### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 18

- 1789
I N R E : E LENA H ERNANDEZ , Debtor

- Appellant

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____________________ Appeal from the United States District Court for the Northern District of Illinois , Eastern Divi sion

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No. 17 CV 3230

— Jorge L. Alonso
, Judge

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____________________
A RGUED O CTOBER 26, 2018

— D ECIDED M ARCH 18, 2019

____________________

Before W OOD , Chief Judge , and S YKES and S CUDDER , Circuit Judges

. S YKES , Circuit Judge

. When Elena Hernandez filed a voluntary Chapter 7 bankruptcy petition in December 2016 , s he reported one sizable asset: a pending workers ’ compensation claim valued at $3 1 ,000. T o place that claim beyond the reach of creditors, she listed it as exempt under section 21 of the Illinois Workers ’ Compensation Act (“ the Act ”), 820 I LL

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. 305/21 (2011) , applicable via 11 U.S.C. § 522(b)

. Two days after filing for bankruptcy , H ernandez settled the claim.2 No. 1 8

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Hernandez owed significant sums to three health care providers who treated her work

- related injuries . The providers objected to her claimed exemption , arguing that 2005 amendments to the Act enable unpaid healthcare providers to reach workers ’ compensation awards and settlements. The bankruptcy court denied the exemption and Hernandez appealed.The district judge affirmed, concluding that using the workers ’ compensation exemption to thwart this specific class of creditors would f rustrate the Act ’ s purpose. We confront an important questio n of statutory interpretation: w hether the Illinois Workers ’ Compensation Act, as amended, allows care

- provider creditors to reach the proceeds of workers ’ compensation claims . Section 21 of the A cthas been interpreted by bankruptcy courts to create an exemption for these assets. The 2005 amendments made several changes to the Illinois workers ’ compensation regime, imposing a new fee schedule and billing procedure for care providers seeking remune ration

. Did those changes alter the scope of section 21?

T he Illinois Supreme Court hasn ’ t addressed the interplay between these competing components of state workers ’ compensation law. Without that controlling authority , we find

ours elves genuinely uncertain a bout the correct interpretation

. This state

- law issue is dispositive, likely to recur , and implicates the effective administration of workers ’ compensation in Illinois

. Therefore, we respectfully certify the question set forth in this opinion to the Illinois Supreme Court

.No. 18

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I. Background
In December 2016 Hernandez filed a Chapter 7 bankruptcy petition in the N orthern District of Illinois. Between 2009 and 2011, she sustained on

- the

- job injuries and was treated at the Ambulatory Surgical Care Faci lity, Marque Medicos Fullerton LLC , and Medicos Pain and Surgical Specialists , S.C. In her bankruptcy petition, Hernandez reported unsecured claims held by the se healthcare p roviders. She owed $28,709.60 to A mbulatory Surgical ; $58,901.20 to Marque Medicos Fullerton ; and $50,161.26 to Medicos Pain and Surgical. She reported minimal assets, listing $1,300 in bank accounts ; some inexpensive jewelry ; and her pending workers ’ compensation claim , which she valued at $31,000. Hernandez claimed an exemption for the entirety of that claim, citing section 21 of the Illinois Workers’ Compensation Act. Two days after filing her bankruptcy petition, Hernandez settled t he claim with her employer, apparently for $30, 5 66.33 , without con sulting the Trustee. The health

- care p roviders object ed to Hernandez’s claimed exemption, arguing that the amended Act empowered them to reach her settlement. They also urged the court to disallow the exemption on grounds that the settlement was the produ ct of fraud. I n April 2017 the bankruptcy court heard argument on the exemption . Th e judge focused on process

- based concerns about Hernandez’s settlement

— including her failure to notify interested parties or the Trustee

— rather than the statutory arguments raised by the parties

. In the end, the judge summarily den ied the exemption without a writ ten opinion. Hernandez appeal ed to the district court , and JudgeAlonso affirmed. His opinion focused exclusively on the interplay between section 21 of t he Act and the 20054 No. 1 8

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amendments codified at 820 I LL

