2021 Highlights from the Illinois Courts
In this 2021 year-end summary, the Illinois Law Blog analyzes several of the most impactful decisions from the Illinois courts. This past year was a dynamic one in The Prairie State marked by several significant appellate decisions affecting insurance defense, medical malpractice, patient privacy, school teacher tenure rights, and the power of the Illinois Educational Labor Relations Board. As with most states, Illinois continued to see a substantial number of COVID-19 exposure claims. The integrity of Governor Pritzker’s executive order shielding COVID-19 responsive health care facilities from liability may be compromised by decisions in both the Northern and Southern District of Illinois.
Biometric Information Privacy Act
In West Bend Mutual Insurance Company v. Krishna Schaumburg Tan, Inc., 2021 IL 125978, a customer filed a class action lawsuit against West Bend Mutual Insurance Company’s insured, Krishna Schaumberg Tan, Inc. The customer alleged Krishna violated Illinois’ Biometric Information Privacy Act, 740 ILCS 14/1, et seq., (BIPA) by scanning customers’ fingerprints and disclosing biometric information containing those fingerprints to an out-of-state third-party vendor. Krisha tendered the lawsuit to West Bend, which had issued to businessowners’ liability policies to Krishna, and requested a defense.
West Bend filed a declaratory judgment action contending that it did not owe a duty to defend Krishna against the class action lawsuit. West Bend argued that the class action complaint did not allege a publication of material violative of privacy rights because the Illinois Supreme Court has defined publication as communication to the public at large, not to a single party, as had occurred here. West Bend alternatively argued that the policies’ “violation of statutes” exclusion applied and barred West Bend from having to provide coverage to Krishna for the BIPA violations. Krisha argued that sharing biometric identifiers and biometric information with a single party is a publication covered by the policies. Further, Krishna argued that regardless of whether the violation of statutes exception applied, the policies also provided coverage for a violation of BIPA under the policies’ Illinois data compromise coverage endorsement.
The trial court entered summary judgment in Krishna’s favor on its counterclaim, finding that “publication” simply means the dissemination of information and that the sharing of biometric identifiers constitutes a publication within the purview of the policies. The trial court also found that the exclusion for violation of statutes does not apply because the exclusion only applies to statutes that regulate methods of sending information and not the collection, retention, disclosure, and destruction of biometric identifiers and information. The First District Appellate Court affirmed. The Illinois Supreme Court then allowed West Bend’s petition for leave to appeal and affirmed the entry of summary judgment for Krishna.
The West Bend policies defined “personal injury” as an injury “other than a bodily injury” that arises out of an “oral or written publication of material that violates a person’s right of privacy.” The Supreme Court found the complaint alleged a “personal injury,” other than a “bodily injury” in that it alleged emotional upset, mental anguish, and mental injury when Krishna disclosed biometric identifiers and biometric information in violation of the right to privacy under BIPA.
The Court then looked to whether Krishna’s sharing of biometric identifiers and biometric information with the out-of-state third-party vendor was a “publication” that violated the customers’ right to privacy. The West Bend policies did not define “publication.” The Supreme Court, after considering dictionaries, treatises, and the Restatement, concluded that the term “publication” has at least two definitions and means both the communication of information to a single party and the communication of information to the public at large. When a term has multiple reasonable definitions or is subject to more than one reasonable interpretation within the context in which it appears, it is ambiguous. The Court, therefore, strictly construed the term against West Bend, as the insurer who drafted the policies. Accordingly, the Court adopted the construction used by Krishna as the insured and construed the terms publication to include a communication with a single party, like the out-of-state vendor.
The West Bend policies also failed to define the term “privacy.” BIPA codifies (1) an individual’s right to privacy in their biometric identifiers (such as fingerprints, retina or iris scans, voiceprints, or scans of hand or face geometry), and (2) an individual’s right to privacy in their biometric information. The Supreme Court found that BIPA protects a secrecy interest – the right of an individual to keep his or her personal identifying information like fingerprints secret. Disclosing a person’s biometric identifiers or information without their consent or knowledge, therefore, necessarily violates that person’s right to privacy in biometric information. Accordingly, the allegation that Krisha shared biometric identifiers and information with the third-party vendor alleged a potential violation of the right to privacy within the purview of West Bend’s policies.
