The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

Is a Workers’ Compensation Settlement “Income” for Child-Support Purposes?

By Kirk Jenkins on Posted in Illinois

Workers’ compensation payments are excluded from income for purposes of federal income taxes. But are they “income” for purposes of calculating a party’s child support obligation? At the close of its September term, the Illinois Supreme Court announced it would resolve this question in Mayfield v. Mayfield.

Mayfield presents two questions: (1) is a lump-sum workers’ compensation settlement “net income” within the meaning of Section 505(a)(3) of the Illinois Marriage and Dissolution of Marriage Act; and (2) if so, is the 20% rule-of-thumb set forth in Section 505(a) of the Act for calculating the per-child support obligation applicable to the entire settlement?

The parties in Mayfield were divorced in 2003, and the husband was ordered to pay child support. In the years that followed, as the children’s living arrangements changed, the child support obligation was adjusted multiple times. Finally in 2011, the wife petitioned to modify child support because the couple’s eldest child – who had been living with the husband – had reached the age of majority. At the hearing on the wife’s petition, the husband disclosed that he had received a $300,000 lump-sum workers’ compensation settlement the year before. The husband conceded that he had not notified his former wife of this development. Following In re Marriage of Dodds, which held that workers’ compensation payments are income for purposes of child support, the Circuit Court ordered the husband to pay 20% of the settlement to his ex-wife, and to continue paying child support.

The Appellate Court affirmed. Section 505 of the Illinois Marriage and Dissolution of Marriage Act provides that the benchmark calculation for support of one child is 20% of the supporting party’s net income. But the Act does not define “income.” The Appellate Court pointed out that the Workers’ Compensation Act provides that compensation awards are computed on the basis of the “average weekly wage” of the employee. Since workers compensation payments replace lost wages, “it is only logical that it is a type of ‘income’” under the Dissolution Act, the Court held. The Court noted that a number of states have expressly included workers compensation awards in their definitions of income for purposes of child support.

Turning to the second issue, the husband argued that the Circuit Court had erred by applying the 20% base multiplier to the entire amount of the workers compensation award, which was intended to replace wages for the remainder of his working life – well beyond the age of majority of the couple’s minor child. The Appellate Court disagreed, pointing out that if a parent obtained a similar lump sum through an employment bonus or an investment, the entire amount would be includable as ordinary income.

Mayfield should be argued and decided by the Court in the next four to eight months.

Florida’s Change of Venue Law for Jury Pool Bias

By on Posted in Civil and Appellate Procedure, Florida, Jurisdictions

The authority of changing venue based on a party’s concern about not receiving a fair trial because of a biased or prejudiced jury pool can be found in section 47.101, Florida Statutes—not  Florida Rule of Civil Procedure 1.060.

Procedural Requirements. The statute requires that a motion to change venue contain a verified statement of facts, be supported by affidavits of at least two “reputable” citizens of the county in which the case was filed, and be filed within 10 days after the action is “at issue,” unless good cause is shown.

A case is “at issue” 20 days after service of the last pleading or once all motions directed to that last pleading are decided. See Fla. R. Civ. P. Rule 1.440. Pleading as used in this rule connotes those finite number of pleadings recognized by the Florida Rules of Civil Procedure (complaint, answer, counterclaim, etc.). See Fla. R. Civ. P. 1.100(a). Some courts have strictly construed these requirements, denying a motion outright for non-compliance.

Standards. The statute contains two bases for changing venue: (1) “Because the adverse party has an undue influence over the minds of the inhabitants of the county”; or (2) “Because movant is so odious to the inhabitants of the county that he or she could not receive a fair trial.” The Florida Supreme Court has announced a succinct test for determining whether a change of venue is proper:

Whether the general state of mind of the inhabitants of the community is so infected by knowledge of the incident and accompanying prejudice, bias, and pre-conceived opinions that jurors could not possibly put these matters out of their minds and try the case solely on the evidence presented in the courtroom.

Rolling v. State, 695 So. 2d 278, 285 (Fla. 1997) (quoting McCaskill v. State, 344 So. 2d 1276, 1278 (Fla. 1977)).

Once a defendant raises the partiality of the venire, the trial court must look at two prongs: (1) the extent and nature of any pretrial publicity; and (2) the difficulty encountered in actually selecting a jury.

On the first prong, courts should consider 5 factors for determining the effect of pretrial publicity on the knowledge and impartiality of the prospective jurors:

(1) the length of time that has passed from the incident to the trial and when within that time the publicity occurred;
(2) whether the publicity consisted of straight, factual news stories or inflammatory stories;
(3) whether the publicity favored the non-movant’s case or version of events;
(4) the size of the community in question; and
(5) whether the defendant exhausted all of his peremptory challenges.

Florida courts have placed great emphasis on the second factor above. “Publicity, in and of itself, is not sufficient grounds for change of venue. The publicity must be hostile publicity.”

