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Illinois Legislature Passes Pre-Judgment Interest in Personal Injury Actions

With virtually no time for public debate, a questionable bill has been slammed through the Illinois legislature.  The Illinois General Assembly, at the behest of the plaintiffs’ bar, has passed Senate Amendment 1 to HB3360 during the current veto session. Personal injury actions in Illinois will now be subject to 9% per annum pre-judgment interest accruing “on the date the defendant has notice of the injury from the incident itself or a written notice.”

The history is truly amazing. HB3360 started as a bill in 2019 to change the filing fee for the Foreclosure Prevention Program Fund.  Suddenly on Monday, January 10, 2021, the bill came up again for Second Reading, and was then placed on the Calendar for Third Reading the very next day, January 11.  The Senate Majority Leader then filed a floor amendment that replaced everything after the enacting clause and substituted the pre-judgment interest language amending the Code of Civil Procedure. On Tuesday, January 11, 2021, it was recalled for Second Reading and the floor amendment was adopted and set for Third Reading later in the day and passed the Senate Monday evening on a party-line vote of 38-17  .It was then sent to the House the very same day. It was immediately referred to the House Executive Committee who passed a motion to concur on January 12, 2021.  The following morning, January 13, 2021, it passed both Houses.  The bill now awaits the Governor’s signature.

Apart from the lack of public debate, there are a number of concerns with this bill.  There is no accounting for delays caused by the plaintiff during the course of a case or a delay in filing the lawsuit. HB3360 Senate Floor Amendment 1 does not account for delay through no fault of the defendant caused by the plaintiff or third-parties. The bill also does not address situations in which the plaintiff voluntarily dismisses and refiles the case a year later. Additionally, there is no accounting for the situation when a defendant offers to resolve the matter for less than what the ultimate judgment turns out to be.

It appears as no mere coincidence that, according to state campaign finance records, trial lawyers, their firms and political organizations have collectively donated more than $2 million to Friends of Michael J. Madigan, alone, the former Speaker of the House, since 2018. They have also been heavy contributors to the campaign of Governor Pritzker.  Nonetheless, we encourage you to contact him to ask him to veto this bill:

The Honorable J.B. Pritzker
Office of the Governor
207 State House
Springfield IL 62706

An email can be sent through an automated form here.

Matushek LLC Wins Jurisdiction Motion, Then Court Does About-Face

Matushek LLC initially won a highly contested motion to dismiss for lack of personal jurisdiction before Judge Clare McWilliams in Cook County Circuit Court on November 26, 2019.

The plaintiff’s decedent, Fred Riebel, was an Illinois resident who was a member of Local 17 International Union of Heat & Frost Insulators.  He was hired by an Illinois insulation contractor to perform work at U. S. Steel’s Gary Works in Indiana.  Mr. Riebel died from mesothelioma and the plaintiff brought premises claims for wrongful death against numerous defendants, including U. S. Steel’s Indiana premises, in the Circuit Court of Cook County, Illinois.  We moved to dismiss for lack of personal jurisdiction on the basis that none of Mr. Riebel’s exposure occurred at a U. S. Steel facility in Illinois.

The plaintiff, represented by the Clifford Law Offices, asserted that the Illinois court had jurisdiction over U. S. Steel, a Delaware corporation headquartered in Pittsburgh, for her premises liability claim involving U. S. Steel’s Gary Works in Indiana.  Plaintiff argued that 1) U. S. Steel “purposely directed its activities” at Illinois because it hired an Illinois subcontractor that employed the plaintiff’s decedent who resided in Illinois, and 2) the plaintiff’s decedent returned home with dust and dirt on his clothes and was somehow exposed to asbestos in Illinois from U. S. Steel.  We refuted the evidence presented by the plaintiff and argued that these circumstances were far too attenuated and speculative to establish a connection between the defendant’s alleged negligent maintenance of its Indiana premises and its purposeful affiliations with the state of Illinois and therefore haling U. S. Steel into an Illinois court for an Indiana premises claim violated its right to due process.  The court first agreed with our position, and granted our motion to dismiss.

More than 60 days later, on a motion to reconsider, the court reversed course and denied the motion on January 29, 2020. The court applied a “but-for” analysis, and ruled that because our client contracted with an Illinois employer of the plaintiff, the court has personal jurisdiction over an Indiana premises owner in a tort action.  This appears to follow the “sliding scale” approach to specific personal jurisdiction that was rejected by the U.S. Supreme Court in the Bristol-Myers Squibb case.

A copy of the court’s initial 13 page Memorandum Opinion and Order is available here: Riebel Order 15L2124 .  The January 29, 2020 order on reconsideration is here: Riebel 15L2124 Opinion and Order on Motion to Reconsider 1-29-20.

For further information, contact Ed Matushek at ejmatushek@matushek.com

Governor Signs Legislation to Eliminate Exclusive Remedy Defense to Illinois Employers For Latent Injury Claims

Governor Pritzker has signed Illinois SB 1596 into law as Public Act 101-0006.

