Wisconsin high court gives Kaul control over settlement money

A lame-duck fight reaches a new endpoint

The Wisconsin Supreme Court ruled 5-2 Friday that Attorney General Josh Kaul may deposit money from multistate lawsuit settlements into the state general fund and credit it to specific state program appropriations, preserving the Department of Justice’s role in directing proceeds from cases it brings.wpr Justice Rebecca Dallet wrote for the court that the attorney general complies with the statute when settlement funds are placed in the general fund, even if they are credited to one or more programs inside it.[0]

The dispute grew out of Republican-backed lame-duck laws passed in 2018 before Democratic Gov. Tony Evers and Kaul took office, including a provision requiring settlement money to go into the general fund.wpr Republican lawmakers sued Kaul in 2021, arguing that he was using accounts he controlled to bypass legislative oversight of state spending.[0]

The majority leaves one lane unclear

The court’s alignment was not purely ideological: conservative Justice Brian Hagedorn joined the four liberal justices on the central question, while conservative Justices Rebecca Bradley and Annette Ziegler dissented.wpr Bradley accused the majority of extending Democrats’ winning streak in litigation against the Republican-led Legislature, while the majority said it was applying the statute’s text.wpr

The ruling did not resolve every budget question tied to settlement proceeds. WBAY reported that the court split over whether some settlement money can be treated as “proceeds from services” by Justice Department or other executive branch employees, leaving that phrase unresolved after the appeals court had not interpreted it.wpr Hagedorn wrote separately that the court’s inability to produce clarity on that issue left the parties without a full guide for future conduct.wpr

Settlement money stays in a wider power struggle

The case is one front in a long-running separation-of-powers fight between Wisconsin’s Democratic executive branch and Republican-controlled Legislature. During March arguments, Kaul’s lawyer said the Justice Department could not spend the disputed money without Joint Finance Committee approval, while the Legislature’s lawyer argued Kaul was finding ways around lawmakers’ effort to rein him in.wbay

The practical stakes include funds recovered when the state sues companies or industries, including money earmarked for restitution, attorneys’ fees or broader public purposes.wpr At oral arguments, justices pressed both sides over why millions should sit unused while the branches fought over control, underscoring how a technical budget dispute had become a test of institutional power.wisconsinwatch