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. 305/8 and 8.2. Relying on In re McClure , 175 B. R. 21 (Bankr. N.D. Ill. 1994), J udge Alonso held that section 21 create s an exemption for workers’ compensation claims but the subsequent amendme nts “significantly altered” the Act, striking a “balance” by limiting what providers can charge while allowing them to resume collection efforts following a settlement. Reading the Act as a “harmonious whole” and citing interpretive canons against surplusa ge and absurdity, J udge Alonso rejected Hernandez’s inter pretation of the amendments as “not reasonable” because i t would undermine a key purpose of the amended Act : ensuring payment for care providers.
Hernandez mo ved to alter or amend the judgment. At a hearing on the motion , Judge Alonso again rejected her statutory arguments. This appeal followed

. I I

. Discussion We apply de novo review to the bankruptcy court’s conclusions of law

. First Weber Grp., Inc. v. Horsfall , 738 F.3d 767, 776 (7th Cir. 2013). “A debtor’s entitlement to a bankruptcy exemption is a question of law

... . ” In re Yonikus , 996 F.2d 866, 868 (7th Cir. 1993). Matters of statutory interpretation are likewise questions of law. Boyd v. Ill. State Police , 384 F.3d 888, 896 (7th Cir. 2004).
A bankruptcy estate contains most property interests held by the debtor, including pending claims . 11 U.S.C. § 541(a). Under § 522 , s ome assets within the estate are nonetheless shielded from creditors by statutory exemptions. Clark v. Chi. Mun. Emp s

. Credit Union , 119 F.3d 540, 543 (7th Cir. 1997) (explaining that under § 522 “an individual debtor can retain certain exempt property while the debtor’s non

- exempt propertyNo. 18

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may be used to satisfy creditors’ claims”). The B ankruptcy C ode recognizes two sour ces of exemptions: the federal exemptions outlined in § 522(d) and , essentially, all others ( that is, federal exemptions beyond § 5 22(d) and state

- law exemptions )

. See 11 U.S.C. § 522(b)(3). The default rule is that a debtor chooses between these bodies of law

. Id. § 522(b)(1). However, s tates may deny debtors that choice and restrict them to non

- § 522(d) exemptions. Id. § 522(b)(2). Illinois has done so. See 735 I LL

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. 5/12

- 1201; Clark , 119 F.3d at 543.
Illinois law ca r ves out exemptions for a broad range of personal property. 735 I LL

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. 5/12

- 1001. The S tate’sgeneral exemption statute doesn’t mention workers’ compensation claims or awards. Id. Hernandez relies on section 21 of the Illinois Workers’ Compensation Act, which bankruptcy

c ourts have interpreted as an exemption. In relevant part t hat section provides : “ N o payment, claim, award or decision under this Act shall be assignable or subject to any lien, attachment or garnishment, or be held liable in any way for any lien, debt, pen alty or damages.” 820 I LL

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. 305/21. A version of section 21 has been in place since the early 20 th century. See Lasley v. Tazewell Coal Co. , 223 Ill. App. 462, 463 (Ill. App. Ct. 1921).
In the 1994 In re McClure decision, a bankruptcy court classified section 21 as a state

- law exemption applicable in bankruptcy proceedings under § 522(b). 175 B.R. at 23

– 24. The
court acknowledged that section 21 isn’t codified alongside other state

- law exemptions and doesn’t use the word “exempt.” Id. at 23. Even so, the court held that the provision’s plain “language is effective to exempt workers’ compensation claims from judgments of creditors.” Id. The court reasoned6 No. 1 8

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that the s tatutory text may not be overridden by “the placement of provisions of state law within a particular codification.” Id.
McClure found support for its conclusion in Mentzer v. Van Scyoc , 599 N.E.2d 58 (Ill. App. Ct. 1992). Mentzer involved a small

- claims dispute in which th e trial court ordered a tenant to pay $10 per month to her landlord. Id. at 60. T he tenant’s income was comprised entirely of workers’ compensation benefits. S he objected to the judgment, arguing that section 21 shielded this income from creditors. The Ill inois Appellate Court held that “court[s] cannot generally require workers’ compensation benefits to be applied to the debts of a claimant,even when reduced to judgment, unless some specific statutory provision

