11-17-14; Hello from the National WC Conference in Vegas, Baby; Tom Nyhan, RIP; Phony Burn, Real Criminal Charges; Sharpline Allocations for MSA Advice and more

Synopsis: Hello from the 23d Annual National Workers’ Compensation & Disability Conference & Expo in Chilly Las Vegas.

Editor’s comment: Your editor and several thousand WC folks from the across the U.S. and Canada are in freezie Vegas wondering what happened to the heat, sunburns and fun in the desert. As you read this, we have several interesting developments to report for folks at the largest WC conference in the U.S.

For the IL WC delegation, last week our new Fearless Leader IL Governor-Elect Bruce Rauner sent the WC industry on its heels when he reported it was his goal to trade an increase in the Illinois minimum wage against “business-friendly” changes to the IL WC Act. In our view, such changes

·         Should have been discussed during the election campaign or

·         Should be presented to the Governor-Elect’s “transition team” that is knowledgeable about workers’ comp issues;

·         We hope the first meeting of the supposed WC transition team may meet before the soon-to-be-Governor is running for his second term.

Conference attendee and WC blog-master Mark Walls confirmed his view that “casual” or causal connection may be the major IL WC reform issue—Mark advised the State of Tennessee just moved to a requirement the work be a “major cause” of the work-related condition to be compensable and their WC insurance premium and cost savings have been dramatic. Mark and your editor have no idea if that is the basis for the new suggested changes in IL WC.

Chicago Mayor Rahm Emanuel was quoted as asking what Rauner’s “pro-business” changes might be. We assume both Speaker Madigan and Senate President Cullerton may be asking the same questions. We assure our readers no one has any idea what might be on the Republican WC legislative table. If you have any notion or inside information that is fit to print, please send it along. As we have said for as long as this KCB&A Update has published, we dislike and feel it is appropriate to criticize the WC process when it is run by secret-powers-that-be from either the Republican or Democratic side of the matrix. We are saddened and chagrined to hear the man who was selected to “shake up Springfield” is falling into the same secretive patterns of his predecessors.

As we indicate above, we have no idea what Governor-Elect Rauner is seeking or if the other side will accept his proposals but we are sure he has no way to effectively change the IL WC Act without approval by the other legislative side and the rabid Petitioner-Plaintiff lawyers from the Illinois Trial Lawyers Ass’n. Our worry for our political neophyte is our view that he needs veteran help in making any changes to the IL WC Act or they may agree to and make lots of “changes” that don’t change anything or actually make things better for the other side. It is his call on whether to ask for help and avoid the sort of errors made when the 2005 Amendments to the IL WC Act were passed which led to the 2006 corrections. Our vote is a confab to discuss important changes, as if we were what some observers call a “democracy.”

On a similar note, we were advised Chairman Latz may be on the way out and his successor is a solid and veteran defense lawyer from a Chicago-based WC defense firm. We think Chairman Latz is a great administrator and we would rather see him keep his current position but we understand the vagaries of political winds. If he is going to be replaced, we assure our readers we haven’t been consulted and have no idea how the successor may have been vetted and then selected. Again, we hate to see a new Chairman be selected as part of a secret and clandestine process. Lots of other states treat such jobs like real jobs and not political appointments—why not interview the top candidates and see who might be the best person?

Gene Keefe is a speaker at the Convention about Ethics in Claims Handling this Thursday—if you are in town and want to attend, send a reply. We appreciate your thoughts and comments on the issues above. Please post them on our award-winning blog.

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Synopsis: Tom Nyhan, Rest in Peace.

Editor’s comment: We received news that Thomas D. Nyhan was at rest on Friday, November 7, 2014 while at his home with his family at his side. Tom was born December 26, 1929 in Chicago. Tom nobly served in the U.S. Navy during the Korean Conflict and was the founding partner of the law firm Nyhan, Bambrick, Kinzie & Lowry in Chicago. The roots of Nyhan, Bambrick, Kinzie & Lowry, P.C. go back to the late 1950's when Thomas D. Nyhan joined the now-defunct Chicago law firm of Pope, Ballard, Shepard & Fowle to assist a veteran attorney in handling workers' compensation claims for General Motors Corporation. Tom Nyhan's "helping out" turned into a 35 year journey as he became one of the premier workers' compensation attorneys in the State of Illinois.

Mr. Nyhan was one of the founders, as well as Executive Secretary, of the Illinois Self-Insurers’ Association which acts as a marketing unit for their firm. Tom also served as President and as a Board Member on the Executive Board of the National Council of Self-Insurers. Tom Nyhan served for many years as the workers’ compensation counsel to the Illinois Chamber of Commerce. He was active in numerous professional organizations and served on the Illinois Supreme Court Attorney Disciplinary Commission.

In our view, Tom Nyhan for the defense and Irv Greenfield for the claimant side worked out the Illinois workers’ compensation system that we have today. Tom Nyhan was a strong proponent and implemented the concept of proposed decisions on Arbitration—prior to the creation of that concept, IL WC Arbitrators could simply issue summary decisions without any basis for their reasoning/rulings. Whether an Arbitrator rules for or against either side, we feel it is a solid idea to that the reasoning laid out clearly and with some detail. Tom’s daughter Suzanne Nyhan is the tireless editor and publisher of the Q-Dex that is a listing of decisions of Arbitrators and the Commission and is a guide for everyone in the IL WC process.

