10-14-11; The Supreme Court yields to good sense and reasonableness in overturning another Madison County attempt to expand the scope of liability product manufactures face

We here at KCA have been providing you with our case analyses in this update for quite a while now. You may have read in these pages that our State’s own Madison County has been described as a “judicial hellhole” and was very Plaintiff friendly. If you don’t recall, it’s the home of the original multi-billion dollar tobacco verdict. The Illinois Supreme Court is routinely very liberal, but Madison County is even more so. A recent decision by the Supreme Court of Illinois reversing a Madison County jury award in excess of $40 million confirmed Illinois is going to stick with the precedent on its books and not expand manufacturer liability in a few interesting ways the Plaintiff in that suit was trying to assert.

As a backdrop, we present a snapshot of the law in Illinois – the law for some time has been that manufacturers are not required to guard against every risk to the consumer. When a design defect is present at the time of sale, the manufacturer has a duty to take reasonable steps to warn at least the purchaser of the risk as soon as the manufacturer learns or should have learned of the risk created by its fault. (see Woodill v. Parke Davis & Co) That duty has not been expanded beyond the point of sale – and in fact, a manufacturer is under no duty to issue post-sale warnings or to retrofit its products to remedy defects first discovered after a product has left its control.” (see Modelski v. Navistar International Transportation Corp.) If a manufacturer, however, does warn consumers, or makes modifications to goods, they can be held liable if the warnings are insufficient or if the corrective measures are in themselves negligent. In Jablonski v. Ford Motor Company, decided last month, the Illinois Supreme Court overturned a $43 million judgment in a 5-0 vote, based in part on an expansion of the law argued at the lower court that would have expanded a manufactures liability beyond this point.

Jablonski was filed as a result of a rear-end car accident involving Dora Mae and John Jablonski, who in 2003 were driving their 1993 Lincoln Town Car when they were struck by another vehicle travelling in excess of 60 mph. The Jablonski’s were essentially stopped when hit, and the collision caused their rear end to crumple. It also propelled a pipe wrench in the trunk through the trunk wall and into the adjacent fuel tank. The punctured fuel tank caused the car to catch fire, leaving  Mr. Jablonski dead and his wife severely burned. The widow brought suit under a multitude of theories, and throughout the course of litigation, the theories of recovery continually evolved. Ultimately Plaintiffs received a $43 million award for what the trial court ruled was the auto manufacturer's negligence, as all potential strict liability claims had been dropped. The Appellate Court summarily affirmed and this appeal was taken the Supreme Court.

Of note were the two issues the reversal was based upon – failure to expand Illinois’s duty to warn to include post-sale duty, and an analysis of the “voluntary undertaking” doctrine. In regard to a post-sale duty to warn, Plaintiff argued for, and the jury was instructed in, a duty to warn of a product-related risk after the time of sale, whether or not the product is defective at the time of original sale, if a reasonable person in the seller’s position would provide a warning under the enumerated circumstances. This is a theory of law not in existence in Illinois, and the Supreme Court essentially said as much, also noting application of such a theory would require facts which were not presented to the jury before an award could be based on it, as even if this law were adopted, it would require more information as to what warning a reasonable person in the seller’s position would provide.

The other basis upon which the reversal was based was the voluntary undertaking doctrine. It is a somewhat intuitive doctrine, when a manufacturer (or reseller for that matter) undertakes, freely or for compensation, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking. This duty is limited, however, to the extent of the undertaking. In Jablonski, Plaintiff argued since Ford had done some testing for police vehicles, which were of an almost exact same design, and recommended changing location of the fuel tank and providing guidance to officers regarding proper placement in the trunk to avoid similar fuel tank punctures, this duty extended to the common public to warn them in a similar fashion. The Supreme Court held the duty in this setting applied only to those persons warned – read, the police. Since the public was never warned about the potential fuel tank punctures, there was no duty stemming from the warning to the police. While somewhat convoluted, the theory is based in the fact that the duty from this undertaking stems from failing to perform the warnings or modifications in a reasonably safe manner – since no warnings or modifications were ever propounded to the public, there was no duty to the Jablonski’s which could be breached. In essence, a claim under this doctrine could only be brought by an officer who was warned about proper trunk usage and who was injured despite following Fords’ guidance regarding tools in the trunk.