... so provides.” Id. at 61. Nor did Illinois’ s general exemption statute “supersede or infringe upon the protection given by section 21.” Id. Mentzer relie d on an earlier Illinois Supreme Court case addressing a claim against a guardianship whose sole asset was a workers’ compensation award. In re Es tate of Callahan , 578 N.E.2d 985 (Ill. 1991)

. Callahan , in turn, held that section 21 prevented the claimant from reaching an award under the Act ; in so holding, the court r el ied in part on a dictionary definition of “debt.” Id. at 989.
We don’t have a dispositive Illinois Supreme Court opinio n clarifying the boundaries of section 21 or even classifying it as an exemption

. T he parties agree that section 21 creates an exemption and thus haven’t briefed that question, so for the time being we assume that the interpretation embraced in McClure is correct . The crux of the dispute is whether the exemption applies to the claims of health care providers after the 2005 amendments.No. 18

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We turn now t o the text of those amendments. First, the General Assembly crea ted a detailed schedule limiting the fees providers may charge for their services to treat job

- related injuries or illnesses . 820 I LL

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. 305/ 8 .2

. Under section 8.2(a) , the Workers’ Compensation Commission (“the Commission”) is empowered to set an d adjust price ceilings for medical care on a regional basis across Illinois.
The General Assembly also altered section 8(a), requiring employers to “ pay the negotiated rate, if applicable, or the les ser of the health care provider’ s actual charges or [fees] according to a fee schedule

... in effect at the time the service

was rendered for all the necessary” medical care “ reasonably required to cure or relieve from the effects of the accidental injury. ” 820 I LL

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. 305/8 (a). Section 8(a) also ins truct s employers to pay undisputed medical bills directly to care provider s on the employee’s behalf

. Id.

T o accompany the new fee schedule, the amendments installed new billing and collection rules

. Under section 8.2(d) :

“ W hen a patient notifies a provide r that the treatment []

... being sought is for a work

- related illness or injury and furnishesthe provider the name and address of the responsible employer, the provider shall bill the employer or its designee directly .” If the “ bill contains substantially all the required data elements necessary to adjudicate the bill,” the employer has 30 days to pay the providers involved in the claim

. Id. § 8.2(d)(1). Claim denials or disputes must be communicated to the provider within 30 days

. Id

. § 8.2(d)(2). Unpaid undisputed bills accrue statutory interest. Id. § 8.2(d)(3).
The amendments also curtailed a billing practice known

as “balance billing,” whereby providers attempt ed to collect from an employee the remaining balance on a n u ndisputed8 No. 1 8

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b ill paid only partially by an employer . “Except as provided in subsections (e

- 5), (e

- 10), and (e

- 15),” the Act now bars p roviders from “hold[ing] an employee liable for costs related to

a non

- disputed procedure, treatment, or service rendered in connection with a compensable injury , ” or “ bill [ing] or otherwise attempt [ing] to recover from the employee the difference between the provider ’ s charge and the amount paid by the employer

... on a compensable injury.” Id. § 8.2 (e). Subsections (e

- 5), (e

- 10), and (e

- 15) address procedures in the event of a dispute between the employer and the provider over a medical bill. If an employer determines that an injury or illness is non compensable under t he Act and refuses to pay the entire bill, the provider is entitled to seek payment from the employee

. Id. § 8.2(e

- 5), (e

- 10). But i f the employee notifies the provider that he has filed an application with the Commission to resolve the dispute, the provider “shall cease any and all efforts to collect payment,” and the statu te of lim itations on the debt is tolled. Id. During t he pendenc y of the dispute, providers are permitted to mail payment reminders

— but not bill s

— to the employee. Id. § 8.2(e

- 15).Finally, the General Assembly addressed collection procedures after an award or settlement of a disputed claim :Upon a final award or judgment by an Arbitrator or the Commission, or a settlement agreed to by the employer and the employee, a providermay resume any and all efforts to collect payment from the employee for the servi ces rendered to the employee and the employee shall be responsible for payment of any outstanding bills for a procedure, treatment, or serviceNo. 18

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rendered by a provider as well as t he interest awarded under subsection (d) of this Section

