July 22, 2026 – The Wisconsin Supreme Court agreed with the Wisconsin attorney general in his dispute with the Wisconsin Legislature to control settlement funds that the Wisconsin Department of Justice (DOJ) receives, in Wisconsin State Legislature v. Kaul, 2026 WI 28 (July 10, 2026).
“We conclude that the attorney general complies with [Wis. Stat. section 165.10] when, in accordance with the straightforward language of the statute, he deposits settlement funds into the general fund,” wrote Justice Rebecca Frank Dallet for the 5-2 majority that reversed the court of appeals.
Although Justice Brian K. Hagedorn voted with the majority on that issue, he dissented on the majority’s decision not to address whether “proceeds from services” in Wis. Stat. section 20.455(3)(g) cover settlement funds.
“The court’s inability to come together leaves the parties with no clarity about how to conform their actions to the law with respect to § 20.455(3)(g),” Justice Hagedorn wrote.
“It is most unfortunate that the court – even while we agree – cannot produce an opinion effectuating our agreement.”
Justice Rebecca Grassl Bradley, joined in part by Justice Annette Kingsland Ziegler, dissented.
“The majority erases Wis. Stat. § 20.906(1) from this court’s grant order … because § 20.906(1) contradicts the majority’s holding – and the majority knows it,” Justice Bradley wrote.
Settlement Funds
The attorney general, a position established in the state constitution and elected by Wisconsin voters, “represents the state in legal matters,” which can include multistate litigation yielding large settlements.
Jay D. Jerde, Mitchell Hamline 2006, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by
email or by phone at (608) 250-6126.
Although some settlement funds go toward certain purposes, such as for restitution, significant amounts lack earmarks.
Attorneys general aligned with both political parties have deposited uncommitted settlement funds into the DOJ’s program appropriation for “Gifts, grants and proceeds” as “proceeds from services” under Wis. Stat. section 20.455(3)(g).
Starting in 2017, the legislature attempted to limit the attorney general’s authority over uncommitted funds.
The current law, Wis. Stat. section 165.10, requires that “[t]he attorney general shall deposit all settlement funds into the general fund.”
The legislature also capped the amount that the attorney general could spend from Wis. Stat. section 20.455(3)(g).
After Josh Kaul, a Democrat, won election as attorney general, the dispute hardened with the Republican-controlled legislature.
The legislature sued, seeking a declaratory judgment compelling the attorney general to deposit all settlement funds “into the general purpose revenues of the general fund.”
The court of appeals reversed Polk County Circuit Court “because § 165.10, together with two other statutes, §§ 20.25 and 20.906(1), required that ‘all settlement funds must be deposited into the general purpose revenue fund.’”
Depositing and Crediting
Money deposited into the general fund also “must be directed to a specific part of the general fund,” meaning credited to it.
“The default crediting rule” under Wis. Stat. section 20.906(1) requires “that money deposited into the general fund ‘shall be credited to the general purpose revenues of the general fund unless otherwise specifically provided by law,’” the majority explained.
The statutory command requiring the attorney general to “deposit all settlement funds into the general fund” is simple and declarative, the majority said, but “[i]t says nothing whatsoever about where that money may or must be credited after it is deposited.”
The general fund includes both general purpose revenues and “program revenues credited to specific program appropriations,” the majority explained.
“Thus, when settlement funds deposited into the general fund are credited to a specific program appropriation, those funds remain within the general fund.”
“For this reason,” the majority continued, “the attorney general is complying with § 165.10 when he deposits uncommitted settlement funds into the general fund, even if he also credits those funds to a program appropriation.”
As appears throughout statutes, “when the legislature wants to direct both that money is to be deposited into the general fund
and that it must be credited somewhere specific, it knows how to do so,” the majority said.
“But § 165.10 does not even reference crediting, let alone restrict where the attorney general may credit money he deposits within the general fund.”
