Recent Court Decisions from Multiple Jurisdictions

New court decisions from multiple jurisdictions are reviewed in this month's Civil Litigation FlashPoints. Some are already having a significant impact on Illinois civil litigation, and at least one opinion will be debated long into the future. Many are factually intensive and could easily provide an engaging plot for a movie script or screen play. It is unfortunate that the judiciary in some of the cases is called upon to deal squarely and effectively with professionalism and civility issues. Two cases reviewed this month firmly establish that Illinois courts, both state and federal, are becoming less patient and increasingly proactive in punishing bad behavior by litigants and their lawyers. The lesson to be learned from these cases is that as lawyers we have the duty to preserve the core values of integrity, professionalism, and civility in everything we do. The Preamble to the Standards of Professional Conduct adopted by the Seventh Circuit serves as a reminder that:

A lawyer's conduct should be characterized at all times by personal courtesy and professional integrity in the fullest sense of those terms. In fulfilling our duty to represent a client vigorously as lawyers, we will be mindful of our obligations to the administration of justice, which is a truth-seeking process designed to resolve human and societal problems in a rational, peaceful, and efficient manner.

Unless we want to adopt The Dixie Chicks "Not Ready to Make Nice," as a theme song for the legal profession in the early 21st century, we have an obligation to increase our vigilance and counsel those among us who delight in acting out the following refrain:

I'm not ready to make nice
I'm not ready to back down
I'm still mad as hell and
I don't have time to go round and round and round.

1. The Fifth District Appellate Court Affirms the Trial Court's Imposition of Rule 219(c) and Rule 137 Sanctions on Account of the Defendant's Cheating and Hiding Evidence during Discovery.

In Cretton v. Protestant Memorial Medical Center, Inc. No. 5-05-0474, 2007 WL 636880, (Ill. App. Ct. 5th Dist. Feb. 28, 2007), the defendant, better known as Memorial Hospital of Belleville, appealed orders entered against it by the St. Clair County Circuit Court, including a $950,000 jury verdict, and sanctions under Illinois Supreme Court Rules 219(c) and 137. The case arose out of circumstances dating back to February 11, 1999, when the plaintiffs' decedent was admitted to the defendant hospital for treatment of advanced lung disease. While she was initially treated in the intensive care unit, she was eventually transferred to an intermediate care unit where her condition deteriorated and she unfortunately died on February 27, 1999. The plaintiff co-administrators of her estate filed a two-count complaint alleging that prior to her death the decedent had been allowed to fall or was dropped while in the hospital's care, and that as a result, she suffered a subdural hematoma that ultimately caused her demise. This was one of the principal issues in the case.

On appeal, the appellate court held that the trial court did not abuse its discretion when it denied defendant's motion for judgment n.o.v. or a new trial seeking to set aside the $950,000 survival action jury verdict. During the trial, the decedent's daughter testified that her mother told her that hospital staff members had dropped her and let her fall to the floor while attempting to transfer her from one bed to another. The daughter reported what her mother had told her to the nursing supervisor, and he said that he would look into it.

In his deposition, the supervisor testified that he had noted his conversation with the decedent's daughter. When plaintiff's counsel attempted to ask some follow-up questions, he was interrupted by the hospital's attorney who interjected that the questions were getting into matters that the supervisor had been asked to examine as part of a quality management council subcommittee. Accordingly, he was going to invoke the protection of the medical studies statute (735 ILCS 5/8-2101 et seq.), and instruct the supervisor not to answer any questions about any documents that he might have prepared as part of the review. Plaintiff's counsel then asked the supervisor whether the daughter had said anything to him about her mother having been dropped to having fallen, to which the supervisor answered, "No." Then, in pursuit of what the appellate court describes as an "intentional deception or a disturbing lack of competence," the hospital followed up the supervisor's deposition by filing an affidavit confirming that a peer-review process had been initiated and that the privileged documents,which were referred to in the deposition were notes by an unknown author.

