Questions Answered, More Questions Raised: An Analysis of the Wisconsin Supreme Court’s Decision in Estate of Lorbiecki v. Pabst Brewing Co. 

By: Matthew P. Martin, Meissner Tierney Fisher & Nichols S.C.

I. Introduction 

Earlier this year, the Wisconsin Supreme Court issued its decision in Estate of Lorbiecki v. Pabst Brewing Co.[1] The case involves a number of important issues, such as the scope and application of Wisconsin’s safe-place statute and how the statutory cap on punitive damages found in Wis. Stat. § 895.043(6) should be calculated. But the opinion also raises a host of important issues—like the scope of appellate review of denials of summary judgment—that the court failed to resolve, leaving those questions for another day. This article discusses the court’s decision in Lorbiecki and outlines how the law may develop in light of the questions raised in the opinion.

II. The Lorbiecki Decision

 a. Background

From the 1970s through the 2000s, Gerald Lorbiecki was a steamfitter who was hired by independent contractors and businesses to install or repair pipes located at business facilities.[2] One of the facilities Lorbiecki worked at was the Pabst Brewing Company’s brewery.[3] In the 1970s, Lorbiecki worked to repair piping at the Pabst brewery while under the employ of an independent contractor.[4] 

At the facility, Lorbiecki, along with other steamfitters, cut out the existing insulated pipes and replaced them.[5] The insulation around the pipes contained asbestos, which would become airborne when the insulation was removed.[6] One expert at trial indicated that thousands of pounds of insulation would have been removed.[7] Evidence in the record indicated that Pabst knew that the pipe insulation contained asbestos and that airborne asbestos causes serious illness years before Lorbiecki began his work at the Pabst brewery.[8] It appears that Pabst provided no documentation of asbestos abatement efforts that occurred prior to the early 1990s.[9]

After Lorbiecki was diagnosed with mesothelioma, he brought a lawsuit against Pabst, as well as a number of other businesses and independent contractors that he had worked for over the years.[10] Over the course of the case, all of the claims against the defendants, except for those against Pabst, were dismissed.[11] As to Pabst, Lorbiecki alleged liability for common-law negligence and liability for negligence under Wisconsin’s safe-place statute, Wis. Stat. § 101.11.[12] Lorbiecki contended that Pabst was negligent in failing to prevent him from being exposed to asbestos. (Lorbiecki passed away prior to trial, but for simplicity’s sake, the plaintiff will continue to be referred to as Lorbiecki.[13])

Pabst moved for summary judgment, which the circuit court granted in part and denied in part. The circuit court granted the summary judgment motion as to Lorbiecki’s common-law negligence claim and denied the motion as to Lorbiecki’s claim under the safe-place statute.[14] After the trial, Pabst moved for judgment as a matter of law, which was also denied.[15] 

The jury found in Lorbiecki’s favor, awarding him compensatory and punitive damages. The jury concluded that “$6,545,163.55 would ‘fairly and reasonably’ compensate for all of Lorbiecki’s injuries, but [it] found that most of those injuries were caused by the negligence of four other non-party companies: Sprinkmann, Wisconsin Electric Power Company (WEPCO), Butters-Fetting Company, and Grunau Company.”[16] The jury apportioned 22 percent liability to Pabst.[17] The jury also awarded Lorbiecki $20 million in punitive damages.[18]

Pabst moved for judgment notwithstanding the verdict, which the circuit court denied.[19] The circuit court then imputed Sprinkmann’s 20 percent liability to Pabst—a decision that Pabst challenged at the court of appeals but not the Wisconsin Supreme Court.[20] After applying the statutory cap on loss-of-society and companionship damages, the circuit court allocated 42 percent of the total amount of compensatory damages to Pabst for a total of $2,328,968.69.[21] The circuit court also concluded that punitive damages were capped at two times the total amount of compensatory damages recovered from Pabst, or $4,657,937.38.[22] The circuit court accordingly entered judgment in the amount of $6,986,906.07.

Pabst appealed, but the court of appeals largely affirmed the decisions of the circuit court.[23] Lorbiecki cross-appealed, arguing that the circuit court erred with regard to the cap on punitive damages. According to Lorbiecki, the punitive damages cap found in Wis. Stat. § 895.043(6) caps punitive damages at two times the compensatory damages awarded across all defendants—not merely those compensatory damages Pabst was responsible for paying—before any statutory caps on compensatory damages are applied.[24] The court of appeals largely agreed.  