The attorney general complied with statute by “deposit[ing] uncommitted settlement funds in the general fund, even if those settlement funds are credited to a specific program appropriation within the general fund.”
Justice Hagedorn’s Dissent: ‘Dismissing an
Issue’?
The second issue, interpreting “proceeds from services” in Wis. Stat. section 20.455(3)(g), the supreme court raised on its own.
A 4-3 majority dismissed the issue as improvidently granted, explaining “[t]he court is too divided to reach a majority mandate on the issue.”
Dissenting in part, Justice Hagedorn said, “I am unaware of this court dismissing an issue as improvidently granted.”
He “strongly disagree[d] with the court’s failure to decide” the issue.
“We added this issue to ensure it was separately and fully addressed,” because the court of appeals majority and dissent discussed the statute, Justice Hagedorn explained, “and to ensure the larger dispute between the parties had a resolution.”
“Our disagreement is simply on how to style the mandate on the second issue,” which “will have no practical effect on the parties in this case.”
Justice Bradley’s ‘Preliminary Statement’: ‘The Majority Refuses to Apply the Law’
“The majority refuses to apply the law” – the default crediting statute – “which favors the Republican-controlled legislature over Democrat Attorney General Josh Kaul,” Justice Bradley wrote in a “Preliminary Statement” to her dissent – the portion Justice Ziegler didn’t join.
The majority “misrepresent[ed] the legislature’s argument,” Justice Bradley wrote, and “[t]he majority’s machinations have left insufficient time to convert my previously-drafted opinion into a dissent.”
“This is not the first time justice has taken a back seat to political interests,” Justice Bradley continued, noting “the Democrats’ almost unbroken winning streak in litigation against the Republican legislature since the progressives took control.”
She footnoted a bulleted list of 14 cases demonstrating “nearly unwavering fealty to one party.”
Justice Bradley’s Dissent: The People’s Money
“Wisconsin’s money belongs to the People of Wisconsin,” Justice Bradley wrote, joined by Justice Ziegler, in dissent.
People have a say in how that money is spent through their representatives in the legislature – as provided by Wis. Const. article VIII, section 2, which requires legislative appropriations to spend Wisconsin’s money.
“Attorneys general have resisted these efforts,” Justice Bradley wrote, since 2010.
The attorney general has no spending authority, Justice Bradley clarified. “Once an enforcement action concludes, … the attorney general’s job is done.”
The legislature controls appropriations of uncommitted settlement funds, which are “substantial.”
“[L]arge multistate antitrust and consumer protection enforcement actions” by 2022 had yielded uncommitted settlement funds of nearly $33 million, Justice Bradley explained.
Central to Justice Bradley’s analysis, Wis. Stat. section 20.906(1) “requires all settlement funds to be credited to the general purpose revenues of the general fund, ‘unless otherwise specially provided by law.’”
“The legislature knew when it enacted Wis. Stat. § 165.10 that Wis. Stat. § 20.906(1) would control the crediting of ‘settlement funds’ unless Wis. Stat. § 165.10 said more,” Justice Bradley clarified.
The exception is narrow, Justice Bradley pointed out. Specifically, Wis. Stat. section 20.455(3)(g) isn’t an exception. It is not a place for settlement funds.
“For decades, attorneys general have credited putatively ‘discretionary’ ‘settlement funds’ to the DOJ program appropriation for ‘Gifts, grants and proceeds’” under Wis. Stat. section 20.455(3)(g), Justice Bradley wrote.
“‘Characterizing such funds as ‘discretionary’ lacks any legal basis. The attorney general has no ‘discretion’ over any moneys the legislature has not expressly appropriated to the DOJ by law.’”
This article was originally published on the State Bar of Wisconsin’s Wisbar Court Review blog, which covers case decisions and other developments in the Wisconsin Supreme Court, the Wisconsin Court of Appeals, and the U.S. Court of Appeals for the Seventh Circuit. To contribute to this blog, contact Joe Forward.