Two days before trial, at plaintiff's request, the trial court held an in camera review of the hospital's claimed privileged documents. The court found a two-page note attributed to the supervisor clearly stating that the decedent's daughter had told him about her mother's fall. The trial court's review also lead to the following conclusions concerning the supervisor's deposition: When plaintiff's counsel began to probe into what the supervisor had been told by the daughter about the alleged drop or fall, the defendant's trial counsel attempted to hide the proof by invoking privilege and instructing the witness not to answer. After that, the hospital's attorneys sat idly by when the witness gave patently false testimony in blatant contradiction to the information found in the documents.

Once more the appellate court determined that only an intentional deception or disturbing a lack of competence could explain the action of the hospital's trial counsel in failing either to correct the supervisor's false testimony or take other appropriate measures. Accordingly, the appellate court held that the resulting trial Rule 219(c) sanctions imposed by the trial court were not unreasonable and were properly fashioned to prevent further intentional deception or other misconduct. Those discovery sanctions included inter alia preventing the hospital at trial from contesting: (1) that a fall was alleged; (2) that the alleged fall had been reported to the nursing supervisor; and, (3) that the allegations made to the supervisor were not properly reported and documented in the patient's medical record.

The appellate court next considered the trial court's imposition of Rule 137 sanctions consisting of an award of $125,000 in attorney's fees and $4,089.90 in costs. The court observed that the purpose of Rule 137 is to prevent abuse of the judicial process by penalizing those who bring vexatious or harassing actions without sufficient foundation. Here, the appellate court concluded that the Rule 137 sanctions were entered at the conclusion of the trial to punish the hospital and its attorneys for their misconduct. As such, they were not duplicative of the Rule 219(c) discovery sanctions that were carefully tailored to effectuate a fair trial on the merits that conformed to the rules of discovery, and to prevent further abuse of those rules by the hospital.

In light of the defendant's misconduct in the case, which was described by the trial court as cheating and hiding evidence, the appellate court, while not specifically approving of plaintiff's conduct, nonetheless could not conclude that plaintiff's closing argument references to the hospital as "the Enron of Belleville," were so beyond the realm of "fair commentary" so as to be unduly prejudicial requiring a new trial.

In Cretton, defense counsel was clearly implicated for conduct characterized as intentional deception or a disturbing lack of competence. In such cases, responsibility for the financial sanctions can be levied against the represented party, the lawyer, or both, but not the signing attorney's firm. By way of explanation, the Appellate Court for the Second District held in Medical Alliances LLC v. Health Care Service Corp. No. 2-06-0188, 2007 WL 678471 (Ill. App Ct. 2d Dist. Mar 1, 2007), that Rule 137 does not allow for the imposition of sanctions against law firms. This is because Illinois Supreme Court Rule 137 contains language that is almost identical to the pre-1993 version of Rule 11 of the Federal Rules of Civil Procedure. Compare Fed. R. Civ. P. 11 (1992) with 155 Ill. 2d R. 137. In considering whether the "old version" of Rule 11 could result in sanctions against a law firm, the Supreme Court in Pavelic & LeFlore v. Marvel Entertainment Group concluded that the plain language of the rule precluded that construction. 493 U.S. 120 (1989). Notably, Rule 11 was amended in 1993 to specifically allow a federal court to impose an appropriate sanction upon the attorneys, law firms, or parties that have violated the rule. Id. (emphasis added). The Illinois Supreme Court has declined to amend Rule 137 to authorize sanctions against the signing attorney's firm.

2. Seventh Circuit Sanctions Attorneys for Unprofessional Conduct During a Deposition.

In a case that Seventh Circuit Chief Judge Frank Easterbrook characterized as a grudge match, the court sanctioned four attorneys for conduct at a deposition, including one attorney who instructed his client not to answer outrageous questions, but then neither claimed a protected privilege nor applied for a protective order under Rule 30(d) of the Federal Rules of Civil Procedure. In Redwood v. Dobson, 476 F.3d 462 (7th Cir. 2007), it seems that the parties clearly had enough after years of litigation rife with overtones of racism and bigotry. The plaintiff Redwood had been convicted in a criminal prosecution for battery, a perceived wrong for which he blamed his lawyer Harvey Welch. When Welch refused to confess his ineffective assistance as counsel in an affidavit, Redwood sued him pursuant to 42 U.S.C. §1983 in federal court, along with the City of Urbana and other lawyers involved in the prior litigation.

