The Appellate Strategist

The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

California Supreme Court In 2015: A Year In Transition

Posted in Appellate Practice, California

7323267556_e8cbc65a8bOriginally published on Law360, Feb. 4, 2016. Posted with permission.

2015 was a year of transition for the California Supreme Court as two new justices appointed by Gov. Jerry Brown, Justices Mariano-Florentino Cuellar and Leondra R. Kruger, took office in early January. Because the new justices replaced Republican appointees, there has been widespread speculation that the court’s decisions might move in a more liberal direction. One year into the new justices’ tenure, the statistical evidence for any marked shift at the court is decidedly mixed.

For 2015, the court decided 32 civil cases and 44 cases from the criminal, quasi-criminal, juvenile and disciplinary side of the docket. Final judgments made up 46.88 percent of the court’s civil docket; an additional 15.63 percent arose from petitions for writs of administrative mandate, with 6.25 percent involving petitions for writ of mandate taken from decisions of the lower courts. Appeals from orders relating to arbitration and workers’ compensation appeals amounted to 6.25 percent of the civil docket apiece. The criminal docket was dominated by review of final decisions (45.45 percent of the docket) and review of death penalty judgments (38.64 percent). An additional 9.09 percent of the docket arose from petitions for writs of habeas corpus.

Not surprisingly, Los Angeles dominates the court’s civil docket, producing 34.48 percent of the caseload. Orange County was next, with 15.63 percent of the civil docket, followed by Alameda and San Diego counties, which accounted for 9.38 percent each. San Francisco and the Workers’ Compensation Board accounted for 6.25 percent of the court’s civil docket apiece.

The criminal docket this past year was more widely dispersed than the civil docket was. Riverside County was the leading source of criminal cases, but accounted for only 15.91 percent of the criminal docket. Another 13.64 percent of the docket arose from Los Angeles County Superior Court. Orange County accounted for 11.36 percent of the criminal docket, with Santa Clara and San Diego counties providing 9.09 percent each. San Bernardino, Contra Costa and Alameda counties contributed 6.82 percent apiece of the criminal docket.

The court’s civil docket was dominated by government and administrative law cases — 43.75 percent of the total caseload. Sixty-four percent of those cases were won by the plaintiffs below, and the court reversed in two-thirds. This is in line with the court’s recent history — between 2010 and 2014, the court reversed 62.5 percent of government and administrative law decisions where the plaintiff won below. The court decided two cases each in a variety of subject areas, including arbitration, constitutional law, workers’ compensation, insurance, commercial law and employment law. All four cases the court heard in insurance and commercial law were won by the defendants below, and the court reversed in all four. The death penalty was the largest single share of the criminal docket, comprising 38.64 percent of the total. Sentencing issues contributed another 22.73 percent of the cases, followed by 18.18 percent in criminal procedure.

Conventional wisdom has it that a successful petition for review to the California Supreme Court requires a dissent at the Court of Appeal from a published opinion. But in fact, only one of the court’s civil decisions this past year drew a dissent below. There’s considerably more truth to the second part of that adage — only 12.5 percent of the civil docket arose from unpublished Court of Appeal opinions. Not surprisingly, 54.54 percent of the criminal docket arises from unpublished Court of Appeal opinions.

Lag times between the Supreme Court granting review and a final decision have become a subject of increasing discussion in recent years in the California appellate bar. Our data analytics research on the Illinois Supreme Court has found that the amount of time a case is pending can be a reasonably accurate predictor of whether the court’s decision will be unanimous or divided. California, however, is different. Non-unanimous civil decisions in 2015 were pending an average of 700.75 days, and cases decided unanimously were pending only slightly less — an average of 699.54 days.

Lag times have increased significantly since 2000. Between 2000 and 2005, lag times tended to average between 500 and 600 days, 100-200 days less than today. Non-unanimous civil decisions reached a low in 2005, averaging 543.18 days pending. In 2002 and 2003, unanimously decided civil cases were pending an average of only 490 days from grant to decision — more than 200 days less than the average for 2015. But since that time, average lag times for civil decisions have bounced around between 600 and 800 days. In fact, the 2015 lag time for non-unanimous civil decisions is a substantial improvement over 2014, when such cases were pending an average of 858.67 days. Curiously, lag times on unanimous civil cases in 2015 increased by 100 days over 2014. Measuring lag times from oral argument to decision is not especially informative given that opinions in California generally must be issued within ninety days of argument. For 2015, non-unanimous civil cases took an average of 87 days from oral argument to opinion. Unanimous cases were pending for an average of 70 days.

Many observers have argued that the lag times at the court are driven by the court’s heavy docket of death penalty cases. Criminal cases as a whole average a much longer lag time than civil cases. Non-unanimous decisions average 1854.27 days from grant to decision, and unanimous decisions average 1905.76 days. Death penalty appeals were pending an average of 3587.5 days (measured from appointment of appellate counsel to decision) in non-unanimous cases, and 3767.08 days for unanimous decisions. Non-unanimous criminal cases not involving the death penalty were pending an average of 863.86 days, while unanimous nondeath criminal cases averaged 695.9 days.

Like civil cases, lag times in criminal cases have drifted upward since 2005. In 2004, for example, non-unanimous criminal cases were pending only 870.6 days, less than half the average today. For most years between 2000 and 2005, criminal cases averaged somewhere between 1000 and 1400 days. Death penalty appeals are taking at least somewhat longer as well. Between 2000 and 2005, death appeals were pending an average of 2,500-3,500 days. Although average lags were down significantly from 2014 to 2015 — the average death penalty appeal was pending for 4028.87 days in 2014 — the numbers from 2015 are roughly comparable to most years since 2005.

The unanimity rate at the court was substantially up in 2015, with the court deciding 87.5 percent of its civil cases unanimously. This is an increase over the court’s trend in civil cases during the past 10 years, when unanimity rates in civil cases tended to be in the low 70s. It represents a sharp increase from the court’s record in the years 2000-2005, when the unanimity rate in civil cases was generally between 55 and 65 percent. In fact, in 2000, the California Supreme Court decided less than half of its civil cases unanimously.

