Butler campaigned for a seat on the Wisconsin Supreme Court in 2000, but lost his election bid to incumbent Diane Sykes by a wide margin. After being appointed to the Wisconsin Supreme Court in 2004, he was defeated by the Judge Michael Gableman in the April 1, 2008 elections. Butler was the first sitting Wisconsin Supreme Court justice to be defeated in a reelection campaign since 1967. The Wall Street Journal argued this loss stemmed from opinions he wrote in medical malpractice, search and seizure, and product liability cases.[2] Business groups, including Wisconsin Manufacturers and Commerce (WMC), paid for a large number[clarification needed] of issue ads in this campaign cycle, although the Butler campaign outspent Gableman's by several hundred thousand dollars.[3]
Since his defeat, Butler agreed to serve a two-year term as Justice-in-Residence at the University of Wisconsin Law School, where he would teach several courses and clinics for the 2008–2010 academic years.[4]
On September 30, 2009, President Barack Obama nominated Butler to serve as United States District Court for the Western District of Wisconsin.[5] However, his nomination was returned to the President on December 24, 2009.[6] Obama renominated Butler on January 20, 2010, but the Senate returned the nomination to the President on August 5, 2010. Obama then renominated Butler on September 13, 2010. NPR commented on the Senate's reluctance to confirm Butler in an August 4, 2011 article:
"Some of the longest waiting nominees, Louis Butler of Wisconsin, Charles Bernard Day of Maryland and Edward Dumont of Washington happen to be black or openly gay."[7]
His nomination was returned to the President on December 17, 2011, pursuant to the rules of the Senate.[8]