LAW ALERT: U.S. H.R. 1215 – “Protecting Access to Care Act of 2017”

The United States House of Representatives is scheduled to vote on the Protecting Access to Care Act (PACA) on June 14, 2017. As written, the bill would preempt existing state laws on a range of topics relevant to personal injury lawsuits. If ultimately passed by the Senate and enacted into law, the PACA would likely have a significant and wide ranging impact on future medical malpractice cases in the State of Illinois

Although the official bill summary states that it would only apply to cases where the care at issue was “federally subsidized” in some respect, there appears to be no language in the most recent bill to this effect. The Congressional Budget Office conducted a review of the bill and does not comment on the limitation, suggesting it may have broader applicability. See https://goo.gl/v0axT1.

As a practical matter, the bill would place significant limitations on all medical malpractice lawsuits. For example, the bill would supersede the Illinois statute of limitations so that lawsuits would have to be filed within one (1) year of a claimant’s discovery of the injury at issue, or within three (3) years, whichever is sooner. A lawsuit could not be filed more than three years after the injury.

From the bill, the new statutes of limitations and repose are tolled only upon proof of fraud, intentional concealment or when a foreign body “which has no therapeutic or diagnostic purpose or effect” is found in the injured person. The current version of the bill does not preempt state statutes of limitations with respect to minors.

PACA also has important prospective effects on damage claims in medical malpractice cases. The bill seeks to cap non-economic damages, including but not limited to pain and suffering, disability, and disfigurement, at $250,000. This would supersede court rulings in various states, including Illinois, finding damage caps unconstitutional.

Further, the bill eliminates joint and several liability, making liability several only. This would mean that defendants would only be obligated to pay the portion of a judgment or settlement proportional to that defendant’s fault. There is also language in the bill to alter or eliminate state collateral source rules.

PACA further places significant limits on attorney’s fees, substantially diminishing the incentive for plaintiff’s attorneys to prosecute medical malpractice actions.

The PACA bill also prohibits naming health care providers as defendants in products liability and class action lawsuits involving products that are approved, licensed, or cleared by the Food and Drug Administration.

With respect to the applicability of the bill, the text states that only lawsuits filed after the date PACA became law would be subject to its terms. For existing claims and injuries occurring prior to PACA becoming law, the statute of limitations in effect at the time of the injury would apply.

Although this bill does not have broad ranging support, political experts expect that it will pass the House of Representatives when called for a vote. Standing alone, it is unlikely that the PACA bill would pass through the Senate, but Republican leaders have signaled their intention to include PACA in a larger budget reconciliation bill together with the American Healthcare Act (ACHA).

Over the past several weeks it has looked increasingly likely that there are fifty Republican votes for the ACHA. By using the budget reconciliation process, the Senate would be able to pass both PACA and the ACHA with only 50 votes plus the vote of Vice President Michael Pence.

Given the ongoing press coverage of the multiple scandals surrounding the Trump administration, it is quite likely that PACA will be able to pass through Congress with little public scrutiny or attention from the media. Therefore, if the combined AHCA / PACA bill becomes likely to pass the United States Senate, we expect there may a significant increase in medical malpractice claim filings in the days and weeks prior to its passage as plaintiff’s firms attempt to avoid the cap on non-economic damages and limits on attorney’s fees. If PACA becomes law, it is entirely possible that filings will decrease given the diminished incentives for plaintiff’s attorneys to prosecute medical malpractice cases, particularly those with uncertain liability.

Although PACA will inevitably be challenged in the courts if it becomes law, it is unclear how Federal courts would rule on challenges. The recent national trend has been against damage caps – the Florida Supreme Court, for example, ruled last week that that state’s damages caps were unconstitutional. See North Broward Hospital District v. Kalitan, Florida Supreme Court, June 9, 2017.

As always, we will update you as developments occur.

JURY TRIAL VICTORIES – THREE IN A ROW

Vito Masciopinto

In the span of three months, Vito Masciopinto tried three cases to verdict resulting in a not guilty verdict for his clients each time.

The first, tried in March, was a victory for an emergency department physician at a south side hospital. Partner Lee Williams assisted at trial. The plaintiffs alleged a failure to inform the family of a lesion on the plaintiffs’ decedent’s liver which was detected on a routine abdominal CT scan. The plaintiffs claimed this resulted in a failure to have her liver cancer diagnosed resulting in her death two years later. Plaintiffs asked the jury for over 16 million dollars, but the jury ruled in favor of the defendants.

In April, Mr. Masciopinto tried a case with associate Kelly Pachis involving a Polish national who presented at a suburban hospital with complaints of abdominal pain. Mr. Masciopinto and Ms. Pachis successfully defended the internist who cared for the patient during the hospitalization. The plaintiffs alleged a failure to diagnose possible surgical abdomen, as well as discharging the patient prematurely resulting in her developing multiple abdominal abscesses and peritoneal infection requiring surgery upon her return to Poland. Plaintiff requested $350,000 in damages. The jury deliberated for less than two hours before finding a not guilty for the physician.

