Lassa v. Rongstad, 2006 WI 105

Summary

The Wisconsin Supreme Court reviewed discovery and contempt sanctions imposed on defendants in a defamation action involving an anonymous political mailer. The court held that the circuit court did not erroneously exercise its discretion by compelling discovery and imposing sanctions before deciding the motion to dismiss, and that the defendants failed to make the preliminary factual showing required to assert a constitutional associational privilege. The court also rejected challenges to stipulated monetary sanctions, declined to create an interlocutory appeal as of right for such issues, and affirmed the circuit court judgment.

Holdings

1. In defamation cases, circuit courts should ordinarily decide a pending motion to dismiss for failure to state a claim before sanctioning a party for refusing to disclose information identifying otherwise-anonymous organization members. Under the circumstances presented, however, the circuit court did not erroneously exercise its discretion by compelling discovery and imposing some sanctions before deciding the motion to dismiss.
2. A party asserting a First Amendment privilege against compelled disclosure of organizational members or contributors must make a preliminary factual showing demonstrating at least a reasonable probability that disclosure will cause an actual chilling effect, such as threats, harassment, or reprisals. Rongstad's conclusory affidavit did not satisfy that requirement, so the circuit court properly rejected the privilege.
3. The 'substantiated assertion of privilege' standard from Burnett v. Alt, which concerned an evidentiary privilege involving expert testimony, does not apply to a First Amendment privilege against compelled disclosure of organizational identities. The applicable showing is the objective, preliminary factual showing required by NAACP and its progeny.
4. The court would not review the rationality or discretionary propriety of the $65,000 in attorney fees and forfeitures because that amount was stipulated by the parties while the amount of sanctions remained pending; the circuit court did not set the amount and therefore did not exercise discretion regarding it.
5. The challenge to the default judgment on liability was moot because the parties' settlement agreement and resulting judgment dismissed the underlying defamation claim with prejudice.
6. The court declined to use its superintending authority to establish an interlocutory appeal as of right in defamation cases involving discovery sanctions and constitutional-privilege claims.

Questions Presented

1. Whether a circuit court in a defamation action should ordinarily decide a pending motion to dismiss before compelling disclosure of anonymous organization members and imposing sanctions for refusal to provide that discovery.
2. Whether Rongstad made the preliminary factual showing required under NAACP v. Alabama and related cases to assert a First Amendment privilege against disclosure of organizational membership and contributor identities.
3. Whether the evidentiary-privilege standard from Burnett v. Alt applied to Rongstad's constitutional privilege claim.
4. Whether the stipulated $65,000 in attorney fees and forfeitures bore a rational relationship to the alleged discovery violations and harm.
5. Whether the default judgment on liability remained reviewable after the parties settled and the underlying defamation claim was dismissed with prejudice.
6. Whether the court should use its superintending authority to create an interlocutory appeal as of right for defamation cases involving discovery sanctions and constitutional-privilege claims.

Disposition

affirmed