Background
For years, Wisconsin attorneys general from both parties resolved civil enforcement actions through settlements that generated “uncommitted” funds — money not designated in the settlement for restitution, attorneys’ fees, or any specific purpose. Rather than routing those recoveries directly to the general purpose revenues of the general fund (where they would be subject to legislative re-appropriation), the AG deposited the funds into the general fund and then credited them to the Department of Justice’s program appropriation under Wis. Stat. § 20.455(3)(g) as “proceeds from services,” retaining discretionary authority to spend the money on DOJ programs.
After Attorney General Josh Kaul took office in 2019, the Republican-controlled legislature argued that Wis. Stat. § 165.10 — which provides that “[t]he attorney general shall deposit all settlement funds into the general fund” — required the AG to credit those funds specifically to the general purpose revenues of the general fund, making them available for legislative appropriation rather than executive spending. After letter exchanges failed to resolve the dispute, the legislature filed suit in Polk County Circuit Court seeking a declaration and injunctive relief to that effect.
The circuit court ruled for the AG, holding that § 165.10 speaks only to where funds must be deposited, not where they must be credited. The court of appeals reversed, reading § 165.10 in combination with §§ 25.20 and 20.906(1) to require that all settlement funds be deposited into the general purpose revenues of the general fund. When the Wisconsin Supreme Court granted review, it also added a second issue sua sponte: whether uncommitted settlement funds constitute “proceeds from services” under § 20.455(3)(g).
The Court’s Holding
A four-justice majority, authored by Justice Dallet, reversed the court of appeals on the § 165.10 question and reinstated the circuit court’s ruling in favor of the AG. The Court held that § 165.10’s command to “deposit all settlement funds into the general fund” is satisfied when the AG places those funds anywhere within the general fund — including a program revenue appropriation. The statute’s plain text imposes only a depositing requirement; it is silent on crediting. Because Wisconsin’s budget statutes treat “deposit” and “credit” as distinct acts with distinct meanings, reading a crediting restriction into § 165.10 would require the Court to add language the legislature chose not to include.
The majority emphasized that program revenue accounts credited to a specific appropriation remain within the general fund; they are not segregated funds. Crediting uncommitted settlement funds to the § 20.455(3)(g) program appropriation therefore does not take those funds out of the general fund in any statutory sense. The Court noted that when the legislature wants to require both deposit into the general fund and crediting to a specific account, it knows how to say so — many other statutes use “deposited in the general fund and credited to” language. Section 165.10 uses no such formulation.
On the second issue — whether settlement funds qualify as “proceeds from services” under § 20.455(3)(g) — the Court was too divided to reach a majority mandate and dismissed that question as improvidently granted. Because neither the circuit court nor the court of appeals had decided the § 20.455(3)(g) question, and because the legislature’s complaint had not sought a declaratory judgment on that issue, the Court found dismissal the appropriate course rather than affirmance. That question accordingly remains unresolved.
Key Takeaways
- Section 165.10’s sole requirement is that the AG deposit settlement funds into the general fund; the statute imposes no restriction on how those funds are credited within the general fund, leaving the AG free to credit them to a program appropriation.
- Wisconsin budget law distinguishes sharply between “deposit” (placing money into a fund) and “credit” (directing money to a specific part of a fund); courts may not conflate the two terms or read crediting rules into a statute that addresses only depositing.
- The question whether civil-action settlement proceeds constitute “proceeds from services” under § 20.455(3)(g) — and thus whether the AG can lawfully credit them to the DOJ program appropriation at all — remains open after the Court dismissed it as improvidently granted.
- Justice Hagedorn concurred on the § 165.10 holding but dissented from the Court’s failure to decide the § 20.455(3)(g) issue, noting that a majority of justices actually agreed on the statute’s meaning but could not agree on how to style the mandate.
- Justice Rebecca Grassl Bradley, joined in part by Justice Ziegler, dissented sharply, arguing the majority ignored the default crediting rule in § 20.906(1) and resolved the dispute along partisan lines.
Why It Matters
The decision preserves a longstanding executive-branch practice — predating Kaul and spanning administrations of both parties — under which the Wisconsin AG retains discretionary control over uncommitted civil settlement recoveries by crediting them to a DOJ program appropriation rather than funneling them to the general purpose revenues subject to legislative re-appropriation. For attorneys general in Wisconsin, the ruling confirms that § 165.10 is a narrow depositing rule, not a vehicle for legislative control over how settlement proceeds are allocated within the general fund.
The unresolved § 20.455(3)(g) question is the litigation’s loose end. A majority of the Supreme Court justices apparently agreed on how that statute should be interpreted, but the Court could not produce an opinion giving effect to that agreement — leaving the parties and lower courts without guidance on whether settlement proceeds legally qualify as “proceeds from services.” That gap virtually guarantees renewed litigation over the same underlying dispute, particularly given the political stakes and the AG’s contested 2026 election.