Vested Interest - Tort Briefs - December 1997 Issue

Illinois Supreme Court Declares Medical Waiver Provision of PA 89-7 Unconstitutional

In a 6-0 decision delivered by Justice Nickels, the Illinois Supreme Court declared that section 2-1003(a) (release of medical records) of the Tort Deform bill was unconstitutional. Justice Heiple took no part in the decision.

The Court found that the section violated the separation of powers provision of the Illinois Constitution, affirming that:

"The statutory provision in this case at bar represents a[n] ... encroachment on this court’s paramount authority to regulate judicial procedure by court rule..... Rule 201 and related rules governing specific discovery methods form a comprehensive scheme for fair and efficient discovery with judicial oversight to protect litigants from harassment. The consent procedure under section 2-1003(a) is inconsistent with this scheme and substantially undermines it." (At 7-8)

The Court also found that the section violated the right to privacy provision of the Illinois Constitution, finding that:

"The confidentiality of personal medical information is, without question, at the core of what society regards as a fundamental component of individual privacy." (at 13) and "section 2-1003(a) requires a blanket consent to disclosure of all medical information without regard to the issues being litigated. The scope of the required disclosure is unreasonable and unconstitutional." (at 14).

The Court declined to hold that the provision coerced plaintiffs in violation of Section 1, Article 1 of the Illinois Constitution, which declares that "all men are by nature free and independent...", noting that "this Section ‘is not generally considered, of itself, an operative constitutional limitation upon the exercise of governmental powers’." (at 15). But the separation of powers and right to privacy arguments were sufficient to overturn the law.

Copies of the decision, Kunkel v. Walton (Docket No. 81176) are available from the ITLA office.

U.S. Congress Reaches Tentative Accord on Product Liability Bill

Sen. J.D. Rockefeller and business groups have agreed to support a products liability bill that would: (1) cap punitives against small businesses at the greater of $250,000 or three times economic damages; (2) establish an 18-year statute of repose for products used in a workplace; (3) release re-sellers of products from liability, unless the manufacturer cannot be reached; and(4) allow manufacturers to argue that injury was caused by misuse or alteration of the product. The business group Product Liability Coordinating Commission has not endorsed the bill, but approves of its tenor. (Liability Week, October 27, 1997)

Republican Donors Generous to Anti-Democratic Non-Profit Organizations

Records given to the Congressional panel investigating campaign fundraising abuses show that the Republican National Committee steered large donors toward non-profit organizations whose voter education projects tended to bash Democrats. Robert L. Cone, former chairman of Graco Children’s Products and a large contributor to Republican candidates, gave $600,000 to Triad Management and another $1.2 million to two non-profit organizations set up by Triad. The two non-profit organizations spent most of their money on television spots against Democratic candidates for office. Cone’s name was made public when Triad’s bank, in answering a Congressional subpoena, forgot to delete individual donor’s names. (AP, October 29, 1997)

Bausch & Lomb Settles Securities Fraud Charge

Federal regulators reached a settlement with Bausch & Lomb, charged with fraudulently overstating its 1993 earnings to investors. The settlement calls for a $42 million payment. Earlier, the Securities and Exchange Commission alleged that the eyewear company had overstated its gross earnings by $42.1 million and net earnings by $17 million in its 1993 Annual Statement. A company official also agreed to pay a $10,000 civil fine, and three other officials agreed to an administrative order limiting their roles in future securities filings. (AP, November 17, 1997)

MGM Sues Sony Over Bond Films

Two of Hollywood’s biggest studios are preparing a battle royale over the rights to the lucrative James Bond film series. MGM has controlled the last 18 Bond films, but former MGM executive John Calley has moved on to Sony Entertainment, and now Sony claims that it, too, can produce Bond films. Calley and Kevin McClory, a writer and producer on early Bond films, claim to have originator Ian Fleming’s permission to develop the Bond series. MGM claims that Fleming could not transfer rights without its permission. More than just the Bond films is at stake: MGM has hinted that the timing of Sony’s announcement that it would develop a Bond film dampened investor interest in MGM’s IPO, offered the following week. (AP, November 18, 1997)

Candy War Erupts Over Packaging

Hersey Foods has filed a trademark infringement suit against M&M/Mars, claiming that new packaging for M&M’s is too close to Hersey’s Reese’s brand. The packaging for Reese’s candies features an orange background with dark brown lettering and yellow highlights. M&M packaging introduced in 1995 is orange with brown lettering and yellow highlights. The suit demands that M&M/Mars recall the candies and destroy them. (Reuters, November 14, 1997)

Fourth U.S. Circuit Upholds Suit Against Publisher

The U.S. Court of Appeals for the 4th Circuit has allowed a suit against a publisher to go forward. The suit claims that the publisher, Paladin Press, is partly responsible for the murder of Mildred Horn. James Edward Perry, the man convicted of the killing, used a how-to manual published by Paladin called "Hit Man: A Technical Manual for Independent Contractors". The Appellate Court concludes that "The Supreme Court has never protected as abstract advocacy speech so explicit in its palpable entreaties to violent crime." Perry was hired by Horn’s husband, who is serving a life term in prison. (AP, November 11, 1997)

Court Strikes Bond Requirement in Tax Appeal

Taxpayer Leonard Price wanted to appeal a $98,999 ruling by the Illinois Department of Revenue to the Third Circuit Court, but balked at the requirement that he first file a surety bond for the disputed amount. Under the rules, failure to post the bond could have resulted in dismissal of the appeal, unless the court, based on an evaluation of plaintiff’s wealth, waived the requirement. Price fought the bond requirement, and won favorable ruling. Judge Randall Bono ruled that the requirements unfairly discriminate on the basis on wealth, especially in regard to the rules limiting judges’ discretion in granting a waiver. The Department of Revenue has announced plans to appeal. (Press Release)

