2-14-12; Smoke and Mirrors--Does Illinois Truly Have a Better Business Climate? Does Anyone in the Reviewing Courts Care?
/In response to another blast from Caterpillar CEO Doug Oberhelman about not moving a facility to our state, Governor Quinn again promised Illinois has enacted worker's compensation reform and passed a tax credit for research and development costs. In response, we feel the jury is still very much out on workers’ comp reform and don’t see costs dropping dramatically but hope our Arbitrators and Commissioners are hearing the Governor’s call.
Looking at the bigger picture, we feel Governor Quinn has become something of a public relations flack or apologist for Illinois’ sagging government situation and state employee unions. He has raised income taxes 66-2/3%, almost doubled our toll costs and can’t find money to pay what will soon be $10 billion in outstanding, overdue and unpaid state government bills. No one actually wants to do business with our Illinois State government because you aren’t going to get paid any time soon—we are told the Illinois State Police can’t afford bullets for target practice!! At some point, decisions like the one from Caterpillar and reported job cuts from ADM and Pepsi may send a message to our Governor and they may not—we don’t know if he is listening and he now appears to be claiming he somehow “volunteered” for the job, like that justifies the mess we are in.
As a few quick cost-cutting thoughts without any insider analysis or expertise:
1. Why do we need human highway toll-takers? Indiana and lots of states don’t have them anymore—they were replaced with machines and saved jillions. We are told Illinois spends about $200 million annually on toll collection when all of it could be automated tomorrow. The reason they keep doing it is solely due to state employee unions who will fight automation and cost-savings that results in taxpayers saving a dime.
2. Why does Illinois need a State Treasurer and a Comptroller? They have been going back and forth on this one for years: http://ballotpedia.org/wiki/index.php/Illinois_Treasurer_and_Comptroller_Amendment_(2012) The current plan appears to be wasting even more time and money to maybe put it on a ballot someday. Our thought would be to try to remember you are flat broke and cut through the red tape, Governor and start saving at least $12 million a year.
3. Can we cut out “odd-lot” total and permanent disability claims for Illinois state workers by bringing them back to work and offering them new state jobs right now? We are told the cost of this is well into the millions, maybe as much as $10 million a year. These awards almost always insure the injured workers get more money in retirement than they received while employed. These “double-pensions” are paid on top of regular pensions with no set-off. Most of such workers get the T&P benefits solely because the Lisa Madigan’s troops and CMS won’t defend our State in hearings and CMS won’t take action to put such workers on a priority status to insure they are hired with accommodation when appropriate positions open up. Captains of private industry like Doug Oberhelman don’t smile to see his tax dollars thrown away like in such a stupid fashion. If you don’t understand how this works, please send a reply.
On top of all of it, last week we saw what we feel is one of the more anti-business rulings out of our Appellate Court in some time. In Patel v. Home Depot USA, 2012 IL App (1st) 103217, issued February 2, 2012, our Circuit and Appellate Courts were asked to enter a judgment for an injured worker on a workers’ compensation award. It appears the injured worker was awarded $22,798.54 by the IL WC Commission. However, the IWCC decision and Appellate Court ruling indicate the employer was unquestionably entitled to a credit of $32,357.47. From our review, Home Depot didn’t pay the $22,798.54 because they were incontrovertibly owed the difference or $9,558.93.
In most states across the country, those two findings would have meant most courts would have rapidly thrown out any claim for a judgment against this major national retailer. One has to wonder how the courts unquestionably use the word “credit” but paradoxically ruled it isn’t a “credit.” As we have told our law students in the past, that “plain English language” version of our IL WC Act and Rules sometimes appears to be magically and randomly suspended in this state. You have to remember you are dealing with the Illinois WC system. We sometimes feel the only thing one can be sure of in this system is employers and their attorneys always get treated unfairly, particularly in the reviewing courts.
What these Illinois courts did was to take what we consider a very, very narrow view of Section 19(g) of Workers Compensation Act which allows for judgments to be entered on an administrative WC award. The Circuit and Appellate Courts found Section 19G does not provide a remedy for an employer's inadvertent overpayment of benefits for a certain time period. Both the lower and appellate courts ruled the employer cannot apply a “credit” for its overpayment against benefits to which employee was previously entitled. With respect to our Circuit Court judge and Appellate Court justices, we don’t agree at all and feel there were many other simple paths they could have taken to either equitably or legally reached a fairer conclusion to the controversy.
On top of all of that, the Circuit Court then provided what we consider staggering largesse to the worker and his attorney and against this employer--the court entered an additional judgment in favor of Patel for
· Attorney fees of $47,000.00;
· Costs of $5,315.31 and
· Interest of $13,679.08.
Please note this does not include fees to present this matter to the Appellate Court! If you are doing the math, the judgment without any credit to the employer was for about $22K and the courts provided counsel and claimant almost $67,000.00 in additional monies!!!??? If you are doing more math, Home Depot was owed $9,559.93 and they will now have to pay claimant and his counsel about ten times that much money or more due to the way our courts have interpreted the law. With respect to our jurists, that blunt outcome borders on irrationality—please note the legal issue presented in this claim wasn’t simple or patent and there are very few rulings from which to reach this end result. To see our courts take literally the most punitive possible approach has to make every business person in and around our state cringe.
In our view as academicians, the award of fees, costs and interest is simply anti-business and wholly punitive. We feel it is shocking and astounding to simple common sense. Giving claimant’s counsel every benefit of the doubt, attorney’s fees in Section 19G filings are relatively simple—you can get fees at the Commission consistent with the statute or 20%. That amount could be no more than about $4,400. The rest of the attorney’s fees are to draft a two-page complaint and seek recovery at the Circuit Court. Such fees can’t be more than a thousand dollars at the worst—it is a simple and summary pleading. We have no idea how counsel could conceivably be able to charge $47K. Similarly, we have literally no idea what over $5K in costs might be for.
Looking at the bigger picture in this claim, we feel the mistake by Home Depot’s defense counsel is patent—immediately sue or countersue claimant to recover the credit provided by the IL WC Commission. The monies were clearly overpaid. It is such a simple thing to do to protect yourself and your client, we cannot imagine why they didn’t do it. They should clearly do so right now, if they haven’t.
And looking at the bigger picture, we hate to analyze and report such shenanigans because we don’t want our readers to shy away from this state. But the facts are the facts and we have a duty to report them. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog.