The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

The Limitations of Rule 304: Is An Order of Foreclosure Appealable?

By Kirk Jenkins on Posted in Illinois

Our preview of the September term of the Illinois Supreme Court continues with EMC Mortgage Corp. v. Kemp [pdf].

Kemp involves a tangled procedural history, but ultimately, a reasonably simple question: when can you appeal from an order for the foreclosure sale of a home?

Plaintiff filed its foreclosure complaint in the summer of 2006. The defendant responded by challenging the plaintiff’s capacity to sue as the legal holder of the mortgage, first in an answer, and later in a counterclaim. In response to the counterclaim, the plaintiff filed an affidavit from an assistant vice president saying that the original lender had assigned the loan to the plaintiff on December 29, 2006.

The defendant filed a slander of title counterclaim, which the trial court dismissed. Ultimately, in June 2009, the trial court finally entered a judgment of foreclosure. But after reconsideration was denied, the defendant filed for bankruptcy. The bankruptcy court ultimately lifted the stay, and several more battles ensued. In October 2010, the defendant offered a new attack on the plaintiff’s standing, pointing out that although the bankruptcy order lifting the stay on the sheriff’s sale listed "EMC Mortgage Corporation/Chase Home Finance LLC" as the relevant party, none of the orders before that had said anything about Chase as the successor to EMC. The trial court denied the defendant’s motion to overturn the sale entirely, but granted language under Supreme Court Rule 304, which permits the immediate appeal of final judgments involving less than all parties when there is no just reason for delay. The court noted that while there seemed to be some question of plaintiff’s standing, there was also grounds for disquiet about the timing of defendant’s objection. Not long after, the defendant filed a motion for reconsideration, pointing out that plaintiff appeared to have acquired the mortgage several months after filing its complaint. The trial court denied reconsideration, but once again included Rule 304 language.

Before the Appellate Court, the defendant argued that nobody can sue to foreclose a mortgage he doesn’t own. The plaintiffs responded that the Appellate Court had no jurisdiction to resolve anything; Rule 304 only made orders which were otherwise final appealable, and foreclosures couldn’t be appealed until the sheriff’s sale has happened. The defendant replied that since she was appealing from denial of an Emergency Motion to Vacate Judgment under Section 2-1401 of the Code of Civil Procedure, 735 ILCS 5/2-1401, she didn’t need the Rule 304 language in the first place — the order was already appealable. The problem was, according to the Appellate Court, that a Section 2-1401 motion assumed an underlying final order. If the underlying order wasn’t final — and the order of foreclosure wasn’t — then defendant labeling her motion a Section 2-1401 motion didn’t make it one, and the result wasn’t final or appealable.

Kemp will be argued at the 9:00 am session of the Court on Tuesday, September 18, 2012. Join us back here later today for a preview of the argument in In re Marriage of Mathis.

Can Taxpayers Challenge the State’s School Financing System?

By Kirk Jenkins on Posted in Illinois

Our preview of the September term of the Illinois Supreme Court continues with Carr v. Koch [pdf].

Plaintiffs have challenged states’ school financing systems on constitutional grounds for nearly two generations now. The state Supreme Courts of Montana, New Jersey, Kentucky and Texas all struck down their state systems, while other challenges failed, such as San Antonio School District v. Rodriguez before the United States Supreme Court.

This month, the Supreme Court wades into the second challenge to Illinois’ system in Carr. The named plaintiffs in Carr are taxpayers — one in Homewood-Flossmoor, one in Cairo. They claim that the state’s financing system in effect requires school districts with lower property values to impose property taxes at a higher rate than those imposed on similarly situated taxpayers in other areas of the state.

For each school district in the state, the state sets a "Foundation Level," and then estimates what percentage of that level each district could achieve, based on local funds, with no state money at all. State aid is set on a sliding scale, depending on whether the local district can raise relatively little, nearly all, or more than all of the basic "Foundation Level."

The plaintiffs had two problems heading in. First, the Illinois Supreme Court has already upheld the state financing system once, in Committee for Educational Rights v. Edgar. There, the Court held that disparities in local funding were rationally related to the legitimate interest of maintaining local control over education. Second problem: as I mentioned above, the plaintiffs were taxpayers, not students. And the property tax assessment rates were set by the local authorities, who weren’t defendants in the action.

