March 2021 Case Notes & Comments

"It is not in the stars to hold our destiny but in ourselves." ~ William Shakespeare

MONTHLY QUIZ: While in Illinois, SUV Driver abruptly U-turns and causes Motorcyclist to collide with the driver's side of the SUV. Though wearing a helmet branded and adorned by Distributor, Motorcyclist sustains head injuries. Motorcyclist sues and Distributor files a motion to dismiss, arguing that Illinois' courts lack jurisdiction over a Michigan corporation with its principal office in Idaho and no connections to Illinois. Distributor claims that it has not undertaken any marketing or branding activities in Illinois or directed marketing to Illinois residents and emphasizes that the helmet was manufactured by a Taiwanese corporation and sold through an online retailer. Is this case properly in an Illinois state court? Have Distributor's activities (i.e. branding and "helmet aesthetics") subjected the company to Illinois' jurisdiction? Does it matter that Distributor has authorized retailers for Distributor's products located throughout Illinois? Should this case be dismissed? You be the judge. (Answer Below).

ILLINOIS' GOVERNOR VETOES INITIAL PROPOSED BILL BUT AMENDED PREJUDGMENT INTEREST BILL ON ITS WAY: Earlier this year, the Illinois General Assembly passed House Bill 3360, which sought to amend 735 ILCS 5/2-1303 to impose pre-judgment interest in tort actions. The bill provided for pre-judgment interest at the rate of 9% per year in all tort actions seeking recovery for personal injury on wrongful death beginning “on the date the defendant has notice of the injury from the incident itself or a written notice”, and was to become effective immediately upon enactment into law. Following a flurry of opinion pieces by various interest groups opposing the bill, including the defense bar, the medical community, and business interests, Governor J.B. Pritzker (D) vetoed HB 3360, indicating that he supported allowing prejudgment interest, but with modifications to make the effects more moderate, including a reduced percentage, and excluding non-economic damages from the calculation.

On March 25, 2021, the General Assembly passed Senate Bill 72 as a compromise bill, which provides the following:

  • The interest rate is set at 6% (rather than the originally proposed 9%), and will not accrue for longer than five years;
  • The interest calculation excludes punitive damages, sanctions, attorney fees, and statutory costs;
  • The accrual of interest begins on the date the action is filed (rather than a vague “date of notice of the injury”), and is tolled in the event plaintiff voluntarily dismisses and re-files the action;
  • The act excludes public entities;
  • For actions filed before the date of the act’s enactment, the interest begins to accrue on July 1, 2021.

The bill also provides an incentive to early settlement offers. If a settlement offer is made within 12 months of filing suit and is not accepted by the plaintiff, the pre-judgment interest only applies to that portion of the verdict exceeding the settlement offer; if the verdict is less than the settlement offer, no prejudgment interest is awarded. The bill was sent to the governor on April 1, 2021, and becomes law if not vetoed by the governor by May 30, 2021.

RE-DESIGNATION OF RULE 213(F)(3) RETAINED EXPERT TO “CONSULTANT” PERMITTED TO HIDE UNDISCLOSED OPINIONS AND INFORMATION:  A medical malpractice plaintiff initially disclosed a neurologist as a Rule 213(f)(3) controlled expert witness, noting that the expert was expected to testify regarding a comparison electromyogram (EMG) and/or nerve conduction velocity study (NCV study) he would be performing on the plaintiff. Subsequently, after the neurologist performed the EMG and NCV study, plaintiff advised the defendants that she was withdrawing the neurologist as a Rule 213(f)(3) controlled expert witness, and re-designating him as a non-testifying expert consultant pursuant to Rule 201(b)(3), and would not be producing any documents regarding the neurologist’s review of the case, or the results of the studies performed. Defendants, concluding from this action that the results of the studies were likely adverse to the plaintiff, challenged the re-designation, and moved for the production of the documents. The Court noted that the rules of discovery do not expressly permit or prohibit changing a witness’s designation, and that the issue was one of first impression with Illinois courts. Ultimately, the Court concluded that a controlled expert witness could be re-designated as a consultant (a) if done in a reasonable amount of time before trial; and (b) where a report has not yet been disclosed. The Court also held that Rule 201(b)(3) protects not only conceptual data, but also the factual information, and that, absent a showing of exceptional circumstances, the information is precluded from discovery.  Dameron v. Mercy Hospital & Medical Center, 2020 IL 125219 (Nov. 19, 2020).

"PRIMARY JURISDICTION DOCTRINE” CANNOT BE USED BY CIRCUIT COURT AS MEANS TO STAY ADMINISTRATIVE PROCEEDINGS: Injured employee filed a claim for benefits in the Illinois Workers’ Compensation Commission and brought a common law action against his employer and others. West Bend, the employer’s insurer, filed a declaratory judgment action in circuit court seeking a declaration that the Workers’ Compensation and Liability policy did not apply as a result of the insureds’ breach of notice conditions. West Bend moved to stay the Commission’s proceedings on the basis that the circuit court had primary jurisdiction to rule on the legal issues raised in its complaint. The primary jurisdiction doctrine provides that when a court has jurisdiction over a matter it may, in certain circumstances, stay the judicial proceedings pending referral of a controversy, or a part thereof, to an administrative agency having expertise in the area.  The trial court granted the motion citing Hastings Mutual Insurance v Ultimate Backyard, LLC, 2012 IL App (1st) 101751, where the court relied on the primary jurisdiction doctrine to support an order staying a Commission proceeding. The appellate court reversed the stay which was affirmed by the Illinois Supreme Court. According to the court, the doctrine only allows the circuit court to stay its own proceedings pending referral of a controversy to an administrative agency. It noted that the purpose of the primary jurisdiction doctrine is to promote “ proper relationships between the courts and administrative agencies charged with particular regulatory duties.” Consistent with that purpose, the doctrine allows for a referral of a matter by the court to an agency when the agency has technical expertise or where a need for uniform standards exists . West Bend’s motion, however, sought an “inverse application” as it sought to stay the administrative agency’s proceedings. The doctrine should facilitate , not delay or hinder an administrative agency’s resolution of an issue such that it could not be used to stay the Commission’s proceedings. The supreme court overruled the Hasting Mutual decision. West Bend Mutual Insurance Co. v TRRS Corporation, 2020 IL 124690 (Jan. 24, 2021). 

ANSWER TO QUIZ: Distributor's motion is denied and the Illinois court determined that it had personal jurisdiction over Distributor. Personal jurisdiction refers to a court’s power to bring a party into its adjudicative process. In Ilinois, courts may bring a product liability defendant into court under "stream-of-commerce" theory. Here, although Distributor did not manufacture, sell or technically distribute Motorcyclist's helmet, Distributor was aware that its helmets were being marketed and sold in Illinois. Further, Distributor maintained relationships with authorized retailers, who sold Distributor's products and were located throughout Illinois. In this case, the court determined that Distributor's relationships with its authorized retailers were significant. Additionally, the court found it important that the accident caused injuries to Motorcyclist, an Illinois resident, and that his purchase was not a single, isolated sale of a helmet in Ilinois. Hernandez v. Oliveros, 2021 IL App (1st) 200032 (Mar. 26, 2021).

 

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