Lassa v. Rongstad, 2006 WI 105 (Wis. 7/13/2006)

Decision Date13 July 2006
Docket NumberNo. 2004AP377.,2004AP377.
Citation2006 WI 105
PartiesJulie M. Lassa, Plaintiff-Respondent, v. Todd Rongstad and The Valkyrie Group, LLC, Defendants-Third-Party Plaintiffs-Appellants, Does 1-5, in their individual capacities, Defendants, American Family Insurance Company, Intervenor, v. Alex Paul, Third-Party Defendant.
CourtWisconsin Supreme Court

APPEAL from a judgment of the Circuit Court for Dane County, Maryann Sumi, Judge. Affirmed.

ON CERTIFICATION FROM THE COURT OF APPEALS

For the defendants-third-party plaintiffs-appellants there were briefs by Michael P. Crooks and Peterson, Johnson & Murray, S.C., Madison, and oral argument by Michael P. Crooks.

For the plaintiff-respondent there was a brief by Edward R. Garvey, Pamela R. McGillivray, and Garvey & Stoddard, S.C., Madison, and oral argument by Pamela R. McGillivray and John Skilton.

An amicus curiae brief was filed by Brady C. Williamson, Kendall W. Harrison, Brian A. Dillon, and LaFollette Godfrey & Kahn, Madison, on behalf of Wisconsin Manufacturers & Commerce, Wisconsin Newspaper Association, Wisconsin Broadcasters Association, American Civil Liberties Union of Wisconsin Foundation, Wisconsin Realtors Association, Wisconsin Bankers Association, and Wisconsin Builders Association, and there was oral argument by Brady C. Williamson.

An amicus curiae brief was filed by David C. Bender and Bender Law Offices, Madison, on behalf of Wisconsin Democracy Campaign, Inc. and Madison Teachers, Inc.

ANN WALSH BRADLEY, J.

¶ 1 This case comes to us on certification from the court of appeals. It requires that we address the propriety of discovery and contempt sanctions. Although the underlying defamation lawsuit has been dismissed with prejudice, we must nevertheless address on appeal issues that arose while the defamation case was pending.

¶ 2 The underlying defamation suit was brought by Julie Lassa against Todd Rongstad and others, including unknown defendants, based on a political mailer that criticized Lassa. An organization headed by Rongstad, the Alliance for Working Wisconsin, sent the mailer. Rongstad, along with his company, the Valkyrie Group, LLC, appeals the circuit court judgment adopting the parties' settlement agreement, under which Lassa agreed to dismiss her claim with prejudice and Rongstad agreed to pay $65,000 in attorney's fees and forfeitures as sanctions for failing to comply with discovery orders.1

¶ 3 Rongstad asserts that the sanctions in this case cannot stand for essentially four reasons:

(A) The circuit court erroneously exercised its discretion by compelling discovery and imposing sanctions over his claim of constitutional privilege before considering whether Lassa's complaint stated a claim upon which relief could be granted;

(B) The circuit court incorrectly applied the constitutional balancing test under NAACP v. Alabama, 357 U.S. 449 (1958), and other cases interpreting it;

(C) Rongstad made a "substantiated assertion of privilege" under Burnett v. Alt, 224 Wis. 2d 72, 589 N.W.2d 21 (1999), a case involving expert witness privilege, thus providing him with justification for failing to comply with the circuit court's discovery orders; and

(D) The severity of the sanctions imposed bore no rational relationship to Rongstad's conduct or to the harm suffered by Lassa.

¶ 4 In addition, Rongstad argues that we should exercise our superintending authority to establish an interlocutory appeal as a matter of right in cases involving threatened sanctions for refusal to disclose information based upon claims of constitutional privilege.

¶ 5 We address the issues raised by Rongstad's arguments as follows:

(A) In defamation cases, circuit courts should ordinarily decide a pending motion to dismiss for failure to state a claim before sanctioning a party for refusing to disclose information that would identify otherwise-anonymous members of an organization. Under the circumstances here, however, the circuit court did not erroneously exercise its discretion in compelling discovery and imposing sanctions before deciding Rongstad's motion to dismiss.

(B) The circuit court properly rejected Rongstad's assertion of privilege under the balancing test of the NAACP line of cases because Rongstad failed to make the required preliminary factual showing to support his assertion.

(C) Alt has no applicability in this case. The showing that Rongstad had to make was the one required under NAACP, not a "substantiated assertion" of evidentiary privilege under Alt.

