The Appellate Strategist

Insights on appellate issues, trial consultations, and evaluating appeals

Justice Liu Authors Four Unanimous Opinions by the California Supreme Court

By on July 9, 2012 Posted in California

As the summer got started, and his first year on the bench nearly completed, Justice Liu produced four unanimous opinions on wide ranging issues of California law, including arbitration, preemption work product and environmental regulations. This makes a total of six opinions by Justice Liu in civil cases. The other two, Dicon Fiberoptics, Inc. (re tax credit for disadvantaged worker) and Kirby, (addressing a fee shifting agreement) were also unanimous. Here is a summary of Justice Liu’s recent opinions.

Arbitration –Arbitration of provisions in a collective bargaining agreement should not be compelled if the provisions violate existing statutes.

In United Teachers of Los Angeles v. Los Angeles Unified School Dist., S177403 (opinion issued 6/28/12), the Court held that a petition to compel arbitration to enforce collective bargaining provisions between a union and a school district should by denied if the provisions at issue directly conflict with provisions of the Education Code — that is, if they would annul, replace, or set aside Education Code provisions. The Court further held that, under the Education Code, an arbitrator has no authority to deny or revoke a school charter. However, the Court found that the union’s claims in this case were too general to make the necessary determinations at this time, and so remanded the case to allow the union to identify those specific provisions of the agreement it claims the district violated.
For more details about United Teachers of Los Angeles, see the ADR update page.

Work Product Doctrine – The Court describes the limits of the work product doctrine regarding witness interviews, and the showing needed to apply the doctrine.

The Court addressed the work product doctrine (C.C.P. § 2018.010, et seq.,) in Coito v. Superior Court, S181712 (opinion issued 6/25/12). The Court reversed the Court of Appeal and made two primary holdings. First, that recorded witness statements obtained by investigators hired by counsel are entitled as a matter of law to at least qualified work product protection, and potentially to absolute protection if the party can show that disclosure would reveal its “attorney’s impressions, conclusions, opinions, or legal research or theories.” Second, that the identity of those witnesses from whom counsel has obtained statements is not automatically entitled to any work product protection. To prevent disclosure of such a list, counsel must justify such protection on a case-by-case basis. For more details about Coito, see the Attorney Related update page. Also, for an analysis of the opinion by the Court of Appeal in Coito, see the previous March 2010 post on this blog.

Environmental Regulations – An air quality district can mandate pollution standards based on reasonably anticipated technologies that do not yet exist.

Partially reversing the Court of Appeal, in National Paint & Coatings Assn., Inc. v. South Coast Air Quality Management Dist., S177823 (opinion issued 6/25/12), the court found that Health and Safety Code § 40440 authorizes an air quality district to promulgate pollution standards based on technologies that do not currently exist but are reasonably anticipated to exist by the compliance deadline. Furthermore, the Court found that the district had sufficiently demonstrated that its challenged emissions limits were achievable in each category and that the categories were reasonably drawn. For more details about National Paint & Coatings Assn., Inc., see the Environmental update page.

Preemption – State consumer protection disclosure requirements are preempted by the broad federal grant of power given to banks to conduct their business.

Again reversing the Court of Appeal, the court held in Parks v. MBNA American Bank, S183703 (opinion issued 6/21/12), that the National Bank Act (NBA) (12 U.S.C. § 21 et seq.) preempts the requirements of California Civil Code § 1748.9 regarding specific types of notice to consumers regarding the use of convenience checks as cash advances on credit card accounts. The Court held that these disclosure requirements stand as an obstacle to the broad grant of power given by the NBA to national banks to conduct the business of banking. For more details about Parks, see the B & P 17200/Class Actions/Commercial update page.

Illinois Supreme Court in the News: 6/15-30

By Kirk Jenkins on July 1, 2012 Posted in Illinois

Today we begin another new feature in our expanding coverage of the Illinois Supreme Court – a regular summary of the news and blog posts about the Court. We’ll run the feature bi-weekly while the Court is in its summer break, and more regularly when the Court resumes its regular terms.

