Marino v. Arandell Corp.

• Decision Date: 13 April 1998
• Docket Number: No. 97-C-32.,97-C-32.
• Citation: 1 F.Supp.2d 947
• Parties: Paul MARINO and Alexis Marino, Plaintiffs, v. ARANDELL CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

1 F.Supp.2d 947

Paul MARINO and Alexis Marino, Plaintiffs, v. ARANDELL CORPORATION, Defendant.

No. 97-C-32.

United States District Court, E.D. Wisconsin.

April 13, 1998.

Alan C. Olson, New Berlin, WI, for Plaintiff.

Christopher P. Banazak & Robert K. Shoel, Reinhart, Boerner, Van Deuren, Morris & Rieselback, S.C., Milwaukee, WI, for Defendant.

DECISION AND ORDER

ADELMAN, District Judge.

The sole question addressed by this decision is whether the exclusive remedy provision of the Wisconsin Worker's Compensation Act ("WCA" or "Act") bars the plaintiff Paul Marino's supplemental invasion of privacy claim, brought under Wisconsin's right of privacy statute, Wis.Stat. § 895.50 ("privacy statute").

Paul and Alexis Marino sued Mr. Marino's employer, Arandell Corporation ("Arandell"), in this forum under Title I of the Americans with Disabilities Act of 1990 ("ADA"), as amended by the Civil Rights Act of 1991, alleging intentional discrimination on the basis of Mr. Marino's disability, chronic Hepatitis C. The plaintiffs claim that Arandell conducted prohibited medical inquiries about Mr. Marino's condition, denied him advancement opportunities, and intentionally failed to maintain confidentiality with respect to his medical records, subjecting him to emotional pain and humiliation. In addition to their ADA claim, the plaintiffs have included four supplemental state claims based on Wisconsin law: invasion of privacy, defamation, intentional infliction of emotional distress, and loss of consortium. The state claims, like the federal discrimination claim, arise from the same set of factual allegations, and this court exercises jurisdiction pursuant to 28 U.S.C. § 1367.

Arandell moved for partial judgment on the pleadings pursuant to Rule 12(c), Federal Rules of Civil Procedure, arguing that the plaintiffs' state claims should be dismissed because the Marinos' exclusive remedy under state law is the WCA. See Wis.Stat. § 102.03(2). On February 26, 1998, the court ruled from the bench, dismissing three supplemental tort claims — defamation, intentional infliction of emotional distress, and the attendant loss of consortium — under the reasoning advanced by Arandell and citing direct state precedent. See Jenson v. Employers Mut. Cas. Co., 161 Wis.2d 253, 262-69, 468 N.W.2d 1 (1991) (holding that employee's common law claims for intentional infliction of emotional distress are barred by WCA exclusivity provision); Wolf v. F & M Banks, 193 Wis.2d 439, 455-56, 534 N.W.2d 877 (Ct. App.), rev. denied, 537 N.W.2d 572 (1995) (holding that employee's common law claims for defamation are barred by WCA exclusivity provision); and Rosencrans v. Wisconsin Tel. Co., 54 Wis.2d 124, 128-29, 194 N.W.2d 643 (1972) (holding that common law claims for loss of consortium deriving from employee-spouse's injuries are barred by WCA exclusivity provision).

However, I reserved ruling on the fourth and final state claim, invasion of privacy, until further consideration and briefing by the parties. At this time, I am ruling that Paul Marino's supplemental claim for invasion of privacy is not barred by the WCA under Wisconsin law and will therefore not be dismissed at the pleading stage. Because loss of consortium is unavailable in conjunction with a claim under Wisconsin's privacy statute or under the ADA, Alexis Marino is no longer a party to this action.

Unlike the previously dismissed state claims, a claim under Wisconsin's privacy statute has never been held specifically barred under the WCA's exclusivity provision by Wisconsin courts at any level. Nor has the Seventh Circuit addressed this question. In Johnson v. Hondo, Inc., 125 F.3d 408 (7th Cir.1997), a supplemental state claim brought under Wisconsin's privacy statute was found preempted by WCA exclusivity at the district court level. See Johnson v. Hondo, Inc., 940 F.Supp. 1403 (E.D.Wis.1996). The statutory privacy claim, however, was not analyzed independently by the district court, but was dismissed without comment along with a handful of common law tort claims. On appeal to the Seventh Circuit, the plaintiff failed to brief the privacy claim. Consequently, although the dismissal of the other tort claims was affirmed on appeal, the Seventh Circuit considered the privacy claim waived and expressly declined to address the question of WCA exclusivity in the context of the privacy statute. See Johnson, 125 F.3d at 418 n. 9.

In the absence of a legal ruling directly on point by the highest state court, federal courts should rule as the state supreme court would, if squarely presented with the issue. L.S. Heath & Son v. AT&T Info. Sys., 9 F.3d 561, 574 (7th Cir.1993). Based on the following analysis, the Wisconsin Supreme Court would not find plaintiff's privacy claim barred by WCA exclusivity.