. Id. § 8.2(e

- 20). Af ter the claim is adjudicated or settled, the provider may se ek collection from the employee, capped atthe fee schedule’s price ceiling if the care is compensable. Payment for noncompensable services “i s the responsibility of the employee unless a provider and employee h ave agreed otherwise in writing .” Id. The healthcare p roviders here argue that these amendments carve out an exception to the exemption in section 21 for care providers who treat an employee’s work

- related injuries or illnesses

. Their argument focuses squarely on statutory purpose. Leaving the exemption intact would “obviate the plain meaning” of section 8.2(e

- 20) by placing a workers’ compensation settlement “ outside the reach o f a specific class of creditors

... [that] the Act has now gone to extraordinary lengths to protect. ” Hernandez emphasizes statutory text, arguing that the General Assembly knew how to create an exception to the exemption but conspicuously left out any language to that effect. Thus, while the amendments ensur e that providers can seek recourse against an employ ee following a settlement , section 21 continues in force as an exempti o n, wall ing off the proceeds of this particular exempted claim

. T he healthcare p roviders’ interpretation carried the day below . The di strict judge concluded that section 21 continues
to exempt workers’ compensation claims as against general creditors “but not as against medical providers after the debtor settles her

... claim with her employer.”10 No. 1 8

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We apply Illinois’s rules of statutory const ruction when interpreting an Illinois statute. Zahn v. N. Am. Power & Gas, LLC , 815 F.3d 1082, 1089 (7th Cir. 2016). “The primary rule ofstatutory construction is to ascertain and give effect to the intent of the legislature,” and “[t]he best evidence of legislative intent is the statutory language .” People v. Donoho , 788 N.E.2d 707, 715 (Ill. 2003). When assessing legislative intent, “ courts should consider, in addition to the statutory language, the reason for the law, the problems to be remedied, and th e objects and purposes sought.” Id. Statutory provisions should not be read in isolation but “as a whole; all relevant parts of the statute must be considered when courts attempt to divine the legislative intent underlying the statute.” People v. NL Indus. , 604 N.E.2d 349, 356 (Ill. 1992).Illinois law recognizes interpretive canons against surplusage and absurdity. “We must construe the statute so thateach word, clause, and sentence, if possible, is given a reasonable meaning and not rendered superfluous , avoiding an interpretation [that] would render any portion of t he statute meaningless or void,” and “ presume that the General Assembly did not intend absurdity, inconvenience, or injustice.” Sylvester v. Indus. Comm ’ n , 756 N.E.2d 822, 827 (Ill. 2001) (ci tations omitted). This statute in particular “i s to be interpreted liberally [] to effectuate its main purpose

— providing financial protection for interrup tion or termination of a worker’ s earning power. ” Id. (citation omitted). Applying these interpretive r ules, we see plausible arguments on both sides . The amendments construct ed a payment process designed to balance the interests of healthcare providers, employees, and employers. For instance, by tolling the statute of limitations during payment disputes, the GeneralNo. 18

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Assembly clearly sought to “protect[] providers’ ability to ultimately receive payment.” Marque Medicos Fullerton, LLC v. Zurich Am. Ins. Co. , 83 N.E.3d 1027, 1036 (Ill. App. Ct. 2017). Hernandez’s interpretation incentivizes strategic behavior and unquestionably undermines healthcare providers. It places the only asset that employees necessarily possess after receiving a workers’ co mpensation award or settlement

— the award or settlement itself

— beyond the reach of providers

. Moreover, ensuring th at providers are paid helps guarantee that employees receive care in the first place

— surely a goal of the workers’ compensation regime. A pplying the exemption in section 21 to the claims of care providers creates tension with the rest of the Act. It’s at l east possible that Hernandez’s interpretation generate s the “ absurdit y, inconvenience, or injustice” that Illinois law seeks to avoid. Sylvester , 756 N.E.2d at 827. On the other hand, Hernandez is correct that the plain text of the amended Act doesn’t contain specific language of an exception to section 21

. If the drafters wanted to place workers’ compensation settlements within the reach of these creditors, they could have altered section 21 or explained that section 8.2(e

- 20) enables providers to reac h those assets. Reading these amendments to create an implicit exc eption to section 21 is not a lightly taken step. In re Michael D. , 69 N.E.3d 822, 825 (Ill. 2015) ( “It is never proper to depart from plain language by reading into a statute exceptions, li mitations, or conditions [that] conflict with the clearly expressed legislative intent.” )