Earlier this month, the Court created the Commission on Access to Justice. The Commission is charged with promoting, facilitating and enhancing "equal access to justice with an emphasis on access to the Illinois civil courts and administrative agencies for all people, particularly the poor and vulnerable." The Court appointed seven judges and attorneys to the Commission, joining four additional members appointed by the Illinois Bar Foundation, the Chicago Bar Foundation, the Lawyers Trust Fund of Illinois and the Illinois Equal Justice Foundation. Sarah Sutschek reported on the story for The Northwest Herald.

Governor Quinn has signed Public Act 97-688, a bill intended in part to overturn the Court’s 2010 decision in Provena Covenant Medical Center v. The Department of Revenue. There, applying then-existing law, the Court had held that the plaintiff hospital did not provide sufficient free care to qualify for a charitable property tax exemption. The new statute provides that to qualify for the exemption, a hospital must provide free care equal to or greater in value that its property tax liability. Melissa Westphal reported the story in the Rockford Register Star.

Today Supreme Court Rule 243 goes into effect. The rule provides that in civil cases, following the conclusion of questioning by counsel, the court may ask the jurors if they have further questions. Out of the presence of the jury, any juror questions are read to counsel, who have the opportunity to object. Once objections are ruled on, the court asks the questions of the witness. Steve Stout of My Web Times, the online version of The Times of Ottawa, reports that more than half of the states and all the Federal Circuits have similar rules. Stout quotes Chief Justice Kilbride as saying that the rule "enhances juror engagement, juror comprehension and attention to the proceeding and gives jurors a better appreciation for our system of justice."

But the big story of the past two weeks for followers of the Illinois Supreme Court was the U.S. Supreme Court’s opinion in Williams v. Illinois, a case up on certiorari from the Illinois Supreme Court. As explained by Jeffrey Fisher at SCOTUSBlog, Williams took place against a backdrop of recent decisions applying the Confrontation Clause to forensic laboratory reports. In two 5-4 decisions, SCOTUS had held that reports certifying test results are testimonial, and placing the lab supervisor on the stand was not sufficient for confrontation purposes. The Illinois Supreme Court held in Williams that testimonial statements in lab reports could nevertheless come in through an expert witness’ testimony as matter the witness relied on, since such matters are not introduced for the truth of the matter asserted. A fractured U.S. Supreme Court rejected this theory, but nevertheless held that the report in question was not sufficiently "formal" or "solemn" to be testimonial.

James Vicini for Reuters, Adam Liptak at The New York Times, Robert Barnes of The Washington Post, Nina Totenberg of NPR and Jess Bravin at The Wall Street Journal reported on the case. According to Andrew Cohen, writing for The Atlantic, the decision "displayed virtually all the dysfunction the justices’ most vocal and powerful critics ever could realistically contemplate." Professor Douglas Berman of Ohio State called the 98 pages worth of opinions "a bloody mess" at his blog Sentencing Law and Policy. At The Volokh Conspiracy, Professor Eugene Volokh noted the unusual composition of the dissent — Justices Ginsburg, Sotomayor, Kagan and Scalia. At the ACS Blog, Professor Brandon Garrett argued that Williams "called for a straightforward application of the Court’s recent [Confrontation] precedents," and concluded that the majority’s refusal to find a Confrontation violation would lead to more wrongful convictions and forensic scandals unless judges strictly ensure access to discovery and exercise their gatekeeping responsibilities over expert evidence. At The Confrontation Blog, Professor Richard D. Friedman noted indications in the opinions that the result would have been different if the lab report had been certified or the case tried to a jury, and concluded that Williams might ultimately have limited impact on Confrontation Clause law. Kent Scheidegger of the Criminal Justice Legal Foundation, writing for the Crime and Consequences Blog, agreed that because of the three-way split in the Court, Williams had left the state of Confrontation Clause law unclear.

Proof of Concept: Elgin and the Blogs

By Kirk Jenkins on June 27, 2012 Posted in Constitutional Law, Employment, Federal

Last month, I joined a panel discussion on blogging during a PLI program on social media led by LexBlog‘s Kevin O’Keefe. I explained how important following blogs through an RSS Reader is to keeping up to speed in a world where information moves more quickly than ever.

I recalled that comment this week while thinking about the Supreme Court’s recent decision in Elgin v. Department of Treasury. Years ago, expert analysis of important new decisions would take weeks, if not months, to become widely available, largely through law reviews and journals. Today, busy lawyers have the benefit of the insights of lawyers and law professors around the country within days, sometimes hours. Elgin has sparked particularly interesting commentary about a range of difficult federal courts issues which has helped crystallize my reading of the opinions.

