Illinois Supreme Court must define class action limits on Madison County cases

Steve Korris Mar. 19, 2009, 11:24am



SPRINGFIELD – Once again the Illinois Supreme Court must define the limits of class action litigation, and this time the Justices invite the Fifth District appeals court in Mount Vernon to share the work.

Fifth District judges recently denied review of Madison County class actions against insurers Hartford and Travelers, but the
Justices sent Hartford back to the Fifth District.

Now the Justices must decide whether to grant a petition that Travelers filed on March 4 for leave to appeal the Fifth District decision.

Madison County Circuit Judge Daniel Stack certified both cases as class actions.

In both cases the LakinChapman firm of Wood River represents plaintiffs alleging that insurers improperly reduced payments for treatment of injuries.

The former Lakin Law Firm sued Hartford in 2000, on behalf of Winnie Madison.

Hartford argues that it committed to pay only reasonable and necessary charges.

Hartford argues that individual inquiries on reasonableness and necessity would predominate over class issues.

Last year Stack certified Madison to represent a class in 36 states claiming breach of contract and a class in Illinois claiming violation of the state consumer fraud law.

He approved a class period starting in 1990.

Hartford asked Stack to certify three thorny questions for review at the Fifth District, and in October he certified all three.

He asked if a judge can certify a class action where reasonableness and necessity cannot be adjudicated on a class wide basis.

He asked if a judge can certify a class action on a "central issue" even if resolution of the issue wouldn't establish a class wide right of recovery.

He asked if a judge can certify a 36 state class action without inquiry into potential variations among state laws.

Fifth District judges chose not to answer the questions, and Hartford appealed.

Robert Shultz of Edwardsville told the Justices that the questions warranted review because they were important and recurring.

Even if Madison proved that Hartford used arbitrary methods, Shultz wrote, she wouldn't establish any element of her claims.

In response, Paul Marks of LakinChapman argued that class action defendants can't argue the merits of a case prior to trial.

Examination of reasonableness and necessity is improper at this stage, he wrote, and matters of proof and trial planning are inappropriate.

"If plaintiffs prevail on their plain meaning construction of the term 'reasonable,' then they should also prevail on liability to the class," Marks wrote.

He wrote that it was premature to determine how to assess damages, and he assured the Justices that "damages would be an elementary calculation."

"Because the construction of the policy language is a merits issue, it would have been premature for the circuit court to resolve this issue at the class certification stage," Marks wrote.

He wrote that the "central issue" question was hypothetical.

He wrote that Stack's exclusion of 14 states proved he analyzed
variations in the laws.

On Jan. 28, the Justices instructed the Fifth District to answer Stack's questions.

On that same date, the Fifth District denied review of the Travelers class action without stating any basis for the decision.

In that case LakinChapman represents chiropractor Richard Coy and his clinic in claiming violations of the state consumer fraud law.

Coy sued Travelers in 2005, just ahead of the effective date of the national Class Action Fairness Act that steered most new class actions to federal courts.

Unlike the enormous class action Stack certified against Hartford, the case against Travelers involves only Illinois workers compensation claims, back to 1996.

After the Fifth District denied review, Troy Bozarth of Edwardsville petitioned the Supreme Court for leave to appeal.

He wrote that Stack violated rules the Justices laid down in 2005 in Avery v. State Farm, in 2007 in DeBouse v. Bayer, and last year in Barbara's Sales v. Intel.

"In case after case, this Court ruled that a named plaintiff cannot prevail on an Illinois Consumer Fraud Act claim without proving she or he was actually deceived by the alleged fraud, and the deception caused actual damages," he wrote.

He wrote that Coy conceded he had no contract with Travelers.

Bozarth wrote that jurors would have to determine whether contracts between health care providers and third parties formed contracts between them and Travelers.

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