The trial court held that both of these problems were fatal to the plaintiffs: Edgar governed, and the taxpayer plaintiffs didn’t have standing anyway, since school districts were free to impose any tax rates they wanted (and in fact, Cairo’s School District property tax was more than double the one in Homewood-Flossmoor). The Appellate Court affirmed, pointing out that striking down the state system would likely lead to even higher tax rates on the plaintiffs to make up for the loss of state funds. As for Edgar, the plaintiffs argued that the state had moved away from local control by imposing state student performance standards, but the Appellate Court pointed out that the plaintiffs didn’t allege that students in their districts had failed to meet those standards.

Carr will be argued at the 9:00 am session of the Court on Tuesday, September 18, 2012. Join us back here later today for a preview of the argument in EMC Mortgage Corp. v. Kemp.

Can You Sue the Court-Appointed Psychologist in a Child Custody Proceeding?

By Kirk Jenkins on Posted in Illinois

Our preview of the September term of the Illinois Supreme Court continues with Cooney v. Rossiter [pdf].

Cooney occurs at the intersection of res judicata and class action work: if a putative class action goes down in flames on the merits before class certification, is the putative class representative’s individual claim barred too?

Plaintiff Deborah was awarded custody of her two children in her divorce. In 2001, plaintiff’s ex-husband filed for a change of custody. She sought appointment of a psychological evaluator in order to provide recommendations about the best interests of her children. The trial court appointed defendant, pursuant to Section 5/605 of the Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/605). The defendant concluded that plaintiff Deborah and her parents (the co-plaintiffs) suffered from Munchausen’s by Proxy Syndrome, and opined that their treatment of the child Christopher was child abuse. The plaintiffs allege that the trial court granted the ex-husband’s petition for a change of custody based on the defendant’s report, which the defendant allegedly intended to injure the plaintiffs. According to the plaintiffs, the defendant deliberately made false statements to an investigator from the Illinois Department of Children and Family Services, and as a result, the DCFS entered a finding against plaintiff Deborah for child abuse.

The plaintiffs filed a federal class action civil rights suit against the defendant. The district court dismissed, holding that the defendants were absolutely immune from liability, and the Seventh Circuit affirmed. Cooney v. Rossiter, 583 F.3d 967 (7th Cir. 2009). So the plaintiffs sued the defendant in state court.  The state court dismissed based on absolute immunity and res judicata.

The Appellate Court affirmed, holding that res judicata barred the plaintiffs’ new suit. Despite the addition of plaintiff’s son as a party plaintiff, the first suit was unquestionably a final judgment on the merits. The Federal 1983 suit and the plaintiffs’ state court claim for intentional infliction of emotional distress "arose from the same set of operative facts." And although plaintiff Deborah’s parents and son were not parties to the Federal action, they were privies to plaintiff Deborah.

So far, so easy. But does it matter that the Federal action was a putative class action? According to plaintiffs, Benton v. Smith requires a categorical answer that res judicata does not apply to individual actions following the failure of a class action. The Appellate Court disagreed, distinguishing Benton‘s facts and denying that it had adopted such a blanket rule.

In the alternative, the Appellate Court held that the defendant was entitled to absolute immunity. Relying upon the Seventh Circuit’s decision in the earlier class action, the Appellate Court found that a Court-appointed psychologist acted under the Court’s direction, and was therefore entitled to the same protection from suit by disappointed litigants as the judge herself was: "court-appointed evaluators must be accorded absolute immunity so as to allow them to fulfill their obligations without worry of harassment and intimidation from dissatisfied parents."

Cooney will be argued at the 9:00 am session of the Court on Tuesday, September 18, 2012. Join us back here later today for a preview of the argument in Carr v. Koch.

Can You Share Your Attorney’s Advice With Your Business Partners?

By Kirk Jenkins on Posted in Illinois

Our preview of the September term continues with Center Partners, Ltd. v. Growth Head GP, LLC [pdf].