On the other hand, the unanimity rate was slightly down from historic trends on the criminal side of the docket. The court decided 75 percent of its criminal, quasi-criminal and disciplinary cases unanimously, following eight straight years with a criminal unanimity rate in the 80s. Only 81 percent of the court’s criminal cases in 2015 were decided by lopsided margins, with zero or one dissenters. Unanimity was down on the death penalty docket as well. The court decided 76.47 percent of its death cases unanimously — with the exception of a single-year dip in 2011, the lowest unanimity rate on the court in death cases since 2002. Although reversal of a death penalty remains a very high mountain to climb before the court, the court reversed more death penalties in 2015 than in any single year since 2000.

Overall, the court reversed in 71.88 percent of its civil cases. This is a significant increase over its recent trend; the three-year weighted average reversal rate in civil cases is 61.25 percent. Indeed, the court’s reversal rate in civil cases has been remarkably stable for quite some time. With the exception of the two-year blip in 2012 and 2013, the three-year weighted average reversal rate has been between 57 and 66 percent for the past 16 years.

A substantial share of the court’s docket arises from San Diego and Los Angeles. In 2015, the three divisions of the Fourth District (San Diego) accounted for 37.5 percent of the civil docket, while the Second District (Los Angeles) produced 34.38 percent of the civil caseload. That’s a substantial increase for the Fourth — the court heard only one civil case from the Fourth District in 2014, and only four in 2013.

The court reversed the divisions of the Second District 81.82 percent of the time, up significantly from 2014, when the court reversed the divisions of the Second District in only 54.55 percent of civil cases. In fact, the three-year weighted average reversal rate for decisions arising from Division Three of the Second District is only 42.86 percent. San Francisco’s First District was the next biggest portion of the civil docket, producing 15.63 percent of the caseload and being reversed every time. This represents a departure from the court’s recent history; the three-year weighted average reversal rate for the First District is 50 percent or less for four of the five divisions.

The Second District accounted for a much smaller proportion of the criminal docket — only 9.3 percent. The court was reversed in 40 percent of those cases. The Fourth District accounted for 23.26 percent, and was reversed in 60 percent of those cases. Although the First District historically has played a relatively minor role in the court’s criminal docket, 11.63 percent of the criminal caseload arose from there in 2015. The First District was reversed in whole or in part in only 40 percent of those cases, and indeed, the First has fared relatively well on the Supreme Court’s criminal docket in recent years. Two of the five divisions of the First District have a three-year weighted average reversal rate in criminal cases of 50 percent, and two of the five have weighted average reversal rates of zero.

The court reversed, at least in part, in 41.18 percent of its death cases in 2015, following up on a 43.48 percent reversal rate in 2014. These are the highest single-year reversal rates for the court in direct appeals from death judgments since our data begins in 2000. Looking at the rest of the criminal docket without taking the death appeals into account, we find that the court reversed in 57.69 percent of its nondeath criminal cases. The three-year floating average for reversal rates in nondeath criminal cases at the court is only slightly higher — 59.3 percent.

For a number of years, the court has tended to write somewhat longer opinions than other state supreme courts. In civil cases for 2015, the average majority opinion in a non-unanimous decision was 31.25 pages. The average unanimous opinion was 27.14 pages long. Dissents averaged 12 pages in civil cases.

The data for criminal cases is dramatically affected by the death penalty appeals. Overall, the average majority opinion in a non-unanimous criminal decision was 42.91 pages. The average unanimous decision was 36.66 pages long. Breaking the docket up between death and non-death cases, we find that the average majority opinion in a non-unanimous death penalty case was 68.75 pages long, and 60.46 pages in a unanimously decided death case. The average majority opinion in a non-death criminal case decided with dissenters was 28.14 pages, and the average unanimous decision was 19.35 pages long — in both cases, shorter on average than the civil cases. The average dissent in criminal cases was 14.14 pages long.

For many years, the California Supreme Court has been quite hospitable to amicus curiae briefs. Between 2000 and 2015, the court has accepted 2,618 amicus briefs in civil cases — an average of 4.16 briefs per case. The court’s average was somewhat down in 2015 over recent years, as the court accepted 3.78 amicus briefs per case on the civil side of the docket, the lowest number since the court averaged 3.45 in 2010. The court’s heaviest year since 2000 for amicus briefs was 2008 at 5.93, but that number is substantially skewed by litigation regarding same-sex marriage. Excluding the marriage cases from our calculations yields averages for 2008 and 2009 right in line with the court’s trends. The court’s second-heaviest year for amicus briefs was 2003, when an average of 5.68 amicus briefs per civil case were filed. Not surprisingly, amicus briefs were far less common in criminal cases, although by no means unheard of. The court averaged 0.48 amicus briefs per case in 2015 on the criminal docket. The court’s lightest year in our data was 2006, when the court received only 0.13 amicus briefs per criminal case; its heaviest was 2002, when the court averaged 0.83 amicus briefs per case.

Chief Justice Tani Cantil-Sakauye led the court with seven majority opinions on the civil side. Next were Justices Carol Corrigan and Kathryn Werdegar, who wrote six each. Justices Ming Chin and Cuellar wrote for the Court three times each in civil cases, Justice Liu twice and Justice Kruger once. The Chief Justice averaged the longest majority opinions at 38.86 pages, followed by Justices Chin and Werdegar at 31.25 and 31.14 pages, respectively. Justice Liu was next at an average of 24.25 pages per majority opinion, and then Justice Cuellar at 23 pages.

On the criminal side, Justice Werdegar was the most frequent writer, with nine majority opinions. Justice Chin was next, writing for the Court in eight criminal cases. Justice Liu was third, writing the majority opinion in seven criminal cases. Chief Justice Cantil-Sakauye wrote six majorities on the criminal side, as did Justice Corrigan. Retired Justice Marvin Baxter wrote for the court in three criminal cases, and Justice Cuellar wrote two criminal majority opinions. The chief justice wrote the longest majority opinions in criminal cases (including death penalty cases) at 46.67 pages, followed by Justices Werdegar (41.56), Liu (40.29) and Corrigan (38.33 pages).