When a party notices the deposition of his adversary's lawyer, it's generally a sign that civility is waning. Redwood's lawyer, Danner, took the deposition of Gerstein, a lawyer who represented Welch in a prior state court defamation suit against Redwood. Things started to go downhill when Danner began questioning Gerstein about his past criminal record (mostly traffic violations). When Danner inquired about Attorney Gerstein's prior problems with the state bar, his mental health, whether he had engaged in homosexual conduct, and whether he was involved in any type of homosexual clique with other defendants in this action, another attorney in attendance, Klaus, stated his opinion that Danner had committed a misdemeanor under Illinois law by asking questions about the deponent's mental health. Gerstein's lawyer, Webber, stated that the questioning violated Rule 30 because is was intended to harass, and instructed Gerstein not to answer. Webber did not, however, follow the procedures outlined in Rule 30 by claiming a protected privilege or by moving for a protective order under Rule 30(d). Things got even worse after a break. Gerstein was questioned about whether he had consulted with his attorney during the break. At this point Gerstein, rather than simply walking out began playing "word games" and claimed "amnesia."

Interestingly, when the Redwoods sought sanctions in the district court, the judge declared that everyone had behaved badly, and that because Danner's behavior was the worst, sanctions against others would not be appropriate. The district court judge had remarked that it was ludicrous for the Redwoods to argue that lawyers may not instruct witnesses not to answer. But, the Seventh Circuit reached the opposite conclusion given the language of Rule 30(d)(1), which specifically provides that œa person may instruct a deponent not to answer only when necessary to preserve a privilege, to enforce a limitation directed by the court, or to present a motion under Rule 30(d)(4) [a motion for an order limiting the scope or terminating the examination altogether]. The majority view is and has been that it is not only improper, but highly improper, for a lawyer to instruct a witness not to answer non-privileged questions, no matter how outrageous or insulting they are. Counsel's appropriate action is to either note an objection on the record and allow the answer, or to move for a protective order. The Seventh Circuit concluded:

Mutual enmity does not excuse the breakdown of decorum that occurred at Gerstein's deposition. Instead of declaring a pox on both houses, the district court should have used its authority to maintain standards of civility and professionalism. It is precisely when animosity runs high that playing by the rules is vital. Rules of legal procedure are designed to defuse, or at least channel into set forms, the heated feelings that accompany much litigation. Because depositions take place in law offices rather than courtrooms, adherence to professional standards is vital, for the judge has no direct means of control.

Rather than simply remand the case, the Seventh Circuit imposed sanctions on its own. Three of the lawyers were censured for conduct unbecoming a member of the bar. One other, Klaus, was admonished for the same offense. All received warnings that any repeat performance would be met with sterner sanctions, including suspension or disbarment.

3. Doctrine of Judicial Estoppel Trumps Contrary Judicial Admissions Due to Failure to Properly Respond to a Rule 216 Request to Admit Facts. Moy v. Ng No. 1-05-1330, 2007 WL 601832 (Ill. App. Ct. 1st Dist. Feb. 27, 2007)

This is another example of protracted litigation arising out of a set of unfortunate facts. See Moy v. Ng, 341 Ill.App.3d 984 (1st Dist. 2003). As a general rule, when a party fails to properly respond to a Illinois Supreme Court Rule 216 request to admit facts, those factual matters in the request are deemed judicial admissions that cannot later be controverted by other evidence. Such an admission is considered incontrovertible and has the effect of withdrawing the facts admitted from contention. Meanwhile, the doctrine of judicial estoppel is grounded in public policy and provides that a party who assumes a particular position in legal proceedings is estopped from asserting a contrary position in a subsequent legal proceeding.

In Moy v. Ng, the defendant, an attorney, was sued for breach of fiduciary duty in her capacity as an escrowee for plaintiffs. The plaintiffs had deposited $151,000 with the defendant to be used to pay contractors who were engaged in restoring a building that the plaintiffs owned. The defendant served the plaintiffs with a request to admit certain facts, among them that there was no escrow agreement between them. The plaintiffs failed to respond, resulting in the facts' admission.