Effective immediately, Public Act 101-0006 amends the Illinois Workers’ Compensation Act and the Workers’ Occupational Diseases Act to allow employees to sue their Illinois employer in civil tort actions for a latent injury that manifests more than 25 years after occupational exposure, creating a special exception to the traditional exclusive remedy provision that has been a part of the workers compensation system of Illinois for more than 80 years.

Earlier this Spring, the Plaintiffs’ Bar introduced legislation in both the Illinois House and Senate (SB 1596) to override the Illinois Supreme Court’s decision in Folta v. Ferro Engineering, 2015 IL 118070 (2015), where the Court held that the Worker’s Compensation Act and Occupational Diseases Act was the exclusive remedy to Illinois employees who suffered latent injuries such as mesothelioma. The proponent’s reasoning was that section 6(c) of the Workers’ Occupational Diseases Act bars a worker’s right to file an application for compensation for a disease that may take 30 to 40 years to manifest. That section provides that, “[i]n cases of disability caused by exposure to *** asbestos, unless application for compensation is filed with the Commission within 25 years after the employee was so exposed, the right to file such application shall be barred.” 820 ILCS 310/6(c) (West 2010); see also 820 ILCS 305/6(d) (West 2010) (analogous 25-year limitation period under the Workers’ Compensation Act).

The rationale for the exclusive remedy provisions of the Illinois Workers’ Compensation Act and the Workers’ Occupational Diseases Act was that the Acts impose liability without fault upon the employer and, in return, prohibit common lawsuits by employees against the employer. The exclusive remedy provision found in the Acts is part of the quid pro quo in which the sacrifices and gains of employees and employers are to some extent put in balance, for, while the employer assumes a new liability without fault, the employer is relieved of the prospect of large damage verdicts.

An appropriate alternative to achieve the legislative goal of recovery for the injured employee would have been to lengthen the statute of repose period for latent injury claims, and keep the worker’s recovery in the longstanding system of Illinois worker’s compensation. That is not what Public Act 101-0006 does, however.  Removing the exclusive jurisdiction of such claims from the Illinois Worker’s Compensation Commission has the unintended consequence of not only creating unlimited liability for Illinois employers in the civil tort system for latent injuries, but has the practical effect of eliminating existing insurance coverage for such claims due to the standard policy exclusion in GL policies that exclude coverage for claims by an employee, and the exclusion in worker’s comp policies that precludes coverage for civil tort actions.

Ed Matushek, on behalf of the Illinois Association of Defense Trial Counsel, testified in opposition to this legislation in the General Assembly which nonetheless voted to approve on straight party votes.   Where do we go from here?  Two major questions arise.

Can the Act Be Applied Retroactively?

The purported goal of this legislation was to aid Illinois workers who suffered from latent injuries who, for instance, had been occupationally exposed to asbestos in the 1960s and early 1970s but were unable to recover from their employer due to the statute of repose enacted in the Worker’s Compensation Act and Occupational Diseases Act.  Public Act 101-0006 states that it is “effective immediately.” The reality is that the majority of claims involving such exposures have already been litigated.  Some plaintiffs’ attorneys may nevertheless attempt to apply Public Act 101-0006 retroactively to pending cases filed before the date this legislation was enacted on May 17, 2019.  This should be attacked as a violation of the due process protections of the Illinois Constitution.

Two recent Illinois Supreme Court cases should preclude the retroactive application of Public Act 101-0006.  In 2009, the Illinois Supreme Court held that legislative amendments to the childhood sex abuse statute of limitations do not apply retroactively to revive previously barred claims, John Doe A. v. Diocese of Dallas, No. 106546, 2009 WL 3063427 (Ill. Sept. 24, 2009)(the new legislation should not be applied because the plaintiff’s cause of action was already time-barred under the limitations period contained in the previous version of the statute, and allowing the lawsuit to go forward would deprive the defendants of a vested right in violation of the due process protections of the Illinois Constitution (Ill. Const. 1970, art. I, §12).  Even more recently, in Perry v. Department of Financial and Professional Regulation, 2018 IL 122349 (2018), the Court clarified the retroactivity analysis of legislation under Illinois law.  If, as here, the amendment does not define the temporal reach of the amended statute, the courts must look to Section 4 of the Statute on Statutes to determine legislative intent, and the Perry court held that statutory changes which are substantive are not to be applied retroactively. There should be no argument that a law which allows or bars a cause of action is substantive rather than procedural, and any attempt to apply this law retroactively should be met with firm opposition.

Other Constitutional Attacks: Is This Special Legislation?

Going forward, consideration should be given to raising a constitutional challenge of Public Act 101-0006 as impermissible special legislation in violation of Article IV of the Illinois Constitution.  The Act has created a special class of injured worker who is entitled to sue in civil court, i.e., those that manifest a disease more than 25 years after exposure, while leaving all other workers who develop the same disease in 25 years or less subject to the restrictions of the worker’s compensation system. This is an irrational difference of situation for workers who suffer the same injury.  This classification confers a special privilege to workers who develop latent injuries after an arbitrary number of years, while leaving others who develop the same injury without a similar remedy.