The third trial took place in May. Mr. Masciopinto and associate Caitlin Ewing successfully defended a north side hospital on a wrongful death claim. The allegations against the hospital’s nurses were for failing to properly provide VTE prophylaxis. The plaintiffs claimed this resulted in plaintiff’s decedent developing a pulmonary embolism resulting in his in-hospital arrest and death. The plaintiff’s requested $3.3 million from the jury, which returned a verdict in favor of the hospital in one hour.

CJ Gibbs has been invited to join the CLM

CJ Gibbs
Lowis & Gellen LLP is pleased to announce that CJ Gibbs has been invited to join the prestigious CLM. The CLM is a nonpartisan alliance comprised of thousands of insurance companies, corporations, Corporate Counsel, Litigation and Risk Managers, claims professionals and attorneys. Through education and collaboration, the organization’s goals are to create a common interest in the representation by firms of companies, and to promote and further the highest standards of litigation management in pursuit of client defense. Selected attorneys and law firms are extended membership by invitation only based on nominations from CLM Fellows.

CJ Gibbs dedicates his practice solely to civil litigation. His primary focus is coordinating the defense of general liability matters for self-insured private and public retailers on a national and regional basis. His experience ranges from coordinating with in-house clients concerning claims and risk management to all stages of litigation, including mediation, arbitration, and trial. Furthermore, Mr. Gibbs has experience defending tire defect claims nationwide ranging from minor injury claims to catastrophic injury and wrongful death claims.

Cahill Edits Leading Treatise on Commercial Bankruptcy Litigation

Comercial Bankruptcy Litigation 2d Edition

Comercial Bankruptcy Litigation 2d Edition

Thomson Reuters has published its comprehensive and annually-updated treatise, Commercial Bankruptcy Litigation, 2d Edition (Jonathan P. Friedland, Elizabeth Vandesteeg & Christopher M. Cahill eds., 2017). Our Christopher Cahill co-authored Chapter One and has served as Executive Editor of the treatise since 2014.

One of West Publishing’s best-selling titles since 2009 and weighing in at more than 1,600 pages, Commercial Bankruptcy Litigation is the result of an effort by approximately 50 leading restructuring professionals, from more than 20 distinguished firms.

2017 Super Lawyer Announcement

Lowis & Gellen is proud to announce that four of our attorneys were named to the 2017 Super Lawyers list by Illinois Super Lawyer Magazine.

The Super Lawyers designation is based upon peer recognition and professional achievement, and no more than five percent of lawyers in each state are selected by the research team to receive this honor.

We congratulate the following attorneys:
Pamela Gellen—Top Rated Medical Malpractice Attorney, 10th consecutive year
Gerald Haberkorn—Top Rated Business Litigation Attorney, 10th consecutive year
Andrea Kott—Top Rated Medical Malpractice Attorney, 4th consecutive year
Robert Smeltzer—Top Rated Business Litigation Attorney, 4th consecutive year

Kristin Ahmadian and Caitlin Ewing Speak to the Illinois Association of Defense Trial Counsel, Young Lawyers Division regarding HIPAA; Seminar Moderated by Kelly Pachis

Kristin Ahmadian and Caitlin Ewing, both Chicago-based attorneys at Lowis & Gellen, recently spoke to the Illinois Association of Defense Trial Counsel, Young Lawyers Division at a seminar on “Medical Litigation Fundamentals: A Young Lawyers Guide to Successfully Defending a Medical Malpractice, Personal Injury, Workers’ Compensation or Tort Case.” Their presentation was titled “HIPAA Basics for Civil Litigation.” Ms. Ewing discussed the history of HIPAA and its requirements. Ms. Ahmadian discussed the enforcement of HIPAA and recent settlements for HIPAA violations. The seminar was moderated by Kelly Pachis, an attorney in Lowis & Gellen’s Chicago office.

Appellate Court Affirms Summary Judgment in Favor of Pharmacy in Wrongful Death Lawsuit

Andrea H. Kott and Patrick S. Viktora won a motion for summary judgment on behalf of a pharmacy defendant in a wrongful death action following the overdose of a 53-year-old male. The plaintiff alleged the pharmacy filled and dispensed multiple prescriptions of Methadone in quantities and time frames that were not appropriate. Ms. Kott and Mr. Viktora successfully argued that there was no common law or statutory duty to refuse to fill a prescription because it is for an “excessive” quantity, and that a pharmacist was not required to second guess the physician’s medical judgment in writing the prescription. On appeal the plaintiff argued that the existence of the “prescription monitoring program” placed pharmacists in a better position than doctors to discover “excessive” prescriptions, creating a duty for a pharmacist to warn the patient or notify the physician that the dose was excessive. Ms. Kott and Mr. Viktora, with the assistance of Kevin J. Clancy, argued on appeal that the plain language of the prescription monitoring program did not impose a duty on pharmacists to second guess physician’s prescriptions. The First District Appellate Court agreed with Ms. Kott, Mr. Viktora and Mr. Clancy, and held that the pharmacy had no duty to monitor the decedent’s methadone prescription history, to attempt to determine whether such use was “excessive,” or to communicate a corresponding warning to the prescribing physician or the decedent.