Elgin involved a group of Federal employees who were terminated for willfully failing to register with the Selective Service, as required by 5 U.S.C. § 3328. The Civil Service Reform Act (“CLRA”) establishes a comprehensive framework for reviewing adverse personnel actions taken against Federal employees: first, the case goes before the Merit Systems Protection Board (“MSPB”) for hearing, and the employee may then seek appellate review at the United States Court of Appeals for the Federal Circuit.

The employees sued in Federal district court, arguing that Section 3328 was unconstitutional as a Bill of Attainder and pursuant to equal protection (since women aren’t subject to Selective Service registration). This created two problems: a number of lower courts have held that the MSPB has exclusive jurisdiction over covered employment actions. But on the other hand, it seemed clear that the MSPB couldn’t adjudicate the constitutional claim because it can’t strike down statutes. So does the employee really have to first litigate his claims before a Board that has no power to decide them?

Elgin turns on a conflict between two related lines of authority. In Webster v. Doe, a covert CIA employee was terminated by the Director pursuant to Section 102(c) of the National Security Act after informing his security officer that he was gay. The Supreme Court held that although the broad language of the NSA was sufficient to bar judicial review on traditional administrative grounds, it was not sufficient to bar judicial consideration of constitutional challenges: “where Congress intends to preclude judicial review of constitutional claims its intent to do so must be clear.”

Only six years later, the Court decided Thunder Basin Coal Co. v. Reich. The Federal Mine Safety Act requires mine operators and miners to designate representatives to participate in regular safety inspections. The Secretary of Labor had broad authority to compel compliance, subject to review by the Mine Safety Commission, then by the appropriate Federal court of appeals. The miners designated two union employees as their representatives. The mine operator filed suit pre-enforcement, arguing that compelling it to first violate the Act and then challenge any penalties administratively violated its due process rights. Rather than applying Webster, the Supreme Court held that all that was necessary when Congress wished to merely delay, rather than preclude judicial review of constitutional claims, was that its intent be “fairly discernible.”

By a 6-3 vote, the Elgin Court held that Thunder Basin governed, and the district courts had no jurisdiction over petitioners’ constitutional claims. It made no difference that the MSPB had no jurisdiction to strike down the statute – the Federal Circuit did have such power once the case went up on appeal. Nor did it make any difference that the Federal Circuit, as an appellate court, was poorly suited to supervise any factual development that might be necessary to decide the constitutional issue; if the factual record was inadequate, the Circuit could remand the matter to the MSPB for discovery, and decide the claims when the case returned to it.

Join me below the jump for some thoughts about what it all means.

Should Appellate Courts Be Doing Their Own Factual Research?

By Kirk Jenkins on June 25, 2012 Posted in Appellate Practice

Like many lawyers – and most appellate specialists – I’m closely following the waning days of the United States Supreme Court’s term. To those of us who spend a lot of time reading recent opinions of the Court, it’s been clear for a number of years that many Justices are becoming increasingly comfortable doing their own factual research, outside the record and the briefs. The Justices aren’t finding their own adjudicative facts – facts about the underlying dispute or the trial – they’re presenting new legislative facts – the type of more general statements about the world outside the courtroom that Congress considers every day.

Thanks to a fascinating new study from Professor Allison Orr Larsen of William & Mary, we now have a detailed analysis of the phenomenon: “Confronting Supreme Court Fact Finding”. The entire article is well worth a read to anyone interested in the Court.

Professor Larsen’s research confirms the anecdotal impression that many court watchers have: independent factual research is commonplace at the Court. Of the 120 most important decisions from the Court between 2000 and 2010 – as measured by two indexes used by political scientists – 56 percent contained at least one factual assertion supported by a source outside the record and never mentioned in any of the briefs. Forty-seven percent of the cases which involve at least one assertion of legislative fact contain four or more extra-record factual sources.