Having made all these findings, the Court concluded that West Bend had a duty to defend. This did not, however, end the Court’s inquiry in that West Bend asserted the policies’ “violation of statutes” exclusion barred coverage because the exclusion applies to statutes that prohibit the communicating of information and BIPA limits the communication of information. The exclusion, however, specifically listed certain statutes to which the West Bend policies do not apply – the TCPA (which regulates the use of certain methods of communication), CAN-SPAM (which regulates electronic mail) and statutes “other than” the TCPA or CAN-SPAM that prohibit or limit the communication of information. The Court construed the violation of statues exclusion to apply only to statutes like the TCPA and the CAN-SPAM act, i.e., those which regulate methods of communication. BIPA, however, does not regulate methods of communication but rather the collection, use, safeguarding, handling, storage, retention, and destruction of information, which is fundamentally different from the two statutes mentioned in the policies’ exclusion. The exclusion, therefore, is inapplicable.
In Steed v. Rezin Orthopedics and Sports Medicine, 2021 IL 125150, plaintiff Glenn Steed suffered a partial tear of his Achilles tendon. He sought treatment from Dr. Stephen Treacy at Rezin Orthopedics. Glenn was 42 years old and borderline obese. Dr. Treacy’s treatment plan included placing Glenn’s lower right leg in a plantar flexion position, set in a plaster cast for six weeks. Dr. Treacy memorialized his recommendation for Glenn to return for a follow-up appointment in two weeks in an invoice and directed the receptionist to schedule a two-week follow-up appointment. The receptionist scheduled Glenn’s casting appointment for at another office on that same day, but did not schedule a two-week follow-up appointment as Dr. Treacy had directed. After Glenn’s leg was casted, another receptionist scheduled Glenn’s follow-up appointment for a date more than three weeks after his initial appointment. About 6 days before that three-week appointment, Glenn experienced discomfort and achiness in his leg and one day experienced pain in his thigh. One day after experiencing thigh pain and 4 days before that three-week follow-up appointment, Glenn experienced a deep vein thrombosis and died of a pulmonary embolism.
Glenn’s wife, Susan Steed, filed suit against defendants Rezin Orthopedics and Sports Medicine, S.C. and Stephen H. Treacy, M.D., alleging medical negligence for failing to prevent a deep vein thrombosis and resulting pulmonary embolism that caused Glenn's death. The negligence claim brought against Rezin Orthopedics centered on its failure to timely schedule a follow-up appointment within two weeks of the casting of the decedent’s leg pursuant to the physician’s order. The plaintiff claimed that, as a direct and proximate result of that failure, the deep vein thrombosis and resulting pulmonary embolism were not discovered, diagnosed, and/or treated, resulting in the decedent’s death. Plaintiff’s expert testified that the risk of developing a deep vein thrombosis is low, that a blood clot in the leg is not life threatening, and that had the decedent been examined and diagnosed within two weeks as ordered, he likely would have survived.
Rezin Orthopedics presented expert testimony that whether the decedent’s follow-up appointment was scheduled within two weeks or three weeks was inconsequential. It also presented expert testimony that the decedent was not high risk for the development of a DVT; that the incidence of DVT formation following an Achilles tendon rupture is very low, less than 3%, probably less than 1%; and that virtually none of those incidents result in a fatal pulmonary embolism.
The case was tried and the jury returned a defense verdict. Plaintiff chose to appeal only the verdict in favor of Rezin Orthopedics. The appellate court reversed with directions to enter judgment notwithstanding the verdict in favor of the estate, but the Illinois Supreme Court reinstated the verdict. In an opinion written by Justice Overstreet, the Court reiterated the Pedrick standard, which provides that judgment notwithstanding the verdict should be granted only when “all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors [a] movant that no contrary verdict based on that evidence could ever stand.” Pedrick v. Peoria & Eastern R.R. Co., 37 Ill. 2d 494, 510 (1967). The court found that the evidence in this case supported a conclusion that Rezin Orthopedics’ failures did not proximately cause Glenn’s death. Accordingly, Glenn’s death was not a reasonably foreseeable result of Rezin Orthopedics’ failure to schedule his follow-up appointment within two weeks of his initial appointment and a judgement notwithstanding the verdict was improper.
