Source: http://www.mcandl.com/tort_reform.html
Timestamp: 2019-04-19 07:09:06+00:00

Document:
In Best v. Taylor Machine Works, an opinion dated December 18, 1997, the Illinois Supreme Court declared unconstitutional the Civil Justice Reform Amendments of 1995 (Public Act 89-7), which made important changes beneficial to defendants in the laws affecting bodily injury, death, negligent injury to property, and product liability. The Court specifically held unconstitutional the two most important provisions of the Act: a $500,000 cap on compensatory damages for non-economic injury and the abolition of joint liability among joint tortfeasors. Having found these two provisions of the law to be unconstitutional, together with two of lesser importance, the Court held that the unconstitutional provisions could not be severed from the remainder, and that Public Act 89-7 is, as a consequence, invalid in its entirety.
In declaring the Act invalid, the Court relied exclusively on arguments that the legislation violated the Constitution of the State of Illinois, not the Constitution of the United States. On this, the Supreme Court of Illinois is the final authority, with no recourse to the United States Supreme Court. Therefore, Public Act 89-7 is no longer law in Illinois and the decision is not subject to review.
The Court’s opinion is a long one, comprising 98 pages with the dissent. Four Justices joined in the majority opinion, one joined in almost all of it, one dissented, and one recused himself because of a conflict of interest. Even the dissent accepted the majority opinion on some issues. Consequently, it is fair to say that despite a lack of unanimity, the decision represents a broad consensus.
Public Act 89-7 was the most important tort reform bill in recent Illinois history. The following sections describe the Act, summarize the principal points of the Best opinion, and assess whether future tort reform legislation is likely to be upheld. In particular, an attempt is made below to determine whether the constitutional infirmities the Court found in Public Act 89-7 are inherent in all attempts at tort reform, or whether the Court based its ruling on errors in draftsmanship that might be corrected by a subsequent legislature. While it seems clear that this Court will never accept a monetary limit on damages, the abolition of joint liability is still possible, and other reforms might also pass muster. Unfortunately, none of the other provisions of the Act held any promise of altering the risk of doing business in Illinois to the same degree as the $500,000 cap.
Because the Civil Justice Reform Amendments of 1995 were immediately challenged as unconstitutional in courts across the state, Illinois lawyers never had an opportunity to determine in practice how effective this legislation would be. The provisions thought to be most important are summarized below. Except as otherwise stated, they were to apply to all actions filed on or after March 9, 1995, for bodily injury, death, negligent injury to property, or product liability.
$500,000 cap on non-economic damages. This limit on non-economic damages, which was to apply only to causes of action accruing after the effective date, was to apply to all intangible damages, such as pain and suffering, disability, and loss of consortium.
Elimination of joint liability. Under current law, the liability of joint tortfeasors is (with one exception) joint and several, so that any one of them can be required to pay an entire loss if the others are uncollectible. Under the Act, each defendant was to be liable to plaintiff only to the extent of his relative degree of fault. The jury was to determine the percentage of fault of each tortfeasor, a term newly defined to include employers, settling parties, and non-parties.
Statute of repose for product liability. The Act provided that the ten-year statute of repose formerly applicable to product liability claims brought under the doctrine of “strict liability in tort” would apply to all product liability claims, regardless of theory, accruing after the effective date.
Product liability certificate of merit. This effort to reduce frivolous filings required every product liability lawsuit to include a written report by a qualified expert. The expert had to either identify specific defects that made the product defective and unreasonably dangerous (in a strict liability case), or specify acts or omissions constituting negligence. In either event he had to determine that the defect was the proximate cause of injury. In a design defect case the expert had either to state that there was a safe alternative or identify an applicable standard that was not complied with.
Product liability presumptions. The Act created a series of defense-oriented presumptions applicable to product liability cases accruing after the effective date. The presumptions included that a product is reasonably safe if it met an applicable federal or state statute or regulation; that the design of a product is reasonably safe unless at the time of sale a practical alternative design was available that would have prevented the injury without significantly impairing the product’s usefulness, desirability, or marketability; and that warning labels are adequate if they conform to general industry standards.