We conclude that within the punitive damages statute, “the amount of any compensatory damages recovered by the plaintiff” is fixed in relation to the plaintiff’s recovery—not to an amount connected to any particular defendant’s liability or the plaintiff’s recovery from any particular defendant. “Recover” is not the same as “receive a payment;” moreover, the statute here does not address any practicalities of collecting a judgment. A plaintiff’s recovery arises out of the calculation of compensatory damages, even if a plaintiff may never touch a fraction of that amount due to other factors.[25] 

The court of appeals, however, disagreed with Lorbiecki that the compensatory damages are calculated based on the award from the jury prior to any statutory caps on compensatory damages being applied.[26] Accordingly, the court of appeals instructed the circuit court to enter punitive damages in the amount of $11,090,327.10.[27]

b. Wisconsin Supreme Court Decision

Before the Wisconsin Supreme Court were the circuit court’s denials of Pabst’s motions for summary judgment, judgment as a matter of law, and judgment notwithstanding the verdict. To start, the court clarified that Pabst’s appeal of the denial of summary judgment was reviewable under Wis. Stat. § (Rule) 809.10(4), which “brings before the [appellate] court all prior nonfinal judgments, orders and rulings adverse to the appellant and favorable to the respondent . . . not previously appealed and ruled upon.”[28] This was important because, relying on precedent from the Wisconsin Supreme Court that predated the current version of the statute governing appellate review, [29] a recent unpublished court of appeals opinion held that denials of summary judgment are not reviewable.[30] 

The court, however, did not address the scope of appellate review of a denial of summary judgment. When a circuit court denies a motion for summary judgment and the case moves to trial, does a reviewing court look beyond the record as it existed at the time of the circuit court’s denial? As the court explained, it “express[ed] no view regarding the appropriate factual record to consider when, after a trial has taken place, an appellate court reviews a pre-trial order denying a motion for summary judgment.”[31] That is because Pabst’s arguments were “purely legal” and “neither party suggest[ed] there [was] any material difference between the factual records at the time of summary judgment and after trial.”[32] 

With that in mind, the court rejected Pabst’s arguments that it was not liable as a matter of law under the safe-place statute. First, the court rejected that Tatera v. FMC Corporation’s general rule that “a principal employer is not liable in tort for injuries sustained by an independent contractor’s employee while he or she is performing the contracted work”[33] applies to the safe-place statute.[34] Tatera, the court explained, was a common-law negligence case, which has never been applied to the heightened duty of care imposed by the safe-place statute.[35]

The court also rejected Pabst’s argument under Potter v. City of Kenosha (and similar cases)[36] that it had no liability under the safe-place statute because it turned over “complete control and custody of a safe place”—that is, the Pabst brewery—to the independent contractor and did not retain the right to supervise or control the independent contractor’s work.[37] The court concluded that based on the record before it, a reasonable jury could conclude that Pabst retained control over the place where Lorbiecki worked.[38] That was so, the court explained, because Pabst owned the brewery, told the independent contractor it would inspect the work area on a daily basis, and required notification whenever the independent contractor’s employees were going to weld or cut the piping or its insulation.[39] This, according to the court, went beyond the “limited right of inspection” in cases like Potter.[40] 

Next, the court rejected Pabst’s argument under the safe-place statute that a reasonable jury could not find that an unsafe condition existed in the Pabst brewery because undisturbed asbestos is not itself dangerous.[41] The court concluded that it was sufficient that there was evidence in the record that Pabst knew that there were miles of pipes insulated with asbestos, that airborne asbestos is dangerous, and that the steamfitters would need to remove the insulation.[42] There was, thus, evidence that Pabst “had notice of that unsafe condition,” but did not make efforts to remediate the issue until the 1990s.[43] The court determined this analysis was supported by a number of decisions it considered analogous, such as Neitzke v. Kraft-Phenix Dairies, Inc.[44] 

The court next addressed the punitive damages award.[45] Although the court concluded there was sufficient evidence to submit the question of whether to award punitive damages to the jury, the court determined that the court of appeals erred on this issue.[46] According to the court, Wis. Stat. § 895.043(6), which provides that “[p]unitive damages received by the plaintiff may not exceed twice the amount of any compensatory damages recovered by the plaintiff or $200,000, whichever is greater,” does not allow for the counting of compensatory damages attributable to parties that were previously dismissed in the action.[47] 