Disclosure of Protected Health Information
In Haage v. Zavala, 2021 IL 125918, the Illinois Supreme Court decided liability insurers are prohibited from using or disclosing protected health information (PHI) for any purpose other than the litigation at issue and are required to return or destroy the PHI at the conclusion of the litigation.
In each of two automobile personal injury actions, plaintiffs moved for entry of a qualified protective order (QPO) pursuant to the Health Insurance Portability and Accountability Act (HIPAA), and its implementing regulations (45 C.F.R. 160, 164) (Privacy Rule). Plaintiffs’ proposed QPOs ordered: 1) that the PHI may not be disclosed for any reason without the party’s prior written consent or by way of court order specifying the parameters of the disclosure; and 2) that the PHI be destroyed or returned within 60 days after the conclusion of the litigation. State Farm, the liability insurer for the named defendants in each case, intervened in each lawsuit and sought entry of its own protective order, which expressly allowed insurance companies to use, disclose, and maintain PHI for purposes beyond the litigation and expressly exempted insurers from the “return or destroy” requirement.
In both cases the circuit court granted the plaintiffs’ motions and entered the plaintiffs’ proposed QPOs. The Cook County standard protective order, however, permits insurers to disclose, maintain, and use PHI for purposes beyond litigation and further exempts insurers having to return or destroy the PHI at the conclusion of the case. For these two reasons, the trial court found that the Cook County standard protective order violated HIPAA. The appellate court and Illinois Supreme Court affirmed.
The Illinois Supreme held that the Privacy Rule applies to State Farm and any other insurer – the reason being that an insurer, while not the disclosing party, is the party seeking Plaintiffs’ PHI and can only do so by complying with a QPO containing the “use and disclosure” prohibition and “return or destroy” requirement. As a result, the Court held that the Cook County standard protective order conflicted with HIPAA and was preempted by the Privacy Rule. The Court similarly rejected State Farm’s arguments that Illinois insurance law mandates the use, disclosure, and retention of PHI. Instead, the Court noted that in order to comply with state law, all State Farm would have to do is maintain a copy of the QPO in the file, which would explain why the documents (medical records and bills) were no longer in the file – because it is not permitted to be kept following the close of litigation.
Illinois School Code
In Board of Education of the City of Chicago v. Moore, 2021 IL 125785, an action arising from disciplinary proceedings to terminate the employment of a tenured Chicago school teacher, the Supreme Court addressed whether the School Code authorized the Board of Education of the City of Chicago to opt for suspension rather than either dismissal or reinstatement. In a unanimous decision, the court interpreted the applicable statutory provisions in the School Code to provide the board with the implied power and authority to issue alternative sanctions when a teacher’s conduct is determined to be negligent but remediable.
The CEO of the Chicago Public Schools approved dismissal charges against the teacher, Daphne Moore, following an incident in which she allegedly did not respond appropriately to a student’s overdose on medication in the classroom. Moore was suspended without pay pending the outcome of a dismissal hearing. Finding that Moore had alerted the administration of the incident and that, contrary to the charges, she did not lie during the investigation, a hearing officer concluded that the board did not establish cause for the teacher’s dismissal. The board partially rejected the hearing officer’s findings; it found that Moore should have taken additional steps to meet the standard of satisfactory conduct. In the board’s view, the circumstances called for a suspension and a reduction in the back pay Moore would receive, but not dismissal.
Moore challenged the authority of the board to impose discipline short of dismissal where the board commenced termination proceedings and contended that the proceedings could end only in dismissal or reinstatement. Administrative review led to an appellate decision reversing the board’s decision. The appellate court concluded that no provision in the School Code empowered the board, after exercising its statutory power to seek termination, to act other than to dismiss or to reinstate Moore with full back pay.
