Foxconn legal challenges would go straight to Supreme Court under GOP proposal

By Jason Stein

MADISON - The state Supreme Court could jump ahead of appellate courts and hear potential legal appeals related to a multibillion-dollar flat-screen plant planned for southeastern Wisconsin, under action by a legislative panel Tuesday. 

On party line 12-4 votes, Republicans on the Legislature's Joint Finance Committee amended and then approved the more than $3 billion incentive bill for Foxconn Technology Group Tuesday as part of a marathon week of action on the subsidy legislation and the separate state budget

Environmental groups have said in recent weeks that they would consider suing over the Foxconn legislation, which already exempts the Taiwanese company from certain state rules to protect wetlands and the environment. 

The unusual legal provision would allow parties in environmental and other Foxconn lawsuits to appeal trial court orders related to the plant directly to the state Supreme Court, which is controlled by conservatives. All lower court orders would be automatically suspended until the Supreme Court weighed in. 

Rep. John Nygren (R-Marinette), co-chairman of the Legislature's budget committee, said Republicans were trying to do everything they could do to ensure the up to $10 billion plant moves forward and creates up to 13,000 jobs. 

"This is the most exciting thing to happen to Wisconsin since the cow," Nygren said. 

But Democrats said GOP lawmakers and Gov. Scott Walker were going too far in promising up to $2.85 billion in cash payments to Foxconn, forgoing about $150 million in sales taxes on construction materials, borrowing $250 million to upgrade I-94 south of Milwaukee and rewriting both environmental rules and the legal process for the company. 

"I am very concerned about that," state Rep. Katrina Shankland (D-Stevens Point) said of the legal changes. "I feel like it's rigging the game."

Rick Esenberg, president of the conservative Wisconsin Institute for Law and Liberty, said the direct appeal to the Supreme Court might raise constitutional concerns.

He noted that Congress has required appeals involving the redrawing of legislative districts to go directly to the U.S. Supreme Court, but said federal courts aren't identical to state courts. 

State lawmakers might be infringing on the court system's powers by taking jurisdiction away from the state Court of Appeals and automatically suspending the lower court's order, Esenberg said. 

"It might be a separation of powers problem," he said. "...I think that's a close question."

The Foxconn legislation has already passed the Assembly, but Tuesday's committee changes mean the bill will have to pass that house again in addition to the Senate before it goes to Gov. Scott Walker. 

Under the legislation, the state could pay up to $1.5 billion to Foxconn in cash incentives for job creation over 15 years if the company brings on enough workers. 

Foxconn could also receive up to $1.35 billion in separate cash payments if the company invested in the plant and equipment in Wisconsin, even if the plant turned out to be highly automated and employed fewer workers than expected. The deal doesn't currently contain a minimum number of jobs for Foxconn to receive those payments.

Republicans Tuesday amended the bill to require the Wisconsin Economic Development Corp. to review Foxconn's progress in creating jobs before paying out these plant and equipment subsidies. But the amendment didn't include any minimum job creation numbers for Foxconn, limiting the provision's practical effect.

Tuesday's GOP amendment to the bill would also:

  • Allow Racine or Kenosha counties — the potential sites for the Foxconn plant — to use the county sales tax to pay off loans taken out to build infrastructure to serve the plant. Kenosha currently has a sales tax, but Racine does not. 
  • Increase state grants to the communities that win the Foxconn plant to $15 million, up from $10 million previously. 
  • Require the nonpartisan Legislative Audit Bureau to review the payments of state subsidies to Foxconn every five years, starting in 2018.
  • Give the host community for Foxconn a limited exemption from state spending caps.

Sen. Jon Erpenbach (D-Middleton) said that the deal represented a historic shift for the state, but not a positive one.

"Is this a game-changer? Yes, but it's not the kind of game-changer you want," he said. 

Rep. Dale Kooyenga (R-Brookfield) said he had some concerns about the tax incentives that would result in cash payments from taxpayers to the company. 

But, "you have to look at the entire package," Kooyenga said. "We're having a discussion about bringing an entire industry to Wisconsin and an entire industry to America."