Tom Nyhan was your editor’s first WC mentor and teacher. Like many of the men and women on both sides of the Illinois WC bar, Tom was a great lawyer, a good father and a kind man. Tom understood the need for lawyers to aggressively advocate for clients while also respecting your opponent. He will be forever missed. We send our condolences and best wishes to his family and friends.

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Synopsis: Woman “Un-burned” Due to Faking Hot Coffee Burn Injuries! A woman in Victorville, California is charged with allegedly faking second-degree coffee burns from her McDonald’s cup of joe. Analysis by Bradley J. Smith, J.D.

Editor's Comment:  A woman in California has been indicted by the San Bernardino County district attorney with twenty-one (21) felony counts of insurance fraud and workers’ compensation fraud. The woman allegedly bought coffee from McDonalds at the drive-through window, and claims that coffee spilled on her right hand when she was handed a cup of coffee with an unsecured lid. The woman allegedly was attempting to obtain $10,000.00 from McDonalds for her injuries. However, the insurance company became suspicious of the woman’s claims and referred the case to state investigators, who launched an investigation.

As evidence of the alleged burns, the woman provided pictures of second-degree burns on what purported to be her hand. However, upon further investigation, those photos and medical bills were allegedly false. Investigators state the photos were actually taken from the Internet of real burns, albeit from another unknown individual’s hands. In fact, investigators determined the photos were from a hospital website. Even more damning, the woman’s medical providers advised authorities that she had not received any medical treatment.

This prosecution comes after the over twenty (20) year old verdict of $2.9 million to a 79-year-old woman who was badly burned after hot coffee from a McDonald’s restaurant spilled into her lap causing severe and delicate burns. That case is history, but clearly not forgotten.

Insurance fraud is an obvious and ever-present problem that effects not only insurance and related companies, but also befalls normal individuals paying insurance premiums every day. In the event of observing insurance fraud, it should immediately be reported to the insurer and their attorneys. As premiums are always on the rise, anything that can be done to prevent false and fraudulent claims aids in a goal that is common both among insurers and insureds, lower premiums. 

The lawyers at Keefe, Campbell, Biery & Associates, LLC always investigate and report suspected insurance fraud to the appropriate authorities in order to protect their clients and the general public from any foul play. We are happy to share our expertise and training to insure you pay the claims you owe and fight the phony claims you should fight.

The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding insurance fraud and general liability defense at bsmith@keefe-law.com.

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Synopsis: Sharpline Allocations, Our Favorite U.S. MSA Provider.

Editor’s comment: One of the great vendors in Vegas this week is the team from Sharpline Allocations. Sharpline Allocations is a customer service and relationship driven provider of Medicare Compliance and Settlement Planning services. At Sharpline, they understand each client’s unique needs, and deliver customized services that allow the claims professional to have complete certainty that each claim is in full compliance with Medicare Secondary Payer regulations.

The main differentiator between Sharpline and their competitors is great service and their hands on approach. They not only make recommendations, but provide assistance and follow up on with adjusters, risk managers, nurse case managers, Plaintiff/Defense counsel and other vendors to follow through on suggestions to reduce exposure and the potentially high cost of an MSA. They stay with the MSA until settlement, as opposed to moving on from the MSA once completed.

They are also piloting a new MSA Intervention program with one of their National accounts that has significant exposure at this time. The idea is that as soon as a Medicare eligible claimant reaches MMI, the file is referred to Sharpline for early intervention/bird’s eye view of any issues and to make recommendations to prep the claim for future settlement with closure of medical rights, and dramatically reduce MSA exposure by that time. This will potentially reduce the future MSA exposure and reserves. It will also drive claim costs down as the client will be able to settle and get the claim closed faster, rather than waiting to address issues at the time of MSA.

They can discuss this concept further if you are interested or to address any questions/ concerns. If you want more information, go to their great website at http://www.sharplineallocations.com/

11-10-14; Winner, Winner--How Do We Help Illinois New Leader?; New Rules Hit Your WC Claims for Hydrocodone, Vicodin and Other Narcotics; Litigation Management Ruling, analysis by Brad Smith and more

Synopsis: Winner, Winner!!—How Do We Help Illinois’ New Leader?

Editor’s comment: After more than a decade of watching Illinois descend into a financial morass, we are happy to report Bruce Rauner is the Governor-Elect of Illinois! We do feel you as our readers and KCB&A as a defense firm played a role in helping him get the nod and we want to continue to assist him whenever and wherever we can. Mr. Rauner is the first Governor in IL state history to volunteer to do the job without compensation—this symbolizes the fact he genuinely wants to cut government costs and lower your tax bills. To our further understanding he and his top aides are among our readership. We have a couple of important thoughts for him to consider and we are asking for your best thoughts, as he plans and prepares for his tenure as Illinois Governor.

