The Wisconsin Supreme Court on Friday affirmed that the attorney general can decide how money from legal settlements handled by the Department of Justice is credited after it is deposited into the state's general fund, a decision that restores executive branch discretion over those dollars.
The 5-2 opinion — with a partial concurrence from Justice Brian Hagedorn — struck down a 2018 statute passed during a Republican lame-duck session that required settlement proceeds be deposited into the general fund and, according to the Legislature's argument, intended to hand control of the money to lawmakers.
What changes for residents
For taxpayers and state agencies, the ruling upholds the attorney general's current practice of placing settlement receipts into the general fund and then crediting those amounts to specific Department of Justice program accounts within that fund. That preserves a method proponents say allows the DOJ to ensure settlement money is used for the purposes tied to enforcement and victim services rather than being treated as unrestricted revenue.
The dispute began after the 2018 law passed during the transition from a Republican administration to the elected Democratic governor and attorney general. Since taking office, Attorney General Josh Kaul has deposited settlement sums into the general fund and then credited them to DOJ accounts. Legislative Republicans challenged that approach, saying it undercut the purpose of the lame-duck statute.
"[The statute] entitled 'Deposit of settlement funds,' provides in its entirety that '[t]he attorney general shall deposit all settlement funds into the general fund,'" Justice Rebecca Dallet wrote for the majority.
Dallet wrote that the statute plainly mandates the deposit location but does not specify how the funds must be credited after deposit. The majority declined to read additional restrictions into the law beyond its explicit text.
Legal and practical implications
The ruling resolves a constitutional and administrative tug-of-war over control of settlement money that can fund consumer protection, enforcement, victim assistance and other DOJ programs. It limits the Legislature's ability to reassign those funds simply by prescribing where they must be deposited.
- Vote: 5-2 in favor of the attorney general's authority to credit accounts after deposit.
- Contested law: 2018 lame-duck statute requiring deposit into the general fund.
- Effect: Upholds current DOJ practice of depositing then crediting settlement funds.
| Item | Detail |
|---|---|
| Court decision | 5-2 majority; partial concurrence by Justice Hagedorn |
| Key legal question | Whether the attorney general may credit settlement funds to DOJ accounts after deposit |
| Statute at issue | 2018 law titled "Deposit of settlement funds" |
The Legislature had urged a strict reading of the statute, saying its plain words showed intent to shift fiscal control to lawmakers. The majority opinion, however, found the statute’s single declarative sentence described where funds must be placed but did not dictate subsequent crediting decisions.
The decision will influence how future settlements are administered and could affect budgets for programs tied to DOJ settlements. State agencies that rely on credits from settlement receipts will continue to receive funds under the accounting method the attorney general has used since taking office.
The case highlights continuing tensions between Wisconsin’s legislative and executive branches over fiscal authority and the limits of statutes passed in transition periods. Attorneys for the Legislature and the attorney general’s office presented competing interpretations of statutory text during oral arguments in March; the court’s ruling adopts the executive’s interpretation in this contest.
Implementation details and any follow-up actions by the Legislature or executive branch agencies will be watched closely in the coming weeks as officials adapt to the court’s guidance.
Brooke Steiner is the Wisconsin correspondent for News Block.