Restrictions on physician-patient privilege. The Act made the filing of a lawsuit for bodily injury a waiver of the physician-patient privilege and required plaintiffs to consent to the release of all medical records by any health care provider. It specifically authorized physicians (including those not parties) to communicate privately with the attorneys for any party, and authorized defendant physicians to communicate freely with attorneys for their past or present insurers, employers, or partners.
Restrictions on the doctrine of apparent agency. Under the new law, a plaintiff could use the doctrine of apparent agency to hold a hospital liable for the acts of physicians who were not its employees or agents only if he could establish that some action by the hospital reasonably suggested that the physicians were its agents, that he was aware of these representations and relied on them, and that he would have gone to another hospital had he known that these physicians were not the hospital’s agents. These requirements were quite strict and would have made it more difficult to hold hospitals liable for the acts of non-employee physicians, especially emergency physicians and anesthesiologists.
Limitation on contribution recoveries from employers. In a contribution action by a tortfeasor against an employer, the employer’s liability would be limited to its Workers’ Compensation obligation, but the tortfeasor would receive a credit for the full amount of the employer’s degree of fault.
Qualifications and affidavits of medical experts. Augmenting a prior requirement that medical malpractice plaintiffs obtain an affidavit of merit from a qualified health care provider, the new law made it necessary to identify the affiant. It also required that expert witnesses in medical malpractice cases be licensed, board certified or board eligible in a defendant’s specialty, familiar with the medical problem presented, and working at least 75 percent of the time as a practitioner or teacher (not as a professional witness).
Restrictions on voluntary dismissal. Plaintiffs were no longer to be allowed to voluntarily dismiss and refile after the statute of limitations had expired. Prior law allowed refiling within one year, regardless of the statute of limitations. Some plaintiffs used this to keep a case alive when they could not find an expert or otherwise comply with some requirement.
Best v. Taylor Machine Works is a consolidated appeal from two personal injury cases arising in Madison County, a venue widely regarded as favorable for plaintiffs. The circuit court held eight separate parts of Public Act 89-7 to be unconstitutional, including the major product liability provisions. The Supreme Court took a narrower approach, finding four sections of the Act unconstitutional, and then striking down the whole on the theory that the parts were not severable. As a result, we know in detail what the Court thinks about some issues, including the damage cap and joint liability, but nothing about its views on others, including expansion of the product liability statute of repose. Set forth below is our summary of the Court’s opinion.
In all common law, statutory or other actions that seek damages on account of death, bodily injury, or physical damage to property based on negligence, or product liability based on negligence, or product liability based on any theory or doctrine, recovery of non-economic damages shall be limited to $500,000 per plaintiff. There shall be no recovery for hedonic damages.
The opinion takes several pages to describe the extreme haste in which the legislature adopted this Act, the misunderstandings that the Court thinks lay behind its adoption, the legislature’s uncritical acceptance of erroneous anecdotal evidence (like the notorious McDonald’s hot coffee case), and the expert evidence plaintiffs presented by affidavit that damage caps do not lower medical costs or otherwise benefit the public. After this lengthy criticism of the legislative reasoning process, the Court says that, of course, it is “not empowered to ‘adjudicate’ the accuracy of legislative findings.” Instead, its “task is limited to determining whether the challenged legislation is constitutional, and not whether it is wise.” This recitation, although doubtless enunciating the standard for decision, nevertheless appears pro forma, given the Court’s obvious lack of respect for the way tort reform was adopted in this instance.
The Court points out that although this clause originated in attempts to curb the corrupt nineteenth century practice of establishing favored business monopolies by the passage of special corporate charters, there is a long tradition in Illinois of using it to invalidate laws that the Court believes discriminate between different classes of citizen using a classification not rationally related to a legitimate state interest. The special legislation clause has been used to strike down a $500,000 limit on compensatory damages in medical malpractice cases, a cap on damages in automobile accident cases when the automobile was being used for commercial purposes, and a law transferring to employers the right to pursue lawsuits against tortfeasors who injure employees covered by Workers’ Compensation. In each case, the Court found some way in which the proposed legislation treated differently individuals it found to be situated similarly, and held that there was no rational basis for the classification.