First and foremost, pension reform should be front-and-center. In this regard, we recommend he make a pretty important phone call to IL Supreme Court Chief Justice Rita Garman and ask her to put their crucial pension reform ruling on the front burner. The Supreme Court is considering the viability of pension reforms proposed by outbound Governor Quinn and while they are doing their important work, Illinois taxpayers are watching the $105B+ pension deficit skyrocket. In the event the Supreme Court tosses out all proposed pension reforms, we hope Plan B can start moving into place. Whatever they do, we consider the Illinois-gov’t-seven-fake-pension-programs crisis to be the biggest challenge our new Governor will face. Please give us any solid thoughts about how he should best attack it.

Please remember the reforms under Supreme Court consideration affected only three of the five IL pension programs. The unbelievably lucrative and massively unfunded judicial and legislative pension programs were not “reformed” at all. We strongly agree with the Chicago Tribune about completely ending the legislative pension program altogether. http://www.chicagotribune.com/news/opinion/editorials/ct-pension-illinois-general-assembly-edit-jm-20140908-story.html Legislators do not work full-time and they aren’t supposed to be getting hundreds of millions from taxpayers after they “retire,” as they currently are. We suggest pay out the current retirees (because you have to under the law) but end the “winning lottery tickets” for new and future legislators. We also hope someone takes a look at judicial pensions and reforms a program that can pay former judges over a million dollars a year for each year of service if they live long enough.

So What About Workers’ Compensation in Illinois under Governor Rauner?

Workers’ compensation hits Illinois state government and all taxpayers in three separate ways.

ü  First, you have the cost of the IWCC or workers’ comp administrative/hearing costs.

ü  Second, you have the State of Illinois as a large employer with its own workers’ comp claims.

ü  Third, you have the IWCC, its decision-making and its impact on other smaller governments and private businesses in setting costs with awards and settlements for work-related accidents and diseases.

1.    IL WC Administrative Costs

In dealing with the first of the three concepts, we recommend Governor Rauner and Lieutenant Gov. Sanguinetti memorize five letters “ATBBC” or Across-the-Board-Budget-Cuts. We recommend our new leaders consider 10% Across-The-Board-Budget-Cuts for all state agencies, including the Illinois Workers’ Compensation Commission. Why 10% cuts?—well, it is a great start on a new and never-before-seen concept in Illinois state government. We feel it might work in a bipartisan setting, if the Democrat state legislative majority will sign on. We find it hard to believe Multimillionaire House Speaker Mike Madigan and Senate President Cullerton would fight reasonable budget cuts when our state is always billions behind in paying “our bills.” If ATBBC could be put into place for all state agencies, we might not need the Madigan-Hates-Millionaires Tax and we might not need to bring IL income taxes up to almost 9% as Senate President Cullerton said he wants/needs to pay “our bills.”

We want IWCC Chairman Michael Latz and the other Commissioners and the various boards to take a hard look at agency expenditures. The defense team at KCB&A is happy to participate in the cost-cutting process or any open hearings about it. We note the 2013 Annual Report for the IWCC is on the web at http://www.iwcc.il.gov/annualreport13.pdf. The report indicates they spent $23,546,547 during fiscal year 2013. We are sure they can get by on 10% less or about $21M. We also strongly suggest the Rate Adjustment Fund, the Second Injury Fund and the “Settlement Fund” all come to a close after hearings and discussion. That is a complex discussion that we won’t outline here but there are millions of wasted business tax dollars in all three funds.

2.    IL WC Government’s Own WC Claims Program

Aside from the Commission’s administrative function, our own State’s workers’ comp claim management has plenty of room for improvement.  A couple of years ago, there were over 25,000 pending state WC claims with about six people to adjust them. Their computer program was about twenty years old and was a great way to hide incompetence because you couldn’t get anything of value out of the mainframe.

We are sure the state gov’t WC claims program was such a complete mess the departing Governor’s administration brought in a California-based company, TriStar to try to pull the program apart and put it back together. To highlight how poorly thought out that process was, State administrators “replaced” the adjusters with TriStar but didn’t get rid of the folks TriStar replaced! As you read this, we are sure the outside legal defense teams have not been independently bid or vetted for the best service in many years. We would suggest proper staffing internally, as well as proposals be accepted for the best legal defense teams to tackle the disputed litigated claims.

In short, we salute great local administrators like Mayor Mike Houston of the City of Springfield and lots of other local governments who open their books and bring in consultants and fight to save WC costs for our taxpayers. Please take a look at this link: http://www.sj-r.com/article/20130224/News/302249938. We have never seen anything like that happen in the Illinois state government’s workers’ comp claims program and we hope to start seeing it under our new Gov. Bruce Rauner.

3.    IWCC Impact on WC costs for Local Governments and Private Industry

As we advised our readers over the last year, the silly “WC advisory rates” have nothing to do with progress in cutting WC costs for Illinois business. The proper metric to review workers’ compensation costs is the State of Oregon Every-Other-Year WC Premium analysis. We feel that report is accurate and scientifically accurate. The current IL WC news is great and getting better. The biennial report by the Oregon Department of Consumer and Business Services indicated Illinois recorded the sharpest reductions in workers’ compensation insurance premiums in the entire nation over the last two years.