The second prong of the analysis requires the trial court to examine the extent of difficulty in actually selecting an impartial jury at voir dire. If voir dire shows that it is impossible to select jurors who will decide the case based on the evidence, rather than the jurors’ extrinsic knowledge, then a change of venue is required. The ability to seat an impartial jury in a high-profile case may be demonstrated by either a lack of extrinsic knowledge among members of the venire or, assuming such knowledge, a lack of partiality.

On this point, the supreme court has encouraged trial courts “to attempt to impanel a jury before ruling on a change of venue.” This provides trial courts an opportunity to determine through voir dire whether it is actually possible to find individuals who have not been seriously infected by the publicity. If the trial court finds such individuals, a jury is selected. Where the voir dire fails to produce these individuals, the trial court must grant the motion for change of venue.

The supreme court has, on numerous occasions, emphasized that to be qualified, jurors need not be totally ignorant of the facts of the case, nor do they need to be free from any preconceived notion. In fact, knowledge of the incidence because of its notoriety is not, in and of itself, a ground for a change of venue. Rather, the issue may turn on the nature and extent of the pretrial information the juror has acquired and an analysis as to whether a juror “can lay aside his impression or opinion” based upon any pretrial information and “render a verdict based on the evidence presented in court.”

Appellate Standard of Review. A motion for change of venue is addressed to the trial court’s discretion and will not be overturned on appeal absent a “palpable abuse of discretion” or a “grossly improvident” exercise of discretion. The determination is usually one of fact which the presiding judge, who has knowledge of all the circumstances of the case, is in a much better position to pass on that the appellate court. Because of this heightened standard of review, most of the cases in Florida have affirmed the trial court’s denial of a motion for change of venue.
 

When You’re Hit By an Ambulance: Illinois Supreme Court Takes Bookend to Harris

By Kirk Jenkins on Posted in Illinois

During its May term, the Illinois Supreme Court decided Harris v. Thompson, which posed the question of whether a public entity or employee could be held liable for negligent operation of an ambulance. At the close of its September term, the Court allowed a petition for review in Wilkins v. Williams. Wilkins poses the inevitable follow-up question to Harris: but what if the ambulance is operated by a private company’s employee?

Since Harris may give us clues to the Court’s initial thoughts on Wilkins, let’s start there. (For our preview of Harris, click here, and for our report on the opinion, here.)  Harris reached the Court as a perceived conflict between two statutes. On the one hand, the Local Governmental and Governmental Employees Tort Immunity Act provided that public entities and employees could not be “liable for an injury caused by the negligent operation of a motor vehicle or firefighting or rescue equipment, when responding to an emergency call, including transportation of a person to a medical facility.” On the other hand, the Vehicle Code says that although the driver of an emergency vehicle has certain privileges, he or she still has “the duty of driving with due regard for the safety of all persons.” The Appellate Court had held that the Vehicle Code trumped the Tort Immunity Act, making the driver and employer potentially liable.

But the Supreme Court held that there was no conflict. According to the six-Justice majority, the Vehicle Code extended certain privileges and imposed certain duties. The Tort Immunity Act addressed a different question: whether or not there was a duty involved, was the suit barred? The Court held that it was. Chief Justice Thomas L. Kilbride dissented, arguing that there was an “obvious and undeniable conflict” between the statutes, and the Vehicle Code should have prevailed.

Wilkins involves virtually identical facts: an ambulance transporting a patient on a non-emergency run strikes another vehicle, injuring the driver. Is the driver of the ambulance and her employer liable?  But in Wilkins, the ambulance was privately owned. So rather than the Tort Immunity Act, we have the Emergency Medical Services (EMS) Act to deal with.

Nonetheless, the two statutes seem similar in scope. According to the EMS Act, no “person, agency or governmental body certified, licensed or authorized pursuant to this Act” who “provides emergency or non-emergency medical services” can be “civilly liable as a result of their acts or omissions in providing such services unless such acts or omissions . . . constitute willful and wanton misconduct.” 210 ILCS 50/3.150(a).

So, two questions: (1) Does the EMS Act extend to non-emergency transport of patients? (2) Does the statute extend to injuries sustained by third parties not directly treated by EMS workers?

The first issue may not detain the Supreme Court long. Although the Legislature removed a reference to “transporting a patient” from the EMS Act in an earlier amendment, as the Appellate Court pointed out, the Supreme Court held in Abruzzo v. City of Park Ridge that the statute still impliedly covered transportation of patients. It seems unlikely that the Court will disturb Abruzzo only four years after it was decided.

The second issue is likely to be the focus of the Court’s attention. The Appellate Court concluded that the EMS Act was ambiguous with respect to whether it negated any duty to third party motorists. The Court then turned to Section 11-205 of the Vehicle Code – exactly the same provision that led the Appellate Court astray in Harris – and held that in order to give effect to both provisions, the EMS Act had to be construed as not negating the independent duty to third party motorists imposed on ambulance drivers and every other motorist. The defendants in Wilkins cited the Court to the Tort Immunity Act, but the Court held that the Tort Immunity Act “evidences the legislature clear intent to immunize public entities and employees” – an intent missing in the EMS Act.

