A Recent History of Medical Malpractice and Civil Justice Reform in Illinois: The Five Year Wait for the Supreme Court to Decide the Fate of Reform in LEBRON V. GOTTLIEB MEMORIAL HOSPITAL

Recently, the Illinois Supreme Court ruled on the validity of the bipartisan Medical Malpractice Reform Act of 2005.¹ The last effort to enact civil justice reform occurred in 1995 when a Republican majority controlled the Illinois General Assembly and the Governorship. That General Assembly promulgated several civil reforms and bundled a hard cap on noneconomic damages inside a larger omnibus bill. At the time, the Illinois civil justice reforms were considered the most comprehensive tort reform to be enacted by any state legislature. A Cook County trial judge ruled the legislation unconstitutional almost immediately after its effective date. On appeal from Cook County, the Illinois Supreme Court ruled in Best v. Taylor Machine Works² that the caps on noneconomic damages were an infringement of the separation of powers and the bar on “special legislation” and struck the entire tort reform package. In doing so, the supreme court considered a severability clause meant to preserve the other tort reforms in the legislation and determined that the parts that were unconstitutional could not be severed from those remaining.

In the ensuing years, the business and healthcare community significantly increased the pressure for reform. In particular, the litigation in a southern region of the state made national news. On the east side of the Mississippi from St. Louis, two counties repeatedly produced large jury verdicts, and the docket was growing. Those two counties, Madison and St. Clair, make up part of what is commonly referred to as the Metro East region of Illinois. Metro East became an increasingly preferred venue for trial lawyers due to the advantages plaintiff s enjoyed there. The American Tort Reform Association even nicknamed the region a “judicial hellhole.” More and more class action lawsuits and personal injury actions ended up in Metro East courthouses despite what critics said were tenuous connections to the counties concerned, or Illinois generally. No serious legislative debate of civil justice reforms occurred until 2004.

The Debate over Civil Justice Reform Is Revived by Medical Malpractice Issues

Prior to 2004, medical service delivery in Illinois was changing as a result of the number of lawsuits and the resulting jury verdicts. Two examples are striking. As of 2004, there were no neurosurgeons south of Springfield, the state capital. This meant that in any car accident resulting in head trauma, patients were being transported north, or out of the state, to get to the nearest available trauma center. This could typically require helicopter transport due to the long distances involved. A second effect of the lawsuits against physicians was that women in downstate Illinois found it more and more difficult to find obstetric and gynecological services. Due to massively increased medical malpractice insurance premiums, OBGYN doctors and clinics were relocating outside Illinois, sometimes just over the state border. Other service providers simply shut down, and there are indications that many doctors simply went without malpractice insurance. In the end, the dwindling number of insurance carriers who would even sell medical malpractice insurance in Illinois forced other regions of the state to take notice.

Solutions Debated in the 93rd General Assembly

The pressure from constituents and the absence of OBGYN and neurosurgical services caused the single-party-controlled General Assembly to hold bipartisan meetings on healthcare litigation beginning in 2004. These meetings included representatives of the Illinois Hospital Association, the Illinois State Medical Society, the Illinois Trial Lawyer Association, and members of the General Assembly and their respective staff members. Senator Cullerton, Chairman of the Judiciary Committee, conducted meetings throughout the legislative year, and they were later taken over by Governor Blagojevich and his staff . Discussions revolved around what the problems were, who was affected, and how they could be addressed. Very specific reforms were proposed and debated. These included ideas such as broadening the liability protections for those providing free medical services to the poor and creating incentives for medical malpractice insurance carriers to begin writing policies in Illinois once again. Negotiations reached an impasse over caps on noneconomic damages and the disclosure of certifying experts. With that deadlock, the regular session of the 93rd General Assembly ended with no agreement on an omnibus reform package despite nearly two dozen reforms that were approved by all participants. The interested parties differed as to the cause of the problems. The Medical Society and Hospital Association believed the problems were caused by the civil justice system, and the trial lawyers believed inadequate regulation of the insurance industry and inadequate disciplinary enforcement for medical professionals were to blame.