This article was researched and written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com.

10-14-11; There is a new policy from CMS addressing liability MSAs and it mirrors advise we have been giving for some time now. And in other news, the MSPRC Self Service Information Service is up...

The Centers for Medicare and Medicaid Services (CMS) has released a policy memorandum (dated September 29, 2011) pertaining to liability Medicare set-aside (L-MSA) arrangements. CMS has indicated the new guidelines and procedures are effective “upon publication of this memorandum” so they are already applicable, folks.

Per CMS, the memo provides information regarding proposed Liability Medicare Set-Aside Arrangement (L-MSA) amounts related to liability insurance (including self-insurance) settlements, judgments, awards, or other payments (which they note as “settlements”). Through this memo, CMS indicates they will consider Medicare’s interests regarding future medicals to be “satisfied” upon procurement of specific information from the plaintiff’s treating physician as follows:

Where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance (including self-insurance) ‘settlement’ has been completed as of the date of the ‘settlement,’ and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular ‘settlement,’ satisfied. If the beneficiary receives additional ‘settlements’ related to the underlying injury or illness, he/she must obtain a separate physician certification for those additional ‘settlements.

If the physician certification as referenced above is obtained, according to CMS you do not need to submit the certification or any proposed L-MSA to be reviewed. In keeping with their tradition of refusing to provide any parties with significant confirmation that they have made appropriate efforts, CMS will not provide the parties with any type of confirmation indicating Medicare’s interest regarding future medicals is satisfied and instead they strongly suggest plaintiffs and/or their representative maintain the physician’s certification.

To obtain a copy of CMS’ September 29, 2011 memo, please email Shawn R Biery at sbiery@keefe-law.com.

AND

In other CMS news, you can now attempt to contact CMS to determine conditional payments if you have the necessary information and use an automated service. It appears to be working as long as you have all of the necessary info. The MSPRC phone number is the same, (866)677-7220, but now it gives you the option to use the automated service or to speak to an associate. 

To use the automated service, you will need to have the following information:

  • Case Identification Number (as found on the Rights and Responsibilities letter)
  • Date of Loss
  • Beneficiary's Date of Birth
  • Last four digits of the SSN
  • First four digits of beneficiary's last name
  • Medicare Number

After receiving the status on a file, it will ask if you want to search for another case or speak to an associate. Remember, to speak to an associate, there will be an extended hold time (with Shawn’s personal best being over 70 minutes). For more information on the MSP automated response feature, go to www.msprc.info .

Our law partner, Shawn R. Biery, J.D. holds the M.S.S.C. certification and has presented opinions in seminars throughout the U.S. If you have had the pleasure of working with him in the past, you know that he has been advocating for obtaining confirmation of “no further treatment” from treating physicians for an extended period already. If you have questions or concerns about such issues, please feel free to contact Shawn at sbiery@keefe-law.com.

10-14-11; Are Some Illinois Governments in a Death Spiral and We Don’t See It? The Shocking Story of the IL Firefighter with a Runny Nose and Watery Eyes

Illinois government is something of a smoking mess on a lot of levels. Right now, estimates are

·         The State of IL is running an $8.3 billion dollar deficit by the end of the next fiscal year, ending June 30, 2012. That deficit is in spite of billions received from the recent income tax increases!  http://www.civicfed.org/sites/default/files/State%20of%20Illinois%20Enacted%20Budget%20FY2012.pdf

·         The City of Chicago is running a deficit of over $600 million, based on an overall budget of $3.2 billion. The City’s deficit is projected to be $800 million within two years.  http://www.bloomberg.com/news/2011-07-29/chicago-s-budget-deficit-widens-50-million-to-635-7-million-mayor-says.html

·         The Chicago Public Schools have a deficit separate from the City of Chicago expected to be $720 million. http://www.suntimes.com/news/4470528-460/chicago-public-schools-deficit-up-to-720-million.html

·         The Chicago Transit Authority has a deficit expected to be $277 million dollars. http://www.huffingtonpost.com/2011/10/04/cta-chief-agency-faces-27_n_994708.html

One reason we see for all these depressing deficits are pensions, benefits and basically entitlements. We keep seeing new and unprecedented ways for workers to get government money. We are confident our legislators and administrators have no idea what the cost is to the taxpayers. We are certain lots of free chickens being given to workers in some quarters are coming home to bust budgets.