Wilkins should be interesting to watch play out at the Supreme Court. Can the plaintiffs persuade at least four members of the Court – necessarily including at least three members of the six-Justice Harris majority — that there is a meaningful difference between the Tort Immunity Act and the EMS Act? We should find out in between four and eight months.

Argument Report: Debating the Illinois Rights of Privacy and Gender Equality

By Kirk Jenkins on Posted in Illinois

Our reports on the oral arguments of the Illinois Supreme Court’s September term conclude with Hope Clinic for Women v. Adams. In Hope Clinic, the Court confronts the question of whether the Illinois constitution offers greater protection to privacy and gender equality interests than the Federal constitution. To watch the video of the argument, click here.

Our in-depth summary of the facts and lower court rulings appears here. According to the Illinois Parental Notice of Abortion Act, a physician must disclose to a parent, grandparent, step-parent living in the household or legal guardian that his or her minor or incompetent child is seeking an abortion. Plaintiffs brought a litany of challenges under the state Constitution, including due process, equal protection, privacy and gender equality.   The Circuit Court dismissed on the grounds that all four of these state guarantees are interpreted in lockstep with Federal constitutional law, and because the plaintiffs’ claim would fail under Federal law, it must necessarily fail under state law. The Appellate Court reversed, finding that Illinois’ privacy and gender equality rights were not interpreted identically to Federal constitutional law.

The Court was surprisingly quiet during the Hope Clinic argument, giving few clues as to what it might decide. The argument began with the cross-appeal relating to whether the State’s Attorneys of Tazewell and Effingham County should have been allowed to intervene. Neither counsel for the State’s Attorneys nor the State’s counsel received any questions. Chief Justice Kilbride asked counsel for Hope Clinic what came next if the intervenors prevailed — would the case return to the trial court for further hearings? Counsel responded that the case would return for the development of an additional factual record.

Even in the principal appeal, counsel for the state received no questions. Counsel argued that the essential first step of the plaintiff’s action was that the state Constitution granted rights more broad than those included in the Federal constitution. However, nothing in state law supported such a conclusion, according to counsel. Counsel argued that the statute easily satisfied rational basis review for equal protection purposes. The state gender equality provision was limited to discrimination between genders, counsel claimed, which would not apply in the case at bar.

The plaintiff responded that the Supreme Court had never evaluated a parental notification statute pursuant to the Equal Protection Clause, so the issue of whether the state constitution was construed in lockstep with Federal law was not determinative. Justice Thomas asked whether the plaintiff was asking the Court to sit as a super legislature and assess the new studies released since the most recent relevant cases. Counsel responded that the Court should remand the matter in order to give the plaintiff an opportunity to put on its evidence, permitting the Circuit Court to determine whether the burden imposed by the statute was justified. Justice Garman asked whether plaintiff’s evidence had been presented to the legislature. Counsel responded that it had not. Justice Thomas questioned counsel’s challenge to Family Life League v. Department of Public Aid, 112 Ill.2d 449, asking whether plaintiff’s position was that the case had been decided without any consideration of the purpose and legislative history of the privacy clause of the state constitution. Counsel responded that at the time the privacy clause was enacted, the drafters made it clear that their intent was to provide greater protection than the Federal constitution. Justice Thomas noted that at the time the Illinois Constitution was approved, abortion was illegal, and pointed out that Elmer Gertz, the chair of the Convention’s committee on the Bill of Rights, had publicly stated that the privacy clause had nothing to do with abortion. Counsel responded that in fact, the legality of abortion had been unclear at the time, and it was clear that the delegates wanted a constitution which evolved over time. Justice Thomas pressed further, repeating his question about Delegate Gertz’ views; counsel once again responded that the Convention had intended to allow for further development of their constitution. Justice Thomas asked whether, assuming arguendo that the Supreme Court had recognized a state right to abortion, that right was coextensive with the Federal right. Counsel responded that the state constitutional right to privacy was not interpreted in lockstep with the Federal right. In his rebuttal argument, counsel for the state insisted that the state Supreme Court had made it clear in its earlier cases that any protected right involved was no greater in scope than the Federal right. Counsel concluded by arguing that any remand to the Circuit Court for fact finding was incompatible with rational basis review.

 

Argument Report: How Independent Should a Government Ethics Officer Be?

By Kirk Jenkins on Posted in Illinois

Our reports on the oral arguments of the Illinois Supreme Court’s September term continue with Ferguson v. Patton. Ferguson involves a potentially important issue for the growing field of government ethics law: can the ethics officer sue another official of the same government entity to enforce his or her subpoenas? To watch the video of the argument, click here.

