An appellate court has ruled the Department of Financial and Professional Regulation wrongfully required a therapist to produce for a hearing personal notes, which were protected as confidential work product, and the state must pay the therapist's legal bills for making him fight the demand.
The court awarded attorney fees and costs in favor of licensed clinical professional counselor Terrence Lavery and his employer, Illinois Professionals Health Program.
Justice Mary Mikva delivered the judgment of the court with opinion Aug. 25 in the Illinois First District Appellate Court. Justices Sharon Oden Johnson and Sanjay Tailor concurred in the judgment and opinion.
Illinois First DIstrict Appellate Justice Mary Mikva
Lavery asserted his work-product privilege to withhold personal notes he took during his treatment of Dr. Anil Ramachandran in proceedings before the department in which Ramachandran sought reinstatement of his medical license.
The Department initiated licensing proceedings against Ramachandran in 2014, and in 2015 it suspended his medical and controlled substances licenses pursuant to a consent order. When Ramachandran petitioned in 2018 to have his licenses restored, he called as a witness Lavery, the case manager who, for over four years, had been responsible for monitoring the doctor's compliance with a substance and alcohol abuse recovery plan.
Lavery alleged in his complaint that, during his testimony in the licensing proceedings, he disclosed the existence of personal notes in connection with mental health services provided to Ramachandran. Lavery said his personal notes were protected as confidential work product under the state's Mental Health and Developmental Disabilities Confidentiality Act.
The administrative law judge presiding over the hearing stated he reviewed the relevant discovery requests and responses, halted Lavery’s testimony, and ordered the notes be produced. He concluded, however, that Lavery failed to meet his burden of establishing that the withheld documents fell within the statutory privilege. Despite the fact that Lavery had asserted the privilege while testifying under oath and subject to cross-examination, the ALJ faulted him for not “attaching an affidavit concerning the records in question” to his motion. In December 2019, the ALJ denied Lavery’s motion for a protective order and ordered him to produce the withheld notes.
Lavery and IPHP sued the IDFPR beginning Jan. 29, 2020, seeking a declaration that the withheld documents were protected by the therapist’s work product privilege. They also asked the court to order the state to pay an award of attorney fees and costs. They sought $4,079 payable to IPHP for payments it had already made to the plaintiffs’ law firm, and $6,560 payable to the firm for amounts still outstanding.
The IDFPR argued the circuit court lacked jurisdiction under the law to award fees and costs, because the state was protected by the doctrine of sovereign immunity. Sovereign immunity is a common law doctrine that generally protects the government from being sued without its consent.
But Lavery argued sovereign immunity doesn't protect the state in this instance, because he was seeking an injunction barring the state from illegally demanding records that were already protected by the state's own laws.
On appeal, the First District court justices agreed with Lavery.
The ancillary award of fees is necessary to make it practicable for citizens to assert a claim to stop a state actor from illegal conduct, the court said. The mere fact that a successful action would cause money to be paid from the state treasury does not mean that sovereign immunity bars the suit.
“An award of fees and costs that is ancillary to an action seeking injunctive relief under the prospective injunctive relief exception does not transform the nature of the suit,” the panel said. “The underlying relief sought here is plainly injunctive relief under the Confidentiality Act, and the legislature saw fit to make attorney fees and costs available to parties who succeed in actions brought to protect their rights under the Act. We see no reason why plaintiffs should be denied that relief where what they have sought all along is equitable relief not precluded by the doctrine of sovereign immunity.”
The panel noted this has long been a settled question in federal courts.
An award of statutory attorney fees and costs is ancillary to that relief and does not constitute a separate monetary judgment against the State, the panel said.
“We need not consider plaintiffs’ alternative arguments that the doctrine does not apply here because this is an outgrowth of proceedings initiated by the State or that the Act should be read as a waiver of sovereign immunity,” the panel said.
Lavery and his employers requested the court award them fees and cost arising from this appeal or remand for the circuit court to do so. The panel believed the circuit court is better equipped to expeditiously review a fee petition and any objections so it remanded for this limited purpose.
Lavery has been represented by attorney Rick Schoenfield, of DiVincenzo Schoenfield Stein, of Chicago.
The IDFPR was represented by lawyers from the office of Illinois Attorney General Kwame Raoul.