MADISON, Wis. (CN) - The Wisconsin Supreme Court on Wednesday refereed the latest squabble between the Republican-controlled Legislature and the Democratic attorney general, this time over settlement revenue.
"I think both sides have overcomplicated the legal scheme here to fit their argument when really the text is extremely clear," said Justice Rebecca Bradley.
In 2017, the Wisconsin Legislature passed a package of laws aimed at limiting the power of newly elected Governor Tony Evers and Attorney General Josh Kaul in a lame duck session held before the Democrats assumed their offices.
One of those is a catch-all that requires Kaul "deposit all settlement funds into the general fund."
The statute is brief, maybe too much so. Kaul interprets it to mean that he can deposit settlement funds into any subaccount within the general fund, while the Legislature argues it intended him to deposit them into the "general purpose revenues" account within the general fund.
The Legislature sued Kaul in Polk County Circuit Court for avoiding legislative oversight by crediting funds to the "program revenue appropriation" within the general fund. The court agreed with Kaul, and an appellate panel later sided with the Legislature.
On Wednesday, the Wisconsin Supreme Court grilled both sides - each for over an hour - apparently frustrated with the Legislature for allowing the funds to sit in the general fund unspent and with the attorney general's broad reading of the statute.
"The attorney general wouldn't dispute I'm sure who this money that he and the Legislature are fighting over belongs to," Bradley asked of Assistant Attorney General Hannah Jurss, arguing on behalf of Kaul.
Jurss began to say the money belongs to the state, before Bradley cut her off: "No, it belongs to the people of Wisconsin. This is taxpayer money. How does it serve the people of Wisconsin that millions are just sitting in this account?"
The justices didn't make the attorney general shoulder that burden alone. Justice Susan Crawford posed a similar line of questioning to the Legislature's attorney, Misha Tseytlin, who was recently mentioned in a lawsuit accusing the Legislature of wasting taxpayer dollars on outside counsel.
"The Legislature accomplished its goal to prevent the attorney general from spending settlement funds, and now those are just sitting there," Crawford said after confirming that nothing is preventing it from spending the money.
The Legislature has control over settlement funds deposited in the general fund whether they are credited to Kaul's preferred appropriation or the general purposes revenue appropriation, making this lawsuit largely about power and politics.
Judge Maria Lazar wrote the majority appellate opinion in the Legislature's favor and ordered Kaul to stop dodging legislative oversight in October 2025.
The Legislature argued in its briefs that the brief catch-all statute was intended to prevent the attorney general from circumventing the Legislature's Joint Committee on Finance by depositing funds into a "gifts, grants and proceeds" general fund, which his office has discretion over.
Kaul, however, claimed the law was intended to strip his office of its power. Jurss argued there are parallel laws that dictate how certain settlement funds should be credited.
The Legislature countered that argument Wednesday by pointing to a "default rule" within the statutes that directs all state funds to the treasury to be credited to the general purposes revenues "unless specifically provided by law."
The justices found the attorney general's understanding of what is covered by "all proceeds from services" to be overly broad. But they also questioned the reach of the Legislature's argument that the default rule, when read in tandem with the catch-all statute, is clear enough.
Kaul prevailed in his countersuit against the Wisconsin Legislature in June 2025 when the Wisconsin Supreme Court overturned one of the lame duck laws, finding it violated the separation of powers.
The law had shifted the power of approving civil settlements involving the state from the attorney general to the Joint Committee on Finance, controlled by state Republicans. The court said that the Legislature can establish the scope of Kaul's litigation power, but it cannot execute those powers itself.
Kaul told Courthouse News in December 2024 after Lazar's appellate opinion that the lame duck laws are "senseless" and that he believes himself to be on the right side of the issue.
Lazar is currently running for a vacancy on the Wisconsin Supreme Court created by Bradley's retirement. The conservative-leaning judge will face off in April against one of her colleagues on the appellate bench, liberal-leaning Judge Chris Taylor.
The parties declined to comment after the grueling arguments, but shook hands after the justices departed to chambers.
Source: Courthouse News Service