Our in-depth summary of the facts and lower court rulings appears here. In Ferguson, the Inspector General of the City of Chicago opened an investigation of how a former City employee had been awarded a sole-source contract, in apparent violation of city rules. He sent a document request to the Corporation Counsel, but the law department claimed attorney-client and work product privileges as to several. So the IG sent the Corporation Counsel a subpoena. The Corporation Counsel objected, the IG responded, and the Corporation Counsel refused to comply.

So the IG sued the Corporation Counsel. The Circuit Court dismissed, but the Appellate Court reversed.

The case presents two questions: (1) can the IG hire a private lawyer when City ordinances provide that the Corporation Counsel is the sole lawyer for the city? and (2) can the Corporation Counsel assert privilege against the IG?

Before the Supreme Court, the City made the interesting decision to take a hard-line view; the Court seemed highly skeptical. Counsel argued that the City was a single entity; an appointed official of the City could not bypass the elected senior executive officer — the Mayor — to sue another appointed official. The dispute at bar, counsel insisted, was internal to the municipal corporation. Justice Theis referred counsel to the IG’s ordinance, providing that the IG "shall take no action" to enforce his or her subpoena for seven days. The ordinance seemed to recognize some relationship between the IG and the Corporation Counsel, according to Justice Theis. Counsel answered that the ordinance required that the IG spend seven days trying to work out disputes, but said nothing about what happened next. Justice Theis asked what would happen after seven days. What would happen if the IG subpoenaed an officer of the Water Department, and he or she refused to cooperate? Counsel answered that no court would have jurisdiction over a lawsuit to enforce the subpoena, but the IG would have other options, such as seeking disciplinary action against an uncooperative target. In any case, even the Corporation Counsel could not sue another officer of the City, even to enforce an IG subpoena. Justice Thomas wondered whether it was problematic to ask the IG to go to the mayor if he or she was investigating the mayor’s awarding of a contract. Counsel responded that the complaint didn’t allege any involvement by the mayor. Nevertheless, the IG had options available short of suing. Justice Thomas followed up, pressing counsel to admit that there was something problematic about asking the mayor to enforce a subpoena in an investigation of the mayor’s conduct. Counsel answered that the IG had options available if the mayor refused to cooperate, including sharing the investigation with outside law enforcement.

Counsel for the IG led off by arguing that a municipality could confer independent power to sue on whoever it wants, and in fact, in the IG ordinance, the City has conferred such power. Counsel found significance in the City’s admission that the IG could acquire power to sue by referendum, since that must mean that there is nothing inherently disqualifying about suing another officer of the same municipal entity. After all, if the IG is forbidden from moving to enforce his or her subpoena for seven days, it must necessarily follow that the IG may enforce after that time; otherwise, why is the time limit necessary? Counsel also pointed out that according to a settled rule of construction, a specific provision — here, the IG ordinance — prevailed over general ordinances such as the Corporation Counsel’s general authority. Counsel concluded by dealing with the cross-appeal on privilege, arguing that the duty to cooperate and disclose material to the IG eliminates any expectation of confidentiality necessary for the existence of the privilege. The Court had no questions at all for the IG (never a good sign for counsel for the appellant).

The City began its rebuttal by pointing out that the IG cited not a single case of one officer of a municipal entity suing another. Justice Karmeier asked whether the City could authorize capacity to sue by ordinance. Once again, the City took a hard-line view, arguing that a voter referendum would be necessary to bestow separate corporate status on the IG, thus authorizing a separate suit.

Turning to the cross-appeal, counsel argued that the privilege is critical to government work. Government officials seek legal advice nearly every day, and according to counsel, it makes no sense that the City Council would have wanted to abrogate the privilege in the IG ordinance. Justice Garman asked whether it made any difference what the purpose of the IG office was. Counsel responded that the IG was an internal watchdog. He or she has many tools at hand if a party refuses to cooperate with a subpoena, including going public with an investigation. Justice Garman asked whether a department head or other officer could shield documents from disclosure by conferring with Corporation Counsel. Counsel answered that given that the Corporation Counsel is an attorney governed by the Rules of Professional Conduct, the Corporation Counsel would be required to act to protect the City if an officer confessed wrongdoing.

Argument Report: When Should a Court Lose the Power to Decertify?

By Kirk Jenkins on Posted in Illinois

Our reports on the oral arguments of the Illinois Supreme Court’s September term continue with Mashal v. City of Chicago. Mashal presents an issue of potentially enormous importance to class action practice in the Illinois state courts: when does the Circuit Court lose the power to decertify the class under Section 2-802 of the Code of Civil Procedure? To watch the video of the argument, click here.

