A Chicago federal judge has refused to bar a plaintiff in a medical malpractice case from invoking a law, which lets prejudgment interest accrue if a defendant doesn't quickly offer a settlement, saying the law still stands, even though a Cook County judge said it's unconstitutional.
The decision was issued Oct. 13 by Judge Steven Seeger, of U.S. District Court for the Northern District of Illinois. The decision favored Ahzar Saiyed in his 2020 action against the U.S. government, Swedish Covenant Health and its corporate affiliates, as well as a nurse and a doctor. The United States was named a defendant because the nurse and doctor were employee or agents of the U.S. Dept. of Health and Human Services, according to court papers.
Saiyed's wife died in 2019 shortly after giving birth to their daughter at Swedish Covenant Hospital (now Swedish Hospital) in Chicago. The child suffered brain injury. Saiyed sued for wrongful death and negligence.
Defendants asked Judge Seeger to prevent Saiyed from applying an Illinois statute that lets interest accumulate ahead of time on any judgment that may be rendered. The statute is intended to encourage defendants to make prompt settlement offers. If defendants go to trial and lose, they can be ordered to pay interest on the judgment from the time the suit was filed, not from the moment judgment was reached. The amount of interest depends whether defendants proposed a settlement and the difference between the settlement and the judgment.
To avoid the interest, defendants must make an offer within 12 months after the suit was filed, with the offer not accepted within 90 days or not accepted at all.
The statute has drawn criticism from almost all Illinois business groups and trade associations, as well as from legal reform advocates. These critics have labeled the statute an unnecessary boon to trial lawyers.
In Illinois, trial lawyers are among the biggest and most loyal of donors to the Democratic politicians who control Springfield. The law was particularly criticized as a gift to trial lawyers at the direction of former Illinois House Speaker and Illinois Democratic Party Chairman Michael Madigan, as federal prosecutors zeroed in on him. Madigan was ultimately indicted on federal political corruption charges for allegedly accepting bribes from electrical utility ComEd in exchange for pushing through legislation sought by the company.
The prejudgment interest provision was challenged by defendants in a separate medical malpractice lawsuit working its way through Cook County court.
In that lawsuit, in May 2022, Cook County Judge Marcia Maras declared the prejudgment interest statute unconstitutional. Maras found a number of things wrong with the statute, including that it infringed on defendants' rights and encroached on the power of a jury to award damages.
Plaintiffs in that case have the option to appeal Judge Maras' ruling, potentially directly to the Illinois Supreme Court.
Defendants in the Saiyed suit cited Maras' ruling in their request to Seeger. However, Seeger was not persuaded, noting Maras' ruling is not binding because it did not come from the Illinois Supreme Court.
"They ask this Court to put prejudgment interest on ice until the constitutional dust settles. Trial is a long way off. Entering judgment won’t take place anytime soon. Between now and then, Illinois courts will have a chance to continue to address the constitutionality of the statute. This Court sees no reason to lurch forward and address the statute’s constitutionality, especially when the passage of time may yield more guidance from the Illinois appellate courts," Seeger said.
Seeger noted defendants' argument for the stay was "barebones."
Having refused to put the statute on pause, Seeger stressed its usefulness.
"Maybe the Illinois appellate courts will uphold the statute, or maybe not. There is risk. And that risk should incentivize parties to make decisions about a possible resolution of the case. The risk of prejudgment interest is one of many risks that parties may consider when making settlement decisions. This Court declines the request to take away a potential financial incentive to talking settlement. If anything, the parties need a nudge," Seeger stated.
Seeger noted both sides know the statute is "lurking out there," and halting the statute would do nothing other than slide settlement negotiations to the "back burner."
Likening the statute to a carrot-and-stick scenario, Seeger said placing a stay on the statute "would preserve the carrot and shrink the stick."
Saiyed has been represented by attorneys Stephen D. Phillips, Stephen J. Phillips and Terrence M. Quinn, of Phillips Law Offices, of Chicago.
Swedish has been defended by Chicago lawyers Amy Garland and Laura Jean Young, as well as Katherine Kelleher, of Kominiarek, Bresler, Harvick & Gudmundson, of Chicago.