Center Partners involves a dispute over the purchase of a property company. Defendants – a maze of corporations, partnerships and trusts we’ll call Westfield, Rouse and Simon – negotiated the purchase of the assets of Rodamco North America. Rodamco owned Head Acquisition, the general partner of Urban Shopping Centers. The same day the purchase agreement was signed, Westfield, Rouse and Simon entered into a separate agreement deciding who would get what among Rodamco’s assets, and the purchase each would pay, as well as entering into yet another agreement allocating Urban’s mall interests among themselves.

During the negotiations to buy Rodamco, Westfield, Rouse and Urban frequently shared with one another their individual attorneys’ legal advice as they attempted to work through the issues and structure the necessary agreements. But the trouble started later, when the plaintiffs – the minority limited partners of Urban – sued Westfield, Rouse and Simon for breach of fiduciary and contractual duties in connection with the acquisition.

In October 2008, the plaintiffs filed a motion to compel seeking production of all communications disclosed between Westfield, Rouse and Urban during the negotiations. The motion was granted on the grounds that the privilege had been waived. Eighteen months later, the plaintiffs filed a second motion, seeking all attorney-client communications in the possession of any defendant relating to the same subjects covered by the earlier documents, whether shared among the partners or not, arguing that the disclosure of some communications had worked a general subject-matter waiver. When the trial court granted that motion too, Westfield sought and received a “friendly contempt” order, and off to the Appellate Court the whole dispute went.

Illinois has recognized subject matter waiver in privilege law for nearly a century, but the defendants argued that such waivers were limited to litigation. They shared their attorneys’ advice in the course of a business negotiation. The Appellate Court disagreed: “[W]e find no reason to distinguish between a waiver occurring during the course of litigation or during a business negotiation.” In the alternative, the defendants argued that the waiver found by the trial court – which extended to 279 documents in all – was severely overbroad, but the Appellate Court held that the defendants had failed to specifically show which documents might still be protected.

Not surprisingly, the defendants have attracted heavyweight amicus support before the Supreme Court. The first brief, cosigned by the Illinois State Bar Association, the Association of Corporate Counsel and the Association of Corporate Counsel Chicago Chapter, argues that unless the Appellate Court’s decision is overturned, “Attorneys will have a difficult, if not impossible task of instructing clients about the risk of waiver.” The Bar Association points out that the Appellate Court’s decision is contrary to the letter and spirit of a number of different provisions of the Rules of Professional Conduct and their supporting commentary. For example, Comment 5 to Rule 1.6 recognizes that a lawyer may be impliedly authorized to make a disclosure that facilitates a satisfactory conclusion to a matter. Rule 1.6(b) permits limited disclosure in certain additional specified circumstances, such as where necessary to enable the affected persons to prevent or mitigate reasonably certain harm. Rule 2.3, entitled “Evaluation for Use by Third Persons,” specifically permits a lawyer to provide an evaluation of a matter for the use of someone other than the client, to the extent consistent with the representation – a rule which is arguably mooted by the Appellate Court’s decision. Finally, the decision is inconsistent with Federal Rule of Evidence 502, mirrored in Illinois’ Proposed Rule 502 – both of which limit subject matter waiver to court or agency litigation.

In a second amicus brief, the International Association of Defense Counsel and the Illinois Association of Defense Trial Counsel argue that the Appellate Court’s decision threatens the attorney-client relationship in a variety of circumstances beyond real estate negotiations, including settlement discussions, grand jury investigations, compliance with SEC filing requirements and patent disputes. This second group of amici urge the Court to squarely limit the doctrine of subject matter waiver to litigation alone, arguing that the rationale for the waiver – blocking one from using limited disclosure as a sword, while shielding related materials – is not applicable in most business transactional situations. If the Court is unwilling to limit the waiver, amici argue, the Court should adopt clear guidance for the lower courts to apply in determining the scope of the waiver.

Center Partners will be argued at the 9:00 am session of the Court on Tuesday, September 18, 2012. Join us back here tomorrow for a preview of the argument in Cooney v. Rossiter. 

A Potential Liability Trap for Settling Joint Tortfeasors

By Kirk Jenkins on Posted in California

Late last month, the California Supreme Court raised the stakes for defense counsel negotiating settlements in multiple defendant cases, abolishing the common-law “release rule” in Leung v. Verdugo Hills Hospital [pdf]. Leung has gotten a good bit of attention in the news and the blogs, including stories in The Wall Street Journal, Findlaw, Plaintiff Magazine [pdf] and Law360.  