Professor Larsen points out that cases like Brown v. Entertainment Merchants Association, which involved a law restricting the sale of violent video games to minors, sparked considerable independent research from many members of the Court – Justice Breyer compiled an appendix of academic journals; Justice Alito cited to a number of websites; and Justice Thomas cited 59 sources for the proposition that the founding generation believed that parents had complete authority over their children, 57 of them nowhere to be found in the record or briefs. She discusses many other examples as well, including Sykes v. United States, which involved the question of whether fleeing from the police in a car was a violent felony, and Graham v. Florida, which involved the question of whether the 8^th Amendment permitted sentencing juveniles who committed non-homicide offenses to life without parole. Other scholars have pointed out similar examples in lower appellate courts [pdf].

But the core question, of course, is should anyone object? Professor Larsen suggests several reasons why the phenomenon is disturbing. First, the risk of simple mistake. As many courts have observed, for the most part, anyone can post anything on the internet for any reason. Second, there is a risk of systemic bias. Several search engines claim that the results they present to a particular user are influenced by the user’s earlier search history – in other words, the search engines present you with what they think you want to see. So there’s a risk that your independent research will merely reinforce the conclusions you had already drawn.

Professor Larsen’s third reason – and to me, the most compelling reason by far – is fairness and legitimacy. Technical non-legal issues arise all the time in my principal field of antitrust law, and scholars have investigated how generalist judges fare handling those issues. As an attorney, I want an opportunity to offer the court my analysis of any non-legal materials it is contemplating relying on.

Even more important, however, is the interests of our clients. Many appellate judges have remarked that the primary function of oral argument, in their view, is to support the legitimacy of the process. Appellate decision-making can seem like a largely opaque process to those not accustomed to it. But through oral argument, a client can feel, win or lose, as if his or her advocate had an opportunity to face the decision-makers and make the case as best he or she can. This institutional value is seriously diminished if, when the attorney and client receive the court’s opinion, the result has turned on a finding of legislative fact and extra-record research which no one ever addressed while the case was at issue.

So what to do? Professor Larsen notes suggestions offered by various judges and commentators, including training judges in empirical analysis, making it easier for judges to use their own experts, and even creating a judicial research service. But such steps do little or nothing to address the serious issue of fairness and legitimacy; indeed, they arguably make the problem worse.

California addressed this problem nearly a generation ago, and its solution points out a useful way forward. According to California Government Code § 68081, before any appellate court decides a case “based upon an issue which was not proposed or briefed by any party to the proceeding,” the court must grant supplemental briefing. If the court does not do so, the court must grant rehearing on the timely petition of any party. Fairness and legitimacy concerns would be substantially eased if California’s solution was broadened and adopted elsewhere. Whether by court rule or statute, courts should commit to permitting the parties and their lawyers a fair opportunity to comment, either through supplemental briefing or rehearing, before a case is decided based upon a finding of legislative fact supported only by extra-record sources.

But now it’s your turn, readers. Has the trend towards independent research on legislative facts spread to state and intermediate Federal appellate courts? If so, is it a matter that should be addressed by rules or institutional reform? And what kinds of solutions would you suggest?

Can the Language of a Will Prove Lack of Capacity?

By Kirk Jenkins on June 21, 2012 Posted in Illinois

We complete our preview of the new civil review grants at the Illinois Supreme Court with DeHart v. DeHart [pdf], a will contest which raises a range of issues from how do you prove lack of testamentary capacity, to undue influence, to whether or not Illinois should adopt the theory of "equitable adoption."

Like many will contests, DeHart has a complex domestic drama wrapped inside. Plaintiff filed a will contest. According to his operative complaint, decedent had held plaintiff out for some sixty years as his son. In addition to telling members of the community for years that plaintiff was his son, decedent gave plaintiff a birth certificate listing his own name as the plaintiff’s natural father. There the story remained until 2000, when plaintiff applied for a passport. The government wouldn’t accept the copy of plaintiff’s birth certificate he had, so for the first time, he requested a certified copy. The certified copy listed an entirely different person as plaintiff’s father. When the plaintiff confronted decedent, the decedent said that plaintiff’s mother had married the listed father after learning she was pregnant, but that decedent had "secretly" adopted plaintiff two years later. In the years following the 2000 discussion, decedent continued to represent plaintiff as his son; he financed a family vacation for himself, plaintiff and plaintiff’s children, and at some point drafted a will leaving bequests to plaintiff and his children.

But then, at approximately eighty-three years of age, decedent married defendant. Only a year later, he signed a new will stating that he had no children and never mentioning plaintiff. When decedent died three months after the will was signed, the widow probated the document.