The defendant, however, was the subject of proceedings before the Illinois Attorney Registration and Disciplinary Commission (ARDC). In her affidavit regarding discipline on consent, the defendant admitted that she was an escrowee for insurance proceeds that were earmarked for the restoration of the plaintiff's property; that she had received $117,000 and had distributed $78,000; and, that as to the expected balance of $38,000, only $502.86 remained because she had without authority used $38,297.14 for her own personal and business expenses.

Given these circumstances, the appellate court concluded that the defendant was barred under the doctrine of judicial estoppel from using the contrary Rule 216 admitted facts to thwart the plaintiffs or otherwise prevail in the lawsuit against her.

A review of recent substantive developments in the case law follows:

4. Supreme Court Affirms Seventh Circuit in Holding that a Cause of Action under 42 U.S.C. § 1983 for False Arrest Accrues at Time of the Arrest, Commencing the Running of the Applicable State Law Limitations Period. Wallace v. Kato, 127 S. Ct. 1091 (2007).

In January 1994, Chicago police detectives Kristen Kato and Eugene Roy arrested 15-year-old Andre Wallace for the murder of John Handy. Wallace told the police that he was 17, so he was treated as an adult suspect. After an all-night interrogation session, Wallace confessed.

At the trial of the underlying case, the court denied Wallace's motions to suppress his confession on grounds that he was arrested without probable cause and that the confession was coerced. Wallace was found guilty of first-degree murder in April 1996. On appeal, the appellate court in 1998 found that the Chicago police lacked probable cause to arrest Wallace and he was granted a new trial. Because his confession was essentially the only evidence that the prosecution had, the Cook County State's Attorney's Office eventually dropped the charges against Wallace. In April 2002, Wallace was released from prison after serving nearly 8 years.

In 2003, Wallace filed suit in federal court against detectives Kato and Roy and the City of Chicago for damages under the federal civil rights statute, 42 U.S.C. § 1983, for violating his Fourth Amendment rights by falsely arresting him. Section 1983 of the Civil Rights Act provides a federal cause of action for damages to anyone deprived of their constitutional rights under color of state law. But, in determining the applicable statute of limitations, federal law looks to the time period for personal injury torts provided by the law of the state in which the cause of action arose. Under Illinois law, that period is two years. 735 ILCS § 5/13-202.

5. Supreme Court Restricts Rules for Individual Qui Tam Actions. Rockwell Int'l Corp. v. United States, No. 05-1272, slip op. (Mar. 28, 2007).

The False Claims Act, 31 U.S.C. §§ 3729-3733, provides civil liability and treble damages for submitting false or fraudulent payment claims to the United States. The Act authorizes either the Attorney General or a private party, known as a "relator" to bring a "qui tam" action on behalf of the United States. The Act withdraws federal court jurisdiction, however, over actions brought by relators that are based upon publicly disclosed allegations or transactions, unless the relator is an "original source," meaning that he or she "has direct and independent knowledge of the information on which the allegations are based" and has voluntarily provided the information to the Government before filing the action. 31 U.S.C. §§ 3730(e)(4)(A)-(B).

In a 6-to-2 opinion written by Justice Scalia, the Supreme Court held that the original-source requirement under Section 3730(e)(4) is jurisdictional, and gave that requirement an expansive reading that will limit the instances in which relators may proceed on behalf of the United States. In particular, the Court clarified that relators who had predicted that a defect would occur, but had made that prediction based on an incorrect factual premise, do not satisfy the original-source requirement. The Court further explained that Section 3730(e)(4) does not permit jurisdiction over all of a relator's claims just because the relator may be an original source with respect to some of the claims. In reaching these conclusions, the Court held that the statutory requirement that a relator have independent knowledge of the "information on which the allegations are based" refers to the information on which the allegations of the relator are based, not the publicly disclosed allegations. The court also clarified that if a relator amends his or her complaint, then original-source status is to be determined with reference to the relator's allegations as amended.

