Wisconsin Supreme Court Says Overruled Means Overruled

August 17, 2010

In a case about uninsured motorist (UM) benefits, Blum v. First Auto & Casualty Insurance Co., 2010 WI 78, ___ Wis. 2d ___, ___ N.W.2d ___, the Wisconsin Supreme Court ruled that when it overrules a court of appeals opinion, the entire opinion is overruled and retains no precedential value. Thus, court of appeals opinions that are “overruled in part” cannot be relied upon as governing authority for any proposition of law, unless the Wisconsin Supreme Court expressly preserved a portion of the opinion.

In Blum, the court of appeals had ruled that the plaintiff was not entitled to UM benefits based on a portion of one of its previous decisions that the Wisconsin Supreme Court had overruled in part. Blum argued to the Wisconsin Supreme Court that a reasonable reading of the plain language of the insurance policy afforded him coverage and that the policy language should control. He claimed that by relying on a portion of an opinion that was partially overruled, the court of appeals was frustrating the reasonable expectations of an ordinary insured and making insurance policies incomprehensible to a layperson.

The Wisconsin Supreme Court disagreed with Blum’s reading of the insurance policy and ruled that a plain reading of the policy language did not provide coverage. However, it nonetheless ruled that court of appeals opinions that are overruled in part do not maintain any precedential value. Writing for a majority of the Court, Justice David T. Prosser noted that the court of appeals had established a complex and confusing body of law as to what parts of overruled court of appeals opinions retain precedential value and that the court of appeals had applied this body of law in an inconsistent manner. The Court also stated that the court of appeals is an error correcting court that is limited to applying existing precedent and, as such, it should not make determinations as to whether parts of overruled opinions are still good law.

Therefore, the Wisconsin Supreme Court held that “when the supreme court overrules a court of appeals decision, the court of appeals decision no longer possesses any precedential value, unless this court expressly states otherwise.” The Court explained that establishing this bright-line rule would assist the court of appeals in performing its error-correcting function. “The court of appeals is in a better position to apply established law when there is a bright-line rule nullifying the precedential value of an overruled court of appeals decision.” The Court also stated that requiring the supreme court to detail every holding in an opinion it intended to overrule would be cumbersome and would interfere with its function as a law-developing body. Finally, the Court stated that circuit courts and litigants would benefit from the new rule. “[Circuit courts] and litigants do not benefit when they are put in the position of relying on a decision that is of questionable precedential value; relying on a decision that cites such a decision; or having their case decided on precedent that [the supreme court] intended to overrule but had not said so expressly.”

Justice Patience D. Roggensack (herself a former court of appeals judge) disagreed with the new rule announced by the Court and dissented from that part of the opinion. She argued that the bright-line rule adopted by the majority was not necessary and was inconsistent with the way federal courts treat partially overruled opinions. She also argued that the majority opinion would create confusion among attorneys because of the way online legal research engines label overruled opinions. Finally, she noted that the majority’s new rule does not apply to court of appeals decisions that are reversed in part on direct review.

The Wisconsin Supreme Court’s new bright-line rule clarifies that an overruled court of appeals decision loses all precedential value. However, the opinion also creates unanswered questions. For instance, the Court did not expressly address whether the rule applied prospectively or retrospectively. Because the Court ruled that the court of appeals in Blum erred in relying on one of its past opinions, the new rule should apply retrospectively to all previous decisions of the court of appeals that have been overruled in part. Also, Justice Roggensack’s dissent raises the issue of whether the new rule applies to court of appeals opinions that are reversed in part on direct review (as opposed to being overruled in an unrelated case). However, because the Court’s analysis relied heavily on the different constitutional roles performed by the supreme court and court of appeals, it is likely the new rule will apply to court of appeals decisions that are reversed in part on direct review, as well as opinions that are partially overruled in unrelated cases. Finally, the Court did not address how the new rule would apply where a partially overruled court of appeals decision has been cited in a line of cases for an unrelated statement of law. As the Court repeatedly stated that it was establishing a “bright-line rule,” the Blum decision has the potential to invalidate entire lines of cases if based on a portion of a partially overruled opinion.