The Oregon study, online at http://www.oregon.gov/DCBS/docs/news_releases/2014/workers-comp-rate-study-14.pdf ranks all 50 states and the District of Columbia by the amount insurance premiums rose or dropped in the last two years. It highlights that Illinois had the steepest reduction in workers’ compensation rates when compared to the median, with an estimated rate drop of 24 percentage points between 2012 and 2014 compared to the national median reduction of only 2 percent. The report shows Illinois employers workers’ compensation premiums dropped from $2.83 per $100 of payroll in 2012 to $2.35 in 2014. We are certain this means hundreds of millions of dollars in savings for Illinois businesses.

Please also note the current Oregon study measures changes through the beginning of 2014. We are sure the strong cost-saving impact of the 2011 Amendments to the IL WC Act didn’t start until we had new claims beginning on September 1, 2011. We feel we are safe to advise our readers the trend in IL WC is costs are dropping and will continue to drop, as the years roll on. We are sure all Illinois Arbitrators and Commissioners got Senate President Cullerton’s message to give every WC claim a “haircut.” The “haircutting” remains ongoing with professional and experienced Arbitrators who are carefully considering all evidence and trying to reach a reasonable middle-ground wherever possible. We are also sure our administrators are strongly concerned about ethics and stopping WC fraud when/if they see it.

We remain concerned the IL Appellate Court, WC Division didn’t get the “haircut” message and still remains very pro-Plaintiff. With respect, we feel the “manifest weight” of the evidence isn’t very heavy when they want to reverse denials and award benefits. We feel appeals of more recent Commission decisions which were well-reasoned and adjudicated to reach the proper conclusion have been reversed by our Supreme and Appellate Courts based on interpretation of our statute. We would prefer to see the Commission have latitude to interpret facts/apply the law on a case-by-case basis without sweeping legal mandates by the reviewing Courts.

The Illinois Suggestion Box is Open, Folks!

We are sure new Governor Rauner and his transition team are readers of this KCB&A Update. We hope everyone understands the exciting opportunity present for everyone to start to change IL government for the better. We are asking you and all your friends to send us your best thoughts on how to cut costs in IL government without dramatically affecting needed services. We are hoping to work with incoming IL State Chamber President Todd Maisch and his team to come up with solid ideas for the new administration to bring down expenses and perhaps avoid the need for spiraling new taxes, tolls and fees. As we have advised, here are some common sense examples:

·         Get rid or combine the offices of the IL State Treasurer or Comptroller—everyone agrees the two offices are redundant and duplicative. The projected annual savings is about $15M. Taxpayers save even more money when the administrators don’t get their “de-funded pensions.”

·         Get rid of satellite offices—the IWCC has four satellite offices at hearing sites in Collinsville, Springfield, Peoria and Rockford. We do feel the hearing sites should be kept but it is our view the clerical staff there don’t perform enough tasks of importance so as to justify the cost. Actually, the IWCC only staffs three of the four offices, highlighting how unnecessary the expense for the other three offices is. The “offices” or more accurately, the nice ladies who work there don’t do much other than to answer the phone and print/hand out WC forms that are readily available online. Please note the IL Treasurer’s office recently shuttered six such satellite offices at a solid savings—do IL taxpayers need to spend several hundred thousand for printing WC forms?

·         Stop buying tow trucks that don’t tow trucks. Illinois has these expensive lime-green Minutemen trucks that sort of patrol our expressways. The drivers aren’t allowed to tow your car—why buy tow trucks? Why can’t our State Police provide these very limited services to motorists?

Remember we created these simple cost-saving concepts on the outside of government, looking in. We know we have readers on the inside and all around IL government. Now is the time for you to be heard—the money you save may be your own!! If you have state government cost-cutting thoughts or ideas, send them along, please. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Major Changes in Opioid Prescribing Hits Your WC Claims.

Editor’s comment: We feel claims handlers, risk managers and other industry participants need to be aware of the new rules that hit our entire country last month. Our federal government has stepped in to try and prevent addicts from getting easy access to otherwise legal narcotics. The U.S. Drug Enforcement Agency (DEA) announced combination drugs containing hydrocodone are now classified as Schedule II products, imposing on them the same restrictions that apply to pure hydrocodone, as well as oxycodone and morphine. The new rule will also make it more challenging for patients to gain access to Vicodin, which is a blend of hydrocodone and acetaminophen.

Your WC Claimants will now have to show up at pharmacies with handwritten prescriptions--no more call-ins from physicians or their staff. And continued use of these drugs will not be granted as many automatic refills.

Vicodin and similar products used to be grouped in the less restrictive Schedule III, but recent DEA research showed the drugs can be as addictive as pure opioids and "may lead to severe psychological or physical dependence.” The also indicate "Adding nonnarcotic substances like acetaminophen to hydrocodone does not diminish its abuse potential."

The DEA published a final rule moving hydrocodone combination products (HCPs) from Schedule III to Schedule II, starting about a month ago on October 6, 2014. The controversial scheduling change was recommended by the Assistant Secretary for Health of the U.S. Department of Health & Human Services (HHS) and supported by DEA’s own evaluation of relevant data. Under the final rule, Schedule II requirements will apply to “all pharmaceuticals containing hydrocodone currently on the market in the United States.” These requirements include, but are not limited to, requirements related to security protocols, labeling and packaging, inventory, and recordkeeping and reporting.