We’ve argued in our work on the Illinois Supreme Court that one measure of the dynamics of a state supreme court is how often justices tend to be in the majority when the court is divided. Four justices — the chief justice and Justices Werdegar, Cuellar and Kruger — voted with the majority in all of the court’s non-unanimous civil decisions. Justice Goodwin Liu voted with the majority in three-quarters of the non-unanimous civil cases, and Justices Corrigan and Chin did so in half. Only Justices Kruger and Cuellar were in the majority in all the court’s non-unanimous criminal decisions. Justice Corrigan was with the majority in 90.91 percent of those cases. Justice Liu was next at 81.82 percent. The chief justice and Justice Werdegar voted with the majority in 72.73 percent of the non-unanimous criminal cases, and Justice Chin did so in 45.45 percent.

So far, evidence that the court is shifting in a more liberal direction is sparse on the civil side of the docket. Justices Cuellar and Kruger voted together in every non-unanimous civil case in 2015, but their agreement rates were 100 percent with the chief justice and Justice Werdegar as well — both Republican appointees. Cuellar and Kruger voted with Justice Liu, the third Gov. Jerry Brown appointee, in 75 percent of the non-unanimous civil decisions this past year. The two newest justices voted only half the time with Justices Corrigan and Chin.

Agreement rates among the Republican appointees to the court are somewhat lower. Between 2013 and 2015 in non-unanimous civil cases, the chief justice has agreed with Justice Corrigan 75 percent of the time, with Justice Werdegar in 70.59 percent of cases, and with Justice Chin two-thirds of the time. Although Justices Corrigan and Chin have agreed in 93.33 percent of split civil cases during that three year period, she has voted the same way as Justice Werdegar in only 43.75 percent of non-unanimous civil cases. Meanwhile, Justice Werdegar has agreed with Justice Chin in only one-third of the non-unanimous civil decisions during that time. Justice Liu has maintained a centrist position in the court’s voting dynamics, agreeing with the chief justice in 76.47 percent of non-unanimous civil cases since 2013, with Justice Werdegar 70.59 percent of the time, with Justice Chin in 53.33 percent of cases, and with Justice Corrigan in half.

There is somewhat more evidence of a relatively consistent liberal voting wing of the court in criminal matters. Justices Cuellar, Kruger, Liu and Werdegar agreed in every one of the non-unanimous criminal cases decided in 2015. Justices Cuellar and Kruger agreed with Justice Corrigan in 85.71 percent of such cases last year. In contrast, the two Brown appointees agreed with the chief justice in only 57.14 percent of criminal cases, and with Justice Chin in only 14.29 percent.

Turning to the Republican appointees, the chief justice and Justice Chin have agreed in 89.29 percent of non-unanimous criminal cases since 2013. The chief justice has agreed with Justice Corrigan in 75 percent of cases during that same period, and with Justice Werdegar 67.86 percent of the time. Justices Corrigan and Chin have agreed in 71.43 percent of non-unanimous criminal cases since 2013, and Justices Corrigan and Werdegar have agreed 64.29 percent of the time. Justices Werdegar and Chin have agreed in only 57.14 percent of the court’s non-unanimous criminal decisions in the past three years. Justice Liu, the only Brown appointee to serve the entire three-year period, has agreed with Justice Werdegar 82.14 percent of the time, with Justice Corrigan in 71.43 percent of non-unanimous criminal cases, and with the chief justice in 60.71 percent of such cases.

We can draw a number of conclusions from our review of the California Supreme Court’s decisions in 2015: (1) the court continues to have a strong interest in government and administrative law; (2) although unanimity at the Court of Appeal is not fatal to one’s chances of persuading the Supreme Court to grant review, an unpublished appellate decision very nearly is; (3) both the court’s unanimity rate and its reversal rate may be edging upward; (4) there is significant evidence that the court may be taking a more liberal approach in criminal law; and (5) although the margin for error for civil defense counsel may have decreased with the retirement of two Republican justices, there remains a viable center on the court, consisting of the chief justice and Justices Corrigan, Chin and Werdegar.

Image courtesy of Flickr by Amit Patel.

Florida High Court to Decide Whether Attorneys’ Fees Limitation in Claim Bill Is Constitutional

Posted in Florida


The Florida Supreme Court has accepted review of Searcy Denney Scarola Barnhart & Shipley, P.A. v. State, No. 4D13-3497, 2015 WL 4269031 (Fla. 4th DCA July 15, 2015), which will require it to decide whether a claims bill* that awarded $15 million to a minor plaintiff, but limited attorneys’ fees to $100,000, when the law firm spent $500,000 in costs alone, is constitutional. See No. SC15-1747.

This case arises from a catastrophic brain injury sustained by Aaron Edwards during his birth as a result of the medical negligence of employees at Lee Memorial Health System. Aaron and his parents retained the law firm of Searcy Denney Scarola Barnhart & Shipley, P.A. (“Searcy Denney”) to represent them. The Edwards family agreed to pay Searcy Denney a 40% contingency fee and acknowledged that to the extent that a governmental agency was responsible for their damages, federal and Florida law may limit the amount of attorneys’ fees charged by Searcy Denney.

A jury awarded Aaron over $28 million, his mother $1.34 million, and his father $1 million. Because Lee Memorial was a governmental agency, the judgment against the hospital was limited to $200,000 pursuant to Florida’s sovereign immunity statute. The Florida Legislature ultimately passed a claim bill directing Lee Memorial to appropriate $10 million, with an additional $5 million payable in annual installments to Aaron’s guardianship. See Ch. 2012-249, Laws of Fla. The claim bill also limited the total amount paid for attorneys’ fees, lobbying fees, and costs to $100,000.

After the first $10 million installment had been paid, various law firms that had worked on the case, petitioned the guardianship court to approve a closing account statement transferring $2.5 million to them—an amount that was consistent with the sovereign immunity statute, but which contravened the limitation in the claim bill. The law firms argued that the claim bill was an unconstitutional impairment of their contract with the Edwards family. The guardianship court refused to transfer the money.

On appeal, the Fourth District agreed with the guardianship court’s ruling based on two Florida Supreme Court decisions, Gamble v. Wells and Noel v. Sheldon J. Schlesinger, P.A., which upheld the constitutionality of attorneys’ fees limitations in claim bills significantly less than the amount contracted for by the claimants. The district court grounded its decision on two principles: (1) a claim bill is a “voluntary recognition of its moral obligation by the legislature” and is a “matter of legislative grace”; and (2) parties cannot enter into a contract to bind the state in the exercise of its sovereign power. Judge Ciklin wrote a lengthy dissenting opinion.