As the court explained, the word “recovered” in the punitive damages statute refers “only to money or property a plaintiff is legally entitled to receive after prevailing in a case, and thus obtaining a judgment.”[48] “[P]laintiffs cannot recover compensatory damages on the basis of a verdict alone; rather, plaintiffs may recover damages only on the basis of a judgment.”[49] Since Pabst was the “sole remaining defendant at trial”—“and thus the only party against whom Lorbiecki could legally receive compensatory damages after obtaining a judgment”—the compensatory damages that should have been considered under the punitive damages statute were those attributed or imputed to Pabst.[50] So the punitive damages against Pabst were capped at $4,657,937.38.[51]

The court hastened to add, however, that its interpretation of the statute “does not import principles of comparative negligence into the calculation of punitive damages.”[52] “The reason Lorbiecki could not recover any of the other compensatory damages included in the verdict is not because of comparative negligence, but simply because the other alleged tortfeasors were not parties, and thus judgment could not be entered against them.”[53]

c. Separate Writings by Justices Dallet and Ziegler

Recognizing its importance to courts and litigants alike, in a concurrence, Justice Dallet, joined by Justice Hagedorn, expanded on the issue of reviewing the denial of summary judgment.[54] She put the question this way: “When reviewing the denial of summary judgment on appeal, should an appellate court rely only on the pre-trial factual record developed in discovery, only on the evidence admitted at trial, or both?”[55] Somewhat surprisingly, although she acknowledged that “one might think that an appellate court reviewing the denial of summary judgment should rewind the clock to the moment the summary-judgment motion was decided and evaluate, based on the record that existed then, whether there were genuine issues of material fact and the moving party was entitled to judgment as a matter of law,” she suggested that appellate courts might be limited to the trial record in their review of denials of summary judgment.[56]

As Justice Dallet explained, federal courts—which often have a strong influence on Wisconsin jurisprudence[57]—do not “rewind the clock” when reviewing the denial of summary judgment.[58] In federal court, “[d]enials of summary judgment on factual grounds are ‘unreviewable after final judgment.’”[59] Because “the facts of the case are developed and clarified as the case progresses from summary judgment to a jury verdict,” “the summary-judgment record is superseded by the trial record,” rendering the pre-trial record “ancient history” that “is not subject to appeal.”[60] Pure questions of law, however, can be addressed on appeal “even if the party seeking review did not raise them again at trial through a motion for judgment as a matter of law or judgment notwithstanding the verdict” so long as they were raised in a motion for summary judgment.[61] Even when reviewing these pure questions of law, “the pre-trial evidentiary record is irrelevant.”[62] 

Though Justice Dallet suggested that the federal rule might be adopted in Wisconsin, she did not definitively take a stance on the question.[63] She concluded her concurrence by emphasizing the need for guidance in this area of the law, stating

it is important for litigants and courts to have clear guidance on what factual record to consider when the denial of summary judgment is reviewed on appeal. It is not hard to imagine a case in which the evidence at summary judgment will differ markedly from that at trial. Indeed, in such a case, it might be outcome-determinative if an appellate court is supposed to look only at the record as it existed at the time of summary judgment, or only at the trial record, or if fact-bound denials of summary judgment are unreviewable after trial. Accordingly, we should consider clarifying whether we will follow the federal courts’ lead on this question, or to chart our own path.[64]

While Justice Dallet remained somewhat ambiguous regarding her stance on the issue, the dissent—written by Justice Ziegler and joined by Justice Rebecca Grassl Bradley—did not.[65] As the dissent saw things, “failing to review summary judgments using the record at summary judgment effectively denies review.”[66] Anything else would make denials of summary judgment “de facto unreviewable.”[67] The dissent also worried that “it is unclear whether the court’s decision” was “an implicit instruction” to practitioners that they must attempt to seek interlocutory review of denials of summary judgment because no review “will be afforded after trial.”[68] The dissent further observed that interlocutory review is inadequate recourse for defendants since such review is “unlikely to be granted.”[69]

On the substance of the dispute, the dissent did not believe that, based on the records before or after the trial, the plaintiff had adequately shown Pabst was liable under the safe-place statute.[70] Arguing at length, the dissent contended that there was no evidence that Pabst retained control of the Pabst brewery or that there was an unsafe condition in the Pabst brewery prior to the steamfitters conducting their work (because it was undisputed that the undisturbed asbestos was not hazardous).[71] The dissent argued that “the things the majority [said] constitute ‘control’ actually demonstrate Pabst’s compliance with its own ongoing safe-place duties to its employees and evolving OSHA regulations.”[72]