Only prescriptions issued before October 6, 2014, and authorized for refills may be dispensed, as long as such dispensing occurs before April 8, 2015. The DEA did state a practitioner may issue multiple Schedule II prescriptions to provide up to a 90-day supply of medication. The DEA cautioned, however, practitioners must make their own decisions “based on sound medical judgment and in accordance with established medical standards” about whether multiple prescriptions are appropriate for a patient.

For Illinois WC claims handlers and risk managers, the KCB&A defense team recommends using utilization review or UR to certify or non-certify the continued use of these drugs for your claimants. Following the 2011 Amendments to the IL WC Act, UR has a presumptive effect. We feel any claims handler who knows a claimant is using such drugs should start using UR within 45 days of the initial prescription. We recommend Genex and CID Management for UR on your pending and future claims. If you need a contact, send a reply.

Please also note the National Safety Council (NSC) released the 2014 edition of its resource named Injury Facts, which details the latest injury and fatality statistics and safety trends across the United States and worldwide. Among the more surprising statistics, the NSC found that poisonings, including those from unintentional prescription painkiller overdoses, were the leading cause of death in 18 states and Washington, DC. The increase in fatalities corresponds with the national increase in deaths from drug poisonings, including those involving prescription painkillers, says an NSC press release. According to the Centers for Disease Control (CDC), 100 people die each day in the U.S. from drug overdoses—the rate has more than tripled since 1990. The CDC points to “a growing, deadly epidemic of prescription painkiller abuse,” with three out of four prescription drug overdoses caused by opioid pain relievers.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Don’t Overpay--Efficient KCB&A Defense Counsel is What You Need! Federal Court awards $108,350.87 in fees to Plaintiff’s counsel on a $2,000.00 jury verdict for Plaintiff. Analysis by Bradley J. Smith, J.D.

Editor's Comment: In a ruling that we believe is important as it relates to care and feeding of defense counsel to represent you in cases where attorneys' fees go to the victor such as Section 1983 claims, Federal Employment Law Claims, Illinois Nursing Home Care Act Claims, etc., the federal Seventh Circuit stated defense counsel should not engage in "scorched earth defense strateg[ies]." In Montanez v. Simon, the Seventh Circuit Court of Appeals affirmed the federal District Judge's award of $108,350.87 on jury verdicts of $1,000.00 for compensatory damages and $1,000.00 for punitive damages. The Appellate Court reasoned the District Judge's use of the "Lodestar" method was proper in reducing the fees from $217,110.50.

Please note the high attorney fee award was predicated on the wildly high attorney defense work created by the team selected by the City of Chicago. We wish the federal courts would publish the fee amounts billed by the defense team so taxpayers could see how badly this litigation was managed on both sides. We would guess the defense costs were probably over $200K and the “overwork” caused the embarrassing six-figure attorney fee award for Plaintiff. The federal appeals court wrote:

The award will be paid by the City of Chicago, and although it’s much less than requested, it’s still a huge sum—almost $110,000—in part because the City adopted a scorched-earth defense strategy. This simple civil-rights claim, overlitigated by both sides, took on all the protracted complexity of high-stakes commercial litigation, replete with hard fought discovery battles and even a mock trial. 

Plaintiff was arrested for consumption of alcohol on a public way. He was arrested by two reporting officers Fico and Simon. While in the squad car, Officer Fico allegedly punched Plaintiff in the face. Consequently, Plaintiff filed a claim under 42 U.S.C. §1983 lawsuit for excessive force against Fico and for failure to intervene against Simon. After a trial, a jury entered a verdict on the claim against Fico and found against Plaintiff on the claims directed at Simon. Thereafter, under 42 U.S.C. §1988, Plaintiff's attorneys brought a post judgment fee petition seeking fees of a whopping $426,380.00. Ultimately, the District Judge reduced the fees down to $108,350.87.

The District Judge used the "Lodestar" method to determine the proper fees by multiplying the number of hours reasonably expended by a rational hourly rate. In doing so, the District Court struck entries that were unnecessary, duplicative, excessive, or improperly documented. Specifically, the District Court reduced the hours from 1,021 to 869. Also, the Court reduced the hourly rate from $400-450 per hour for mid-level partners, to $385.00 and $175.00 for second and third year associates. Particularly, the District Court looked at reasonable rates throughout the Chicago marketplace for similar types of cases. The "Lodestar" fee ended up being $217,110.50, which is felt to be presumptively reasonable. However, under Hensley v. Eckerhart, other factors were reviewed to rebut "Lodestar." The degree of success achieved by the prevailing party is reviewed. Alternatively, when the Court cannot distinguish between work on successful and unsuccessful claims, an "across the board" reduction is sanctioned. In applying the above standards, the District Court found Plaintiff lost four of six claims and was awarded only $2,000.00 by the jury. Accordingly, the District Court reasoned there should be a fifty percent reduction of the "Lodestar" fees. On appeal, the Seventh Circuit agreed with the District Court's reasoning and affirmed the decisions on fees.