The parties are currently briefing the issues for the Court. This article will be updated once the supreme court decides the case.

*A claim bill, sometimes called a relief act, is a bill that compensates a particular individual or entity for injuries or losses occasioned by the negligence or error of a public officer or agency. It is a means by which an injured party may recover damages even though the public officer or agency involved may be immune from suit. For further information on claim bills, see Legislative Claim Bill Manual.

Image Courtesy of Flickr by Boston Public Library

Florida Supreme Court to Resolve Conflict Regarding Whether a Proposal for Settlement Must Reference Attorneys’ Fees When There Is No Fee Claim Pled

Posted in Florida


The Florida Supreme Court will review the First District’s decision in Borden Dairy Co. of Alabama, LLC v. Kuhajda, 171 So. 2d 242 (Fla. 1st DCA Aug. 14, 2015), which certified conflict with the Fourth District’s decision in Bennett v. American Learning Systems of Boca Delray, Inc., 857 So. 2d 986 (Fla. 4th DCA 2003). See No. SC15-1682. The conflict centers around whether a plaintiff’s proposal for settlement is unenforceable when it fails to state if it includes attorneys’ fees and if attorneys’ fees were part of the legal claim, as required by Florida Rule of Civil Procedure 1.442(c)(2)(F), when the plaintiff did not seek attorneys’ fees in her complaint.

Sometime before trial, Plaintiff Susanne Kuhajda served on defendants identical offers of judgment that proposed to settle all claims for one lump sum. The offers specified that they included costs, interest, and all damages recoverable under the complaint and by law. The offers, however, failed to state whether they included attorneys’ fees and whether attorneys’ fees were a part of the claim as required by Rule 1.442(c)(2)(F). Plaintiff prevailed on her negligence claim against the defendants and the jury awarded her damages in excess of the amount contained in her offers of judgment. The trial court granted plaintiff’s motion to tax attorneys’ fees and costs pursuant to the unaccepted offers of judgment, concluding that the failure to include the attorneys’ fees language did not create an ambiguity because plaintiff never sought attorneys’ fees in her complaint.

The First District reversed. It reasoned that the supreme court has repeatedly held that the rule and statute governing offers of judgment must be strictly construed. The First District found that plaintiff did not strictly comply with Rule 1.442(c)(2)(F) when she failed to state in the offers of judgment whether the offers included attorneys’ fees and whether attorneys’ fees were part of the legal claim. To bolster its conclusion, the First District pointed to a supreme court decision that invalidated a similar proposal for settlement where the plaintiff did seek attorneys’ fees in the complaint. It saw “no reason why this holding would not apply equally to a case where attorneys’ fees were not sought in the complaint.”

The Court will not hear oral argument on this case. This article will be updated once the supreme court decides the case.

Image Courtesy of Flickr by Northern Illinois University Digital Library


Posted in Appellate Practice, Florida


On December 2, 2015, the Second District Court of Appeal, in Panzera v. O’Neal (Case No. 2D14-4302), held that the plaintiffs did not present any admissible evidence to support their negligence claim against the defendant-truck driver and his employer or to refute the conclusion that the decedent-pedestrian caused the highway collision. Accordingly, the court affirmed the lower court’s order granting summary judgment in favor of the defendants.

Read the opinion here.

The undisputed facts established that at approximately 3 a.m., Anthony Panzera climbed a fence and entered Interstate-75, where he was struck and killed by a Publix semi tractor-trailer driven by Darryl O’Neal. Panzera was wearing a dark shirt and there were no street lights in the area. The truck was equipped with a device that capped its speed at 65 mph, which was 5 mph less than the posted speed limit. The truck was also equipped with a device that generated a report when the truck suddenly decelerated. On the night of the collision, the truck was traveling at 65 mph when it suddenly decelerated.
O’Neal testified that he saw Panzera run across the interstate into his lane of traffic. He applied the brakes and steered to avoid Panzera, but was unable to avoid the collision. The officers who responded to the accident testified that the evidence at the scene, including the lengthy skid marks, led them to conclude that O’Neal took immediate evasive action and could have done nothing more to avoid the collision.
At the hearing on the defendants’ motion for summary judgment, the plaintiffs, Panzera’s parents and the personal representatives of his estate, presented no evidence or expert testimony to refute the officers’ conclusions. The trial court granted final summary judgment in favor of the defendants.
On appeal, the appellate court reiterated that in a negligence action, summary judgment is improper “unless a defendant can establish unequivocally the absence of negligence or that the plaintiff’s negligence was the sole proximate cause of the injury” and that “[t]he party moving for summary judgment has the burden of establishing irrefutably that the nonmoving party cannot prevail.” Once the moving has met this heavy burden, the nonmoving party must offer admissible evidence that shows the existence of a genuine issue of material fact. The court stated that many litigants labor under the misconception that they only need to argue or proffer any fact that they believe to be in conflict in order to defeat a motion for summary judgment, but that to prevail, it must be admissible evidence that creates a colorable issue of material fact.
Here, in response to the defendants’ motion for summary judgment, the plaintiffs raised only speculative, rather than genuine, issues of material fact. In particular, the plaintiffs submitted their testimony that O’Neal could have avoided the accident by taking additional evasive maneuvers. However, because the plaintiffs did not witness the accident and admitted that they were not experts in accident reconstruction; their lay opinion testimony could not be relied upon to create a material issue of fact. Rather, the evidence established that O’Neal was driving below the speed limit, he applied his brakes, and he steered to avoid the collision, which supported the defendants’ argument that Panzera was the sole proximate cause of the accident. Because the plaintiffs’ evidence was purely speculative, no material issues of fact remained and the appellate court affirmed the entry of final summary judgment in favor of the defendants.

Image courtesy of Flickr by Alan Taylor.

Illinois Supreme Court Sides With Chicago Board of Education in “Do Not Hire” Union Dispute

Posted in Illinois

6288971_713a12216a_zThis morning, a majority of the Illinois Supreme Court sided with the Chicago Board of Education in a dispute with its teachers union, holding in The Board of Education of the City of Chicago v. The Illinois Educational Labor Relations Board that the Board of Education was not required to participate in mandatory arbitration over its policy of placing “do not hire” designations in the files of certain nonrenewed probationary appointed teachers. Our detailed summary of the underlying facts and lower court rulings is here. Our report on the oral argument is here.