The Summer of 2004 and a Judicial Election in the Metro East Region

In Madison and St. Clair Counties a supreme court battle had been brewing during the medical malpractice reform negotiations of 2004. Illinois is laid out in 5 appellate court districts, and the supreme court is made up of 7 justices. All appellate court and supreme court justices are elected on a partisan ballot in Illinois. Cook County elects 3 of the supreme court justices at large, and the rest of the state elects one from each of the four remaining appellate court districts. Madison and St. Clair Counties lie within the Fifth Appellate Court District, which stretches from the Mississippi River on the west to the Indiana border on the east. It encompasses the entire southern point of Illinois bordering Kentucky and Missouri. As such, the Fifth District includes all of the Metro East area.

Judicial vacancies in Illinois are typically filled by appointment if a judge or justice retires. The appointed judge can then circulate petitions and campaign to keep that seat for a multi-year term. Since the supreme court justice of any given appellate district has direct control of appellate justice appointments, those supreme court justices have a huge impact on appointments further down the line. In general, the party controlling the supreme court seat has an opportunity to make appointments and elect their fellow partisans all the way down to the associate judge level. This means that in a region dominated by one political party, that political party may control the direction of judicial philosophy through their candidates for supreme court, appellate, and circuit judge vacancies.

In 2003 it became clear that the sitting Fifth District supreme court justice would retire and a new justice would then be elected in the fall of 2004. The candidates for the supreme court vacancy raised and spent almost $10 million, making it the most expensive judicial election in United States’ history. That does not include money spent by allied interest groups. The sheer volume of campaign contributions put an exclamation point on what was happening in the Metro East judicial system.

In the end, Lloyd Karmeier, self-identified as the tort reform candidate, soundly defeated Appellate Justice Gordon Maag, who was favored by the state’s trial lawyers. Karmeier not only won a clear victory in the supreme court race, but Justice Maag also lost his simultaneous retention election for the appellate court. Perhaps because of a surprising result after such a hard fought campaign, Gordon Maag filed suit over the election. His complaint was dismissed, but the message of the voters reverberated under the capitol dome in Springfield.

The Stakeholders in Medical Malpractice Reform Return to Springfield

House Speaker Mike Madigan and Senate President Emil Jones, both trial lawyer allies, began the Spring 2005 Session of the General Assembly determined to pass medical malpractice reform. Over the strongest objections of the trial bar, the leaders passed a package of medical malpractice reforms compiled by the Illinois State Medical Society and the Illinois Hospital Association in negotiations with the Democratic leadership of the General Assembly. The ISMS and IHA included almost all of the agreed provisions from the prior year’s worth of negotiations along with hard caps on non-economic damages and required disclosure of certifying experts. Specifically, Public Act 94-677 limited non-economic damages to $1,000,000 against a hospital and $500,000 against a doctor. In a tactical move, the ISMS inserted an inseverability clause in the bill. If any provision of the reform bill was deemed unconstitutional, the whole bill would fail. This ISMS condition is critically important, as will be explained later.

While the spirit of bipartisan cooperation continued, some of the original negotiators were unhappy. During the committee hearings when the ISMS and Senate President Emil Jones introduced the medical malpractice reform package, the trial lawyers’ lobbyists confronted President Jones directly. There were even allegations that the trial lawyers threatened to run candidates in the primary against prominent Democrat leaders.

The ISMS Medical Malpractice reforms passed quickly through the Senate and the House during the May 2005 Spring Session. The election results in the 5th District Supreme Court race were fresh in legislators’ memories. Now known as P.A. 94-677, the ISMS-drafted reform package was soon challenged in Cook County courts. In that venue, a local judge deemed the cap on noneconomic damages unconstitutional in the case of LeBron v. Gottlieb Memorial Hospital.³ Under Illinois law a finding of unconstitutionality takes the appeal immediately to the Illinois Supreme Court.

The ISMS hired former U.S. Solicitor General Ted Olson to represent the defense of the reform package, and numerous amicus briefs were filed on both sides. The oral arguments occurred in November 2008 and the decision was rendered on February 4, 2010.