KCB&A's efficient and well-versed defense attorneys get strait to the point with their defense litigation strategy. Although they are always adaptable and further ready for the twists and turns of litigation, they always develop an early strategy to get to the logical conclusion of the case. Additionally, KCBA attorneys review the potential exposure for their clients (including the availability of attorneys' fees to the prevailing party) in their initial case assessments. In addition to Civil Rights Claims, KCBA attorneys' also handle Illinois Nursing Home Car Act cases wherein attorneys' fees are available to a prevailing plaintiff. 

The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding Civil Rights defense, Nursing Home and ALF defense, and any other general liability defense questions at bsmith@keefe-law.com.

11-3-2014; Please Don't Vote Based Upon Propaganda, Illinoisans!; Important Federal Fall-Down Ruling, analysis by Dan Boddicker JD; Important Construction Ruling, analysis by Brad Smith JD and much...

Synopsis: Can Illinoisans Be the Most Gullible of All Electorates? Please Don’t Make Decisions Based Upon Propaganda, Illinois!

Editor’s comment: Thankfully, this is our last KCB&A Update on the topic of the current 2014 gubernatorial election. As we advised, we strongly endorse Bruce Rauner for Illinois Governor and hope our readers vote accordingly before the election ends tomorrow night. Here are some reasons.

Last week, we pointed out the only folks we can figure who might vote for Gov. Quinn are current government workers concerned about future changes to their pensions. We have not heard a single objective reason from any other reader why one might vote for Gov. Quinn. Every reasonable metric indicates Governor Quinn and our state are doing miserably. He has no plan to change anything for the better, that we have heard. As we advised last week, Illinois has

·         Soaring unemployment;

·         A miserable jobs outlook;

·         The worst credit rating of all the United States;

·         $6B+ in unpaid state government bills at any given time;

·         We are 48th in economic status in a recent national study;

·         We have gone from $54 billion in debt to $105 billion in debt in the last five years under Gov. Quinn;

·         We have the second highest real estate taxes of all the United States;

·         Illinois is one of only 12 states with an estate tax which means you, your parents and grandparents may want to move out of Illinois as we get older.

Illinois Income Taxes May Soon Almost Triple Under Gov. Quinn If You Listen to Senate President Cullerton

On top of all that, last week, IL Senate President Cullerton wrote an article for the Chicago Tribune. In short, he bluntly confirmed he wants to bring Illinois income taxes up as high as New Jersey—please note this would effectively triple Illinois income taxes from the value they are supposed to drop to on January 1, 2015. Trust us, if you vote for Quinn, this may happen in about two weeks at the fall legislative veto session in Springfield. The legislation may already be drafted. Senate President Cullerton quoted his own floor speech:

“The fact is that we have been falling behind, in my opinion because of a structural deficit because our income tax rates are so much lower than (those of) other states. We've looked at states like New Jersey…”

Please note New Jersey’s income tax rates are currently at a shocking 8.97%. Senate President Cullerton blithely indicates we need to keep raising income taxes to record levels to “pay our bills.” Well, we hope someone can get into government and start to lower “our bills.” As we have repeatedly advised, we hope Bruce Rauner can come into Illinois government and start to push for and/or make appropriate/reasonable budget cuts and counter the need and drive of Illinois Democrats to continually raise taxes/tolls and fees. In our view, State Democrats keep raising taxes and creating new taxes to pay billions for fake pensions for folks that don’t work for us any more—that isn’t supposed to be “our bills.”

What Might Bruce Rauner Do to Cut Gov’t Costs and Save Taxpayers Millions?

From the perspective of the one state agency we are intimately familiar with, the Illinois Workers’ Compensation Commission, we ask these obvious questions:

      Could we get along with six and not the current nine IWCC Commissioners and their support staff?

      Could we get along with twenty-five or even twenty Arbitrators and their support staff—no matter how good they are, do we need 30 IL WC Arbitrators?

      Could we end the silly “Second Injury Fund” that was effectively replaced by ADA and that has no true value at all?

We don’t want the IWCC to disappear or dramatically change, we just feel it could be more efficient and effective. Would IL WC claims still get resolved in a timely, professional and fair fashion? We don’t know the answer but, as our state has about $6B in unpaid bills, we hope such concepts are explored. Some reasonable cost-cutting would save Illinois business/taxpayers millions off the cost of running this single state agency. When you look at IL government’s 87 other state agencies, we assure our readers a solid administrator could make reasonable cuts with amazing gains for taxpayers, if we vote for Bruce Rauner.

What about Quinn’s Poison/Attack Ads? Can Anyone Really Care About Ketchup on a Hot Dog?