As a result of the Supreme Court's ruling, 81 year-old retired engineer James Stone will not be entitled to share in the $4.2 million that Rockwell International (now a part of Boeing) was ordered to pay to the government on account of fraud connected with the environmental cleanup at the closed Rocky Flats nuclear weapons plant northwest of Denver. Stone was laid off a year before Rockwell began submitting false claims. According to the Court, he did not have any direct or independent knowledge of the information upon which the allegations of fraud were based.

6. Illinois Supreme Court for the First Time Recognizes Direct Participant Theory of Liability. Forsythe v. Clark USA, Inc., No. 101570, 2007 WL 495292 (Ill. Sup. Ct. Feb. 16, 2007).

This case arose out of a tragic fire at a Blue Island, Illinois refinery owned and operated by Clark Refining. Two of the refinery's mechanics were killed on their lunch break. Clark Refining's sole shareholder and parent corporation was Clark USA. The workers' widows, as special administrators of their husbands' estates, filed lawsuits against certain defendants including the parent corporation, Clark USA. In support of their liability theory against the parent corporation, the plaintiffs alleged that Clark USA fostered an overall budget strategy to minimize operating costs, including the costs associated with training, maintenance, supervision, and safety. The plaintiffs further alleged that the capital cutbacks prevented Clark Refining from making the lunchroom safe by reinforcing the walls or relocating it to a safer location within the refinery. Finally, plaintiffs alleged that the parent corporation's "survival mode" business plan forced the refinery to hire unqualified maintenance employees, which either caused or contributed to the fire.

The trial court granted summary judgment to the defendant parent corporation, but the appellate court reversed and remanded. The Illinois Supreme Court affirmed the appellate court. For the first time in this state, the Supreme Court recognized the viability of a direct participant theory of liability. But, in the opinion authored by Justice Garman, the court cautions that budgetary oversight alone is an insufficient antecedent to liability, as is the parent corporation™s acts consistent with its investor status. Accordingly, in order to establish liability plaintiffs must show more than the fact that the parent corporation made policy decisions and supervised the activities of its subsidiary. As for the effect of the Workers' Compensation Act's exclusive remedy rule (829 ILCS § 305/5(a)), the court determined that the Act's immunity only extended to Clark Refining as the decedent's employer and as the entity that actually paid workers' compensation benefits to the decedent's families.

7. Illinois Supreme Court Unanimously Reverses Prior Decision in the Same Case. Murray v. Chicago Youth Ctr., No. 99457, 2007 WL 495281 (Ill. Sup. Ct. Feb. 16, 2007).

Ryan Murray, a 13 year-old, signed up for extracurricular tumbling class during lunch period at the Bryn Mawr Elementary School on Chicago's Southeast Side. An instructor was hired by the Chicago Board of Education from Chicago Youth Centers. One of the pieces of equipment used was a mini-trampoline that had been purchased by the Chicago Board of Education. In December 1992, Ryan took his turn jumping on the mini-trampoline that had been set in place by the instructor, James Collins. Collins did not require spotters while others were jumping, and the plaintiff's expert indicated that the padding for such exercises was insufficient.

At the end of the class, the instructor allowed free time for the students to do whatever they wanted, without instruction or guidance. Ryan jumped off the mini-trampoline into the air, attempting to perform a flip, and landed on his upper chest and neck, partially on the mat and partially on the gym floor. He sustained injuries that rendered him a quadriplegic.

A lawsuit was filed against defendants Chicago Board of Education (Board), Chicago Youth Centers (CYC), and the instructor. The Circuit Court of Cook County granted the defendants' motions for summary judgment pursuant to sections 2-201 and 3-108a of the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act) (745 ILCS §§ 10/2-201, 3-108(a)).

On appeal, the Illinois Supreme Court decided that the defendants' actions did not amount to willful and wanton conduct, despite previous Illinois precedent that indicated that question generally is decided by a jury. Murray v. Chicago Youth Center, No. 99457 (Ill. Sup. Ct. July 5, 2006). A rehearing on the matter was granted on September 25, 2006. After an unusual second oral argument, the court has now issued a new, unanimous opinion pointing out that pursuant to section 3-109 of the Tort Immunity Act, immunity can be defeated if the government's conduct is willful and wanton. According to the Court, a jury should ultimately decide that issue.