The Supreme Court reached the opposite conclusion and found that the School Code, 105 ILCS 5/34-85, provided the board with the implied authority to suspend tenured teachers with less than full back pay at the conclusion of a disciplinary action seeking dismissal. The court rejected the notion that the legislature required a second, separate action. The court found no conflict in two other sections of the School Code addressing different sanctions—dismissals and suspensions. A harmonious reading of the cited sections of the statute, rather than a reading of portions of the Code in isolation, supported the board’s authority to manage its school system by protecting both the safety of students and the rights of tenured teachers. The Supreme Court also found satisfactory the board’s articulation of its findings and no statutory prohibition of the board’s reduction of back pay.
Western Illinois University v. Illinois Educational Labor Relations Board, 2021 IL 126082, involved a 2017 arbitrator finding that Western Illinois University violated its collective bargaining agreement with respect to layoffs. In 2018, the arbitrator entered a supplemental award, finding that the University failed to comply with the earlier award. The Illinois Educational Labor Relations Board then found that the University committed an unfair labor practice in violation of the Illinois Educational Labor Relations Act, 115 ILCS 5/14(a)(1), (8), by failing to comply with the two arbitration awards. The Act requires that public education employers arbitrate disputes arising under a collective bargaining agreement. Refusal to comply with the provisions of a binding arbitration award is an “unfair labor practice” under the Act. The appellate court vacated the Board’s decision.
At issue was whether the arbitrator was within his rights to issue a supplemental award in March 2018, after he found the university failed to implement the terms of his earlier award in July 2017. The arbitrator was weighing the University Professionals of Illinois Local 4100's grievances challenging the university's layoffs of ten bargaining unit members.
During the appellate court oral arguments, it was argued that the arbitrator did not exceed either his statutory or his contractual authority when he retained jurisdiction over the implementation of the July 2017 award. The board reasoned that the statute didn't deprive arbitrators of their “widely accepted” authority to retain jurisdiction over an award's implementation, and it properly deferred to his interpretation of the collective bargaining agreement. The board further contended that both the arbitrator and the board each properly performed their statutory functions here.
The University argued that it is “statutorily predetermined” that a party's refusal to comply with an award is an unfair labor practice within the board's jurisdiction. It further argued that an arbitrator can retain jurisdiction in some regard and weigh in if there is an error in the award or if clarification is needed, but the responsibility belongs to the Labor Board with respect to who decides whether an employer has complied with a binding arbitration award.
The Illinois Supreme Court agreed with the University. An arbitrator in the public educational labor relations context exceeds his authority by reviewing a party’s compliance with his own award in contravention of the Act, which vests exclusive primary jurisdiction over arbitration awards with the Board. The Board may not limit the evidence it will consider in an unfair labor practice proceeding under the Act to the evidence before the arbitrator. Under the Act, arbitrators retain limited jurisdiction of the awards for the sole purpose of resolving remedial issues that may arise from the award itself.
COVID-19 Direct and Indirect Exposure
Direct Exposure Claims
Over the last year, Illinois courts also faced questions over the extent to which Governor Pritzker’s Executive Order No. 17 shielded nursing homes from liability against COVID-19 litigation. According to Section 3 of that Order, during the pendency of Governor Pritzker’s disaster proclamation related to COVID-19, health care facilities shall be immune from civil liability for any injury or death alleged to have been caused by any act or omission by the health care facility, if the injury or death occurred at a time when the health care facility was engaged in the course of rendering assistance to the State by providing health care services in responsive to the COVID-19 outbreak, unless the injury or death was caused by gross negligence or willful misconduct. On April 1, 2021, the District Court for the Northern District of Illinois declined to dismiss a lawsuit based upon Executive Order No. 17 immunity.
In Claybon v. SSC Westchester Operating Co., 20-cv-04507, 2021 U.S. Dist. LEXIS 64067 (N.D. Ill. Apr. 1, 2021), the plaintiff alleged that while the decedent resided at the defendant’s nursing home, members of the nursing staff began to show symptoms of COVID-19, one staff member tested positive, and one staff member was hospitalized for the virus. According to the plaintiff, despite these developments, the defendant instructed its employees to report to work. Plaintiff’s decedent died after developing a dry cough, fever, and shortness of breath. Plaintiff alleged defendant was liable for decedent’s death because it required symptomatic employees to report to work, failed to provide adequate PPE, and failed to implement pandemic-related guidelines issued by the Center for Medicare & Medicaid Services.