(D) We reject Rongstad's challenge to the severity of the $65,000 in attorney's fees and forfeitures because the circuit court did not set that amount—the parties did by stipulation. Rongstad cannot claim that the amount of $65,000 has no rational relationship to the harm suffered or that the court erroneously exercised its discretion in setting the amount. Rather, the issue of the amount of monetary sanctions was pending before the court when the parties stipulated to $65,000. We also determine that Rongstad's challenge to the sanction of a default judgment on liability is moot under the parties' settlement agreement.2

¶ 6 In addition, we decline to exercise our superintending authority to establish an interlocutory appeal as a matter of right in defamation cases involving discovery sanctions that raise questions of a constitutional privilege.3 Accordingly, we affirm the circuit court judgment.4

I

¶ 7 The Alliance for Working Wisconsin is a 501(c)(4) organization whose main purpose is "to educate the public about public policy issues related to business, taxes and families in Wisconsin on a national, state and local level." A few days before the general election in November 2002, the Alliance sent a mailer criticizing then-State Representative Lassa for alleged connections to then-State Senate majority leader Chuck Chvala.

¶ 8 Among other things, the mailer said that Lassa wanted to become a state senator, so she "hooked up" with Chvala. The mailer also stated that "[n]obody knows for sure what she had to promise to gain his approval."

¶ 9 At the time, Lassa was running for re-election to the Assembly. Also at that time, Chvala had just been charged with 20 felonies, including extortion, misconduct while in public office, and falsifying reports to the State Elections Board. The mailer made this apparent by including images of a newspaper clipping and Chvala's booking photograph.

¶ 10 The mailer concluded with this statement:

Extortion, misconduct in public office, pay to play, lying, cheating and stealing. Wisconsin politics has gone completely astray. Please call Julie Lassa . . . and the rest and ask them the tough questions—did you compromise your integrity, did you play along with an illegal game, did you misuse tax dollars to win elections?

And, most importantly, will you please clean up your act?

¶ 11 Lassa filed a defamation action against Rongstad, the Alliance, the Valkyrie Group, and five unknown "Doe" defendants in their individual capacities for their role in publishing and distributing the mailer.5 At the time, she was considering whether to run for her district's state senate seat, soon to be vacant. She immediately sought to depose Rongstad in order to ascertain the identities of the "Does" involved in the mailer. During Rongstad's deposition, Lassa asked him questions regarding who from the Alliance may have played a role in the mailer. Rongstad objected, refusing to answer a number of these and related questions and asserting a constitutional privilege.

¶ 12 The parties called the court to obtain a ruling on Rongstad's assertion of privilege. Rongstad argued that Lassa's questions pertained to the membership of the Alliance and therefore involved constitutionally-protected rights of free speech and freedom of association under the First and Fourteenth Amendments. He relied on a number of cases, including NAACP, in which the United States Supreme Court invalidated a discovery sanction against the NAACP for refusing to disclose membership lists to the State of Alabama in the course of a discovery dispute. Under the principles in those cases, Rongstad contended, Lassa was not entitled to discover the identities of Alliance members.

¶ 13 The court ruled at a hearing the next day, February 4, 2003. It observed that the cases on which Rongstad relied required a preliminary factual showing of a reasonable probability that compelled disclosure of members' identities would subject them to threats, harassment, or reprisals from either government officials or private individuals. The court determined that Rongstad failed to make such a showing. Even if he had, the court determined, the Alliance members' associational rights were outweighed by other interests that the court was required to balance against the members' rights. These other interests, the court explained, included Lassa's interest in clearing her name and the state's interest in preventing fraud and libel, an interest that is heightened during election campaigns.

¶ 14 The court thus overruled Rongstad's constitutional objection to Lassa's questioning. It ordered Rongstad to answer all questions pertaining to the identity of individuals involved in the preparation, funding, or distribution of the mailer.

¶ 15 Although Rongstad's deposition continued, he moved the court to reconsider its February 4 order and submitted an affidavit in an apparent attempt to make the required factual showing. Specifically, Rongstad averred that members of the Alliance had told him that if he was compelled to disclose the identity of members of the organization, they would no longer be interested in participating in the organization or any such organization for fear of public reprisal and potential legal action. The court again determined that Rongstad failed to make the required preliminary factual showing, deeming his affidavit conclusory and insufficient. Thus, the court denied Rongstad's motion to...

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2 cases
  • Lassa v. Rongstad
    • United States
    • Wisconsin Supreme Court
    • July 13, 2006
    ... 718 N.W.2d 673 ... 2006 WI 105 ... Julie M. LASSA, Plaintiff-Respondent, ... Todd RONGSTAD and ... Alt, 224 Wis.2d 72, 589 N.W.2d 21 (1999), a case involving expert witness privilege, ... ...
  • Doe v. Coleman
    • United States
    • Kentucky Court of Appeals
    • June 20, 2014
    ...331 (2013). Still other jurisdictions have addressed the issue through rules of discovery and motions to dismiss. Lassa v. Rongstad, 294 Wis.2d 187, 718 N.W.2d 673 (2006). Having reviewed this jurisprudence from our sister state courts, our Rules of Civil Procedure and our common law, we be......

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