According to the “release rule,” a plaintiff’s settlement and release of one joint tortfeasor releases all nonsettling tortfeasors from any liability for the plaintiff’s economic damages. The traditional rationale for the rule has been that since defendant can receive only one compensation for the joint wrong, and each joint tortfeasor is responsible for the entire liability, any payment must necessarily satisfy the claim.

California law has developed two “work-arounds,” one statutory and one judge-made.

In 1957, the legislature enacted C.C.P. Section 877, which establishes a system of “good faith settlements.” Where the trial court determines the settlement to be in good faith – meaning in the reasonable ballpark of the settling defendant’s liability, taking into account that the defendant should pay less in settlement than after trial – the settlement reduces joint tortfeasors’ potential liability, but does not automatically release them. Once a good faith determination is made, nonsettling defendants are barred from later suing the settling defendant for contribution on the grounds that the settling defendant paid too little.

The judge-made work-around was even simpler: courts held that as long as the settlement agreement was phrased as a “covenant not to sue” rather than a “release” (a distinction the courts ultimately admitted was largely without a difference), non-settling joint tortfeasors would not be released.

Leung involved an infant who sustained severe brain damage from kernicterus, a condition in which excessive bilirubin builds up in a newborn’s body and migrates to the brain. Before trial, the plaintiffs settled with the pediatrician for $1 million – his policy limits. The pediatrician agreed to participate in the trial, and in return, the plaintiffs gave him a release. The pediatrician’s petition for a good faith determination under Section 877 was denied, but the parties went ahead with the settlement anyway. At trial, the jury returned a verdict against both the pediatrician and the hospital, awarding over $95 million in future medical expenses and lost future earnings. The trial court entered judgment against the hospital for 95% of all economic damages – the share of liability for the pediatrician and hospital – subject only to the $1 million settlement as a setoff. On appeal, the Court of Appeal applied the release rule and reversed the judgment with respect to economic damages, holding that the release of the pediatrician released the hospital as a matter of law.

The Supreme Court reversed the Court of Appeal: “In light of the unjust and inequitable results the common law release rule can bring about, as shown in this case, we hold that the rule is no longer to be followed in California." After considering various alternatives for a new rule, the Court held that a settlement by a joint tortfeasor, absent a finding of good faith, operates as a setoff against the ultimate judgment, but that the nonsettling tortfeasors retain the right to pursue the settling defendant for contribution.

What all this means as a practical matter is that Section 877 good faith hearings will likely be harder-fought than ever. Settling defendants will litigate the matter aggressively, since a good faith determination cuts off future satellite lawsuits for contribution. Counsel for settling defendants should give careful consideration to including in the settlement agreement a provision allowing the parties to abrogate the settlement if a good faith determination is denied. Nonsettling defendants will have every incentive to scrutinize the settlement carefully and challenge anything not in the Section 877 “ballpark.”

 

Conceding a Battle But Winning the War?

By Kirk Jenkins on Posted in Illinois

Yesterday, the Illinois Supreme Court posted its docket for the upcoming September term [pdf]. Today, we begin a series of previews of civil cases scheduled to be argued this term, starting with the first civil argument on the docket: Hernandez v. Bernstein.

In 2005, the plaintiffs sued the defendants, his former attorneys, alleging that they negligently failed to advise him to sue other potentially liable parties in connection with his workers’ compensation claim. The defendants moved to dismiss, pointing out that the underlying claims the plaintiffs were relying on had been time-barred before the defendants began representing the plaintiffs. The trial court agreed and dismissed without prejudice. But the plaintiffs amended, alleging that the defendants should have advised them to sue the firm that represented plaintiffs while the underlying claims were still viable. The trial court refused to dismiss, but in April 2009, the plaintiffs voluntarily dismissed the lawsuit without prejudice.

Five months later, the plaintiffs were back, filing a one-count complaint against plaintiffs, alleging both that defendants should have advised them to sue their former lawyers, and the underlying time-barred claims. The trial court dismissed the suit as res judicata, and the plaintiffs appealed.