For a detailed discussion of the facts and rulings below in Mashal, click here. The case arises from the City of Chicago’s practice of issuing "fly-by" traffic citations to taxi drivers — citations which were received by mail, rather than being personally served or placed on the vehicle. The City conceded that it issued such citations occasionally, principally when drivers either fled or became aggressive; the plaintiffs alleged that the practice was far more widespread than that. A class was certified in 2002. In 2005, partial summary judgment was entered, finding that the practice was illegal. The following year, the City obtained its own partial summary judgment, eliminating claims before 1995 on statute of limitations grounds.

According to Section 2-802, a court may amend a class certification order at any time "before a decision on the merits." The statute doesn’t define what "decision on the merits" means. In 2007, the City decided to find out, moving to decertify the Mashal class on the grounds that the partial summary judgment on the legality of the practice eliminated the only common issue. The Circuit Court granted the motion to decertify, and the case rose to the Appellate Court on various certified questions. The Appellate Court held that "decision on the merits" meant something similar to the types of judgments and orders given res judicata effect — a complete resolution of the liability claim.

Counsel for the plaintiffs argued that the need for individualized determinations didn’t mean that a "decision on the merits" hadn’t yet occurred, since every class action involves such determinations. Justice Thomas asked counsel to address the City’s argument that the partial summary judgments were a decision on the merits. Counsel responded that if a decision resolving nothing more than the legality of the practice involved in the case became a vehicle for decertification, that exception would swallow the class action statute. Such a rule was antithetical to the underlying reason for class actions: that litigating the claims one by one was impractical. Justice Theis asked whether the Circuit Court’s decision rejecting the City’s affirmative defenses was a decision on the merits, and counsel responded that that order could have been appealed if Rule 304(a) language had been granted.   Justice Theis then suggested that "decision on the merits" and "final judgment" arguably sounded like the same thing, and asked counsel to explain his distinction. Counsel responded that a final judgment was a complete resolution of a claim, granting relief. A decision on the merits didn’t need to be final; the order concluding that issuance of fly-by tickets violates the law was enough. Justice Thomas asked counsel whether counsel was saying that every order resolving affirmative defenses was a "decision on the merits," or only the defenses resolved in the particular order at issue. Counsel responded that the particular defenses involved in the court’s order made the decision one on the merits.

Counsel for the defendant responded that the reason for setting the cutoff for decertification at the decision on the merits was to keep the option open until all possibly common issues have been decided. Justice Garman asked whether some determination of liability to a class member or members was required. Counsel responded "yes", and in the case at bar, such a determination was impossible given the need to determine whether each class member had received a "fly-by" citation. Justice Burke pointed out that the City had admitted to issuing such citations; counsel responded that the City had admitted the practice as a general matter, but the taxi driver class members had not linked themselves to the limited group who received such citations. Justice Thomas asked counsel to address plaintiffs’ argument that there was no rebuttal to the proposition that the class members had received fly-by citations. Counsel answered that such affidavits were not admissible, and in fact there were many reasons to question the class members’ credibility. Counsel argued that deposition testimony was needed to determine the credibility of all class members. Justice Garman wondered why issues like credibility and individual liability weren’t part of ancillary proceedings. Counsel responded that under the circumstances presented, liability would have to be determined class member by class member, and this was the time to conclude, once and for all, whether class prerequisites were met.

On rebuttal, Justice Karmeier asked counsel for the plaintiffs to respond to the City’s argument that plaintiffs’ reading of the statute would eliminate courts’ ability to reevaluate whether common issues continued to predominate. Counsel answered that it was necessary to set a cut-off point. Although not all summary judgments would bar decertification, this one — holding that defendant’s conduct was unlawful — would. Justice Thomas asked how the Court should take into account the fact that individual plaintiffs would have to proceed with small liability cases, given that the rule announced by the Court would be used even outside the class action context. Counsel responded that the Court’s ruling would be limited in impact — even res judicata involved subtle differences that might limit the scope of the Court’s decision. At any rate, counsel argued that this consideration should not affect the Court, since the legislature could step in and change any rule it didn’t approve of.

Washington Supreme Court Makes a Surprising About-Face in Third-Party Asbestos Liability

By Angelo Carosio on Posted in Asbestos

The Supreme Court of Washington recently decided the case of Macias v. Saberhagen Holdings, Inc. – a decision that flows against the trend of courts ruling that manufacturers of non-asbestos containing products cannot be held liable simply because their products were used in conjunction with or in the vicinity of asbestos products manufactured by third parties.

In Macias, plaintiff Leo Macias was allegedly exposed to asbestos dust while working as a toolkeeper in a shipyard.  One of his duties had been to clean and maintain respirators that other workers wore to filter out dangerous contaminants. Mr. Macias later developed mesothelioma.