In Best, the main distinction the Court makes is between a person injured mildly and one injured severely. Under the proposed cap, a person sustaining less than $500,000 in non-economic damages could be compensated in full, while a person injured more severely could be compensated only in part. The Court describes a particular example in which this would be an impermissible discrimination: an individual who loses a leg in one accident and then loses another leg in a second accident. It hypothesizes that this victim might recover $400,000 each for non-economic damages in two lawsuits against two different defendants. On the other hand, someone who lost both legs in a single accident, and was therefore hypothetically entitled to $800,000, would have his non-economic damages arbitrarily limited to $500,000. The Court also notes that different classes of tortfeasors would likewise be treated differently without any justification. It examines, and rejects, a variety of theories holding that the legislature can both expand and restrict common law rights, and that such expansion and restriction inherently requires the drawing of distinctions.
The special legislation discussion is the best reasoned part of the Best opinion, has the most applicable precedents, and seems to carry the strongest conviction. One does not have the impression, after reading the decision, that a more carefully drawn cap on damages could ever be approved by these justices.
The Court also based its decision invalidating the damage cap on a second argument. It held that the cap violated the “separation of powers” clause of the Illinois Constitution by improperly assigning to the legislature the power of remitting verdicts. Remittitur is the doctrine that allows a trial judge to correct an excessive verdict by requiring a plaintiff to agree to forego a portion of the damages awarded. If plaintiff does not consent, the judge orders a new trial. The Court ruled that Section 2-1115.1(a) “functions as a legislative remittitur” that “unduly encroaches upon the fundamentally judicial prerogative of determining whether a jury’s assessment of damages is excessive . . . .” Remittitur, according to the Court, should be applied case by case, because the evidence and circumstances supporting verdicts differ, and should give plaintiff the option of a new trial if he is unwilling to accept the reduction. For the legislature to assume the power of remittitur, and then alter for the worse the way it is applied, violates the separation of powers that ought to exist between the branches of government.
As the dissent points out, this part of the opinion builds a straw man and then demolishes it. Characterizing the damage cap as a “legislative remittitur” is more clever than convincing. A limit on damages that is legislative rather than judicial, mandatory rather than optional, and with a single level rather than adapted to particular cases, should not be called remittitur at all, especially since the Act does not restrict a judge’s power to order traditional remittitur. One of the five concurring justices dissented from this part of the opinion. It is difficult to understand why the Court added this additional ground for striking down the legislation, given the strained reasoning, when the Court declined to consider two other grounds relied on by the court below. The circuit court had held that the cap also violated the constitutional guarantees of a right to a jury trial and a right to a certain remedy. The Supreme Court found it unnecessary to consider these holdings since the Act is unconstitutional as special legislation. This reasoning should logically have applied to the separation of powers argument as well.
This does not, however, alter the conclusion that the tenor of the Supreme Court’s decision is so strongly against damage caps on an absolute basis that one should expect any future cap to be invalidated while these justices remain a majority on the Court. Moreover, the decision is phrased in such absolute terms as to make it difficult to overturn in the future, even after time brings about a change in the Court’s composition.
The Act amended the Joint Tortfeasor Contribution Act to modify a common law rule, known as the Kotecki Doctrine, which provides that if a tortfeasor brings a contribution action against a plaintiff’s employer, on the theory that the employer was responsible in part for the injury, the employer’s liability is limited to his Workers’ Compensation obligation. As modified by Public Act 89-7, the employer’s liability would still be so limited, but the tortfeasor could receive a credit against his liability to plaintiff equal to the degree of the employer’s percentage of fault.