. T he Act never discusses which assets are available
to healthcare providers seeking to vindicate their collection rights

. So while the purpose of the amendments may h ave been to protect care providers, it’s not obvious that the General Assembly effectuate d that purpose by exposing a12 No. 1 8

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heretofore

- exempt asset. And while Hernandez’s interpretation might hinder the Act’s effectiveness, it wouldn’t make any provision “meaningless or void,” triggering the canon against surplusage. Sylvester , 756 N.E.2d at 827

. Without guidance from the Illinois Supreme Court, we decline to hold, as the district court did, that section 21 no longer blocks this class of cre ditors. That’s one reasonable interpretation of the amended Act, but it’s also possible that the General Assembly’s silence on the matter means the workers’ compensation exemption remains intact. In her appellate brief, Hernandez moves to certify this que stion to the Illinois Supreme Court. 1 The healthcare p roviders join her motion. We may certify a question if “the rules of the highest court of a state provide for certification to that
court .” 7 TH C IR

. R. 52 (a). The Illinois Supreme Court permits certification provided the question is one of state law , “ determinative of the said cause , ” and unanswered by “controlling precedents.” I LL

. S. C T

. R. 20 (a)

. In exercising our discretion to certify a question, “the most important consideration is whether we find ourselves genuinely uncertain about a question of state law that is key to a correct disposition of the case.” Lyon Fin. Servs., Inc. v. Ill. Paper & Copier Co. , 732 F.3d 755, 766 (7th Cir. 2013). For the reasons discussed above, we have “serious d oubt[s] about how[the] state’s highest court would resolve” this question of statutory interpretation. State Farm Mut. Auto. Ins. Co. v. Pate , 275 F.3d 666, 672 (7th Cir. 2001) (quotation marks omitted).

1 A party is permitted to move for certification in his brief without filing a separate motion. 7 TH C IR

. R. 52(a) (“ A motion for certification shall be included in the moving party ’ s brief. ”).No. 18

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Neither the Illinois Supreme Court nor the state ap pellate
court has addressed the interplay between section 21 and the 2005 amendments to the Act

. Lyon , 732 F.3d at 766 ( explaining that certification is warranted “ where the state supreme court has yet to have an opportunity to illuminate a clear path on
t he issue ”). And the answer to that question determin es the
outcome in Hernandez’s case

— a requirement for certification under our caselaw and the Illinois Supreme Court’s rule. Zahn , 815 F.3d at 108 6. There is an added layer of uncertainty here because the Illinois Supreme Court hasn’t answered a key preliminary question: whether section 21 creates an exemption in the first place. To be sure, a federal bankruptcy court has construed section 21 to do so , see In re McClure , 175 B.R. at 24 , and othe r bankruptcy courts have followed suit

. But that’s not dispositive. Without an authoritative interpretation of section 21 from the state courts , our evaluation of the interaction between that section and later enactments is yet more uncertain.
Our decision to certify also considers whether “ the case concerns a matter of vital public concern ” or is an “ issue l ikely [ to ] recur in other cases.” Zahn , 815 F.3d at 108 5 (quotation marks omitted)

. Of course, Hernandez won’t be the last bankruptcy debtor with unpaid medical bills and a workers’ compensation settlement. In many low

- asset bankruptcies, accessto the proceeds of a workers’ compensation claim will determine whether health care providers receive compensation at all

. Whether the Act permit s providers to reach that asset implicates the s tate’s ability to administer a fair and efficient workers’ compensation regime.We respectfully ask the Illinois Supreme Court, in its discretion, to answer the following certified question:14 No. 1 8

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After the 2005 amendments to 820 I LL

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. 305/8 and the enactment of 305/8.2, doessection 21 of the Illinois Workers’ Compensation Act exempt the proc eeds of a workers’ compensation settlement from the claims of medical

- care providers who treated the illness

or injury associated with that settlement? Nothing in this certification should be read to limit the scope of the Illinois Supreme Court’s inquiry, and the justicesare invited to reformulate the certified question. Further proceedings in this c ourt are stay ed while this matter is under consideration by the Illinois Supreme Court. Q UESTION C ERTIFIED

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