Hernandez revolves around two principal issues. Were the allegations arising from the underlying injury, on the one hand, and the allegations arising from the failure to sue the former lawyers, on the other, one claim or two? And even though the plaintiffs dismissed the first suit without prejudice, did that make the trial court’s dismissal final for res judicata purposes?

The distinction between a “claim” and a “theory” can occasionally be a somewhat slippery one, particularly for young lawyers and law students. The issue seems to be attracting some interest on the Court at the moment; in another case likely to be argued later in the year, Wilson v. Edward Hospital, the Court will consider whether actual and apparent agency are separate claims for res judicata purposes.

Before the Appellate Court, the defendants insisted that the case involved two separate “claims” – negligence in failing to sue the additional parties potentially responsible for the underlying injuries, and negligence in failing to sue the original lawyers. If true, this would have rendered the earlier order disposing of the allegations regarding other tortfeasors “final” for purposes of res judicata. But the Appellate Court disagreed, holding that only one “claim” was brought – legal negligence – and the dismissal order had merely allowed the plaintiffs to plead additional facts.

So if the earlier dismissal wasn’t final when it was entered, did it become final when the plaintiffs voluntarily dismissed the first suit? This question involves a debate between two of the Court’s earlier cases, Hudson v. City of Chicago, 228 Ill.2d 462 (2008) and Rein v. David A. Noyes & Co., 172 Ill.2d 325, 334 (1996).  Both Hudson and Rein hold that a voluntary dismissal can, under certain circumstances, have res judicata effect, and both will be central once again later in the year in Wilson. In Hernandez, the Appellate Court distinguished both Hudson and Rein, reading the earlier cases as relating to the effect of a dismissal on otherwise final earlier orders.

Hernandez will be argued at the 9:00 session of the Court on Thursday, September 13, 2012, and will likely be decided within two to four months.

Join us back here tomorrow for a preview of the argument in Center Partners, Ltd. v. Growth Head GP, LLC.

Game Over: Time Runs Out on Assistant Coach

By Kirk Jenkins on Posted in Employment

Usually, a negligent misrepresentation case from the Minnesota Supreme Court would fall a bit outside my usual purview for blogging. But as a lifelong Kentucky basketball fan, how could I resist commenting on Williams v. Smith [pdf]: a suit revolving around the hiring of an assistant basketball coach with an ex-Kentucky coach as a defendant, and a former Kentucky player — the son of another former Kentucky coach — as the plaintiff’s ex-boss? And it turns out there are important takeaways from the case.

Orlando "Tubby" Smith resigned as Kentucky’s head coach in March 2007 to coach the University of Minnesota Golden Gophers. Shortly after he was hired, he contacted several individuals as potential assistants, including plaintiff Jimmy Williams – a former Minnesota assistant with pro coaching experience. After several days of negotiation, Smith allegedly called Williams, and asked if Williams was ready to join him at Minnesota. Williams said "yes." That same day, Williams called his then-boss, Oklahoma State head coach Sean Sutton, and told him he was resigning as assistant at OSU. Oklahoma State quickly moved to replace Williams, but Minnesota Athletic Director Joel Maturi balked at the idea of rehiring Williams, since Williams (among others) had been accused of NCAA rules violations during his earlier tenure at the school. Ultimately, Williams’ apparent offer dissolved, and he sued the school and Maturi for breach of contract and negligent misrepresentation, among other things. Later, he sued Smith too, and the cases were consolidated. The jury found for Williams on the negligent misrepresentation claim, awarding $1.24 million in damages, the court of appeals affirmed, and the Supreme Court granted review.

Which is when several Justices headed for the door. Four of the seven Justices who either held degrees from the University of Minnesota, or in one case had taught there for several years, recused themselves from hearing the case.

So what happens when an appellate court loses its quorum? It’s not unheard of; most recently in California, the entire state Supreme Court recused itself in a case challenging the potential sale of state buildings, including the one where the Court sat. In such cases, pro tem Justices must be appointed from the lower courts — if that’s what it takes, an entire pro tem Court. In Williams v. Smith, two pro tem Justices were appointed, including one retired Justice from the state Supreme Court.

The principal issue before the state Supreme Court was: did Smith have a tort duty of care not to negligently mislead Williams?

