“The Kaul Doctrine” – Exclusive Executive Authority to Settle Civil-Enforcement and Agency-Directed Litigation

1. Introduction

On 17 June 2025 the Wisconsin Supreme Court delivered a unanimous decision in Josh Kaul v. Wisconsin State Legislature, 2025 WI 23, that will likely reverberate far beyond the Badger State. Confronting an amendment enacted during Wisconsin’s 2018 “lame-duck” session, the Court struck down a statute requiring the Attorney General (AG) and Department of Justice (DOJ) to obtain prior approval from the Joint Finance Committee (JFC) of the Legislature before settling most civil cases. The plaintiffs—Attorney General Josh Kaul, DOJ, Governor Evers, and the Secretary of Administration—challenged the statute only as it applied to two discrete classes of litigation:

Civil-enforcement actions (e.g., environmental, consumer-protection, financial-regulation cases brought in the name of the State), and
Agency-directed actions (cases that executive-branch agencies ask DOJ to prosecute—often breach-of-contract or tort actions designed to protect state programs or assets).

The central issue: whether the Legislature may constitutionally insert itself into the executive’s decision to compromise or discontinue these suits. As Justice Hagedorn wrote for a unanimous Court, “settling these two categories of cases is within the core powers of the executive branch,” and any legislative veto “violates the Wisconsin Constitution’s separation of powers.”

2. Summary of the Judgment

1. The Court reversed the Court of Appeals and reinstated the circuit court’s summary-judgment ruling in favor of DOJ.
2. It held that:

Litigation and settlement in civil-enforcement and agency-directed cases unmistakably constitute core executive functions.
The Legislature failed to identify any countervailing “institutional interest” grounded in the Constitution—such as control over appropriations—that could transform those functions into an area of shared power.
Therefore, Wis. Stat. § 165.08(1), as amended by 2017 Wis. Act 369, is unconstitutional as applied to those two categories. JFC pre-approval may not be required.

3. The decision articulates a new, clearer rule—dubbed here the Kaul Doctrine: When the Legislature statutorily authorises the Attorney General to initiate civil actions in execution of state law, the accompanying discretion to resolve those actions (including through settlement) belongs exclusively to the executive, unless the Legislature can demonstrate a constitutionally rooted institutional interest in a specific case or subset of cases.

3. Analysis

3.1 Precedents Cited and Their Influence

Service Employees International Union, Local 1 v. Vos, 2020 WI 67 (“SEIU”)
• The Court in SEIU upheld § 165.08 against a facial challenge, holding that legislative involvement might be permissible in some situations where an “institutional interest” is implicated (e.g., settlements that require expenditures from the state treasury).
• In Kaul, the Court explained that SEIU never declared litigation to be a shared power in every context. Rather, it left open “as-applied” challenges—which DOJ now prevailed on for two specific categories.
Buckley v. Valeo, 424 U.S. 1 (1976) (U.S. Supreme Court)
TransUnion LLC v. Ramirez, 594 U.S. 413 (2021)
Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476 (D.C. Cir. 1995)
• These federal authorities underscore that litigation on behalf of the sovereign—deciding whom to sue, how aggressively to pursue claims, and how or whether to settle—is quintessential executive work.
Wisconsin separation-of-powers canon—a line of cases from State v. Holmes (1982) to Evers v. Marklein (2024). They define “core powers” (exclusive) and “shared powers” (overlapping) and the “undue burden” test when overlap exists.

3.2 The Court’s Legal Reasoning

Step 1 – Clarify Standard
• Because this is a “category-specific (hybrid) challenge,” DOJ had to show there is no constitutional application of the statute within each category.
Step 2 – Identify the Nature of the Power
• The power to “faithfully execute the laws” (Wis. Const. art. V, § 4) includes litigating to enforce those laws.
• Settlement is inseparable from litigation strategy; discretion over compromise is part of execution.
Step 3 – Test for Legislative Institutional Interest
• The Legislature posited two interests: (a) taxation/revenue and (b) general policymaking (the “power of the purse”).
• The Court rejected both:
- Article VIII § 5 (tax uniformity) gives the Legislature authority to levy taxes, not to micro-manage incoming revenue streams.
- Policy preference arguments are too attenuated; once the Legislature grants statutory authority, execution (including policy-tinged discretion) belongs to the executive. If the Legislature disapproves, it may change the statute prospectively, not veto individual settlements.
Step 4 – Apply Separation-of-Powers Doctrine
• Because the Legislature failed to show a constitutionally grounded shared power, settlement authority in these categories remains core to the executive.
• Any legislative attempt to wield that power is per se unconstitutional; no need to apply “undue burden” balancing.

3.3 Potential Impact

1. Immediate Practical Effect: DOJ regains unilateral authority to settle:

Environmental, consumer-protection, and other civil-penalty suits.
Agency-referred contract or tort actions (e.g., highway damage claims, Medicaid fraud).

2. Legislative Strategy: The ruling does not strip the Legislature of all influence. It can:

Amend substantive statutes to narrow DOJ settlement discretion (e.g., require certain recoveries to be deposited into the general fund).
Mandate reporting and transparency.
Use appropriations power to limit expenditures after funds reach the treasury.

3. Future Litigation:

Any statute allowing legislative committees to veto or pre-approve executive enforcement decisions will be scrutinised under the Kaul Doctrine.
State high courts or legislatures in “divided government” states may revisit similar oversight mechanisms adopted during lame-duck sessions.

4. Theoretical Clarification: The decision tightens the analytical framework introduced in SEIU by:

Re-affirming that litigation is predominantly executive.
Limiting the “borderlands” of shared power to concrete, text-based constitutional interests (e.g., Art. VIII § 2 appropriations).

5. Political Dynamics: Governors and AGs gain leverage in nationwide settlement negotiations (opioids, PFAS, data-privacy, etc.) because counterparties can rely on finality without legislative second-guessing.

4. Complex Concepts Simplified

Core Powers – Powers the Constitution unmistakably vests in a single branch (e.g., legislating, executing, adjudicating). Another branch may never exercise them.
Shared Powers – Functional overlap where the Constitution implicates more than one branch (e.g., sentencing: Legislature sets penalties; courts impose; Governor pardons). Courts then ask whether one branch’s action “unduly burdens” another.
Institutional Interest – A concrete, text-based constitutional responsibility (not merely a policy disagreement) that justifies cross-branch involvement. Example: the Legislature’s appropriations power lets it control settlements that spend state money.
Facial vs. As-Applied vs. Category (“Hybrid”) Challenge –
- Facial: invalid in all circumstances.
- As-Applied: invalid in one specific factual scenario.
- Hybrid/Category: invalid for an entire subset of scenarios (here, two classes of lawsuits).
Joint Finance Committee (JFC) – A powerful bicameral body in Wisconsin that reviews budgetary and fiscal matters; here it was given veto authority over settlements.

5. Conclusion

Kaul v. Wisconsin State Legislature solidifies a clean doctrinal line: once the Legislature delegates enforcement authority to the Attorney General, the settlement of those enforcement actions is normally the executive’s exclusive domain. The Legislature may still define what claims exist and how recovered funds are ultimately allocated, but it cannot sit as a co-counsel second-guessing each compromise. By striking down the JFC veto mechanism for civil-enforcement and agency-directed suits, the Wisconsin Supreme Court both recalibrates state power dynamics and furnishes a roadmap for other jurisdictions wrestling with post-election “lame-duck” constraints on executive functions. The Kaul Doctrine thus stands as a robust affirmation of classical separation-of-powers principles in the modern regulatory-litigation era.