III. Addressing the Questions Left Unresolved by the Lorbiecki Decision 

The Wisconsin Supreme Court’s decision in Lorbiecki is significant both for what it decides and what questions it leaves open for another day. While articles can—and should—be written about the court’s interpretation and application of the safe-place statute, this discussion will focus on what the court decided and left for another day with regard to the review of denials of summary judgment on appeal and how the cap for punitive damages found in Wis. Stat. § 895.043(6) should be calculated.

Starting with the review of denials of summary judgment on appeal, it is welcome news that the Wisconsin Supreme Court clarified that denials of summary judgment are reviewable on appeal, rejecting that the court’s decisions in Wittke v. State ex rel. Smith[73] and Richie v. Badger State Mutual Casualty Co.[74]still apply despite the changes made to Wis. Stat. § (Rule) 809.10(4). As mentioned above, this is an incredibly important determination in light of a recent court of appeals decision that held that a party waived review of a denial of summary judgment because the case proceeded to trial.[75] Whether to apply the federal rule barring review of denials of summary judgment when the denial is based on factual grounds is an interesting question. But, on balance, it would be an error to import the federal rule into Wisconsin jurisprudence. 

As discussed previously, under federal law, “factual issues addressed in summary-judgment denials are unreviewable on appeal,” but “the same is not true of purely legal issues—that is, issues that can be resolved without reference to any disputed facts.”[76] The different treatment for factual issues and legal issues comes down to the purpose of a trial, which is to find facts “not to hash out the law.”[77] A trial record supersedes the pre-trial record; the same is not true for pure questions of law.[78] 

One of the principal reasons that the federal rule should not be brought into Wisconsin law is the difference between the statutes governing appeals at the federal and state levels. Federal law provides that the courts of appeals “shall have jurisdiction of appeals from all final decisions of the district courts.”[79] As the United States Supreme Court has determined, “orders denying summary judgment do not qualify as ‘final decisions’ subject to appeal.”[80] They are interlocutory decisions by nature.[81] Pure questions of law addressed in a denial of summary judgment may be reviewed only because “such rulings merge into the final judgment.”[82]

The Wisconsin statute governing the scope of review on appeal is quite different. It specifically states that an appeal from a final judgment or order brings before the appellate court “all prior nonfinal judgments, orders and rulings adverse to the appellant and favorable to the respondent made in the action or proceeding not previously appealed and ruled upon.”[83] It is difficult to reconcile the federal rule, which would make many denials of summary judgment unreviewable, with the statute’s command that all nonfinal orders and rulings are reviewable on appeal. Similarly, as Justice Ziegler observed in her dissent, looking beyond the record as it existed at the time of the denial of summary judgment would effectively deny review of the denial of summary judgment.[84] 

The federal rule might be supported by the intuition that it makes little sense to go back and review the record as it existed when summary judgment was denied when a more fulsome record is created during a trial. The whole point of summary judgment is to avoid wasting time and money on an unnecessary trial.[85] So, if a trial occurs, the value of summary judgment evaporates. 

That is a fair point. But I see two problems with it. First, Wis. Stat. § (Rule) 809.10(4)’s text appears to include all denials of summary judgment, and one would think that if an exclusion were to exist, it would show up in the text of the statute. It is not as if summary judgment is an unusual litigation tool that might have slipped the drafters’ minds. Second, the point also ignores the unfairness on the other side of the issue. While going through a trial only for it not to matter may be inefficient and wasteful, it is also fundamentally unfair for a defendant to lose a case that it should have won at summary judgment simply because the circuit court erroneously denied summary judgment on a factual ground.

Given the ubiquity of summary judgment motions and the number of denials of summary judgment on factual grounds, it will be important to obtain clarity on this issue soon. In the meantime, attorneys should proceed with caution. Failure to obtain interlocutory review of a denial of summary judgment based on a factual dispute may waive a party’s ability to have that denial reviewed on appeal.

