Why It Matters
A Wisconsin Supreme Court decision upholding the attorney general’s authority over where settlement money is deposited resolves a dispute over control of funds flowing from litigation settlements. The ruling clarifies the balance of power between the state’s executive branch and the legislature over the use of settlement revenue.
What Happened
The Wisconsin Supreme Court ruled 5-2 on Friday that Attorney General Josh Kaul has authority to determine how settlement funds from the Department of Justice are deposited and allocated within the state treasury. Justice Rebecca Dallet authored the majority opinion, with Justice Brian Hagedorn filing a partial concurrence.
The case centered on a 2018 law enacted during the legislature’s lame-duck session after the elections of Democratic Governor Tony Evers and Democratic Attorney General Kaul. That law required the attorney general to deposit settlement money into the state’s general fund, a provision aimed at limiting the executive’s discretion over the funds.
Since the law’s passage, Kaul has deposited settlement earnings into the general fund while crediting the money to specific DOJ programs within that fund. The Republican-controlled legislature challenged this practice, arguing Kaul was circumventing the intent of the statute to maintain legislative control over how the money would be spent.
Dallet’s majority opinion focused on the plain language of the statute. She wrote that the law imposed “a single, narrow restriction on where that money must be deposited (into the state treasury, specifically ‘the general fund’),” leaving the attorney general latitude in how those funds are then allocated within the treasury system.
Justice Rebecca Bradley dissented, joined in part by Justice Annette Ziegler. Both justices had signed off on the original lame-duck legislation. Bradley argued that the majority was refusing to apply the law in a way that would have favored the legislature’s intent to control settlement revenue.
By the Numbers
5-2 — the vote margin of the court decision
2018 — year when the contested law was enacted and when Evers and Kaul were elected to office
Zoom Out
The dispute reflects a broader tension in state governance between executive and legislative authority over public funds. Lame-duck sessions—where legislators continue serving after elections but before their successors take office—have become a vehicle for parties losing control of the executive to constrain incoming administrations through legislation that limits executive discretion. Wisconsin’s experience mirrors similar conflicts in other states where divided control of government has led to statutory constraints on executive branch spending and fund management.
The settlement fund dispute also illustrates how control of the judiciary can influence outcomes in partisan governance battles. The court’s composition shifted in recent years, and the majority’s interpretation of the statute favored the sitting Democratic attorney general over the Republican legislature.
What’s Next
The ruling closes the immediate legal dispute, allowing Kaul to continue crediting settlement funds to DOJ programs within the general fund without further judicial challenge on this issue. The legislature retains the option to revisit the statute through new legislation, though doing so would require navigating potential gubernatorial veto or court challenge. The decision may also influence how future administrations and legislatures structure settlement agreements and fund allocations.