We hate propaganda and feel it is intellectually insulting to the taxpayers and voters of this great state. We hope you are NOT gullible and will reject such offerings. Propaganda is the presentation of facts selectively and sometimes lying by omission to produce an emotional rather than rational response to the information presented. Please note Gov. Quinn’s various Poison/Attack Ads are almost all baloney, balderdash and blarney. If you aren’t aware, there have been complaints and tweets and instagrams all over the web about Candidate Rauner ordering a hot dog with mustard and ketchup for a staffer! Eeek! That issue indicates the level of silliness that has stained this election. Here are thoughts on other senseless and misleading attack ads:

1.    The tiny baby you see on TV wasn’t around for the more-than-a-decade-old drug price debate you hear in the attack ads. Issues were raised by the FTC about drug pricing and competition among drug companies from 2002 to the sale of the company in 2009. The FTC lost their lawsuit and a class action suit was later settled, terms not disclosed. Nothing illegal occurred, no laws were broken and no one went to jail. We agree the wildly varying price of the same medicine across the globe should be something the Feds should analyze—that said, it has nothing to do with Illinois government or this election. Pat Quinn had no role of any kind in dealing with or regulating drug prices or competition. In our view, the drug price and competition debate from more than a decade ago doesn’t say anything about someone’s fitness to be Governor, in any way.

2.    The lady you hear about that Bruce Rauner was going to “bury” wasn’t buried and is doing well, thank you. Her name is Christine Kirk. Ms. Kirk was fired in 2001, the start-up company quickly failed and lawsuits were dismissed and/or settled. Ms. Kirk didn’t testify about the hearsay statements used in the ads and she refused interviews. FYI, Gov. Quinn has rapidly and rudely fired lots and lots of folks including former IL WC Arbitrators and the poor lady who was running the IL Dep’t of Transportation when his hiring scandals were recently discovered.

3.    The poor treatment of residents in a Florida nursing home from 2002 attributed to Bruce Rauner is a complete joke. Please note Governor Quinn also is arguably on the “board” of all state-run Illinois nursing homes, as our Governor. Across our state, there are about 6,000 formal nursing home complaints lodged annually against IL gov’t-run nursing homes. In the six years Pat Quinn has been our governor, simple math indicates there would have been 36,000 nursing home complaints lodged against his government. We don’t feel either Gov. Quinn or Bruce Rauner are directly or even minimally responsible for the day-to-day operation of any of these nursing homes complained about.

Our problem with listening to or voting based on propaganda is you are certain to encourage more propaganda. We hate to see poorly constructed and misleading propaganda being broadcast over and over, as if we were all stupid. We consider these misguided attacks a reason to vote against the propagandist and not the opposite.

But Can’t Bruce Rauner, as Governor, Completely Change our Lives?

Actually, no. Please calm down and understand he is a trend-maker but won’t have complete power. There is no question Bruce Rauner will be a governor without voting control of the IL State House or Senate. He can have an impact but he will have to work in a bipartisan fashion to make progress. He can let us know a solid path to follow. He can slow or stop silliness from State Democrats who would have to override his veto to pass laws. We think that is a very good idea for our state.

We join with every major news source in and outside Illinois to endorse Bruce Rauner for Illinois Governor. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Don’t slip up! Don’t miss this business friendly ruling presenting a road map to help you protect your business from an invitee’s slip and fall. Analysis by Daniel J. Boddicker, JD.

Editor’s Comment: In a decision directly affecting Illinois businesses, the United States Court of Appeals for the Seventh Circuit, affirmed the Federal District Court’s granting of summary judgment and held a business invitee who slipped on water on defendant’s floor failed to show a breach of duty.

In Zuppardi v Wal-Mart Stores, Inc., Plaintiff Zuppardi walked down an action alley, which is a highly trafficked main aisle of the store. She did not see any other customers or store employees. Ms. Zuppardi slipped and fell in a puddle of water, without knowledge of how and when the water accumulated. She further claimed there were no warning signs or caution cones around the puddle. Zuppardi further alleged there were no track marks, footprints, or trails leading to or from the puddle.

Wal-Mart employees were required to follow policies and procedures, including the conducting of regular safety sweeps of the store with a focus on high traffic areas. The employees were tasked with monitoring the action alleys and scanning for unsafe conditions while performing their other job duties. Upon encountering a spill, employees were required to stay with it until removed. All employees carried a “towel in pocket” to clean up any discovered spill.

The Court noted in Illinois, businesses owe their invitees a duty to maintain the premises in a reasonably safe condition to avoid injuring them. For a breach of that duty, the court noted liability can be imposed when a business’s invitee is injured by slipping on a foreign substance on its premises if the invitee establishes

(1)  the substance was placed there by the negligence of the business;

(2)  the business had actual notice of the substance; or

(3)   the substance was there a sufficient length of time so that, in the exercise of ordinary care, its presence should have been discovered, i.e., the business had constructive notice of the substance.

The Court reasoned to create a triable issue of fact with respect to placement of the substance by Wal–Mart, Zuppardi needed to present some evidence showing the substance was more likely placed on the premises through Wal–Mart’s negligence rather than a customer’s potential negligence. To prove the defendant business, as opposed to a third person, created the dangerous condition, Illinois courts have required the plaintiff to (1) show that the foreign substance was related to the defendant’s business and (2) “offer some further evidence, direct or circumstantial, however slight, from which it could be inferred that it was more likely that defendant or his servants, rather than a customer, dropped the substance on the premises ...”