Plaintiff challenged the will on a litany of grounds: lack of testamentary capacity; defendant’s undue influence; a separate tort claim against defendant for fraudulent inducement; and a claim that plaintiff was entitled to share in the estate as his adopted son, either through a contract of adoption or "equitable adoption," a theory which Illinois has neither adopted nor rejected. The Circuit Court dismissed, but the Appellate Court reversed on all counts.

The lack of capacity count is of particular interest. Although plaintiff alleged a host of facts which, on motion to dismiss, sufficiently alleged that plaintiff was a natural object of decedent’s bounty, unlike many will contests, the lack of capacity rested on one fact only: decedent’s statement in his will that he had no children. The defendant argued that the statement was factually true, but the Court held that that was for the jury to decide — the statement in the will was sufficient for plaintiff’s challenge to the decedent’s capacity to proceed.

Reversal of several additional claims was relatively fact-bound: plaintiff alleged undue influence based on the claim that defendant held decedent’s power of attorney, and plaintiff’s allegations that she had intercepted and destroyed cards and letters from plaintiff. Although the Court noted that plaintiff’s tort claim against defendant might ultimately be vulnerable if the will contest succeeded, it declined to affirm dismissal at this point.

The Appellate Court’s holdings on adoption, however, may well establish an interesting precedent at the Supreme Court. Relying on Monahan v. Monahan, 14 Ill.2d 449 (1958), the court held that plaintiff had alleged enough circumstantial evidence that a jury could permissibly infer the existence of an enforceable contract to adopt. Presiding Justice Schmidt dissented from this holding, emphasizing the complaint’s failure to identify the parties to the purported contract. In the alternative, the Appellate Court became the first court in Illinois to endorse the theory of adoption by equitable estoppel, pursuant to which, when a plaintiff alleges an express or implied contract to adopt, detrimental reliance, and performance of obligations under the de facto relationship, equitable estoppel prevents the alleged parent and those in privity with him from denying the relationship. The Court held that the complaint’s allegations of sixty years of conduct by decedent consistent with a parental relationship was sufficient to establish an estoppel applicable against decedent’s estate.

The Illinois Supreme Court’s First Nicastro Case

By Kirk Jenkins on June 21, 2012 Posted in Illinois

We continue our preview of the new civil review grants from the Illinois Supreme Court with Russell v. SNFA, which raises questions of general and specific jurisdiction over a French-based manufacturer.

Russell [pdf] arose from a 2003 helicopter crash in Illinois. The decedent’s estate sued, alleging that one of the helicopter’s tail rotor drive-shaft bearings had failed, fracturing the drive shaft, making the tail rotor inoperable, and leading to the crash. The defendant was a French-based manufacturer of custom-made aerospace bearings and helicopter tail-rotor bearings.

And that’s where the trouble started. Turns out the helicopter had been built in Italy by an Italian company. From there, it had found its way into the hands of first a Germany company, then a Louisiana-based company, and finally, to the decedent’s employer, which was based in Cook County. The Louisiana company had replaced several of the bearings with replacements made by defendant. Those were manufactured in France, sold in Italy, sold again to the customer’s American subsidiary, and then sold to the Louisiana-based former owner (note that we still haven’t tied anything to Illinois other than the accident and the domicile of the decedent). Both the original and the replacement bearings had been custom-made by the defendant for the Italian-based customer.

The trial court dismissed for lack of jurisdiction, noting that the only contact between the defendant and Illinois anytime in the general vicinity of the accident had been a single visit to a completely different customer. The court mentioned a little less than a million dollars in sales into the state, but it’s not clear whether these sales came straight from the defendant, as opposed to passing through a distributor. The court held that the plaintiff was dependent on general jurisdiction — which grants authority over any action based on "doing business" — rather than specific jurisdiction, and plaintiff’s showing fell short.

The Appellate Court reversed. Heavily relying on Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), the Court held that specific jurisdiction was present over the French defendant. After all, the defendant knew that its Italian customer sold its helicopters throughout the United States, and that the customer had an American subsidiary to facilitate American distribution. So it should expect to be haled into court in Illinois or — for that matter — any other state in the country, the Court concluded. Jurisdiction was reasonable since the defendant had designed and manufactured a component that was incorporated into a product that was intended to be, and was in fact sold in the United States, according to the Court.

