Ayers v. Township of Jackson, 525 A.2d 287, 292 (N.J. 1987) (nine years). Yet, on June 21, 1995, six weeks after filing the complaint and 22 days before JFI even answered the complaint (July 13, 1995), the majority declares, as a matter of law, that the lawsuit became utterly meritless.
¶ 99. Not only is six weeks a blink of the eye in the life of a toxic tort case, six weeks is a wholly inadequate period of time for plaintiffs' counsel to gather and build what is needed to prove causation in a toxic tort case. Causation is the core of a toxic tort case and, by its nature, is riddled with special and complex problems of *585proof. 2 A Guide to Toxic Torts, ch. 15 (Matthew Bender 1999) ("Special Issues of Cause and Effect in the Defense of a Toxic Tort Case"). Proving causation in a toxic tort case normally requires evidence of the level, date, and circumstances of the chemical exposure, as well as the observed effects of exposure on each of the individual plaintiffs. 2 A Guide to Toxic Torts, § 15.01[6]. All of this proof of causal relationship must be shown in addition to some form of scientific evidence. Yet, according to the majority, plaintiffs' counsel must assemble all of this proof in a six-week period of time.
¶ 100. Setting aside the folly of finding this suit frivolous after only six weeks and before issue was even joined, the majority's rationale underlying its conclusion does not withstand scrutiny. The majority's holding, as I understand it, is that the Previant firm's suit became frivolous on June 21,1995, because on that date the Previant firm served its second request for the production of documents on JFI.3 Majority op. at 575. This ordinary act of formal discovery became egregious, the majority maintains, for two reasons: (1) the Previant firm should not have relied upon the advice of Dr. Dahir who suggested that the Previant firm needed to know the levels of toxic exposure before it could secure an expert opinion on causation; and (2) the Previant firm could have obtained the same information from OSHA without discovery. Majority op. at 570-71.
¶ 101. It is not entirely clear why Dr. Dahir's suggestion is relevant to the majority's conclusions. The Previant firm consulted Dr. Dahir prior to filing the *586suit. This explains why the circuit court's findings regarding Dr. Dahir were in regard to the frivolous filing of the suit (a conclusion, of course, with which the majority disagrees), but it does not explain why the majority extrapolates them to the frivolous continuance of the suit.
¶ 102. In any event, it is elementary that in order to determine whether exposure to a toxic chemical is harmful, it is necessary to know the level or amount of exposure. As this court has previously stated, even normally "benign" chemicals can become harmful if released in excessive amounts. See Donaldson v. Urban Land Interests, Inc., 211 Wis. 2d 224, 233, 564 N.W.2d 728 (1997); Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 F.2d 1037, 1043 (7th Cir. 1992). The majority's attack on Dr. Dahir's opinion, his experience, and his training creates confusion not illumination. It really provides no support for the majority's argument.
¶ 103. Next, the majority suggests that the continuation of the action is frivolous because the Previant firm could have obtained the requested information from OSHA without formal discovery. Majority op. at 570-71.1 am bewildered both by the factual and by the legal assumptions that underlie the majority's assertion. Factually it is not, as the majority repeatedly contends, "undisputed that this information was available to the Previant firm short of discovery." Majority op. at 571. To the contrary, at oral argument the Previ-ant firm maintained that it did check the OSHA records related to JFI. Additionally, the Previant firm argued that such information was of only marginal assistance because the information is limited to what OSHA requires a company to report. These records did *587not provide all the information the Previant firm needed.
¶ 104. More importantly, legally I am aware of no rule of civil procedure in this state that imposes a duty on a plaintiff to exhaust outside sources of information before seeking that information from an opposing party through formal discovery. Certainly there is no such rule imposed by Wis. Stat. ch. 804. Actually such a rule is in conflict with § 804.01(2)(a) which states that "[p]arties may obtain discovery regarding any matter, not privileged...." The majority does not even make a serious attempt to justify its bald assertion that formal discovery on a subject is sanctionable until every alternative source has been exhausted, as its discussion on the matter is bereft of any cited authority on that principle.4 See majority op. at 570-71.
¶ 105. Instead, the majority hangs its hat on what it terms the circuit court's conclusion that "the information the Previant firm claims it needed prior to *588acquiring an expert opinion. . .could have been acquired without discovery." Majority op. at 570. That is not what the circuit court said. Rather the circuit court found that "[i]t was unnecessary, and therefore unjustified, for the Previant Firm to sue JFI to obtain this information" because the documents existed at OSHA. Quoted by majority op. at 565-66 (emphasis added). But the majority has already concluded (contrary to the circuit court) that the Previant firm acted permissibly in filing its suit. Majority op. at 562. Having permissibly filed suit, the Previant firm did not need to access the documents from OSHA; it was permitted by the Rules of Civil Procedure to get them directly from JFI.
¶ 106. Similarly, the majority takes a rather parochial approach to discovery. As the Previant firm's lead attorney indicated at the hearing, the Previant firm suspected that JFI, as a multi-million dollar corporation, might have conducted research on its chemicals and their health effects on employees. This type of information would never have appeared in an OSHA file.
¶ 107. The Previant firm was seeking discovery for more diffuse reasons than just causation. The Previant firm needed access to JFI's records in order to have a more complete picture of what JFI knew, when it knew it, and what it had done with that knowledge.
¶ 108. Having found little success with its "Dr. Dahir" and "OSHA" arguments, the majority resorts to contending that the Previant firm presented disingenuous arguments to the court. The majority rejects the Previant firm's claim that it needed the discovery to obtain expert opinions because "once [the Previant firm] did contact experts, it did not provide those *589experts any of the information it obtained as a result of discovery." Majority op. at 573.
¶ 109. While the majority may be technically correct, it fails to recognize the effect that the confidentiality agreement had on the Previant firm's actions. As part of the confidentiality agreement governing the disclosure of JFI's records, the Previant firm had to "advise [JFI] of the identity of the expert and/or advisor to whom disclosure is contemplated." The anonymity provided to consultants by the rules of civil procedure was eviscerated by the confidentiality agreement. See Fredrickson v. Louisville Ladder Co., 52 Wis. 2d 776, 782, 191 N.W.2d 193 (1971); Wisconsin Discovery Law & Practice, § 8.11; Patricia Graczyk, The New Wisconsin Rules of Civil Procedure, Chapter 804, 59 Marq. L. Rev. 463, 474-75 (1976).
¶ 110. Had the Previant firm done what the majority would seem to require — "provide those experts. . .the information it obtained as a result of discovery" — the identity of its consultants would have been revealed to JFI. Following the requirement of the majority would unfairly force the Previant firm's hand.
¶ 111. Tellingly, the majority has nothing to say about the effect that the confidentiality agreement had on the Previant firm's decision not to show its consultants documents obtained from JFI. There was no duplicity on the part of Previant, only cautious lawyer-ing.5 By suggesting otherwise, the majority further *590exhibits that its conclusion is inconsistent with the facts and law guiding this case.
¶ 112. Finally, I note that in remanding this case to the circuit court for a determination of the reasonable amount of fees and expenses, the majority correctly questions whether the defendants have fulfilled their duty to mitigate those fees and expenses. Majority op. at 579. As discussed above and as noted in the majority opinion, it is difficult to "square JFI's varying views that causation was impossible to prove as a matter of law and the need to expend the hundreds of thousands of dollars that JFI expended in defending this suit." Majority op. at 579 (citing Kirk Capitol Corp., 16 F.3d at 1491). It is inconsistent for JFI to contend that continuing the lawsuit is patently frivolous while at the same time giving credence to the suit's merit by spending excessive sums in JFI's defense.
¶ 113. The majority also correctly notes in its opinion that the plaintiffs allege two claims each against JFI, one in common law negligence and the other under the safe place statute. Majority op. at 543. The majority, however, declines to determine whether the safe place claims were frivolously continued and makes a conclusion only with regard to the common law negligence claims. Majority op. at 573.
¶ 114. As a result, upon remand JFI will have the burden of proving what amounts of its claimed fees and expenses are attributable only to the "frivolous" common law negligence claims. No fees and expenses may be assessed for the defense of the safe place claims. Any doubt as to whether an amount is attributable only to the common law negligence claims should be resolved in favor of the Previant firm. See Juneau County, 221 Wis. 2d at 640.
*591¶ 115. Upon remand and consistent with the majority opinion, the circuit court should deduct from the requested amount all fees and expenses incurred prior to June 21,1995. Next, it should allow fees and expenses that are attributable only to the "frivolous" continuation of the common law claims. Finally, in fashioning the award, the circuit court should consider JFI's duty of mitigation. As the majority quoted, "A party having vigorously resisted a baseless claim may therefore find that the court, in making an award, will consider its expenditures to have been excessive." Majority op. at 578 (citing Brown v. Federation of State Medical Boards of U.S., 830 F.2d 1429, 1439 (7th Cir. 1987)).
¶ 116. In sum, the majority is correct to conclude that the Previant firm's action was not frivolous when it was commenced. However, its conclusion that the Previant firm continued a frivolous action as of June 21, 1995, six short weeks into the litigation, is merit-less. Accordingly, I dissent.
¶ 117. I am authorized to state that CHIEF JUSTICE SHIRLEY S. ABRAHAMSON joins this opinion.

