A private equity firm once headed by former Illinois Gov. Bruce Rauner has asked a Cook County judge to dismiss hundreds of lawsuits against it over emissions from a Willowbrook medical device sterilization plant, saying evidence makes clear it did not actually own the company that owned the sterilization facility.
Since 2018, equity firm GTCR has been included on a list of defendants on a long and growing list of personal injury lawsuits related to alleged toxic emissions from the Sterigenics facility in west suburban Willowbrook.
GTCR is the current iteration of an equity and investment corporate finance entity dating back to the 1970s. In the early 1980s, Rauner joined the equity firm, eventually becoming lead partner.
Rauner retired from that post in 2012. Rauner was elected governor of Illinois in 2014, and served one term before losing to current Gov. JB Pritzker in 2018.
During that campaign, the Pritzker campaign exploited Rauner’s past leadership at GTCR to blame Rauner for controversy surrounding the Sterigenics Willowbrook facility.
Since 2018, hundreds of lawsuits have been filed in Cook County Circuit Court against Sterigenics and allegedly related entities.
The lawsuits assert Sterigenics and the other roster of defendants should be made to pay for allegedly emitting the chemical known as ethylene oxide (EtO) into the air in the region around Willowbrook, allegedly causing cancer and other illnesses in the those living and working nearby.
The lawsuits were spurred in large part by a report issued in 2018 by the federal Agency for Toxic Substances and Disease Registry (ATSDR). The report asserted Sterigenics’ emissions from the use of EtO had significantly increased the risk of cancer and other illnesses in Willowbrook and surrounding communities.
Sterigenics used the Willowbrook plant to sterilize large quantities of key medical devices and surgical tools, including those used in heart surgery, knee replacements and a host of other surgical and other medical procedures.
Sterigenics and others in the medical device industry have asserted the use of EtO is essential to sterilizing medical devices and reducing infection risks in hospitals and operating rooms. They have noted no other sterilization method can replace EtO in safely and properly sterilizing large quantities of medical devices and tools.
After taking office, Pritzker moved against Sterigenics, using the Illinois Environmental Protection Agency (IEPA) to order the plant closed. The Sterigenics facility has remained closed ever since.
Sterigenics has accused Pritzker and the IEPA of acting unlawfully in closing their plant. They noted no one has ever accused them of violating any emissions limits imposed by either the state or federal government.
In the meantime, Illinois enacted stringent new EtO emission limits, which prompted Sterigenics to abandon the fight to reopen the plant.
However, the private lawsuits against Sterigenics only continued to mount, with hundreds more filed in 2020 and 2021.
More recent lawsuits have also named food ingredients maker Griffith Foods as a defendant. Sterigenics and other defendants have called such additions a “transparent ploy” by the plaintiffs’ lawyers to “enlarge the pool of potential deep pockets” from which plaintiffs may extract a potentially massive settlement or judgment.
Cook County courts have consolidated the actions against Sterigenics and other defendants for the purposes of discovery and other common proceedings.
As a result of those discovery proceedings, GTCR now argues it is clear the equity firm should be allowed to exit the Sterigenics-related legal actions.
From the beginning of the litigation, GTCR has been named as a co-defendant in the case, helping to make the cases against Sterigenics a political issue exploited by the Pritzker campaign.
Rauner himself has been individually questioned at a sworn deposition in the case. Attorneys for GTCR have recently moved to keep that deposition under seal, to prevent Rauner’s testimony from being released to the public and used for purposes outside of the Sterigenics-related litigation.
For its part, GTCR says the evidence indicates it merely advised companies which invested in other entities that actually owned Sterigenics and the Willowbrook sterilization plant.
Allowing the lawsuits to continue against GTCR would “eviscerate long-established rules of corporate separateness,” which prohibit courts from holding one company directly responsible for the alleged actions of another, which it did not own or control.
“In seeking to hold GTCR LLC liable for the alleged actions of Sterigenics, Plaintiffs are violating this principle and seeking a radical restructuring of Illinois law,” GTCR wrote in a motion seeking summary judgment, filed March 15.
“… Even in the parent-subsidiary context, Illinois requires ‘a great deal more’ than that relationship to impose liability on a parent.
“Again, however, this is not a parent-subsidiary situation, and no Illinois court – and as far as GTCR LLC can tell, no court anywhere – has held an investment advisor like GTCR LLC liable under any similar circumstance.”
In the motion, GTCR asserts it did not exercise any control over Sterigenics’ operations in any way. Rather, GTCR said it served as investment advisor to other investment groups which, in turn, invested in Sotera Health, the parent company of Sterigenics.
In the filing, GTCR conceded some of its employees and members served on Sotera Health’s board of directors. But GTCR said it did not exercise operational control over Sterigenics’ business, and neither GTCR nor its employees and members on Sotera’s board ever denied any funding requests, or took any other action that would have thwarted the installation of emissions controls at the Willowbrook plant.
“Plaintiffs cannot point to evidence showing that any of GTCR LLC’s actions could have foreseeably caused their alleged injuries,” GTCR wrote in its motion for summary judgment. “There is no evidence that GTCR LLC ‘hindered or discouraged’ Sterigenics from making adequate investments in safety.
“Nor is there evidence that GTCR LLC directed any actions that affected the level of ethylene oxide emitted from the Willowbrook facility. In fact, there is no evidence that Sterigenics’ ethylene oxide emissions ‘had anything to do with [GTCR LLC’s] overall business strategy.’ GTCR merely advised funds that made indirect investments in Stergenics and Sotera Health.”
GTCR is represented in the action by attorneys Bruce Braun and Robert S. Velevis, of the firm of Sidley Austin, of Chicago.