Public Act 94-677 Found Invalid and Void Due to the Separation of Powers Clause of the Illinois Constitution

Under LeBron v. Gottlieb Memorial Hospital,⁴ the Illinois Supreme Court consolidated several medical malpractice cases and ruled invalid the section of the Code of Civil Procedure at 735 ILCS 5/2-1706.5, which contained the caps on noneconomic damages adopted as part of Public Act 94-677. The court found that that the limitation of noneconomic damages in medical malpractice actions violated the separation of powers clause of the Illinois Constitution by supplanting the judicial branch’s power to correct jury verdicts through remittitur. Remittitur is a century old doctrine that allows a judge to reduce an excessive jury verdict. The court referred to the medical malpractice caps as a “legislative remittitur” that would override this unique power of the judiciary. That is the basis for the same violation of the separation of powers rationale used to invalidate the civil justice reforms in Best v. Taylor Machine Works.

In order to reuse the Best analysis, the Illinois Supreme Court had to distinguish the hard caps in P.A. 94-677 from limitations of the rule of joint and several liability as well as prohibitions on punitive damages the court upheld in the past. The court accomplished this by pointing out that noneconomic damages are part of compensatory damages that are meant to make the plaintiff whole whereas punitive damages are meant to punish bad conduct. For example, the court noted that statutes banning punitive damages in certain types of action do not require the courts to reduce a jury award of noneconomic damages to a predetermined level like P.A. 94-677 does.

After rejecting comparisons to successful caps on noneconomic damages and dismissing comparisons to reforms in other states, the court held the entire package of medical malpractice reforms invalid and void due to the inseverability clause contained in the Act. As you may recall, the parties to the medical malpractice reform effort made a strategic decision that it should be all of the agreed-upon reforms or none. The court left it to the legislature to reenact any of remaining reform provisions in P.A. 94-677. Finally, the court criticized the emotional and political rhetoric in Justice Karmeier’s dissent and deemed standing and ripeness waived by the defendants in this matter.

Justice Karmeier began his dissent with a recitation of the purpose of P.A. 94-677 and the primacy of the legislature in regulating and reforming healthcare. The justice noted that that the constitutionality tests of a statute have changed since the Best decision was rendered in 1997. Continuing in his dissent, Justice Karmeier then posited that there actually was a problem with ripeness and standing since the underlying case was still at the pleading stage. The justice noted that no jury verdict has actually been reduced due to P.A. 94-677 in the 5 years since its passage, bringing into question any remittiturlike effect. Moving right along, the justice questioned the judicially-created doctrine of remittitur itself, which has also been challenged under the separation of powers clause of the Illinois Constitution. He further criticized the majority in LeBron v. Gottlieb Memorial Hospital for failing to appreciate that P.A. 94-677 is a proper exercise of the legislature’s authority to modify the common law. Justice Karmeier stated that it is a court’s job to “do justice under the law, not make the law.”

What the Future Holds for Civil Justice Reform in Illinois

The Speaker of the Illinois House, a surprising proponent of P.A. 94-677 in 2005, has indicated that medical malpractice reforms are unlikely to advance in the legislature in the wake of LeBron v. Gottlieb Memorial Hospital. When asked about what he would do in reaction to caps on compensatory damages being struck down for what is actually the third time in Illinois history, the Speaker said, “Three strikes and you’re out.” He and his colleagues in the legislature may be assuming that the issue cannot heat up as fast or as intensely as it did in 2004 and 2005 which led to P.A. 94-677. One of the justices in the majority opinion is up for retention this year, so a push to challenge his retention is still possible however.

In the aftermath of the court’s decision in LeBron v. Gottlieb Memorial Hospital, there is plenty of time to debate what the outcome of the ISMS inseverability strategy actually achieved. Without the provision, the Illinois Supreme Court would have stricken the damage caps, leaving all of the previously agreed-upon provisions intact. If that had happened, the remaining reforms would have looked like the legislation preferred by the trial bar in the spring of 2004. However, with the inseverability provision, the supreme court’s action has placed the various parties to the reform effort back in the same situation they were in prior to 2004. While the fervency of the interest groups and the memory of the dramatic Karmeier election may have waned, those favoring limits on medical malpractice liability remain in a strategically advantageous position if OBGYN and neurosurgical services once again leave the state.

Endnotes

1 P.A. 94-677 (eff. August 25, 2005).

2 689 N.E. 2d 1057 (Ill. 1997).

3 No. 2006 L 012109 (Ill. Cir. Ct., Cook County Nov. 13, 2007).

4 No. 105741 (Ill. Feb 4, 2010).