The defendant nursing home moved to dismiss the complaint, asserting immunity under Section 3 of Executive Order No. 17. In rejecting defendant’s argument, the court explained that the “problem” with the defendant’s argument was that whether it was assisting the State in response to the pandemic when it committed the allegedly tortious conduct was a question of fact that could not be resolved at the pleadings stage. Moreover, the plaintiff died on March 30, 2020, but the Executive Order upon which the defendant relied was not filed until April 1, 2020, and it was unclear whether the Order applied retroactively.
In a related case, the Northern District of Illinois again declined to dismiss a complaint against the same nursing home defendant based upon immunity under Executive Order No. 17. In Brady v. SSC Westchester Operating Co., 20CV4505, 2021 U.S. Dist. LEXIS 68920 (N.D. Ill. Apr. 9, 2021), the court explained that Section 3 immunity applies when a healthcare facility is engaged in the course of rendering assistance to the State; thus, immunity applies where a facility spreads COVID-19 while affirmatively treating or trying to prevent its spread, but does not apply where a facility allows the virus to spread through inaction. The court determined that it was unclear from the face of the plaintiffs’ complaint, where plaintiff alleged that Westchester failed to protect its residents from infected nursing staff spreading the virus, whether plaintiffs’ claim triggered the immunity provision.
The Northern District also found that the plaintiffs’ claim survived because they sufficiently alleged a willful and wanton misconduct claim, which are specifically excluded from the immunity provisions of the Executive Order. The court found the plaintiffs sufficiently alleged that the defendant knew about the risks of exposing its residents to infected nursing staff by mid-March 2020 and, despite that knowledge, required employees who had tested positive for, or were displaying symptoms of, COVID-19 to report to work. The court rejected Westchester’s argument that it could not have known the symptoms of COVID-19 so early in the pandemic. According to the court, by March 2020, at least two of the defendant’s employees had tested positive for the virus, so it had objective knowledge that members of its staff were carrying the virus, and official guidance issued by mid-March 2020 listed symptoms of a respiratory infection (e.g., fever, cough, shortness of breath, or sore throat) as signs of the virus, all symptoms reported by staff members who were nevertheless required to report to work.
The District Court for the Southern District of Illinois also allowed a similar COVID-related lawsuit to proceed beyond an initial review. In Brown v. Watson, 21-cv-00138-JPG, 2021 U.S. Dist. LEXIS 65560 (S.D. Ill. Apr. 5, 2021), the plaintiff claimed he developed COVID-19 due to conditions at the jail, including being forced to sleep in proximity to COVID-positive inmates. According to the complaint, jail staff were provided with masks and gloves to prevent infection, but inmates were not. Additionally, incoming inmates were not tested for COVID-19, separated from one another, or allowed to use protective gear. The plaintiff alleged that a COVID-19 outbreak occurred due to conditions at the jail, resulting in 300 inmates testing positive for the virus. Finally, the plaintiff claimed that he was denied adequate testing and medical care for COVID-19. The plaintiff asserted claims against the St. Clair County Sheriff and the jail’s doctor.
Under federal law, the court was required to conduct what is known as a preliminary review to filter out non-meritorious claims. See, 28 U.S.C.§ 1915A. The court determined that the plaintiff satisfied the conditions necessary to survive a preliminary review by setting forth allegations suggesting that each defendant acted objectively unreasonable or deliberately indifferent to the conditions of his confinement and/or medical condition.
