Lakin class actions filed on eve of CAFA end on the same day at high court

Steve Korris Oct. 6, 2011, 11:30am





SPRINGFIELD – Class actions that the former Lakin Law Firm started against insurers Travelers and Safeco on the same day ended in failure on the same day.

On Sept. 28, the Illinois Supreme Court denied petitions to review appellate court opinions that shut down Madison County class actions against the insurers.

In March, Fifth District appellate judges reversed Circuit Judge Barbara Crowder in the Safeco action and former circuit judge Daniel Stack in the Travelers action.

Lakin lawyers sued Travelers and Safeco on Feb. 11, 2005, in a rush of class complaints as the effective date of the national Class Action Fairness Act approached.

The act steered most new class actions to federal courts.

Chiropractors Richard Coy and Frank Bemis led the action against Travelers, alleging it improperly reduced medical payments though a preferred provider organization.

Chiropractor Ryan Bemis led the action against Safeco, alleging it improperly reduced payments through computer review.

Stack certified a class action in 2008, Crowder in 2009.

Travelers and Safeco petitioned the Fifth District for leave to appeal, and Fifth District judges denied both petitions.

The insurers turned the tide at the Supreme Court, winning supervisory orders that obligated Fifth District judges to accept the appeals.

This March, both class actions fell flat.

Justices Stephen Spomer, Bruce Stewart and James Wexstten found they couldn't affirm Stack's order on Travelers without nullifying language in a contract.

"The plaintiff has provided no authority, and this court is aware of none, that would permit such a rewriting of the contracts," Spomer wrote.

He wrote that to the extent plaintiffs alleged that payor agreements violated insurance regulations, the Department of Insurance must determine whether they did.

He wrote that to the extent they alleged that Travelers failed to steer patients to them, they simply realleged breach of contract as consumer fraud.

He wrote that to the extent a quasi contract arose for the price of their services, it arose between them and injured workers or their employers.

He wrote that Travelers had a legal basis for taking discounts.

In the Safeco action, Spomer, Stewart, and Justice James Donovan found individual issues predominated over common issues.

"The theory Bemis advances, which is that all the bills submitted by a medical provider are presumed to reflect usual and customary charges for reasonable and necessary medical services under the terms of the insurance contract, is contrary to Illinois law," Spomer wrote.

"Evidence would be required, on an individual basis, in order to determine whether Safeco breached its contract to pay the usual and customary charge for reasonable and necessary services for each class member," he wrote.

"More importantly, Safeco has the right to rebut that evidence on an individual basis and show that any charges it failed to pay were not usual and customary charges for reasonable and necessary medical services," he wrote.

Donovan concurred on grounds that a bill isn't proof of a reasonable charge, but he would have allowed an expert to evaluate reasonableness and necessity.

LakinChapman lawyers Robert Schmieder, Jonathan Piper, and Andrew Kuhlmnann litigated against Safeco, along with Timothy Campbell of Godfrey.

Tom Keefe of Belleville defended Safeco, along with Randal Mullendore, Robyn Buck, and Mairi Lough, all of Husch Blackwell in Clayton, Missouri.

Schmieder and Campbell litigated against Travelers.

Troy Bozarth, of Hepler Broom in Edwardsville, defended Travelers along with Robert Johnson and Lisa Lilly of Chicago.

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