8. Illinois Supreme Court Declines to Adopt "Simple Product to Product Liability Risk-Utility Analysis." Calles v. Scripto-Tokai Corp, No. 101089, 2007 WL 495315 (Ill. Sup. Ct. Feb. 16, 2007).

In this case, Susan Calles' 3 year-old daughter died of smoke inhalation after her twin sister started a fire in their home with a Scripto "Aim N' Flame" butane utility lighter. The plaintiffs alleged that the lighter was defectively designed because it didn't have a child-resistant safety device. The defense that had won summary judgment in the trial court urged the Illinois Supreme Court to adopt a "simple" product exemption to the risk-utility analysis. Without a dissent, the Supreme Court declined to do so, finding that such a rule would discourage safety improvements, as well as frustrate the well-settled objective lying at the core of strict products liability law.

9. First District Holds that Wrongful Death Action Lies for an Aborted Fetus. Williams v. Manchester, No. 1-05-2126, 2007 WL 794709 (Ill. App. Ct. 1st Dist. Mar. 16, 2007).

In a case of first impression, the Illinois Appellate Court for the First District has held in Williams v. Manchester that a mother may be permitted recovery for the death of her unborn child subsequent to an abortion, where the abortion was a consequence of a tortfeasor's preceding negligence. The opinion, authored by Justice Joseph Gordon, presents a masterful, in-depth review of the law of proximate cause over the course of 38 pages. The facts of the accident and injuries are largely not the subject of dispute. Michelle Williams was a passenger in a car struck by defendant Manchester's car on October 15, 2002 at an intersection on the North side of Chicago. As a result of the accident, Williams sustained injuries consisting of a fractured pelvis and hip. She was taken to Illinois Masonic Hospital for treatment. It so happens that the plaintiff was approximately 12 weeks pregnant.

Williams presented evidence that the unborn child was not harmed in the accident. But, her condition was problematic. Different physicians engaged in the practice of different specialties at Illinois Masonic advised that because her pelvic bone was fractured, they could not be certain that she could maintain the pregnancy. If she chose to remain pregnant, then she would be bedridden. Her bones would eventually heal, but there was the possibility that they would have to rebroken and reset after delivery. The doctors also told her that the x-rays that were taken of her in the emergency room could cause or contribute to a developmental disability in the baby.

Williams took the doctors as recommending an abortion. According to the plaintiff, no one recommended against an abortion. The healthcare system to which Illinois Masonic belongs had a policy not to perform elective abortions. The hospital's perinatal ethics committee reviewed the plaintiff's case and finding significant risk to Williams without it, approved the performance of the procedure. As a result, Williams underwent an abortion, and subsequently a surgery was successfully performed to fix her pelvis.

When she recovered, Williams sued Manchester in the Circuit Court of Cook, County seeking damages for her own injuries along with her unborn child's wrongful death. Williams also alleged the right to recover for her unborn child's death under the Survival Act. In the trial court, summary judgment was granted in the defendant's favor on the wrongful death and survival counts.

On appeal to the First District Appellate Court, the court revived the wrongful death cause of action. According to the court, the defendant's alleged negligence broke the plaintiff's pelvis, requiring that she chose between terminating her pregnancy and recovering, or maintaining the pregnancy with the risk that she may never again walk properly, and risking other potential permanent injuries not only involving herself, but also her child. According to the court, the defendant's negligence put her to a form of "Sophie's choice." Given the risks communicated to her by her physicians, and the legality and availability of the choice she eventually made, the majority found that the foreseeability of that choice must be determined by a jury, and not by a judge as a matter of law. Thus, in the majority's view, Williams should be allowed to proceed on the wrongful death count.

The dissent focused on the fact that the Wrongful Death Act is statutory remedy in derogation of the common law. As such, the statute should be strictly construed and not subject to judicial amendment, among other things.

In sum, the Williams v. Manchester case no doubt will serve as a lightening rod for comment and controversy as it proceeds.