The opinion notes, correctly, that this provision is fundamentally inconsistent with the replacement of joint liability by proportionate several liability (discussed below). It states that contribution claims against employers ought never to be filed under the new law since no tortfeasor should be liable for more that his own percentage of fault. If any intelligible reconciliation of the parts of the Act were possible, it would give guilty tortfeasors a “double reduction.” The Court suggests the case of a $500,000 injury caused equally by the tortfeasor and the employer. Since the tortfeasor is 50 percent at fault, his liability should be reduced to $250,000. He is then entitled to a credit equal to the employer’s 50 percent share of fault, which is also $250,000. The result, according to the Court, is a double reduction that eliminates plaintiff’s recovery altogether. Any other construction of the provision, according to the Court, would result in this section never being applied at all, a violation of the canon of construction that does not permit a law to be construed as a nullity.
As a result of the foregoing, the Court holds that the contribution credit is either arbitrary and unconstitutional, because of the double reduction, or entirely superfluous. In either event the Court finds it invalid, leaving Kotecki as the governing law in Illinois.
(a) In any action brought on account of death, bodily injury to person, or physical damage to property in which recovery is predicated upon fault as defined in Section 2-1116, a defendant is severally liable only and is liable only for that proportion of recoverable economic and non-economic damages, if any, that the amount of that defendant’s fault, if any, bears to the aggregate amount of fault of all other tortfeasors, as defined in Section 2-1116, whose fault was a proximate cause of the death, bodily injury, economic loss, or physical damage to property for which recovery is sought.
(b) Notwithstanding the provisions of subsection (a), in any healing art malpractice action based on negligence or wrongful death, any defendants found liable shall be jointly and severally liable if the limitations on non-economic damages in Section 2-1115.1 of this Act are for any reason deemed or found to be invalid.
The Court spends several pages of the Best opinion explaining the flaw in the reasoning behind the abolition of joint liability. Proponents of abolition contend that although it may be unfair for a plaintiff to go uncompensated for his injury, it is equally unfair to require a defendant to pay for more than the part of the injury he caused. The Court says that, on the contrary, joint liability is only imposed when all the defendants proximately cause the injury, and it is therefore fairer that one of them should bear the whole cost, if necessary, than that the innocent victim should go uncompensated. The fact that one can invent a scheme to allocate fault among defendants does not detract from the fact that each defendant is guilty of negligence but for which the injury as a whole would not have occurred. Joint liability is therefore theoretically sound, in this Court’s view.
After making this argument, the Court surprisingly did not base its decision upon it, but instead chose a technicality for overturning the section. Note that subsection (b) restores joint liability in medical malpractice cases if the damage cap is found to be invalid. The opinion concludes that there is no reason malpractice cases should be treated differently from other types of cases. Reinstating joint liability in medical malpractice cases benefits only medical malpractice plaintiffs, and moreover fails to meet the legislation’s purported goal of achieving fairness among defendants in medical malpractice cases. Therefore, according to the Court, section 2-1117(b) arbitrarily provides a special benefit in violation of the constitutional prohibition against special legislation. The Court then holds that subsection (b) cannot be severed from subsection (a), so the whole section must be stricken. In other words, the exception being unconstitutional, the rule itself must be abolished.
The reasoning of the Court in Best would, on its face, permit the total abolition of joint liability so long as there is no exception for medical malpractice cases. However, given the Court’s unkind words about abolition of joint liability in obiter dictum, it is difficult to be certain of its reaction to abolition with no exception.
Moreover, it is interesting to note that there has been a minor exception since 1986 to the rule of joint and several liability. Except in medical malpractice and pollution cases, the liability of a defendant with less than 25 percent of total fault is joint only for medical expenses, and several for all for other damages. The Supreme Court has never ruled on the constitutionality of this provision, but it cited the statute without commenting on its validity in a 1994 case, Lannon v. Kosco, which could be interpreted as evidence for the constitutionality of several liability.