Next there is the court’s holding regarding punitive damages. The court was correct to hold that the statutory cap on punitive damages found in Wis. Stat. § 895.043(6) does not allow circuit courts to consider the compensatory damages attributed by the jury verdict to parties not before the court when calculating the cap on punitive damages. Section 895.043(6) provides that “[p]unitive damages received by the plaintiff may not exceed twice the amount of any compensatory damages recovered by the plaintiff or $200,000, whichever is greater.” If a person or entity is not a defendant before the court, then the plaintiff cannot recover compensatory damages from that person or entity.[86] 

But what if in Lorbiecki the other defendants had not been dismissed? Under those circumstances, would Lorbiecki then have been entitled to the $11,090,327.10 in punitive damages ordered by the court of appeals? The Wisconsin Supreme Court was not faced with that question in Lorbiecki. To my mind, the answer to that question is likely “no.”

First, a reading of Wis. Stat. § 895.043(6) that makes the punitive damages cap contingent on whether other defendants are also found to owe the plaintiff compensatory damages does not mesh well with the point of imposing punitive damages. As the name suggests, punitive damages are, well, a punitive measure against a defendant. “Punitive damages are not awarded to compensate the plaintiff for the loss sustained. They are allowed for purposes of public policy to punish the wrongdoer and to deter him and others from future similar wrongdoing.”[87] In short, they “serve the same purposes as criminal penalties.”[88] That is why the trigger for punitive damages—evidence that the defendant acted “maliciously toward the plaintiff or in an intentional disregard of the rights of the plaintiff”—focuses on the conduct and state of mind of the defendant against whom punitive damages are sought.[89] It is hard to see how it makes sense, given the purposes of punitive damages, to impose a larger punishment on a defendant simply because other persons or entities also caused harm to the plaintiff.  

A similar point can be made with regard to the traditional factors that a jury considers when determining how large of a punitive damages award it should impose. “Factors to be considered in determining the proper amount to be awarded as punitive damages include: the grievousness of defendant’s acts; the degree of malicious intention; the potential damage which might have been done by such acts as well as the actual damage; and the defendant’s ability to pay.”[90] In light of the defendant-focused nature of these factors, it makes little sense to tie the statutory punitive damages cap to the liability for compensatory damages of all of the defendants involved in a matter. 

The court of appeals rejected a similar argument made by Pabst, concluding that the argument poses no problem for the view that the damages calculation for purposes of Wis. Stat. § 895.043(6) should include the compensatory damages owed by each defendant. According to the court of appeals, the argument “ignores that the jury awarded $20 million in punitive damages solely against Pabst; no imputation of punitive damages occurred, so Pabst’s argument that it is being punished for the conduct of others is not persuasive.”[91] This response does not strike me as sufficient. The point is that Pabst would, under this view of the statute, be punished more harshly (many millions of dollars more harshly) because of the harmful conduct of other persons or entities. 

Second, due process concerns are heightened under an interpretation of Wis. Stat. § 895.043(6) that requires the consideration of the compensatory damages owed by all of the defendants.[92] That is because such a reading allows for an enhanced punishment against a defendant because of the conduct of other persons or entities. Due process concerns are also increased because under such a reading, the ratio between the compensatory damages and punitive damages owed by the defendant at issue is likely to be substantially larger than it would be under a reading that focuses exclusively on what the defendant at issue owes in compensatory damages. 

When determining whether a punitive damages award is excessive under the Due Process Clause of the Fourteenth Amendment, courts consider the ratio between the award of compensatory damages and the award of punitive damages.[93] When doing so, courts focus on the portion of the compensatory damages that the defendant at issue is responsible for—not the total award of compensatory damages.[94] In light of this approach under the constitutional analysis, Wisconsin courts are likely to read Wis. Stat. § 895.043(6) similarly to avoid conflicts with the Constitution.[95] 

That said, we will have to wait for future cases to see how the Wisconsin courts handle these issues. 

Author Biography: 

Matthew P. Martin is an attorney in the Litigation Practice Group at Meissner Tierney Fisher & Nichols S.C. His practice focuses on complex commercial litigation, insurance disputes, and appellate advocacy. He is the Editor of the Wisconsin Civil Trial Journal.

Matthew earned his J.D., magna cum laude, from the University of Wisconsin Law School. There, he served as a Note & Comment Editor for the Wisconsin International Law Journal. During his time in Madison, he interned with the chambers of Justice Ann Walsh Bradley and Justice Rebecca Grassl Bradley. He went on to serve as a clerk for both Justice Rebecca Grassl Bradley and Chief Justice Annette Kingsland Ziegler.