In a 5-4 decision authored by Chief Justice Barbara Madsen, the Court concluded that the defendant manufacturers of the respirators owed a duty to warn Mr. Macias of the hazards of asbestos. But just four years ago, this same Court announced in Braaten v. Saberhagen Holdings, Inc. and Simonetta v. Viad Corp. that manufacturers have no duty to warn of the dangers inherent in products they do not manufacture, sell, or supply.  The cases of Braaten and Simonetta are in line with decisions from other jurisdictions.  (See e.g. O’Neil v. Crane Co. (2012) 53 Cal.4th 335; Lindstrom v. A-C Product Liability Trust (6th Cir. 2005) 424 F.3d 488; Ford Motor Co. v. Wood (1998) 119 Md. App. 1; Baughman v. General Motors Corp. (4th Cir. 1986) 780 F.2d 1131; Acoba v. General Tire, Inc. (1999) 92 Haw. 1; Rastelli v. Goodyear Tire & Rubber Co. (1992) 79 N.Y.2d 289;  Faddish v. Buffalo Pumps, Inc. (S.D. Fla. Aug. 2, 2012) 2012 U.S. Dist. LEXIS 108055.)

Interestingly, Chief Justice Madsen authored the majority opinion in Braaten.  Another of the Justices “switching sides” in Macias to find potential liability on the part of the defendants was Justice Mary Fairhurst, who had previously voted with the majority in Braaten and Simonetta.  Justice James Johnson, who had voted with the majority in Braaten and Simonetta, penned Macias’s dissent.

The Macias majority concluded that “Simonetta and Braaten do not control the present case because the duty at issue is to warn of the danger of asbestos exposure inherent in the use and maintenance of the defendant manufacturers’’ own products, the respirators.”  Specifically, the Court reasoned that the plaintiffs’ claims “are fundamentally different from those in Simonetta and Braaten because here the focus of the claims is on the respirator itself[:] it failed to include adequate warnings and instructions regarding the safe use, handling, maintenance, and cleaning of the respirator.”  The plaintiffs’ claims “rest squarely on the respirator product in and of itself, and specifically on the inadequate warnings and instructions of the respirator product, without reference to any other manufacturer’s products.”

The Court noted that the defendant manufacturers in Simonetta and Braaten were outside the chain of distribution of the harmful asbestos products; the defendants’ products did not require the use of asbestos, were not specifically designed to be used with asbestos, by their very nature did not necessarily involve exposure to asbestos, and “only happened to be insulated by asbestos products because the Navy chose to insulate the equipment on its ships with asbestos products.”  In contrast, the Court reasoned that the respirators were specifically designed and intended to filter contaminants from the air, including asbestos. And, integral to reuse, the respirators had to be safely cleaned.  The majority distinguished the respirators from other tools such as hammers and tarps – which were used around the shipyards and similarly returned for cleaning – that came into contact with hazardous asbestos by happenstance: “the respirators come into contact with asbestos because that is what they are designed to do.”

Thus, according to the majority, the defendants in Macias were in the chain of distribution of the products that posed the risk to the plaintiff’s asbestos exposure – the respirators. It did not matter, said the majority, that the respirator manufacturers were not in the chain of distribution of products containing asbestos when manufactured.  The majority concluded: “[t]his case comes within the general rule that a manufacturer in the chain of distribution is subject to liability for failure to warn of the hazards associated with use of its own products.”

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Argument Report: Forum Non Conveniens and Forum Shopping

By Kirk Jenkins on Posted in Illinois

Our reports on the oral arguments of the Illinois Supreme Court’s September term continue with Fennell v. Illinois Central Railroad Co. Fennell presents the issue of whether a case with no apparent connection to Illinois, filed here after an initial lawsuit was thrown out of plaintiff’s first choice forum (and home state), could remain in Illinois. To watch the video of the argument, click here.

The facts and holding of the decision in Fennell are summarized here. Plaintiff alleges exposure to asbestos, diesel exhaust, sand, environmental tobacco smoke and toxic dusts, fumes and gases during his thirty-seven year employment with the defendant railroad. Plaintiff filed a putative class action in Mississippi in 2002, but the action was dismissed without prejudice on the motion of the defendant in 2006. So plaintiff sued in St. Clair, Illinois.

The defendant moved to dismiss under forum non conveniens: the plaintiff was a lifelong resident of Mississippi; he wasn’t injured in Illinois; and perhaps thirteen potential witnesses, including plaintiff’s family, co-workers and treating physicians, lived in Mississippi. The defendant cited the need to call its risk mitigation manager for occupational disease claims as well. He lived in Memphis, and testified that he would find it easier to come to Copiah Co., Mississippi (the alternative forum) than to St. Clair County. The plaintiff responded that defendant was represented by regional counsel in St. Clair County, evidence was located in St. Clair, and he wanted to call two defense representatives, one in Illinois and one in Memphis. The Circuit Court denied the motion to dismiss, and the Appellate Court affirmed.