We recently saw a claim for an Illinois firefighter we consider difficult to read. In Richter v. Village of Oak Brook, (No. 2-10-0114, opinion filed September 23, 2011) claimant was a firefighter who suffered from rhinitis. If you aren’t sure, rhinitis, commonly known as a stuffy nose, is the medical term describing irritation and inflammation of some internal areas of the nose. The primary symptom of rhinitis is nasal dripping. It is caused by chronic or acute inflammation of the mucous membrane of the nose due to viruses, bacteria or irritants.

The problem with rhinitis involving a firefighter is claimant could no longer continue as a firefighter—he became sensitive to dust and smoke. It appears clear he could work and be truly functional in lots of other jobs but he simply wasn’t cut out for fighting fires. In lots of other states, that wouldn’t be a problem.

In Illinois, when a firefighter or police officer develops a work-related condition or suffers an injury which means they can’t do police or fire work, we have a legal concept which allows them to claim they are “catastrophically injured.” For the uninitiated, this is a legal theory which simply means the worker can’t be a firefighter or police officer. Once they are found to be injured and can’t do their jobs, thereafter taxpayers have to pay for lifetime line-of-duty disability pensions at 65% of their highest salary on a tax-free basis. As the average Illinois firefighter makes $52,000 a year, claimant would get about $33,800 on a tax-free basis for life. If he is a 30-year-old with a 47-year life expectancy, that cost to the Village is $1,588,600.00. In our view, that is a lot of money for a runny nose and watery eyes.

Please remember the government largesse doesn’t mean they can’t perform any work or are what your mom and dad might think is catastrophically injured. They can work at normal jobs and still get the pension money. Basically, the Illinois legislature has never studied what it costs municipalities to provide all these benefits, even when lots of firefighters and police officers continue to get their pensions while they work at normal daily jobs and make a tidy post-government living.

In Richter, what is even more shocking is claimant asserted he had shoulder pain while fighting a fire. Fighting any fire is, by legal definition, considered an emergency. The Village settled all his WC claims together for the rhinitis and the shoulder problem. By so doing, the Appellate Court found claimant was not only entitled to a line-of-duty disability pension, on top of that, he was additionally entitled to lifetime family medical healthcare coverage. If you aren’t sure, a new study out today by the Kaiser Family Foundation, a nonprofit research group that tracks employer-sponsored health insurance, shows the average annual premium for family coverage through an employer topped $15,000 in 2011. For a thirty-year-old firefighter with a 47-year life expectancy, that lifetime cost is $705,000. That number assumes the cost of family health coverage doesn’t go up. If health care coverage costs continue to surge, the expected cost to the Village of Oak Brook over the years may be $2-3 million dollars. Please be sure to notice these payments do not mean claimant cannot return to work and make a nice living on top of what he receives from the Village.

Please note we aren’t criticizing the Appellate Court ruling which basically followed Illinois law. Our problem is the whole system of entitlements that has no built-in cost controls and is lurching along without anyone watching the nickels and dimes. Someone in the Governor’s office, legislature or courts has got to wake up and smell the coffee and stop giving millions for runny noses.

We assert many government benefits sound simple and justified. We want firefighters and police officers to be taken care of when they suffer unforeseen and truly crippling or catastrophic injuries, particularly when working and endangering themselves in emergency settings to save innocent folks. However, when a firefighter with a runny nose and watery eyes costs taxpayers millions of dollars, it is not hard to understand why we are facing monster budget deficits and our readers have concerns about sustainability. We don’t want more anti-business taxes and increased tolls and fees to pay for things like this.

We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog. If you want a copy of the Appellate Court’s ruling, send a reply.