The breadth of the negligent misrepresentation tort is an issue which frequently appears before state Supreme Courts around the country. Such cases sometimes illustrate the old maxim that hard cases make bad law, with sympathetic plaintiffs and facts that might seem, at least on the surface, to call for relief. But Minnesota, like most states, has resisted the temptation to expand the tort, limiting it to certain legal relationships and situations where one party had superior knowledge. Most states — including Minnesota — have so far refused to extend a duty of care to arm’s length commercial transactions which are more adversarial rather than advisory.

But can a relationship with a government employee like Smith ever be "adversarial"? By a 3-2 vote, the Court concluded that under the circumstances, Smith owed Williams no tort duty: (1) the parties were sophisticated businessmen negotiating at arm’s length; (2) Smith did not have superior knowledge, since — at least according to the Court majority — the limitations in Smith’s authority to hire were noted in a publicly available website; and (3) the weight of authority around the country has refused to recognize a tort duty in negotiating for prospective government employment.

Williams v. Smith reinforces important lessons in employment litigation, especially when representing government employers. Plaintiffs may attempt to emphasize any sympathetic facts, but defendants should widen the issue, placing the rule plaintiffs advocate in the context of law around the country on negligent misrepresentation. Appellate courts are always concerned about the implications of their holdings for all the cases to come, so consider asking: if the rules are changed to allow the case at hand through the courthouse doors, what sorts of cases will follow?

Plaintiffs may try to blur the distinction between the plaintiff, a potential employee, and the general public; surely government officials should not mislead the public, negligently or otherwise? But this is a distinction that the Minnesota Supreme Court properly rejects. Federal, state and local governments employ millions of people across the country. In many contexts, there is no obvious reason why tort duties should be different for government employers than anyone else. Ultimately, the question rests where the Minnesota Supreme Court wisely left it: opening up arm’s length negotiations between sophisticated business people to negligence suits invites a flood of new litigation in the courts and an entirely unjustified distortion of economic relationships.

Florida Adopts Mandatory E-Service Rules

By on Posted in Florida

As of September 1, 2012, service by e-mail of pleadings and other court documents is mandatory in Florida state court civil cases.Every pleading subsequent to the initial pleading and every other document filed in any court proceeding must be served on each party in accordance with these new rules, which are summarized below. The decision implementing these changes can be found here [pdf].

  1. Designation of Email Addresses – At the outset of any new action, or by Sept. 1, 2012 for any pending action, all parties must file a designation of a primary email address, and up to two secondary email addresses (this can be other attorneys on the file, secretaries, paralegals, etc.), for service of all court documents. See Fla. R. Jud. Admin. 2.516(b)(1)(A).
     
  2. Signature Block – ALL signature blocks should now also contain the attorney’s primary email address. See Fla. R. Jud. Admin. 2.516(b)(1)(A).
     
  3. Signing Court Documents – Documents served on other parties by email may be signed electronically (with an “/s/”). However, the original document filed with the clerk must still be physically signed by the attorney. See Fla. R. Jud. Admin. 2.516(b)(1)(E)(iii).
     
  4. Time Computation – Although service is complete upon sending the email, the rule specifically provides that for purposes of time computation, email service shall be treated as service by U.S. Mail. This provides the additional 5 days for service when computing deadlines. It appears that the only way to cut off the 5-day addition is to additionally serve by hand delivery or fax. See Fla. R. Jud. Admin. 2.516(b)(1)(D)(iii).
     
  5. Filing – The Florida Supreme Court has also issued a new rule regarding e-filing, but this does not take effect until April 2013. For now, filing shall be as usual, but the e-service rule requires that filing be made either before service or immediately thereafter. See Fla. R. Jud. Admin. 2.516(d).
     
  6. Return Error Message – If you receive a server response that the email was not delivered, you must immediately send another copy by email, or by U.S. Mail, fax or hand delivery. See Fla. R. Jud. Admin. 2.516(b)(1)(D)(ii).
     
  7. Unusual Number of Parties – The rule provides an exception for cases with an unusually large number of parties. In such actions, the court may modify the service requirements of this rule on motion or on its own initiative in such a manner as may be found to be “just and reasonable.” See Fla. R. Jud. Admin. 2.516(c).
     