Counsel for the defendant argued that documents are less important than they would otherwise be, under the circumstances, because of the ease of moving documents from one place to another. As for witnesses, counsel argued that only two witnesses lived in Illinois, while thirteen were in Mississippi, beyond the reach of the court in the event that trial occurred in Illinois. Depositions are not a substitute for live testimony, counsel argued; without the ability to call live witnesses, the defendant would be unable to quickly adapt to unexpected trial testimony. Justice Burke asked whether the defendants had business operations in Illinois, and whether that fact should have any bearing on the ultimate result. Counsel responded that the mere fact that a corporation did business in a state could never be sufficient without more to defeat a forum non conveniens motion.

Counsel for the appellee emphasized that a defendant must show exceptional circumstances in order to justify overruling the plaintiff’s choice of forum. The suit had been filed in Illinois for several reasons, according to the plaintiff– the plaintiff needed access to fragile documents located in Illinois, and the documents were located in the defendant’s counsel’s office, down the street from the St. Clair County courthouse. Justice Garman asked whether any part of plaintiff’s alleged exposure had happened in St. Clair County, and counsel answered no. Plaintiffs’ counsel argued that defendants had substantially changed their story in hopes of winning their forum non conveniens motion. Justice Garman suggested that it was hardly surprising that defendant would be uncertain of which witnesses would be called early in the case, when a forum non conveniens motion was filed. Counsel responded that the case had been in Mississippi for four years, discovery had been done and depositions taken, and defendant had substantially delayed filing its motion after re-filing in Illinois Counsel argued that the initial filing in Mississippi was not relevant, and the defendants needed, at most, two witnesses from Mississippi — the plaintiff’s treating physicians. According to counsel, the defendant had failed to meet the burden of justifying dismissal, and if the Court reversed, the Court was saying that defendants didn’t have to. Chief Justice Kilbride asked whether the dismissal in Mississippi had been instigated by the defendant, and whether anything in the order of dismissal had contemplated re-filing in Illinois. Counsel responded that although the order didn’t mention Illinois, it certainly contemplated re-filing somewhere.

 

Argument Report: The Perils of Waiting Too Long on Your Fees Claim

By Kirk Jenkins on Posted in Illinois

Our reports on the oral arguments of the Illinois Supreme Court’s September term continue with Rodriquez v. Department of Financial and Professional Regulation. To watch the video, click here.

The facts and holding below are set forth in detail in our preview of the argument. Here’s the question – when you get an administrative rule struck down, do you have to bring your claim for attorneys fees under Section 10-55(c) of the Illinois Administrative Procedure Act, 5 ILCS 100/10-55(c), in the same action as your challenge to the rule, or can it wait? In Rodriquez, the trial court held that the plaintiff was required to bring the fees claim as part of his challenge to the administrative rule; but the Appellate Court reversed, holding that the legislature had not imposed a time limit on the Section 10-55(c) action for fees.

Counsel for the State argued that the plain language of the statute makes it clear that the legislature was talking about a fees request brought as part of a single action. According to counsel, no one had ever tried to extend the statute to multiple actions. Justice Garman asked whether, if the Appellate Court strikes down a rule, the Appellate Court awards attorneys fees. Counsel responded that the court striking the rule should hear the motion for fees. The challenger should plead the claim for fees in the complaint, or he (or she) can plead the claim for thirty days after the final order striking the administrative rule. Counsel for the State pointed out that if the plaintiff’s position prevailed, the State would be looking at long-tail liability for fees, given the plaintiff’s apparent position that a fees request remained viable forever. Justice Burke asked whether that wasn’t what the Appellate Court had found — that the legislature had not intended to impose a time limit? Counsel responded that the language of the statute should be limited to a single action — the case in which the administrative order was struck down. Justice Garman asked whether the State’s argument was that the fees claim was a separate cause of action or a separate claim. Counsel responded that it was a separate claim, but not a separate cause of action. Chief Justice Kilbride asked whether, if the case had wound up in a final administrative action, the individual could couple a claim for fees with a complaint seeking judicial review of the final administrative action. Counsel for the State answered that that was a plausible scenario, and he thought that was what the legislature intended to happen, as opposed to declaratory judgment actions brought before the administrative rule fell. Justice Theis asked counsel to respond to the Appellate Court’s reliance on Town of Libertyville v. Bank of Waukegan. Counsel for the State responded that in Libertyville, the Court retained jurisdiction to consider an award of fees in a single action. He concluded by summarizing his position: (1) the statute controls; and (2) res judicata bars the plaintiff’s action.

When the plaintiff began, Justice Garman asked whether counsel could name any other examples of a cause of action with no statute of limitations. Counsel responded that the claim for fees might have a statute of limitations — the five-year catch-all statute that might apply. Justice Theis asked whether plaintiff argued that the fees request was a claim or a cause of action. Counsel responded that the request was a cause of action. Then why shouldn’t it be handled pursuant to our usual rule, Justice Theis asked — all claims must be brought before final judgment, and if they’re not, there’s a res judicata bar? Counsel responded that the claim did not accrue until the rule was invalidated. Justice Theis followed up by asking when the claim accrued; counsel responded that the claim had accrued twice, once when the trial court invalidated the order, and again when the Appellate Court reinstated the court’s original order and struck down the rule. Justice Thomas asked whether there was an opportunity in the second Rodriquez action to bring the attorneys fees claim. Counsel responded that there was not, since the action was not ripe until the rule had been struck down.

