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Matushek Nilles LLC Sponsors 2019 FETTI Conference

Matushek Nilles LLC again supported the National Forum for Environmental and Toxic Tort Issues (“FETTI”) as a Gold Level Sponsor for 2019. This year’s conference was held from September 25 through 27, 2019 at the Union League Club in Chicago, Illinois.  FETTI is a world-class seminar on a broad range of environmental issues with nationally recognized speakers, including  Mike Martinez, partner at Matushek Nilles LLC.  If you’d like further information on his topic, Relatively Exclusive: A National Overview of Employer Liability for Toxic Torts, or if you need assistance with a claim in this new frontier of tort liability in Illinois, please give us a call.

Mike Martinez addresses the participants at the 2019 FETTI Conference on recent changes in toxic tort liability of employers.

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 and Terry Casey Join Matushek Nilles LLC as Associates

The Partners of Matushek Nilles LLC are pleased to announce that Morgan Hochheiser and Terry Casey recently joined the firm as associates. Morgan previously practiced in the defense of physicians and  medical institutions in the defense of medical malpractice claims, and Terry was a judicial intern for the Hon. John Robert Blakely of the U.S. District Court, Northern District of Illinois. They will add their talents to our defense of complex mass tort litigation.

Matushek Nilles LLC Presentation at 2019 IDC/IMA Synergy Forum

Matushek Nilles 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 Nilles LLC Prevails in Seventh Circuit Appeal

Matushek Nilles attorneys Mike Martinez and Vincenzo Chimera recently prevailed in the Seventh Circuit Court of Appeals in a case alleging their 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.

Mike Martinez was retained to defend ACS on appeal and, with the assistance of associate Vincenzo Chimera, successfully argued 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 Mike Martinez or Vincenzo Chimera.

Illinois Appellate Court Reverses Denial of Motion to Dismiss for Lack of Jurisdiction

On May 18, 2018, the Illinois Appellate Court for the First District reversed Judge Clare McWilliams’ denial of a defendant’s motion to dismiss for lack of personal jurisdiction. The plaintiff was a resident of Alabama and worked in numerous states and for a short time at the former Republic Steel in Illinois, but failed to allege actual exposure to the defendant’s products occurred in Illinois. The defendant, a New York corporation, filed a motion to dismiss on the basis that the plaintiff’s complaint failed to allege sufficient facts to confer personal jurisdiction upon it, arguing that it did not consent to the circuit court’s jurisdiction, the court had no general personal jurisdiction exists over it, and no specific personal jurisdiction existed because the plaintiff did not allege that he was exposed to asbestos from its products in Illinois. The plaintiff countered by asserting in part that Illinois has “jurisdiction by necessity” because the plaintiff was exposed to asbestos in multiple states and there is no single forum in which he could sue every defendant. Read More »

Missouri Supreme Court Applies Daimler to Find No Jurisdiction Over Out-of-State Defendant

The Supreme Court of Missouri recently issued a decision that may stem the increased flow of out-of-state toxic tort cases being filed in St. Louis City Court. State Ex Rel. Norfolk Southern Railway Company v. The Honorable Colleen Dolan, issued February 28, 2017, upheld the dismissal of a railroad defendant on a lack of personal jurisdiction, finding that specific jurisdiction wasn’t present because the tort occurred outside Missouri, and that the defendant wasn’t subject to general jurisdiction under the U.S. Supreme Court’s opinion in Daimler.

Indiana Appellate Court clarifies premises liability in Indiana asbestos cases, expanding scope of liability for negligence of independent contractors

For the second time this year, an Indiana appellate court has expanded the scope of asbestos liability in the Hoosier state. Hot on the heels of the Indiana Supreme Court’s invalidation of the state’s Product Liability Act statute of repose in asbestos cases in Myers v. Crouse-Hinds Division of Cooper Industries, Inc., 53 N.E.3d 1160 (Ind. 2016), the Indiana Court of Appeals has issued another opinion arising out of the Larry Myers case, this time bearing on premises liability and the scope of the general rule of non-liability for the negligence of independent contractors. Read More »

Illinois Supreme Court Restores Twelve-Person Juries in Civil Cases

The Illinois Supreme Court held on September 22, 2016 in Kakos v. Butler, 2016 IL 120377, that the right to trial by jury includes the right to demand a 12-member jury. The change to Illinois’ jury system to reduce the size of juries in civil cases was proposed by the plaintiffs’ bar and had passed the Illinois legislature without much real debate in the waning days of former Gov. Patrick J. Quinn’s time in office, and became effective June 1, 2015. The Court held PA 98-1132 which reduced civil juries to only six members, and the statute it amended, 735 ILCS 5/2-1105(b), was facially unconstitutional. Because the provision regarding jury size could not be severed from the Act, the Court held the entire Act invalid. The 5-0 decision was authored by Justice Garman, with Justices Thomas and Kilbride taking no part. Read More »

Attempt by plaintiff to circumvent the Supreme Court’s Folta decision rejected by Morgan County Court.

In a victory for the asbestos defense bar, Randy Smith and Mike Martinez of Matushek Nilles LLC secured summary judgment for Brand Insulations, Inc. in the case of Rex Hill (Morgan County, Illinois, Case No. 13 L 21). Randy and Mike convinced Judge Christopher R. Reif to reject a novel attempt by the plaintiff to circumvent and nullify the effect of Folta v. Ferro Engineering by pursuing claims of secondary exposure between coworkers. Read More »