Board of Education begin in the summer of 2010, when the Board notified the teachers union that it was designating as ineligible for rehire certain probationary appointed teachers who had either been nonrenewed twice or given an unsatisfactory performance rating. The Board began placing “do not hire” designations in the affected teachers’ files.

The union presented four grievances to the Board – three on behalf of individual teachers and one on behalf of all probationary appointed teachers – and demanded arbitration under the parties’ collective bargaining agreement. The Board refused to arbitrate the matter, contending that the “do not hire” notices went to the Board’s exclusively managerial right to decide who it would and wouldn’t hire as teachers. The union filed an unfair labor practice charge with the Illinois Educational Labor Relations Board, alleging that the Board of Education’s refusal to arbitrate violated the Educational Labor Relations Act. The IELRB upheld the grievances and ordered the Board of Education to arbitrate the dispute. A divided panel of the Appellate Court reversed the IELRB, concluding that the matter was exclusively managerial.

In an opinion by Justice Freeman, the Supreme Court affirmed. The Court noted that a school district was permitted to refuse to arbitrate a grievance where: (1) no contract required arbitration of the substance of the dispute; or (2) the dispute was not arbitrable under Illinois law.

Several provisions of the parties’ CBA were relevant to the question of whether the contract covered the matter, according to the Court. According to Article 3 of the CBA, “a complaint involving a work situation, a complaint that there has been a deviation from, misinterpretation of or misapplication of a practice or policy; or a complaint that there has been a violation, misinterpretation or misapplication of any provisions” of the CBA were all arbitrable. Article 34-4 expressly provided that “no derogatory statement about a teacher or other bargaining unit member . . . shall be placed in the teacher’s or other bargaining unit member’s personnel file” without giving the affected person notice and an opportunity to respond. Finally, Article 48-2 provided that “matters of inherent managerial policy” were not arbitrable.

The Court held that the “do not hire” policy related to the Board’s decision to initiate employment – a matter of managerial policy – not to the terms and conditions of employment, and was therefore not arbitrable. Even if the CBA had arguably required arbitration of the matter, the Court majority held that arbitration would still be barred by Section 4 of the Act, which bars arbitration over “matters of inherent managerial policy . . . includ[ing] . . . selection of new employees.” The Court also concluded that requiring arbitration would conflict with various provisions of the School Code, including requirements that Boards appoint teachers “for merit only,” and authorizing Boards to dismiss teachers, including by nonrenewal.

Justice Kilbride dissented. He agreed that employment decisions were a matter of inherent managerial policy and therefore not arbitrable. But the dispute wasn’t about who the Board would and wouldn’t hire, Justice Kilbride concluded. Rather, it was about the placement of derogatory matter in personnel files, which appeared to be a clear violation of Section 34-4 of the CBA. Accordingly, Justice Kilbride concluded that the IELRB’s decision compelling arbitration should have been upheld.

Image courtesy of Flickr by Alan Levine.

Illinois Supreme Court Rejects Broad Construction of Judge Challenge Statute

Posted in Illinois

3293465641_b6c5081e87_zA litigant files suit, litigates for several years, and then, prior to trial, exercises her right to voluntarily dismiss the action without prejudice. Not long after, she refiles the action and is assigned (apparently by chance) to the same judge. The litigant attempts to exercise her statutory right to one automatic substitution of judge under Section 2-1001(a)(2)(ii) of the Code of Civil Procedure (735 ILCS 5/2-1001(a)(2)(ii)).

Can the trial court take the first action into account in ruling on the challenge? This morning, the Illinois Supreme Court held in Bowman v. Ottney that the answer was “yes,” writing that a contrary holding would have opened a loophole in the statute likely to encourage judge-shopping. Our detailed report on the facts and underlying court rulings in Bowman is here. Our report on the oral argument is here.

Bowman began in 2009 when the plaintiff, acting as special administrator of a decedent’s estate, sued the defendant doctor and a medical practice for malpractice. The case was litigated for four years, during which the judge made various substantive rulings, including resolving discovery matters. Ultimately, the plaintiff filed a voluntary dismissal without prejudice under Section 2-1009(a) of the Code of Civil Procedure (735 ILCS /2-1009).

Four months later, she refiled, this time naming only the doctor as a defendant. The case was assigned to the judge who had heard the first case. The plaintiff moved for automatic substitution of judge. The defendant objected on the grounds that the judge had made substantive rulings in the first action, making the challenge untimely. The circuit court denied the motion for substitution, but certified a question under Rule 308(a) as to whether under the circumstances a trial court had discretion to take the first case into account in ruling on a substitution motion in the second case. The Appellate Court answered that question “yes,” with one Justice dissenting.

In an opinion by Justice Freeman, the Supreme Court affirmed. The Court noted that Section 2-1001(a)(2)(ii) provides that a litigant is entitled to one substitution so long as the motion is made “before the judge to whom it is presented has ruled on any substantial issue in the case.”

So everything turned on what “in the case” meant. If the refiled action was a different “case,” the plaintiff wins. If “case” was interpreted more broadly, then the defendant did.

Although Section 2-1001(a)(2)(ii) had always been interpreted liberally in favor of the right of substitution, it was equally true that the courts have been wary of constructions which would seem to promote judge-shopping and gamesmanship, the Court wrote. The plaintiff relied on a line of cases holding that the second action after a voluntary dismissal is a separate case, filed under a different docket number and requiring the payment of a new filing fee. But “new” for some purposes didn’t mean “new” for all, the Court concluded.

The problem was that holding that a voluntary dismissal revived the right to automatic substitution of judge invited judge shopping. A litigant dissatisfied with a judge’s rulings could treat the voluntary dismissal as a “do-over,” dismiss the first case, refile and then challenging the judge. The plaintiff had argued that Supreme Court Rule 219(e), which provides that certain orders entered in the previous action could be considered in the refiled action, sufficiently discouraged judge shopping, but the Court concluded that it cut the other way, demonstrating that the new action wasn’t entirely separate for all purposes.

