Illinois Court Declares State’s Pre-Judgment Interest Statute Unconstitutional

On Might 27, 2022, the Circuit Courtroom of Cook dinner County discovered Illinois’ 6% prejudgment curiosity statute unconstitutional as a violation of the best of trial by jury and the prohibition towards particular laws. This determination has essential implications for private damage and wrongful dying litigation in Illinois, because it invalidates a far-reaching and doubtlessly onerous imposition of prejudgment curiosity broadly relevant to such circumstances.

In 2021, Illinois handed an modification to 735 ILCS 5/2-1303 (Curiosity on judgment) into regulation, permitting curiosity to accrue commencing on the time of initiating all actions searching for damages for private damage or wrongful dying brought on by negligence, willful and wanton misconduct, intentional conduct, or strict legal responsibility (the Modification). Beforehand, curiosity solely accrued from the date of judgment.

The Modification was controversial from the outset as a result of excessive price of curiosity (9% below the Modification’s unique proposal), atypical software in comparison with different states’ legal guidelines, and sensible results that incentivize delayed litigation. The Illinois Basic Meeting subsequently revised the invoice to handle a number of of the criticisms, together with lowering curiosity from 9% to six%, and SB 0072 was ultimately signed into regulation.

In Hyland v. Advocate Well being and Hospitals Company, et al. (Case No. 2017-L-003541) (Cook dinner County, In poor health.), the defendants filed a “Movement to Declare Senate Invoice 0072, Which Amended 735 ILCS 5/2-1302 Invalid Beneath the Illinois Structure.” The movement alleged the Modification violated quite a few provisions of the Illinois Structure, together with (1) the best to a jury trial and (2) the prohibition towards particular laws. The court docket agreed.

Article I, § 13 of the Illinois Structure of 1970 gives “the best of trial by jury as heretofore loved shall stay inviolate.” This language has been interpreted to safe the best of jury trial because it existed at frequent regulation. See Kakos v. Butler, 2016 IL 120377, ¶¶ 13-14 (“This court docket has lengthy interpreted the phrase ‘as heretofore loved’ to imply ‘the best of trial by jury because it existed below the frequent regulation and as loved on the time of the adoption of the respective Illinois constitutions.’”) (quoting Individuals v. Lobb, 17 In poor health. 2nd 287, 298 (2010)). The court docket in Hyland confirmed “[o]ne of these traits being the best of the jury to find out damages- an inviolate right- and never a difficulty for the Legislature.” (Hyland Memorandum Order, p. 4). “[I]t is the jury’s proper and responsibility to evaluate damages to compensate a plaintiff and the Modification violates the elemental proper to jury trial because it improperly strips the operate and position of the jury in assessing all points, together with damages, and as an alternative requires an award of prejudgment curiosity after verdict.” Id.

The distinction between prejudgment curiosity and post-judgment curiosity is essential. For the previous, it’s the responsibility of the jury to award a plaintiff compensation to make her or him entire. The Hyland court docket cited authority displaying Cook dinner County juries have already got been awarding plaintiffs “elevated awards over and above inflation … on the price of three.7% per 12 months from the time between damage and trial.” (Id., pp. 4-5) (citing Michael S. Knoll, A Primer on Prejudgment Curiosity. Put up-judgment curiosity, against this, “measures the time after a discovering of legal responsibility by the jury.” (Hyland Memorandum Order, p. 5). The jury has no management over future damages by way of post-judgment periodic funds versus the normal lump sum process.

Moreover, the Hyland court docket discovered the Modification a violation of the Illinois Structure’s prohibition towards particular laws. The Illinois Structure gives: “[t]he Basic Meeting shall go no particular or native regulation when a basic regulation is or will be made relevant. Whether or not a basic regulation is or will be made relevant shall be a matter of judicial dedication.” In poor health. Const. 1970, Artwork. IV, § 13. The aim of the particular laws prohibition, as said by the Illinois Supreme Courtroom, “is to forestall arbitrary legislative classifications that discriminate in favor of a choose group with out a sound, affordable foundation.” Greatest v. Taylor Machine Works, 179 In poor health. 2nd 367, 391 (1997). With respect to the Modification, the laws was the product of lobbying by the plaintiffs’ bar and one of many final payments handed below Mike Madigan’s 36-year run as Illinois Home Speaker.

As a result of the Hyland court docket discovered the Modification violates the elemental and substantial proper to trial by jury, its constitutionality below the particular laws prohibition should survive a strict scrutiny evaluation. Meaning “the court docket should conclude that the means employed by the legislature to attain a said objective had been essential to advance a compelling state curiosity.” (Hyland Memorandum Order, p. 6). Additionally, “the statute have to be tailor-made narrowly because the legislature should use the least restrictive means according to the attainment of the legislative objective.” Id. at p. 7 (citing Fumarolo v. Chicago Board of Schooling, 142 In poor health. 2nd 54 (1990)). The court docket discovered the aim of the Modification “can’t be construed to advance any compelling State curiosity.” Id. “The requirement that prejudgment curiosity be added to a jury’s award eliminated the jury from figuring out questions of reality as to what’s affordable and simply compensation for a celebration’s accidents and circumstances a defendant’s proper to a jury trial on the fee of a penalty.” Id. The truth is, the court docket discovered that even when the Modification had been analyzed below the rational foundation take a look at, it nonetheless “discriminates in favor of private damage and wrongful dying plaintiffs alone by granting a considerable profit upon them whereas excluding all different equally located tort plaintiffs.” Id. at p. 8. The court docket agreed that “all tort circumstances trigger congestion of the courts and utilizing an arbitrary classification of solely private damage plaintiffs to obtain prejudgment curiosity wouldn’t encourage early settlements or relieve congestion for all different tort actions.” Id.

In the end, the Hyland court docket held the Modification “divides tort events into two teams: events to private damage and wrongful dying actions who’re topic to prejudgment curiosity, and all different tort events who aren’t. It clearly and arbitrarily favors private damage and wrongful dying plaintiff and isn’t rationally associated to any State curiosity.” Id. at p. 9. Due to this fact, the Modification to 735 ILCS 5/2-1303 was deemed “unconstitutional and invalid.” Id. at p. 10.