  8. Non-Compliance – If an attorney does not file a designation of email addresses for service, service may still be made by email at the email address on record for that attorney with the Florida Bar. The Florida Bar has released a guide suggesting that if a party fails to serve documents by email after September 1, 2012, good practice should be to call the attorney and direct them to the new rule. 
     
  9. E-Mail Format – The rule contains strict guidelines for the format of the email in which the document is served: Subject Line – The email subject must begin with: “SERVICE OF COURT DOCUMENT CASE NO. xx-xxxxx.” All caps are required. To: all primary and secondary emails as designated by each attorney of record. Body of Email – The body of the email must contain: 1) the court in which the case in pending; 2) the case number; 3) the name of each initial party on each side of the case; 4) the title of each document being served (more than one may be served in one email); and 5) the sender’s name and telephone number.
     
  10. Attachments – The document being served must be attached in PDF format. The email and the attachment combined may NOT exceed 5 MB. Where the document exceeds 5 MB, it must be split up into separate files smaller than 5 MB, and sent in multiple emails, labeled sequentially in the subject line. The subject line of the string of emails should look like this: Subject: SERVICE OF COURT DOCUMENT CASE NO: xx-xxxxx (1 of 4)

Illinois Supreme Court in the News: 8/1-15

By Kirk Jenkins on Posted in Illinois

With the September term approaching and two new civil decisions being filed, coverage of the Illinois Supreme Court has picked up recently in the news and on the blogs.

At the Madison St. Clair Record, Bethany Krajelis had this story about competing amicus briefs filed with the Court in Fennell v. Illinois Central Railroad Co., an asbestos personal injury case involving issues of forum non conveniens. Briefs were filed by the Illinois Trial Lawyers Association and the Illinois Association of Defense Trial Counsel.

The Court’s ruling in Doe v. White, a case involving school administrators’ tort duties in connection with a teacher sexual abuse case, garnered considerable coverage. The Associated Press discussed the likely importance of the case in a wire report the day before the decision was released, with the story being picked up as far away as The Sacramento Bee. The following day, Christopher Wills of The AP reported on the decision, which he described as having “echoes of the Penn State scandal.” Wills’ report appeared in The Republic of Columbus, Indiana, The DeKalb Daily Chronicle, The St. Louis Post Dispatch, Quad-City Times, The Bloomington Pantagraph, The Muscatine Journal, Dubuque Telegraph-Herald, and The San Francisco Chronicle. Mark Walsh reported on the Doe decision at Education Week, noting that the underlying events had been the subject of an earlier suit against the defendants under Federal Title IX. Mary Schenk of the Champaign-Urbana News Gazette, Kurt Erickson of The Southern Illinoisan and Rich Egger at Tri-States Public Radio filed reports on White as well.

Defusing a Class Action in a Hurry

By Kirk Jenkins on Posted in Class Actions

By any definition, it’s a crisis: your client receives a summons and complaint for a putative class action in Federal court.

Can you close down the case in the starting gate by just giving the named plaintiff what he or she wants — filing a Rule 68 Offer of Judgment for all requested relief, plus attorneys fees and costs?

For several decades, the answer has been "probably not." But in the next Supreme Court term, that may change.

The case to watch is Genesis HealthCare Corporation v. Symczyk, and to appreciate its importance, we have to go back to the dawn of the class action era.

In the spring of 1980, the United States Supreme Court decided two important class action cases in a single day. The first was Deposit Guar. Nat’l Bank of Jackson v. Roper. Roper involved a putative class action of a group of credit card holders against their issuing bank. Following denial of plaintiffs’ motion for class certification, the defendant bank tendered a Rule 68 offer which did not include attorneys’ fees. Could the plaintiff still appeal the denial of class certification?

Yes, the Supreme Court found. The named plaintiff had a surviving concrete interest in Article III terms — the interest in spreading the costs of the litigation among the class through the common fund doctrine. The defendants had left that interest undisturbed by failing to include attorneys fees in their Rule 68 offer. Although a good pick-off move is essential in baseball, it isn’t permitted in Federal class action litigation: "[r]equiring multiple plaintiffs to bring separate actions, which effectively could be ‘picked off’ by a defendant’s tender of judgment before an affirmative ruling on class certification could be obtained, obviously would frustrate the objectives of class actions; moreover it would invite waste of judicial resources by stimulating successive suits brought by others claiming aggrievement."