Justice Kilbride dissented, arguing that the statutory language contained no reference to any previously dismissed case and should be interpreted pursuant to its plain language to allow a mandatory substitution after a dismissal.

Image courtesy of Flickr by Brian Turner.

Illinois Supreme Court Agrees to Clarify When Workers’ Comp Settlement Eliminates Contribution Claim from Third-Party Tortfeasor

Posted in Illinois

4418145006_75edbc7617According to Section 2 of the Contribution Act, when a party settles a claim in good faith against one tortfeasor, the finding of good faith automatically discharges that tortfeasor from any liability for contribution to another tortfeasor. (740 ILCS 100/2.) On the final day of its November term, the Illinois Supreme Court allowed a petition for leave to appeal in Bayer v. Panduit Corporation, a decision from Division 1 of the First District which poses a number of interesting questions about the interaction of the Workers Compensation Act and the Contribution Act.

The defendant is an electrical components manufacturer in De Kalb. In 2007, the defendant entered into a contract with an iron works company to fabricate structural steel for the expansion of the defendant’s warehouse. The iron works company then subcontracted with the plaintiff’s employer to upload and erect the structural steel at the site.

In June 2007, the plaintiff was seriously injured when he fell at the site. His injuries rendered him a quadriplegic. The plaintiff filed a workers compensation claim against his employer, and subsequently sued the defendant and the iron works company for negligence. The defendant then filed a third-party claim against the plaintiff’s employer, alleging that it was negligent in failing to ensure the safety of its employee, and seeking judgment in contribution commensurate with its relative fault.

Three years after the lawsuit began, the plaintiff and his former employer filed a motion for finding of good faith settlement. Following a hearing, the motion was granted. Less than two weeks later, the plaintiff settled with the iron works company, leaving the defendant to go to trial. Judgment was ultimately entered following trial for the plaintiff in the amount of $64 million.

The defendant filed a posttrial motion alleging that the court had erred in dismissing the contribution claim against the plaintiff’s employer because the settlement was not in good faith. Following a hearing, the trial court denied the defendant’s motion. Concurrently, the plaintiff filed a motion for attorneys’ fees and costs against his employer pursuant to the Workers Compensation Act. That motion was granted as to fees relating to future workers’ compensation payments, but denied as to costs. Both the defendant and the plaintiff’s employer filed notices of appeal.

The Appellate Court began its analysis with the good-faith settlement issue. On appeal, the defendant challenged the settlement because (1) no consideration was given for the release, since the employer had paid the plaintiff nothing further, nor had it waived its workers’ compensation lien; and (2) because of the sizable judgment against the defendant and the employer’s failure to waive its lien in the settlement, the employer stood to recover everything it had paid the employer from the defendant, effectively shifting its entire liability to the defendant.

The Court noted that the settlement agreement provided that the plaintiff’s employer: (1) agreed to waive its entire workers compensation lien with respect to any pre-verdict settlements; and (2) agreed to continue making workers compensation payments to the plaintiff until the matter was resolved against all defendants (Illinois law provides that an employer may terminate ongoing workers compensation payments when an employee receives any amount for the same injury from a third-party tortfeasor). The parties’ agreement also provided for partial waivers of the lien depending on exactly how much the plaintiff recovered from a verdict.

The Appellate Court affirmed the trial court’s finding that the settlement was supported by good faith. The Act itself gave employers the right to lien an employee’s recovery from third-party tortfeasors to recover some portion of their payments, the Court noted. Although the plaintiff’s employer ultimately stood to recover all of its workers compensation payments, that was only because of the size of the verdict – and Illinois courts have consistently rejected the notion that a large verdict after-the-fact is relevant to a good faith finding before or during trial. Further, the Court found that the employer’s agreement to continue workers’ compensation payments throughout the case – including, if necessary, any appeals – was sufficient consideration for the settlement by itself.

The Appellate Court then turned to the question of the attorneys’ fees order. On appeal, the employer did not dispute its liability under Section 5(b) of the Workers Compensation Act (820 ILCS 305/5(b)) for attorneys fees in the amount of 25% of the plaintiff’s permanent total disability benefits, but did dispute the payment of attorney fees for benefits suspended by statute as a result of the tort settlements. The Appellate Court held, based on the plain language of Section 5(b), that the employer was not required to pay attorney fees for suspended future medical payments under the Act.

We expect Bayer to be decided in eight to ten months.

Image courtesy of Flickr by Elliott Brown.

Illinois Supreme Court Agrees to Decide Constitutionality of Property Tax Exemption for Aviation Firm

Posted in Illinois

11969715144_b7b7a6e89eIt’s not at all uncommon for state and local governments to use targeted tax breaks as a tool for encouraging economic growth, giving various types of businesses – and sometimes, single major employers – incentives to expand their operations. On the final day of the November term, the Illinois Supreme Court agreed to decide the constitutionality of one such tax break in Moline School District No. 40 Board of Education v. Quinn.

Moline School District arises from Public Act 97-1161, which amended the Property Tax Code to exempt aeronautical firms called fixed based operators – “FBOs” – from property taxes on leasehold interests and improvements at the Rock Island County Metropolitan Airport. At the time of the amendment, the Metropolitan Airport Authority leased property to only one FBO, who paid $150,000 in property taxes a year. The legislative history of Public Act 97-1161 suggests that the bill was intended to encourage that FBO to expand in Illinois instead of Nebraska, Missouri or Iowa – states where the plaintiff pays no property taxes.

The plaintiff school district filed a complaint for injunctive and declaratory relief, arguing that Public Act 97-1161 violated the “special legislation” clause of the Illinois Constitution, which provides that “The General Assembly shall pass no special or local law when a general law is or can be made applicable.” The plaintiff alleged that it would suffer irreparable harm from the loss of funding triggered by the property tax exemption. The plaintiff filed a motion for summary judgment, and the FBO intervened in the action and filed a cross-motion. The trial court denied the plaintiff’s motion for summary judgment, holding that no other FBOs in Illinois were similarly situated to the intervenor, and the legislature could constitutionally enact legislation to address a unique situation.

