Illinois' highest court says parties embroiled in litigation in Illinois civil courts don't surrender their rights to ask for a new judge on the case, just because they have "tested the waters" - or measured the judge's potential position on the case - before making the request.
The decision centers on a legal fight that has lingered for more than eight years, pitting Palos Community Hospital against insurer, Humana, and others. The hospital has alleged the insurer and others committed fraud and breached a contract. The hospital says it is owed $20 million in damages.
PCH filed suit in 2013 in Cook County Circuit Court. Specifically, the hospital said Humana underpaid for services and accused the insurer of inducing discounts on preferred provider organization rates through bad faith representations its clients would seek services in sufficient quantity.
Though the other defendants reached a settlement with the hospital, Humana moved to dismiss the complaint on the grounds PCH didn’t satisfy strict requirements for fraud allegations, and further that the breach of contract claim was untimely. In April 2014, Cook County Judge Sanjay Tailor granted the motion to dismiss with prejudice. Three months later, however, Tailor reinstated the hospital’s breach of contract claim.
After several filings form both parties in the ensuing two years, Tailor entered an order appointing retired Judge James Sullivan to serve as a discovery master in October 2016. In March 2017, Sullivan sent a letter to Tailor regarding his recommendations, which included compelling the hospital to produce certain documents.
At a status hearing the next day, Judge Diane Shelley began presiding over the case.
PCH indicated its intent to object to Sullivan’s report, then argued Tailor didn’t have the authority to appoint a discovery master.
In May 2017, Shelley denied the hospital’s motion for judicial substitution. At a hearing that day, she said “these motions are usually liberally granted, except when the parties have had an opportunity to test the waters.”
Shelley said the substitution motion was untimely, as she said the case had proceeded enough for the hospital to determine “the court may be reluctant to strike the discovery master and his report which recommended that certain contentious documents be produced."
As the case progressed, Humana successfully argued for sanctions against PCH for destroying and concealing evidence. After motions for summary judgment failed, a jury ruled in Humana’s favor in June 2018.
In posttrial motions, PCH challenged the denial of its substitution request. A First District Appellate Court panel upheld Shelley’s rulings, prompting the appeal to the Supreme Court, which considered whether the “test the waters doctrine” is a valid basis to deny such a request.
Justice Mary Jane Theis wrote the 6-0 opinion, filed May 20; Justice P. Scott Neville took no part in the decision, according to the court's opinion.
Theis explained the court had never before considered the "test the waters" doctrine.
But Theis said the court determined the doctrine “is incompatible with the plain language” of the court's rules for civil procedures. The law allows one judicial substitution without cause, by right, as long as a party files its request “before certain, specified occurrences,” Theis wrote, including “before the trial or hearing begins and before the judge to whom the motion is presented has ruled on any substantial issue in the case.”
Although Shelley determined PCH had formed an opinion about her disposition toward the case, that clause “is not among the criteria listed in the statute,” Theis wrote.
“Thus, the test the waters doctrine is an improper basis on which to deny a motion for substitution of judge as of right," Theis wrote.
Theis said Humana’s arguments that PCH wasn’t timely in its request fail because they relied on Supreme Court opinions predating a 1993 amendment to the judicial substitution law. She further said Humana misses the mark with its contention that the "test the waters doctrine” furthers the law’s purposes. Such an interpetation would be a departure from the General Assembly’s clear language, Theis wrote. She added that Humana’s references to similar protective measures other state legislatures enacted “only accentuate the fact that the General Assembly chose not to include similar measures.”
Illinois lawmakers put “explicit timing requirements” in the code governing judicial substitutions in criminal trials, Theis said, further demonstrating a conscious decision to not do so for civil cases.
Since the motion to substitute a judge should’ve been granted, the Supreme Court concluded, it reversed the appellate decision and sent the case back to the trial court with directions to vacate every order entered after April 20, 2017.
PCH has been represented by Donald R. Dixon, General Counsel for the St. George Corporation, and attorneys Everett J. Cygal, Neil Lloyd and David Y. Pi, of the firm of Schiff Hardin, of Chicago,
Humana has been represented by attorneys Tacy F. Flint, Ashley E. Dalmau-Holmes, Emily Scholtes and Marriam Shah, of the firm of Sidley Austin; and attorneys Scott C. Solberg and James W. Joseph, fo Eimer Stahl, all of Chicago.