So why did the Supreme Court take the case? Simple: J. McIntyre Machinery, Ltd. v. Nicastro – decided by the United States Supreme Court three months after Russell came down. Nicastro arose from an accident which occurred in New Jersey. Like the Appellate Court in Russell, the New Jersey Supreme Court affirmed jurisdiction, relying heavily on Asahi. But the Supreme Court reversed.

It was immaterial, the Court held, that the defendant had placed its product into the stream of commerce, and could have expected that it would wind up in New Jersey. It had not "engaged in conduct purposefully directed at New Jersey." The defendant had attended U.S. trade shows, but none in New Jersey; relatively few machines wound up there; the defendant had no office there, paid no taxes, owned no property, and didn’t advertise in New Jersey. As Justice Breyer observed in his concurring opinion, a single isolated sale, even if accompanied by a nationwide sales effort, is simply not enough.

Russell should give the Illinois Supreme Court its first opportunity to apply Nicastro. It’s bound to be a major opinion, and Appellate Strategist will be following developments closely.

Negligence Suits Involving Publicly Owned Emergency Vehicles Barred

By Kirk Jenkins on June 21, 2012 Posted in Illinois

Can a public entity or employee be sued over the negligent operation of an emergency vehicle responding to a call? This morning, the Illinois Supreme Court held in Harris v. Thompson [pdf], written for a 6-Justice majority by Justice Charles E. Freeman, that the answer is “No.”

Harris arose from a 2004 accident. Defendant, a publicly owned hospital, received a diabetic emergency call from a nearby nursing home, requesting an ambulance to transport a resident to another hospital for further care. While on the way to the nursing home, the hospital’s ambulance collided in an intersection with another vehicle, occupied by the plaintiffs.

Plaintiffs sued the hospital district and the publicly employed ambulance driver, alleging negligence. When defendants asserted governmental immunity as a defense, plaintiffs added a claim for willful and wanton conduct. The case proceeded to trial. At the close of plaintiff’s evidence, the court directed a verdict for defendants on the willful and wanton claim, but allowed the jury to return a large verdict for negligence.

Harris involves a perceived conflict between two statutes. First, there’s the Local Governmental and Governmental Employees Tort Immunity Act, 745 ILCS 10/2-109:

Except for willful and wanton conduct, neither a local public entity, nor a public employee acting within the scope of his employment, is 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, there’s the Vehicle Code, which provides that although “the driver of an authorized emergency vehicle” has certain privileges, such as the right to exceed the speed limit, “the foregoing provisions do not relieve the driver of an authorized emergency vehicle from the duty of driving with due regard for the safety of all persons.” 625 ILCS 5/11-205. Section 11-907 of the Vehicle Code contains similar language.

The Appellate Court had held that the Tort Immunity Act and the Vehicle Code were in conflict, and the Vehicle Code governed pursuant to the traditional canon that a specific statute trumps a more general enactment, following Bradshaw v. City of Metropolis, 293 Ill.App.3d 389 (1997). The Supreme Court disagreed and reversed.

In fact, there is no conflict, the Court held. The Vehicle Code extends certain privileges to both public and private employees driving emergency vehicles. The Tort Immunity Act was both more narrowly focused – applying to only public employees and their employers – and addressed a different question: regardless of whether a duty of care was involved, was the suit barred? Therefore, the Court held that absent proof of willful and wanton conduct, public employees and their employers are immune from liability arising out of operating emergency vehicles. In two brief postscripts to the decision, the Court declined plaintiff’s invitation to apply its rule only prospectively, holding that it had announced no new rule of law, and affirmed the Circuit Court’s direction of a verdict against plaintiff on willful and wanton conduct.

Chief Justice Thomas L. Kilbride dissented, arguing that there was an “obvious and undeniable conflict” between the Vehicle Code and the Tort Immunity Act. The Chief Justice concluded that in order to give effect to the legislature’s “clear . . . intent” to impose a duty of due care on emergency vehicle operators to refrain from negligence, the Vehicle Code should have prevailed, and the plaintiff’s judgment should have been affirmed.