If you are an Illinois employer who now finds itself subject to employee claims in the tort system, please contact us if we may be of assistance on these issues.

Morgan Hochheiser Joins Matushek LLC as an Associate

The Partners of Matushek LLC are pleased to announce that Morgan Hochheiser joined the firm as an associate. Morgan previously practiced in the defense of physicians and  medical institutions in the defense of medical malpractice claims. She will add her talents to our defense of complex mass tort litigation.

Matushek LLC Presentation at 2019 IDC/IMA Synergy Forum

Matushek LLC helped support the partnership of the Illinois Association of Defense Trial Counsel (IDC) and the Illinois Manufacturers’ Association (IMA) at the 2019 Synergy Forum on April 11, 2019 at The Itasca Country Club in Itasca, Illinois.  The Forum featured presentations on hot topics facing the manufacturing community and their defense counsel.

Matushek LLC Prevails in Seventh Circuit Appeal

Matushek LLC attorney Vincenzo Chimera prevailed in the Seventh Circuit Court of Appeals in a case alleging our client, a national telemarketing firm, illegally solicited donations on behalf of a “sham charity” in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”). Spiegel v. Associated Community Services, Inc., 733 Fed. Appx. 311 (7th Cir. 2018).

Plaintiff Marshall Spiegel had sued telemarketing firm Associated Community Services, Inc. (“ACS”) in an attempted class-action lawsuit alleging violations of the “Do Not Call” provision of the TCPA, which prohibits businesses from calling numbers listed on the national Do Not Call Registry to solicit “the purchase or rental of, or investment in, property, goods, or services,” unless the call is made by or on behalf of a “tax exempt nonprofit organization.” 47 U.S.C. § 227(a)(4); 47 C.F.R. § 64.1200(f)(14)(iii).

Summary judgment was entered on behalf of ACS because ACS’ telephone calls to Spiegel’s residence were made on behalf of BCS, which the district court found was recognized at all relevant times as a § 501(c)(3) tax-exempt organization by the Internal Revenue Service. Spiegel appealed to the Seventh Circuit Court of Appeals, arguing the district court erred in granting summary judgment to ACS because was BCS not a true “nonprofit” organization but rather a “sham charity” not subject to the exemption.

Vincenzo Chimera assisted in successfully arguing that the district court’s entry of summary judgment in favor of ACS should be upheld because district courts lack authority to overturn IRS tax-exempt designations and because plaintiff Spiegel failed to properly preserve his arguments for appeal. Following oral arguments on July 6, 2018, the Seventh Circuit panel issued a unanimous decision affirming summary judgment in favor of ACS. Spiegel v. Associated Community Services, Inc., 733 Fed. Appx. 311 (7th Cir. 2018).

Despite this victory, litigation under the TCPA continues to spin out of control, having “blossomed into a national cash cow for plaintiff’s attorneys specializing in [such] disputes.” Bridgeview Health Care Ct., Lt.d. v. Clark, 816 F.3d 935, 941 (7th Cir. 2016).  Due largely to the prospect of uncapped statutory damages, TCPA litigation has spiked in recent years, particularly actions against small businesses not engaged in the telemarketing industry.  The risk of TCPA liability has intensified in recent years with the emergence of new communications technologies, such as text messaging, which did not exist when the TCPA was enacted in 1991.

Although we succeeded in preventing the plaintiffs’ bar from further expanding the scope of liability in this Seventh Circuit case, it is expected that TCPA plaintiffs will continue seeking to expand TCPA liability by re-litigating the issue of whether district courts can overturn IRS designations of tax-exempt nonprofit status in cases where waiver cannot be claimed as a defense. If your business is facing the prospect of harassing TCPA litigation, or is uncertain of its exposure in this area of law, the attorneys at Matushek Nilles are available to discuss your options and defenses.

For additional information on this decision, the TCPA or appellate practice in the Seventh Circuit Court of Appeals and appellate courts of Illinois, Indiana and Missouri, please contact Vincenzo Chimera.

Illinois Supreme Court Limits Personal Jurisdiction Over Corporations

The Illinois Supreme Court issued an opinion that limits general personal jurisdiction over corporations. This welcome news to defendants in Illinois asbestos litigation, who find themselves named in suits in Cook, Madison and St. Clair counties that have no relation to corporations that are incorporated and headquartered out of state, facing claims in Illinois where the alleged tort didn’t occur there.In Aspen American Insurance Company v. Interstate Warehousing, Inc. the Illinois Supreme Court held that a corporation must be incorporated in Illinois, have its principal place of business in Illinois, or have contacts with Illinois that are “so substantial and of such a nature as to render the corporation at home in Illinois” for an Illinois court to have general personal jurisdiction. Even though Interstate Warehousing was a registered foreign corporation in Illinois and its contacts with the state had “been continuous and systematic for over twenty-five years,” while doing business through a warehouse in Joliet, the Court said this was insufficient to confer personal jurisdiction.  A copy of the opinion is available here. If you need assistance in seeking dismissal of similar claims, contact us for assistance.