On the other hand, it could easily be argued that the exception under the old statute for tortfeasors with less than 25 percent of fault, and the exception to the exception for pollution and malpractice cases, are as much “special legislation” as the exception in Public Act 89-7. Thus, Best may leave in doubt what law to apply now that the 1995 Act has been found invalid. Prior case law was already unsettled with respect to which persons to consider in measuring a tortfeasor’s fault to see if it was less than 25 percent.
Finally, the Best opinion holds unconstitutional certain physician-patient disclosure rules. Illinois observes a judge-made rule known as the Petrillo Doctrine, which originated in a product liability case in which the judge enjoined defense counsel from engaging in ex parte discussions with plaintiff’s treating physicians. When this doctrine was applied in medical malpractice cases, it became a nightmare for hospitals, because it made it almost impossible to conduct a joint defense with co-defendant physicians. The hospital’s lawyers could not discuss with members of the hospital’s own medical staff the facts giving rising to a claim.
If the legislature had stuck simply to overturning the Petrillo Doctrine, it might have succeeded. However, it overreached by passing some very ill-considered legislation, providing that any party who alleged any claim for bodily injury waived any privilege he had with any health care provider who furnished care at any time. Public Act 89-7 permitted defendants to get complete copies of the medical record from any provider. This was clearly much broader than it had to be and was held unconstitutional in Kunkel v. Walton, a decision issued November 20, 1997. Kunkel was based on separation of powers, but Best adds a privacy argument.
The essence of the separation of powers argument is that Public Act 89-7 eliminated the trial judge’s right to control the scope of discovery so as to balance the interests of the parties and prevent the compulsory disclosure of information irrelevant to the lawsuit. This “creates an irreconcilable conflict with the inherent authority of the judiciary.” This argument is no doubt valid, but it has little to say about whether the legislature should be allowed to overturn the Petrillo Doctrine (or at least the worst aspects of the Petrillo Doctrine) with appropriately narrow legislation.
We believe that the rationale of the Petrillo court is sound and that there is a strong public policy against ex parte conferences between the plaintiffs’ health care practitioners and defendants or their representatives. We further believe that the privacy interest referred to in the “certain remedy” clause of section 12 provides a constitutional source for the protection of the patient’s privacy interest in medical information and records that are not related to the subject matter of the plaintiff’s lawsuit. We also acknowledge that the certain remedy provision has been referred to in general as a statement of philosophy rather than a guarantee of a specific remedy. [Citations omitted.] Nonetheless, we believe that a statement of “constitutional philosophy” is reflective of the strong public policy that was recognized in Petrillo. Therefore, we conclude that patients in Illinois have a privacy interest in confidential medical information, and that the Petrillo court properly recognized a strong public policy in preserving patients’ fiduciary and confidential relationship with his or her physicians.
Note that the Court expressly finds the law to be unconstitutional on privacy grounds insofar as it requires disclosures not related to the plaintiff’s claim, but that it draws back from delineating the full extent of this privacy right. The quoted statement appears intentionally to leave open the question of whether the legislature could overturn the Petrillo Doctrine to the extent of allowing ex parte discussions of information related to the subject matter of plaintiff’s lawsuit.
After ruling on four specific provisions of Public Act 89-7, the Best opinion goes on to consider whether those found unconstitutional can be severed from the remainder. This, it says, is a matter of legislative intent, but the fact that the Act included a severability clause is not conclusive, only “a rebuttable presumption.” The Court must decide if the unconstitutional parts are so inextricably intertwined with the rest that the legislature would not have passed one without the other.
The severability part of the opinion has a partisan ring to it, with an undercurrent of implied criticism of the legislature. The Court says legislation of unprecedented scope and potential impact was worked up behind closed doors and distributed to the House of Representatives minutes before midnight on the evening before debate was to begin. Transcripts show that it “was presented to the full house for vote as a whole, integrated piece, and that the presentation of any modifications and amendments was discouraged.” On the surface, the Court presents these facts to show why it is justified in inferring that the individual pieces of the package are inseparable from the whole. With the core provisions invalidated, and no debate on the rest, the Court says it has no basis for concluding that the legislature would have passed the residue. Reading between the lines, however, there is a suggestion that the Act was passed with unseemly haste and inadequate deliberation, and this may have influenced the Court’s decision to overturn the Act as a whole.