Republican Congressman Considers Suit Against Phone Tapers

Ohio Republican John Boehner, a vocal opponent of the right of injury victims to jury trials, has said he is considering a lawsuit against a Democratic lawmaker for his role in the dissemination of a tape made by a Florida couple of a conference call with House Speaker Newt Gingrich last year. The tape caught top House Republicans discussing Gingrich’s ethics violations, in violation of an agreement not to do so. Boehner said he will file the suit if he is allowed to pay for it with campaign contributions. He is awaiting a ruling from the House Ethics Committee. (AP, November 10, 1997)

Federal Judge Upholds $22.7 Million in Compensatories Against Wall Street Journal

U.S. District Judge Ewing Werlein, Jr., of Texas has upheld a verdict of $22.7 million in compensatory damages against the Wall Street Journal for false and misleading statements made about an investment firm. The judge’s earlier decision to reduce $200 million in punitives to $45 million is under appeal. MMAR Group claimed that the paper knowingly made false and defamatory statements in an October 21, 1993 story that led directly to the firm’s closure amonth later. The verdict also includes $20,000 in punitives to be paid by Laura Jereski, author of the defamatory article. The article, which included at least 5 false and misleading statements about MMAR, resulted in the largest libel verdict in history. (PRNewswire, November 10, 1997)

Police Officers Liable for Teen Suicide: Jury Verdict

A Connecticut jury has found four Milford police officers liable for the suicide of a 13-year-old boy. The police came to the home after receiving a call from a friend that the boy was suicidal. They left after making a cursory check of the home for weapons and asking the boy if any weapons were available. Soon after they left, the boy got his father’s shotgun and killed himself. The parents claimed that police should have made some attempt to contact a responsible adult before leaving the house. The parents’ phone numbers were available at the house, they claimed. (AP, November 8, 1997)

Prisoners Filing Both Fewer and More Lawsuits

According to the U.S. Justice Department’s Bureau of Justice Statistics, between 1980 and 1996, the rate of lawsuits filed by federal prisoners fell from 72.7 per 1,000 inmates to 60.5 per 1,000. But over the same period, the number of inmates shot up fourfold. Consequently, the number of lawsuits filed by prisoners grew from 23,230 in 1980 to 68,235 in 1996. Two laws passed in 1996, the Prison Litigation Reform Act and the Antiterrorism and Effective Death Penalty Act, sought to curtail the legal rights of prisoners. The Bureau of Justice Statistics report seeks to quantify the impact. (AP, October 28, 1997; Copies of the report are available from the Bureau of Justice Statistics Fax Back service at 301-216-1827.)

Sears Offers $273 Million Settlement in Some Bankruptcy Cases

After paying the State of Massachusetts to settle its claims that it illegally billed bankrupt consumers, retail operator Sears, Roebuck has proposed a $273 million settlement with a class action of individual consumers whose claims date since 1992. Under the settlement, Sears will pay to reimburse consumers for principle and interest payments made after their bankruptcy filing, and will also pay compensation. Sears will also pay legal fees in a separate fund, ensuring that Sears’ customers are made whole net of attorneys costs. The class includes 190,000 credit card holders. The settlement amount includes $158 million in reimbursements for charges, $110 million in forgiven debt, $24 million in reimbursements for interest charges, and $25 million in compensation. (Reuters, October 28, 1997)

False Memory Suit Garners $10.6 Million Verdict

An Iowa women sought treatment for depression following the difficult delivery of her second child. Instead, her doctors convinced her that she was the high priestess of a satanic cult and that she had sexually abused her children. The doctors also persuaded her to have her children moved to Chicago from Iowa and hospitalized for observation. Her suit for implanting false memories has secured a verdict of $10.6 million. Her doctor, Bennett Braun, continues to deny any wrongdoing, saying that now she "is doing much better. Where’s the damage?" (AP, November 6, 1997)

First Class Mail is Insufficient Service: U.S. Supreme Court

A Virginia company sued a Maryland company in a land dispute, and notified defendants of the suit by a letter sent first class through the U.S. Postal Service. The suit was won by default, but the Maryland couple claimed they never got the letter. When the company sought to enforce the ruling in Maryland, the Maryland Court of Appeals ruled that first class mail provided insufficient notification of the suit to defendants. The Virginia company, together with Virginia’s Attorney General, appealed the ruling to the U.S. Supreme Court, asking that Maryland courts be required to follow the finding of Virginia courts. The U.S. Supreme Court declined to hear the appeal. (AP, October 3, 1997)

Surgeon to the Stars Files Defamation Suit

A plastic surgeon whose former clients include Michael Jackson and Elizabeth Taylor has filed a defamation suit against co-workers who testified against him to the California Medical Board. Dr. Steven Hoefflin claims that his wife and another physician in his practice defamed him in testimony that he mocked patients who were unconscious. The suit also alleges that four women who had filed and settled a sexual discrimination suit against Hoefflin violated a confidentiality agreement by releasing documents to the Medical Board investigator. Defendants stand by the truth of their declarations. (AP, November 11, 1997)

Al Sharpton’s Defamation Trial Opens with Protests

A former New York prosecutor’s suit against Rev. Al Sharpton began in Poughkeepsie with busloads of protestors in attendance. Steven Pagones, one of the prosecutors in the 1987 Tawana Brawley case, filed the suit against Sharpton and Brawley’s two attorneys, claiming that they labeled him a rapist in more than 30 statements to the press. A grand jury concluded that her allegations of abduction and sexual abuse at the hands of six white police officers were false. Pagones is seeking $165 million in damages to his reputation. (Reuters, November 18, 1997)