The Third District of the Appellate Court reversed. The special legislation clause prohibits the conferring of special benefits or exclusive privileges on a person or group to the exclusion of others similarly situated. Two factors are relevant: (1) a discrimination between two groups which are similarly situated; and (2) the classification is arbitrary. A classification is upheld if it is rationally related to a legitimate state interest.

The Court held that the Act fell under the second factor. The Court found that there was no justification for singling out FBOs at the airport from other FBOs or indeed, any other businesses in Illinois. The Court noted the hope that the intervenor would use the money saved to expand, but found that nothing required it to do so. One could just as easily speculate, the Court commented, that giving a similar tax break to any other FBO or business would encourage it to expand its operations.

The intervenor argued that it was uniquely situated because it was located on the border of states with no property taxes, and had options to expand in those states. The Court found that neither point was sufficient – the tax break was extended to any FBO choosing to locate in the State, not just the intervenor, and there was no reason to believe that other FBOs and businesses around the State didn’t have competitors in no-property-tax states. Because the Court found no rational relation between the Act and a legitimate state interest, the Court held that it violated the special legislation clause.

We expect Moline School District to be decided in eight to ten months.

Image courtesy of Flickr by Glasseyes View.

Illinois Supreme Court Agrees to Revisit 67-Year-Old Precedent Holding that Temporary Flooding Cannot Constitute a Taking

Posted in Illinois

5305820211_d844686e8bOn the final day of the November term, the Illinois Supreme Court agreed to hear Hampton v. Metropolitan Water Reclamation District of Greater Chicago. Hampton poses a simple question: should the Court overrule its 1948 decision in People ex rel. Pratt v. Rosenfield holding that temporary flooding caused by government action can never constitute a compensable taking?

Hampton arises from flooding which occurred following a heavy rainfall in the Chicago area in late July 2010. The plaintiffs sued the defendant Water Reclamation District, alleging that its control and management of the Chicago Area Waterways System was the cause of the flooding, which resulted in serious damage and/or destruction of their property. The plaintiffs purported to state claims under the Metropolitan Water Reclamation District Act (70 ILCS 2605/19) and the Takings Clause of the Illinois Constitution.

The defendant moved to dismiss. The Circuit Court granted the motion with respect to Count I under the Act. However, the Court denied the motion with respect to Count II under the Takings Clause, holding that the Illinois Supreme Court’s holding in Pratt had been effectively overruled by the U.S. Supreme Court’s 2012 holding in Arkansas Game and Fish Commission v. United States. The trial court then certified pursuant to Supreme Court Rule 308 the question of whether Pratt survived Arkansas Game and Fish Commission.

Division Five of the First District held that it did not. The court noted that although the plaintiffs did not invoke the Federal takings clause in their complaint, the Illinois clause was actually broader in scope because it expressly covers “damage” to property, not just a “taking” of it. Nevertheless, in Pratt the Illinois Supreme Court held that a property owner was not entitled to bring condemnation proceedings under the Clause where flooding allegedly occasioned by government conduct had receded, since the property owner could not allege that the invasion was permanent.

After reviewing the Illinois authorities, the Appellate Court turned to Arkansas Game and Fish Commission. There, the U.S. Supreme Court had found that although the duration of a physical invasion is a factor in determining a compensable taking, the mere fact that floodwaters had receded did not create an automatic exemption from a finding that a taking had occurred. The court held that because Pratt was based on the proposition that floodwaters could never result in a compensable taking, the Illinois Supreme Court’s decision in Pratt was effectively overruled by Arkansas Game and Fish Commission.

We expect Hampton to be decided in eight to ten months.

Image courtesy of Flickr by Tatters.

Illinois Supreme Court Appears Inclined to Strike Down Chicago Public Pension Fix

Posted in Illinois

10112994543_c43ab3036dDuring its just-ended November term, the Illinois Supreme Court heard oral argument in Jones v. Municipal Employees’ Annuity and Benefit Fund of Chicago, a sequel of sorts to In re Pension Reform Litigation from earlier this year. This time, the Court is reviewing a decision from the Circuit Court of Cook County striking down SB 1922, a bill aimed at saving the Chicago public employees pension system. Based on the distribution and content of the Court’s questions, it appears likely that the Chicago pension fix will suffer the same fate that the statewide fix did earlier this year. Our two-part data analytic preview of the oral argument in Jones, including a detailed summary of the underlying facts and holdings, is here and here.

Counsel for the City began the argument by saying that the case hinges on two undisputed facts – first, the funds will inevitably go bankrupt in the relatively near future absent some sort of fix; and second, the Act under review dramatically increases the City’s employer contributions and for the first time imposes a legal obligation to fund the system on the City (rather than the funds). Counsel argued that the case presents an issue not before the Court in In re Pension Reform. There, counsel argued, the State conceded that the Act impaired benefits. Here, the City argues that the Act benefits employoees and retirees by saving and stabilizing the funds. Counsel argued that no prior case had involved legislation imposing a substantial new funding obligation. Justice Thomas asked how the promise of funding matters when the Constitution guarantees that benefits must be paid. Isn’t that promising to do what the Constitution already guarantees? Counsel responded that the Constitution does not in fact guarantee funding.   Instead, the Pension Protection Clause tried to prod the legislature to fund pensions by protecting benefits. According to counsel, it was undisputed that before the Act, only the funds were legally obligated to pay the funds’ obligations. Justice Theis noted that the Court has always held that the purpose of the Clause was to ensure receipt of benefits rather than controlling the political branches’ funding decisions. But the City appeared to argue that there was never an obligation to pay for the benefits. How did the City reconcile those points? Counsel answered that there was an obligation to pay, but the issue was whose obligation. Previously, the obligation was only on the funds. Justice Theis asked whether the City was contending that the Clause no longer applies if the funds run out of money. Counsel responded that it depends on the pension contract. The Pension Protection Clause protects the rights and obligations found in the Pension Code. Most funds have a provision that somebody other than the fund backstops the fund’s obligations; but that has not historically been true with the City’s employee funds. Even if the Court accepted the plaintiffs’ arguments, counsel insisted, both employees and retirees were obviously better off after the Act – that was proven by the fact that the fund trustees and twenty-seven of the thirty-one impacted unions supported the City. Counsel argued that absent the Act, participants’ only option was a highly uncertain lawsuit to force funding once the funds were on the verge of default. Justice Thomas noted that the Court was dealing with a statute, not a collective bargaining agreement – any agreement is merely part of the history of how the statute came to be enacted. But if the statute is clear and unambiguous, what did the history matter? Counsel answered that one basis for reversing was finding that the changes in benefits were a bargained-for exchange for consideration. Justice Thomas asked whether the City was arguing that all affected parties had consented. Counsel said no, but that didn’t foreclose the bargain-for consideration argument. All 75,000 of the affected employees and retirees would never agree to anything. Counsel concluded by arguing that even if the Pension Protection Clause is an individual right, there was nothing preventing the Court from applying a reasonable and common sense approach to allow unions to negotiate a fix on their members’ behalf.