Best will make it difficult for any future Illinois Supreme Court to uphold the constitutionality of legislation establishing a damage cap. It is absolutely clear that the Court as currently constituted would not approve such a measure, however well drawn. It is less clear that the Court would reject an abolition of joint liability. The narrow grounds on which it elected to rule, holding that an exception to abolition for medical malpractice cases was unconstitutional, and that the abolition itself must therefore be invalidated, leaves an open door for complete abolition. Still, there is dictum in the case that suggests that the Court might find other grounds for striking down such legislation. Unfortunately, the Court’s reasoning in Best could be used to attack the validity of the law of joint liability as it existed before Public Act 89-7, leaving in doubt what law to apply.
The Court is probably right in declaring unconstitutional legislation that waives the privileged status of all medical records of any personal injury plaintiff, even when those records are not relevant to the injury complained of. However, similar legislation would probably be upheld if it allowed a degree of judicial discretion, so as to protect the plaintiff, and if it were limited to medical records that are relevant to the particular case. Whether the Court would go so far as to permit ex parte conversations between defense counsel and treating physicians is less certain. The Court stated that the Petrillo Doctrine prohibiting such conversations is compelled by the constitutional right of privacy insofar as information irrelevant to the claim is concerned, but conspicuously failed to address the case of relevant information.
The most surprising aspect of the Best decision is its failure to address any of the tort reforms dealing with product liability. The court below had found unconstitutional the expanded statute of repose, the requirement of a certificate of merit, and the pro-defense presumptions created by Public Act 89-7. The Supreme Court elected to remain silent on these important issues, invalidating them only on the general ground that the various parts of the Act could not be severed from one another. Nothing in the decision provides a sound basis for inferring what the Court might do if the product liability sections of the Act were passed as a separate bill.
The opinion as a whole suggests a lack of sympathy toward the kind of tort reform this legislation represents. This is most evident in long passages that criticize the legislature but then form no part of the basis for the Court’s holding. However, there is also an abundance of language in the decision that pays at least lip service to the right of the legislature to make those judgments it deems correct, and the powerlessness of the Court to overturn legislative findings of fact that it believes to be wrong or to second guess legislation that it deems unwise. Therefore, it would be wrong to conclude that this decision puts an end to any hope for tort reform in Illinois. Except for its strong stand against monetary limits on damages, the Best opinion does not in itself foreclose future tort reform legislation.
This memorandum was written after slip opinions for Best and Kunkel were distributed, but before official citations to either case were available. Both cases have now been published. Set forth below are the citations to these cases and to all other cases mentioned in the memorandum. In addition, Best and Kunkel are linked to copies of the slip opinions, in text format, available on the official Illinois state government web site. The published text is controlling over the slip opinion if they conflict.
Best v. Taylor Machine Works, 179 Ill. 2d 267, 689 N.E.2d 1057 (1997).
Kotecki v. Cyclops Welding Corp., 146 Ill. 2d 155, 585 N.E.2d 1023 (1991).
Kunkel v. Walton, 179 Ill. 2d 519, 689 N.E.2d 1047 (1997).
Lannon v. Kosco, 158 Ill. 2d 535, 634 N.E.2d 1097 (1994).
Liebeck v. McDonald’s Restaurants, P.T.S., Inc., No. CV-93-02419, 1995 WL 360309 (N.M. Dist. Aug. 18, 1994).
Petrillo v. Syntex Laboratories, Inc., 148 Ill. App. 3d 581, 499 N.E.2d 952 (1986), cert. denied, 113 Ill. 2d 584, 505 N.E.2d 361, cert. denied sub nom. Tobin v. Petrillo, 483 U.S. 1007, 107 S. Ct. 3232, 97 L. Ed. 2d 738 (1987).

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.