Beware The Sounds of Silence

By Kirk Jenkins on June 20, 2012 Posted in Illinois

In a time of budget cuts — including cuts directed against public employees — Griggsville Perry Community Unit School District v. Illinois Educational Labor Relations Board [pdf] may wind up offering important guidance to the state and local lawmakers. There, the underlying party worked as a noncertified paraprofessional for the plaintiff school district. After a long series of alleged complaints and counseling sessions, the school board informed the employee that she would be terminated. The employee’s board president filed a grievance disputing the allegations of poor job performance, and appeared before the board, but the employee was terminated.

The matter then went to arbitration. First, the arbitrator sustained the grievance and directed that the employee be rehired. The matter went before the Educational Labor Relations Board, which remanded the case, but the arbitrator issued an amended decision and again ordered reinstatement. So the District filed a petition for review with the Appellate Court, which reversed in a sharply worded opinion.

Like most states, the baseline rule in Illinois is at-will employment. The arbitrator acknowledged that nothing in the union contract overrode that principle, but invoked "[the] bargaining history leading up to contractual silence" as grounds for implying a for-cause requirement.

The Appellate Court was decidedly unimpressed. After all, the contract included an integration clause. The bargaining history was irrelevant. And the Court didn’t see anything particularly persuasive in the parties’ bargaining history anyway: "The arbitrator’s decision . . . is not supported by any past practice of the parties." Bottom line: there was nothing in the contract that overrode the at-will principle, so the "due process" the employee was given was more than enough. Justice McCullough dissented, finding that the arbitrator’s decision "was drawn from the essence of the parties’ collective-bargaining agreement."

So can courts go beyond the plain language of a collective bargaining agreement — even beyond an integration clause — to ponder the "sounds of silence"? We should find out within the next year.

The Perils of Self-Insurance

By Kirk Jenkins on June 20, 2012 Posted in Illinois

Today we continue our previews of the new civil review grants from the May term of the Illinois Supreme Court.

In Skokie Castings, Inc. v. Illinois Insurance Guaranty Fund, [pdf] the Court will face questions about the operation of the Illinois Insurance Guaranty Fund with respect to self-insurers. A worker was seriously injured on the job. At the time, plaintiff’s predecessor company was a self-insurer with respect to workers’ compensation insurance, but also held an aggregate excess policy and a specific excess policy. Following the accident, the employer paid the retention amount, after which the insurer took over, until it went into receivership. The Fund began paying, but ultimately informed plaintiff that it had reached its $300,000 cap on covered claims, and stopped. Plaintiff sued and won its motion for summary judgment.

Skokie turns purely on a question of statutory interpretation. Specifically, according to the Insurance Code, 215 ILCS 5/537.2, the Fund’s obligations "shall not . . . exceed $300,000, except that this limitation shall not apply to any workers compensation claims." The Fund argued that the plaintiff’s claim for reimbursement of amounts paid was not a "workers compensation claim," but — noting that the Code states a purpose to protect both claimants and policyholders, 215 ILCS 5/532 — the Court held that the term encompassed claims brought by policyholders of insolvent insurers.

The broader — and ultimately perhaps more important — issue in Skokie is whether the self-insuring employer is an "insurer" within the meaning of the statute, and thus liable to pay the claims until it becomes insolvent before the Fund’s liability kicks in. Noting that there was no Illinois law on the subject, the Court surveyed decisions from around the country, concluding that the majority view was that a self-insuring employer was not an "insurer" for purposes of such a statute. Following a decision of the New Mexico Supreme Court, In re Delinquency Proceedings Against Mission Insurance Co., 816 P.2d 502 (N.M. 1991), the Court agreed. The Court noted that the guaranty statute in New Jersey expressly exempted self-insuring employers, and concluded that if the Illinois legislature had wished to do the same, it would have said so.

New Civil Opinion Coming From the Illinois Supreme Court

By Kirk Jenkins on June 19, 2012 Posted in Illinois

The Illinois Supreme Court has announced that on the morning of Thursday, June 21, it will file an opinion in one civil case [pdf]:

Harris v. Thompson, No. 112525 — Does the Local Governmental and Governmental Employees Tort Immunity Act, 625 ILCS 5/1-100, which limits the potential liability of government employees to willful and wanton behavior, or the Illinois Vehicle Code, which regulates the conduct of a driver of an ambulance, whether employed by a public or private employer, whenever using audible or visual signals, govern the conduct of a publicly employed ambulance driver? See Government Law.