 

The Appellate Decision can be found at Hernandez v. Walgreen Co., 2015 IL App (1st) 142990.

Summary Judgment in Florida “Wheel-Off” Case

Lowis & Gellen’s Florida team headed-up by Deb O’Brien won Final Summary Judgment in a case where the Plaintiff alleged that Defendant negligently installed new tires on his vehicle. According to Plaintiff, five months and 16,000 miles after the tire installation, his right front tire and wheel spontaneously detached from his vehicle while he was driving, causing him to crash, and resulting in significant spinal injury. The Defense argued that Plaintiff failed to meet his burden of proof because he had no direct evidence that his tires were not properly installed, and that Plaintiff could not bridge the evidentiary gap through expert testimony without the broken parts of his vehicle, which Plaintiff failed to retain. In granting Summary Judgment, the trial court ruled that there was “no evidence sustaining Plaintiff’s claim in the record.” The trial court also ruled that the affidavit of Plaintiff’s expert filed in opposition to Summary Judgment was insufficient to create a triable issue of fact because the affidavit was not made on personal knowledge, and was conclusory and speculative.

Big Week for Enforcement of Continuing Guaranties

Guaranties – a promise to perform the obligation of a borrower by a third-party – are documents that are often litigated but there is seemingly a dearth of Illinois case law on the topic. This week, the Second District and the Fourth District Appellate Courts of Illinois weighed in reinforcing Illinois’ courts long-standing history of enforcing commercial guaranties as written.

Picture this: you are a large commercial lender originating a new loan transaction with an established real-estate company. The potential borrower needs financing for properties in multiple counties. As security for the loan, the borrower will execute mortgages for the real estate and the principals of the borrower agreed to execute continuing guaranties covering the entire borrowing relationship. The borrower succumbed to the financial crisis of 2008 and you need to begin foreclosure proceedings.

Per the Illinois Mortgage Foreclosure Law, your counsel files suit in each county in which the real property is located. In your complaints, your counsel seeks to obtain a judgment for breach of the commercial guaranty. After years of litigation, you secure judgment in the first county. Thereafter, you secure judgment in the second county. At that point, the guarantors argue – for the first time – that the judgment in the second county is barred by the doctrine of res judicata.

This is the issue that was addressed by the Appellate Court for the Second District of Illinois in BMO Harris Bank, N.A., v. K & K Holdings, LLC, 2016 IL App (2d) 150923. In that case, the Court affirmed the trial court’s decision rejecting the guarantor’s argument that the claims brought against them in DuPage County relating to a single commercial guaranty are barred by the doctrine of res judicata because of a judgment entered against them on the same commercial guaranty in Kane County. The Court agreed with the Bank’s argument that while the claims against the guarantors in each county were based on the same commercial guaranty, the claims were not based on the same underlying transaction.

In its reasoning, the Court focused on the specific language in the guaranty and the underlying purpose of the guaranty. Specifically, the Court honed in on the language of the guaranty establishing “that the parties contemplated that there would be multiple loan transactions, each of which would trigger potential liability under the guaranty.” See ¶ 14. The Court specifically rejected the guarantors’ attempt to narrow the transactional test by focusing on the continuing-obligation language of the guaranty. The Court explained that “[r]ather than having [the guarantors] enter into a new guaranty for each loan, they opted for a continuing guaranty that would create a new obligation for [the guarantors] for each new loan.” See ¶ 15. In the end, the Court affirmed the trial court’s ruling leaving the Bank’s judgment intact.

Similar to the Second District, the Appellate Court for the Fourth District of Illinois also enforced the plain language of a continuing guaranty. In Navistar Financial Corp. v. Capitol Ready-Mix, Inc., 2016 IL App (4th) 150419, the court affirmed the trial court’s judgment. In that case, the appellant executed an “interlocking guaranty” whereby the appellant agreed to be liable for any then-existing or future debt owed to the appellee. The appellant’s chief argument was that there was no meeting of the minds relating to a debt obligation incurred at a future date.

The Court explained that when a future course of dealing is woven into the terms of a guaranty, it is a continuing guaranty. See ¶ 29. “Continuing guaranties of future obligations are valid, binding, and have a long history in Illinois.” Id. Relying on the specific language of the continuing guaranty, the Court rejected the appellant’s argument.

To discuss this topic further, please contact Tom Peckham (tpeckham@lowis-gellen.com). You can find more information about the firm at www.lowis-gellen.com.