In another Northern District of Illinois case, several McDonald’s employees and their relatives filed suit alleging negligence and public nuisance arising from its decision to remain open during the pandemic without implementing certain health and safety standards. The plaintiffs sought injunctive relief in the lawsuit, including that McDonald’s provide its employees with certain protective equipment and implement various workplace safety measures. McDonald’s subsequently filed suit against its insurer Austin Mutual, arguing that it owed a duty to defend McDonald’s in the underlying lawsuit. On February 22, 2021, the District Court for the Northern District of Illinois denied Austin Mutual’s motion to dismiss, finding that the complaint in the underlying lawsuit potentially gave rise to coverage. McDonald’s Corp. v. Austin Mut. Ins. Co., No. 20C5057 (N.D. Ill. Feb. 22, 2021). The primary issue in that case was whether the underlying lawsuit sought “damages because of bodily injury.” Austin Mutual argued that the underlying case did not trigger coverage because the plaintiffs sought injunctive, not monetary relief. In response, McDonald’s argued that if it was forced to expend money to comply with injunctive relief granted in the underlying case, such would constitute “damages” that would only arise because the plaintiffs in the underlying case contracted COVID-19, a “bodily injury.” Noting that the case was a “very close call,” the District Court concluded that if the plaintiffs in the underlying lawsuit succeeded in obtaining injunctive relief, it would only be because they contracted a bodily injury. The court found that an alternative avenue for coverage existed; namely, that exposure to COVID-19 is itself a bodily injury that McDonald’s would be forced to expend “damages” to remedy.
Secondary Exposure Claims
In Erika Iniguez v. Aurora Packing Co., 20-L-372, the Circuit Court of Kane County dismissed the plaintiff’s complaint with prejudice. In that case, the plaintiff alleged that the decedent’s husband worked for the defendant, contracted COVID-19 at work, and passed the disease on to the decedent, resulting in her death. The court found that the defendant did not owe a duty of care to the decedent. In reaching that conclusion, the court explained that the decedent and the defendant did not stand in a “special relationship” that would give rise to a duty of care. According to the court, the decedent’s relationship to the defendant was no different from the relationship of any other citizen of the world who might encounter an employee of the defendant who had contracted COVID-19 while at work.
The court also found it important that the Illinois legislature and Illinois Appellate Court have refused to extend the duty owed by employers and physicians to third parties that are not part of the employer-employee and physician-patient relationships. As to employers, the court explained that in its most basic sense, the plaintiff’s claim was based on the defendant’s alleged failure to protect its employees from contracting COVID-19 at work. According to the court, Illinois policy regarding employee exposure to dangerous workplace conditions is reflected by the Illinois Workers’ Compensation Act, which provides that the statutory remedies afforded by the Act serve as an employee’s exclusive remedy for compensable injuries. Thus, the court questioned whether Illinois policy would be served by imposing upon employers a common law duty owed to an unlimited pool of potential claimants, “mediated only by the travels and uncontrolled contacts of employees outside the workplace[.]” As to physicians, the court relied upon prior court opinions in which plaintiffs filed suit against physicians, alleging that they developed communicable diseases due to the physicians’ failure to diagnose third-party patients. In those cases, the Illinois appellate court refused to extend the physicians’ duty beyond their patients. See Britton v. Soltes, 205 Ill. App. 3d 943 (1st Dist. 1990); Heigert v. Riedel, 206 Ill. App. 3d 556 (5th Dist. 1990).
Finally, the court distinguished the plaintiff’s claim from “take home asbestos” cases (i.e., where plaintiffs allege that they developed cancer due to asbestos exposure they experienced through the work clothes of a spouse or relative). The court reasoned that in those cases, the alleged injuries resulted from contact with a byproduct of the defendant’s very business, the use or manufacturing of asbestos or asbestos-containing products, whereas the plaintiff in this case based her claim on the relationship between the defendant and its employee.
By contrast, the Circuit Court of Will County allowed a plaintiff’s secondary exposure case to proceed beyond the pleadings stage. In Miriam Reynoso v. Byrne Schaefer Electrical, No. 20-L-620, the plaintiff alleged that she developed COVID-19 from her husband after he contracted the virus through his employment with the defendant. In ruling on the defendant’s motion to dismiss, the court denied the motion as to Count I of the plaintiff’s complaint, while granting the motion as to Count II. The court, however, granted the plaintiff leave to amend Count II of her complaint.
We will continue to keep our eyes on The Land of Lincoln in 2022.