Counsel for the State concluded, arguing that the statute plainly intended for the fees claim to be part of a claim, not a separate cause of action. Counsel emphasized once again the various terms in the statute which appeared to refer to a single, unitary lawsuit.

 

Argument Report: Does the Doctrine of Election Apply to Trusts?

By Kirk Jenkins on Posted in Illinois

Our reports on the oral arguments of the Illinois Supreme Court’s September term continue with In re Estate of Boyar.

Can you accept money from your parents’ will and then challenge it in court? No; that’s settled in nearly every state.

But, as counsel for the trustee in Boyar told the Court, living trusts have become a commonplace substitute for wills; that way, the decedent’s "estate" can be distributed without probate. Does the doctrine of election apply to trusts?

Our preview of the argument, summarizing the facts and holding below, is here. Years before his death, the decedent set up a trust. Through several trust amendments, one provision was unchanged: the beneficiaries could remove the trustee by majority vote. Then, just before his death, the decedent amended the Trust one final time — the Sixth Amendment — revoking the power to remove and appointing a new trustee. The petitioner challenged the Sixth Amendment, arguing that decedent lacked the mental capacity to execute it. When the petitioner acknowledged that he had received personal property belonging to the trust as a partial distribution of his interest, the trustee moved to dismiss the challenge, citing the doctrine of election: a party may not accept benefits under an instrument and then challenge it. The Circuit Court dismissed and the Appellate Court affirmed.

Justice Garman noted that the petitioner’s case presented two questions: (1) does the doctrine of election apply to trusts; and (2) if it does, did the trial court abuse its discretion in applying the doctrine here. Counsel responded that the issue was whether the doctrine of election should be applied to an entirely severable codicil to the trust. Justice Karmeier asked whether, if the petitioner were challenging the distribution, he would still argue that the doctrine of election did not apply. Counsel conceded that he was not arguing that the doctrine would never apply to any trust at any time; the question depended on the facts and circumstances. Justice Garman asked whether petitioner knew the facts of the Sixth Amendment when he accepted the distribution, and whether it made a difference. Counsel responded that one of the factors in applying the doctrine of election is whether a party knew the facts; a doctrine based on equity should be applied without hard-line, black-letter rules, with a grasp of the particular facts. Justice Karmeier asked whether it made any difference to petitioner’s argument whether the petitioner knew of the terms of the Sixth Amendment when he accepted the property. Counsel answered that petitioner did not and could not have known that the items of personal property he accepted were owned by the Trust, and that the doctrine of election has never been applied to a severable amendment to a trust anyway.

When the counsel for the trustee began, Justice Karmeier asked whether it made a difference if a trust was changeable during the lifetime of the settlor. Counsel responded that a beneficiary could accept gifts during the life of the settlor, but not after. Justice Garman asked whether the petitioner knew of the facts involved in the challenge; counsel alleged that the petitioner had learned of the trustee’s identity and the terms of the Sixth Amendment by a direct conversation and two letters. Justice Thomas asked why there was a conflict between accepting benefits from the trust and challenging a provision that had nothing to do with the distribution. Counsel answered that the petitioner had waived his severability claim, and argued that far from being severable, the Sixth Amendment was a critical component of an integrated document. Justice Theis noted the Appellate Court’s comment that the petitioner could file a petition to remove the trustee, and wondered why the doctrine of election did not bar that remedy as well. Counsel responded that a removal petition would have to rest upon alleged misconduct in the administration of the trust. Justice Karmeier echoed Justice Thomas’ earlier question, wondering what was inconsistent about accepting a distribution and challenging a severable trustee provision; counsel responded that the petitioner should be barred from challenging any provision of the instrument. Justice Karmeier wondered whether the court should look to the underlying reason for the doctrine — preventing parties from taking inconsistent positions — but counsel again insisted that the Sixth Amendment was part of a single integrated document.

In rebuttal, counsel for the petitioner conceded that the petitioner was aware of the existence of the trustee before accepting the distribution, but again insisted that the petitioner was unaware of the specifics, or of what property the trust owned. Justice Garman wondered whether it was essential to the petitioner’s argument that he was challenging a severable provision; moments later, Justice Karmeier asked whether petitioner’s argument would be the same if the separate amendment dealt with distribution. Counsel responded that in his view, each case had to be evaluated on its individual circumstances. Responding to Justice Karmeier’s question, counsel agreed that he was not seeking a bright line rule that challenging a separate amendment to the trust could never be subject to the doctrine of election.

 

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