I. Exclusivity Under the WCA

The WCA's exclusivity provision, Wis. Stat. § 102.03(2), like the exclusive remedy provision anchoring any worker's compensation scheme, is crucial to the legislative compromise reflected in the Act. In exchange for guaranteed financial compensation for work-related injuries regardless of fault, employees relinquish their right to bring actions against employers in tort for potentially greater recoveries. Employers, on the other hand, give up their right to ply common law negligence defenses and agree to be strictly liable under the Act's compensation schedule, in exchange for immunity from all tort liability for employees' work-related injuries. County of La Crosse v. Wisconsin Employment Relations Comm'n, 182 Wis.2d 15, 29-31, 513 N.W.2d 579 (1994).

As codified, the exclusivity bar states:

Where [conditions of liability] exist the right to recovery of compensation under this chapter shall be the exclusive remedy against the employer, any other employe of the same employer and the worker's compensation insurance carrier....

Wis.Stat. § 102.03(2).¹ The statutory "conditions of liability" are several, but for the purposes of the present analysis, one is significant: the employee must sustain an "injury" for WCA liability (and thus exclusivity) to exist. § 102.03(1)(a), Wis.Stat. "Injury" is defined in relevant part as "mental or physical harm to an employe caused by accident or disease ..." § 102.01(2)(c).

In the present case, Arandell makes two definitional arguments in support of its contention that Marino's invasion of privacy claim is barred. First, Arandell argues that the alleged intentional work-place disclosure of Marino's confidential medical information is an "accident" within the meaning of the Act, as interpreted by Wisconsin courts.² Second, Arandell argues that the privacy violation which Marino claims to have experienced constitutes "mental harm" within the meaning of the Act, as defined by Wisconsin courts. If both of these conclusions are valid, the defendant argues, then the plaintiff has sustained an "injury" as defined by § 102.01(2)(c), the conditions of liability are thereby satisfied, and WCA affords the exclusive remedy for plaintiff's privacy claim.

The defendant's argument is logical, but, for two interrelated reasons I do not think it compels the conclusion which the defendant advances. First, I believe that Wisconsin case law supports an understanding of "mental harm" which would not encompass the distinct injury that occurs when rights protected by statute or collateral contract are intentionally violated.³ Thus, under the defendant's own analysis, the plaintiff's alleged "injury" in having his privacy invaded is not covered by the Act, and WCA exclusivity would not apply. Coleman v. American Universal Ins. Co., 86 Wis.2d 615, 621, 273 N.W.2d 220 (1979) ("the compensation remedy is exclusive, however, only if the injury falls within the coverage of the act.")

Second, and more importantly, the defendant's analysis is too narrowly focused. To adopt it would efface the purposes behind both statutes at issue — the WCA and Wisconsin's right of privacy statute, Wis.Stat. § 895.50 ("Privacy statute"). In Byers v. Labor and Indus. Review Comm'n, 208 Wis.2d 388, 561 N.W.2d 678 (1997), the Wisconsin Supreme Court overturned an appellate court decision which applied a similar type of analysis to find that emotional injuries sustained by intentional sexual harassment qualified as "mental or physical harm ... caused by accident or disease ..."⁴ So finding, the court of appeals had concluded that the plaintiff's injuries satisfied the WCA conditions of liability and, therefore, any sexual harassment claim under the Wisconsin Fair Employment Act ("WFEA") was precluded by the Act's exclusive remedy provision. Byers v. Labor and Indus. Review Comm'n, 200 Wis.2d 728, 732-34, 547 N.W.2d 788 (Ct.App.1996), rev'd 208 Wis.2d 388, 561 N.W.2d 678 (1997). On review, the Wisconsin Supreme Court expressly assumed that plaintiff's claims satisfied the conditions for liability and were covered by the Act, but, nevertheless, reversed the court of appeals' decision. Byers, 208 Wis.2d at 396 n. 4, 561 N.W.2d 678. The supreme court's conclusion that WCA exclusivity did not bar plaintiff's WFEA claims was based instead on an analysis of the legislative intent of both statutes and a sensitivity to the harmful, unintended consequences of an overly literal analysis, focusing only on the WCA. I believe a similar analysis is in order with respect to the effect of WCA exclusivity on Wisconsin's privacy statute.

II. The Byers Decision

In Byers, the Wisconsin Supreme Court begins its analysis by noting that "the legislature has adopted two statutes ... to address different kinds of work-related harms and to provide different remedies for the harms." Id. at 394, 561 N.W.2d 678. Although both the WCA and the WFEA are potentially applicable to the same set of facts, neither statute mentions the other and both appear all-encompassing. Id. at 394-95, 561 N.W.2d 678. The court describes its duty as harmonizing the two acts in a way "that will give effect to the...