United States Parole Comm’n v. Geraghty, decided the same day as Roper, was a prisoner class action. The plaintiff’s motion for class certification was denied, and while his appeal was pending, he was released. Did that moot the appeal? A narrowly divided Supreme Court held "no," finding that the named plaintiff had a "right" to obtain class certification which survived traditional mootness and was enough for Article III purposes. Justice Lewis Powell led a four-Justice dissent which included Chief Justice Burger — who wrote Roper — and future Chief Justice Rehnquist, who concurred in the Roper result.

In the years since Roper and Geraghty, the Federal and state courts have struggled to figure out what it all means, and how far the precedents should be extended. Only last year, the Illinois Supreme Court decided a precursor of Symczyk‘s issue presented, Barber v. American Airlines, Inc. Barber was a putative class action challenging the defendant’s initial refusal to refund a baggage carriage fee when the plaintiff cancelled the flight. A few days after the complaint was filed, the defendant relented, and refunded the money. The Illinois Supreme Court held that defendant’s action mooted the putative class action, holding that there was no such thing in Illinois law as the "pick off" exception to mootness for class actions.

Which brings us at last to Symczyk. Symczyk arises under the Fair Labor Standards Act. FLSA litigation has been a major growth area for the plaintiff’s bar in the last ten years — annual filings were up 300% from 2001 to 2011, and increased 15% in just the last year of that period. Filings are increasing for two reasons: an award of attorneys’ fees is mandatory, and the FLSA is a strict liability statute whose scope is mostly unresolved. Section 216(b) of the FLSA (29 USC 216(b)) permits representative actions, but there is a crucial difference between FLSA litigation and traditional Rule 23 class actions — employees must opt-in, rather than opting-out. Congress banned Rule 23 class actions under the FLSA in 1947.

Symczyk was a registered nurse. She sued under the FLSA, challenging her employer’s alleged practice of deducting meal break times from her paycheck whether or not she had an uninterrupted break. Before plaintiff filed a class certification motion — and before anyone had opted in — defendants offered her everything she wanted pursuant to Rule 68 — recovery, fees and costs. Then they moved to dismiss. The district court dismissed, but the Third Circuit reversed, extending Roper and Geraghty to FLSA actions and holding that the eventual certification of a class — even if it happens after the case has been effectively mooted — relates back to the date of filing.

Symczyk’s cert petition presents two important questions: (1) do Roper and Geraghty apply to representative actions under the FLSA, in addition to traditional Rule 23 class actions; and (2) do Roper and Geraghty, even in the Rule 23 world, apply to class complaints where a class certification motion has not yet been filed? With respect to the first question, the petition argued that the 9th and 11th Circuits — which have distinguished the FLSA from Rule 23 — are squared off with the 3rd and 5th Circuits. As to the second, broader question, the petition argued that the 3rd, 5th, 9th and 10th Circuits, which hold that a late-filed class certification motion relates back to the filing of a complaint, are in conflict with the 4th, 7th and 8th Circuits, which allow a "pick-off" move. In the opposition to certiorari, plaintiffs distinguished between cases involving Rule 68 offers of judgment and voluntary settlements, but in the reply, defendants pointed out that plaintiffs had never explained why the distinction made a difference. Both the United States Chamber of Commerce and the Defense Research Institute have joined the litigation, supporting the defendants.

So where is all this likely to wind up? Although it’s always a perilous enterprise to predict where SCOTUS is going, I have some difficulty picturing the Supreme Court that decided Wal-Mart Stores, Inc. v. Dukes affirming the Third Circuit. If there is a reversal, I see three possibilities, each a progressively bigger earthquake for class action practice:

  • The Supreme Court holds that Roper and Geraghty do not apply to FLSA representative suits;
     
  • The Supreme Court holds that Roper and Geraghty do not apply even to traditional Rule 23 class actions where a settlement or offer of judgment is served before the class certification motion is filed, effectively legalizing the "pick-off"’; and
     
  • The Supreme Court overrules Geraghty.

Appellate Strategist will be following Symczyk closely as the litigation proceeds. 

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