The Court found Zuppardi simply offered evidence she slipped on something that happens to be sold by Wal–Mart. Consequently, the Court reasoned such evidence fails to support an inference that Wal–Mart caused the spill. The Court stated constructive notice can be established under Illinois law by either presenting evidence that (1) the dangerous condition existed for a sufficient amount of time so that it would have been discovered by the exercise of ordinary care, or (2) the dangerous condition was part of a pattern of conduct or a recurring incident.

The Court confirmed where constructive knowledge is claimed, of critical importance is whether the substance that caused the accident was there a length of time so that in the exercise of ordinary care its presence should have been discovered. Absent any evidence demonstrating the length of time the substance was on the floor, a plaintiff cannot establish constructive notice.

The Court noted Wal–Mart’s internal policies and procedures for monitoring for spills and other hazardous conditions appropriately addressed the threat of these issues by requiring Wal–Mart employees to monitor the “action alleys,” to be on the lookout for unsafe conditions, and to stay with any found spill until removed. The court confirmed there is no bright-line rule designating the requisite time to establish constructive notice, and noted periods in excess of ten minutes had failed the test. The Court held a few minutes was not enough time to give Wal–Mart constructive notice of the puddle.

The Court discussed Zuppardi’s argument that pursuant to Wal–Mart internal policies and procedures, employees need to monitor the “action alleys” of the store continuously during times of increased customer traffic, and Zuppardi’s interpretation this store-specific policy creates a legal standard of ordinary care requiring such continuous monitoring. However, the court rejected said argument as it would require the continuous monitoring and patrolling of a store’s safety conditions that Illinois courts have summarily rejected. The Court held although Wal–Mart’s internal policy requires employees to continuously monitor the “action alleys,” this goes above and beyond the duties required of businesses by Illinois courts and does not create a new legal standard of ordinary care requiring the same.

This article was researched and written by GL defense team member Daniel J. Boddicker, JD.  Dan can be reached with any of your questions or concerns regarding premises liability defense and/or general liability defense at dboddicker@keefe-law.com

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Synopsis: How Much Control is Too Much? In a recent important opinion for the IL construction industry as it relates to general contractor liability, the IL 1st Dist. Appellate Court reversed summary judgment holding the general contractor exercised sufficient control to create a genuine issue of a material fact to be resolved by the trier of fact. Analysis by Bradley J. Smith, J.D.

Editor's Comment: In a ruling we believe is significant as it relates to defense of a general contractor in a negligence action, the First District Appellate Court determined since there was sufficient evidence to show defendant had more than a general right of supervision and was potentially subject to liability under section 414 of the Restatement (Second) of Torts, the trial court’s entry of summary judgment was in error. Specifically, the Court found that Defendant’s safety manual explicitly prohibited the use of stilts by a subcontractor’s employees, and further Defendant had the authority to stop unsafe work and order it remedied. In Lederer v. Executive Construction, Inc., Plaintiff was walking on stilts and tripped and fell over some exposed and unprotected conduit protruding from the floor in the room where he was using the stilts to work on the ceiling.

The trial court entered summary judgment for Defendant on the basis that it did not owe a duty of care to Plaintiff and was not vicariously or directly liable under section 414 of the Restatement (Second) of Torts. Additionally, the trial court found that Plaintiff failed to procure evidence that Defendant had notice of the alleged dangerous condition. On appeal, the First District analyzed the general contractor Defendant’s control. Particularly, the Court reasoned that Section 414 of the Restatement (Second) has carved out a “retained control” exception that “provides for both vicarious and direct liability, depending on the degree of control that the Defendant retains over its independent contractor.

Thus, a general contractor may be held vicariously liable for the subcontractor’s negligence “under the principles of agency where the employer retains control over the operative detail of any part of the contractor’s work.”  Alternatively, the Court reasoned Defendant might be found directly liable “if the employer retains only supervisory control, i.e., power to direct the order in which the work is done, or to forbid its being done in a dangerous manner, unless he exercised supervisory control with reasonable care.”  In applying the aforementioned reasoning to Defendant’s alleged control, the Court reversed the trial court’s ruling. Specifically, the Court held there was sufficient evidence based on the undisputed facts for the trial court to find as a matter of law Defendant has more than general rights of supervision, and was therefore potentially subject to liability for Section 414. 

This decision furthers the “in charge of work” factors from the repealed IL Structural Work Act. As the Plaintiff’s bar has used the “control” of work pursuant to Section 414 of the Restatement (Second) of Torts to “resurrect” the Structural Work Act in a modified format, this decision appears to further that goal. Essentially, the Court applied nearly identical factors to determine Defendant exercised sufficient control pursuant to section 414 of the Restatement (Second) to create an issue of fact, forcing Defendant to defend itself before a jury of its peers. 

If you are in need of counsel for your general contractor construction work, then consider the zealous defense attorneys at Keefe, Campbell, Biery & Associates, LLC. We stay abreast of all current case law to keep you fully apprised of your likelihood of success or otherwise in the legal matters you face. We also provide our clients with detailed liability assessments at the onset and regularly throughout litigation. 

The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding construction accident defense and general liability defense at bsmith@keefe-law.com.