Counsel for the fund trustees was next. According to counsel, overwhelming evidence in the record showed that the funds were facing bankruptcy. The Act benefits the funds by insulating them from investment shocks, as well as by making the City the guarantor of the funds’ obligations. The imposition of that obligation is a significant benefit to all participants, counsel argued, as was the mandamus action authorized by the Act. Justice Theis asked whether future legislation could modify all these changes. Counsel said no, the funding obligations were now a benefit of pension system membership, protected by the Pension Protection Clause. Justice Theis asked whether the Constitution protects this kind of thing, and counsel said yes, that was the legislature’s intent in passing the Act. Counsel concluded by arguing that the funds could not invest their way out of their problems, and without the Act, the unfunded liabilities would continue to grow.

Counsel for the funds briefly concluded, arguing that the Act confers security and certainty. Without the City’s guarantees, the funds can’t raise taxes, can’t increase contributions – they can’t raise any funds at all.

Counsel for the first group of plaintiffs was next. He argued that there was no dispute that members would receive smaller pensions under the Act. According to counsel, the Act was the result of years where employer contributions hadn’t matched the funds’ obligations. Now that the result of that has become intolerable, counsel argued, the City didn’t want to pay – but that’s exactly the option the Pension Protection Clause bars. Counsel argued that the City’s position was merely an end run around In re Pension Reform Litigation. Setting aside money to pay for something already guaranteed by the Constitution was not a benefit, counsel said. The City says this time around, the General Assembly really means it, according to counsel – but that rings hollow too, since the Act allows courts to change the funding schedule for the same reasons the Act had become necessary in the first place. Chief Justice Garman asked whether unions could bargain for diminishment in return for some sort of guarantee. Counsel answered that the rights involved were individual, and would have to be modified individually. Chief Justice Garman commented that then it’s really impracticable for individual benefits to ever be changed, even with consideration. Counsel answered that the City could have negotiated something to individuals an opt-in choice, but those would have to be fair contracts. No participant in the funds was present for any negotiation, and that City offered no evidence, according to counsel, that the union representatives had authority to represent their members in the discussions, let alone retirees. Counsel argued that no union has taken a position on the legislation as ultimately enacted, so there was no basis for finding an agreement. Counsel concluded by arguing once again that putting aside money to pay for benefits already guaranteed wasn’t a benefit within the meaning of the clause.

Counsel for the second group of plaintiffs was next, arguing that this case involved the same issues and arguments, and should involve the same result, as In re Pension Reform Litigation. Counsel argued that the City had made no employer contributions at all for the years 2000-2006, but employees still had to pay the same withheld contributions. Counsel claimed that the City had conceded that it couldn’t accomplish this result through a Collective Bargaining Agreement. Counsel concluded by noting that at any time in the past ten years, the trustees could have gone to court to force City contributions, but they had failed to do so.

Counsel for the City concluded in rebuttal, arguing that Justice Thomas’ question about the plain language of the Act begged the real question – whether an Act giving overwhelming benefits to participants violated the Pension Protection Clause. Justice Thomas asked what the “overwhelming benefit” was. Counsel answered that the benefit was billions of dollars to pay benefits as they came due. Justice Thomas asked whether that benefit was merely the result of the practicalities of where the funds are today, and didn’t the Pension Protection Clause already grant the same benefit? Counsel answered that the plaintiffs’ position proceeds from the false assumption that there is some obligation to fund the funds. According to counsel, the Clause says that employees get the benefit of the bargain that was on the books when they were hired. At all relevant times, the terms said that the funds themselves – not the City – were obligated to pay benefits. Justice Theis asked whether the City was arguing that employees should have known from the beginning that benefits might not be there. Counsel answered that funding was adequate until about ten years ago. The Pension Code says that no contributions were required when the funds were overfunded, which they were until about ten years ago. Did the parties know that the provision saying only the funds were liable was inadequate? No, counsel argued, but that was neither a breach of contract nor unconstitutional. Justice Thomas asked whether the Act means that all parties will get less than originally promised. Counsel answered no, it depends on the circumstances. According to counsel, it would be ironic if the Court declared that adequate funding – exactly what the framers of the Constitution were trying to cause by guaranteeing benefits – was unconstitutional. Justice Thomas asked whether there was anything else the General Assembly or City could have done to make sure funding was adequate aside from the Act. Counsel said no, but that wasn’t issue before the Court. Counsel argued that the only real alternatives were the Act – or fund bankruptcy in 10-13 years. Justice Thomas posed a hypothetical – in ten to thirteen years, the funds are bankrupt. Are the pensioners any less entitled to what they were promised? Counsel responded that the promise to retirees had a limitation. Justice Thomas asked whether retirees would have any recourse at that point to ensure they were paid. Counsel said that the City had been asking the plaintiffs what their alternative is. The only response has been a possible uncertain lawsuit to force funding once the funds were on the edge of bankruptcy. Counsel insisted that participants are better off with the Act than with the results of a speculative and uncertain lawsuit. Chief Justice Garman asked whether the City was saying that impairment is separate from funding. Counsel said it depends on the circumstances of a particular fund. The Clause protects benefits of membership in the retirement system. To define those “benefits,” one looks at what the legislature has put in the Pension Code. In most cases, that includes a guarantor, but these funds don’t have such a provision. Counsel concluded by arguing that the true threat going forward isn’t reducing benefits, it’s that the money simply won’t be there.

We expect Jones to be decided in three to five months.

Image courtesy of Flickr by Catarina Oberlander.