 This is not to say that the case sat idle until that time. From the middle of June until early November, both the Previant firm and JFI debated, weekly at times, issues related to venue, substitution of judges, third-party complaints, and other various items common to complex litigation.

 As we reiterated earlier this term, frivolousness is a mixed question of law and fact. Juneau County v. Courthouse Employees, 221 Wis. 2d 630, 639, 585 N.W.2d 587 (1998). While a circuit court's findings of fact are not upset unless they are clearly erroneous, whether those facts constitute frivolousness is a question of law that we review independently of the determinations of the circuit court. Id.

 Also on that date, the Previant firm served JFI notice of a deposition of one of its officials and JFI requested a confidentiality order.

 The majority castigates the Previant firm's actions as "filling] first and ask[ing] questions later." Majority op. at 569. It is difficult to reconcile this statement with the majority's earlier conclusion that the Previant firm had a reasonable basis in fact and law to file the action. Majority op. at 562.
The majority suggests that it does not hold "that as a matter of course a plaintiff must exhaust outside sources of information before embarking on formal discovery." Majority op. at 568. Yet that assertion is contradicted by the majority's next words: "we do believe that a plaintiff may not rely on formal discovery to establish the factual basis of its cause of action." Majority op. at 568.
The majority's problem, of course, is that it has already held that the plaintiff did establish the "factual basis of its cause of action" at the time of filing. Under the rules of civil procedure, unlocking that door permits a plaintiff to enter the world of formal discovery.

 To the extent that the majority implies that the Previant firm had no discussions with its consultants about what it found in JFI’s records, that assertion is not supported by the record. The circuit court's findings of fact on this issue stated only that the Previant firm's consultants were not "shown any of the documents produced by JFI."