Opinion
1-21-1443 1-21-1483
08-19-2022
MARY LEWIS, TASHAWN BANKS, AND KATHLEEN O'SULLIVAN, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs, v. LEAD INDUSTRIES ASSOCIATION, INC., ATLANTIC RICHFIELD COMPANY, CONAGRA GROCERY PRODUCTS, INC., NL INDUSTRIES, INC., and THE SHERWIN-WILLIAMS COMPANY, Defendants-Appellees Illinois Department of Healthcare and Family Services, Proposed Intervenor-Appellant.
This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court of Cook County. No. 00 CH 9800 Honorable Alison C. Conlon, Judge, presiding.
JUSTICE HOFFMAN delivered the judgment of the court. Justices Cunningham and Connors concurred in the judgment.
ORDER
HOFFMAN JUSTICE
¶ 1 Held: State agency could not assert statutory right to subrogation when subrogors into whose shoes the agency would step did not have a viable claim to pursue, and agency's petition to intervene was untimely when the petition was filed more than 20 years after the initiation of the action and four years after the ultimate impetus for the intervention came to light.
¶ 2 In this latest chapter in a 22-year-long lead-based-paint litigation, the Illinois Department of Healthcare and Family Services ("the Department") appeals the circuit court's final order denying its petition to intervene in Mary Lewis, Tashawn Banks, and Kathleen O'Sullivan's ("the Plaintiffs") class-action suit against various parties in the lead manufacturing industry, Lead Industries Association, Inc., Atlantic Richfield Company, ConAgra Grocery Products, Inc., NL Industries, Inc., and The Sherwin-Williams Company (collectively "the Defendants"). Because the Department's assertion of its statutory right to subrogation would have been fruitless in this case, making intervention inappropriate, and because the Department's petition to intervene was also untimely, we affirm the circuit court's order.
The Department filed two notices of appeal, one concerning the circuit court's order denying the Department's petition to intervene and granting the Defendants' motion for entry of final judgment, and one concerning the circuit court's subsequent order ultimately entering final judgment. We have consolidated those appeals.
¶ 3 The Plaintiffs in this case initially brought six counts against the Defendants, but subsequent litigation whittled those down to one. See Lewis v. Lead Industries Ass'n, 342 Ill.App.3d 95 (2003) (Lewis I); Lewis v. Lead Industries Ass'n, No. 1-05-0974, 362 Ill.App.3d 1229 (2006) (unpublished order under Illinois Supreme Court Rule 23) (Lewis II). In the one remaining count alleging civil conspiracy, the Plaintiffs sought to recover the cost of screening their children for lead poisoning. However, because the costs of Lewis' and Banks' children's tests were covered by Medicaid and the families did not pay anything out of pocket, and because O'Sullivan similarly failed to show that she or her private insurer paid anything for the testing, the circuit court in April 2017 granted summary judgment in favor of the Defendants on the lone remaining count, finding that the Plaintiffs failed to allege any actual economic harm. This court reversed the circuit court's ruling, see Lewis v. Lead Industries Ass'n, Inc., 2018 IL App (1st) 172894 (Lewis III), but in May 2020 the supreme court reversed that decision and affirmed the judgment of the circuit court. See Lewis v. Lead Industries Ass'n, 2020 IL 12410 (Lewis IV).
¶ 4 In August 2020, shortly after the supreme court's mandate issued in July, the Defendants moved for class decertification and for entry of final judgment, arguing that, after the supreme court's ruling, no viable claims remained. The circuit court held a hearing on the motion in February 2021. One month later, and nine months after the supreme court's ruling in Lewis IV, the Department filed a petition to intervene, citing statutory authorization to seek subrogation for the State's payment of blood-lead screening costs.
¶ 5 In an October 2021 order, the circuit court denied the Department's petition to intervene and granted the Defendants' motion to decertify the class and to issue final judgment. Regarding the Department's petition, the court observed that the Department had acknowledged that it had been monitoring the case from its inception 21 years earlier and that the Department had waited nine months after the supreme court's ruling in Lewis IV to seek intervention. Finding no reasonable justification for the delay, the court concluded that the Department's petition was untimely. The court also ruled that, in the alternative, intervention would be improper because by asserting a right to subrogation the Department would be stepping into the shoes of the Plaintiffs, but the Plaintiffs had no viable claims to pursue. This appeal follows.
¶ 6 We agree with both bases for the circuit court's ruling. First, the court was correct that the Plaintiffs' inability to prove the lone remaining conspiracy claim made intervention inappropriate in this case. As the supreme court explained in Lewis IV, section 11-22 of the Illinois Public Aid Code (305 ILCS 5/11-22 (West 2020)) "broadly grants [the Department] 'a charge upon all claims, demands and causes of action for injuries to' a public aid applicant or recipient." Lewis, 2020 IL 12410, ¶ 40. And, as it concerns the Department's recoupment of public aid expenditures, "[s]ection 11-22a grants [the Department] a right of subrogation by intervening or joining an action brought by a recipient against a tortfeasor or by bringing its own action against the tortfeasor." Id. Thus, the Department may either seek subrogation by intervening in an action brought by a public aid recipient or it may pursue its own separate individual action. See id. (noting that the Department may pursue its recoupment rights "directly or by way of subrogation"). In this case, it chose subrogation through intervention.
¶ 7 The problem with that choice, from the Department's perspective, is that "[o]ne who asserts a right of subrogation must step into the shoes of, or be substituted for, the one whose claim or debt he has paid and can only enforce those rights which the latter could enforce." Dix Mutual Insurance Co. v. LaFramboise, 149 Ill.2d 314, 319 (1992). In other words, a subrogee is generally limited to recovering that which the subrogor would be entitled to recover. The Department contends that this principle is rooted in equitable subrogation and is inapplicable to the statutory right to subrogation that is at issue here, but section 11-22a appears to operate no differently, providing that "the Department shall be subrogated to any right of recovery such recipient [of public aid] may have." (Emphasis added.) As with equitable subrogation, the Department's statutory right to subrogation is limited to what the public aid recipient could have recovered. In this case, the Plaintiffs into whose shoes the Department would be stepping have shown no economic harm and, therefore, do not have any valid claims to pursue. See Lewis, 2020 IL 12410, ¶ 56. Consequently, neither would the Department as subrogee. As a result, the circuit court was correct that the Department could not assert its right to subrogation though intervention in this case.
¶ 8 We also see no abuse of discretion in the circuit court's conclusion that the Department's petition to intervene was untimely. Section 2-408 of the Code of Civil Procedure (735 ILCS 5/2-408 (West 2020)) provides for a right of intervention "upon timely application." The statute does not provide any further instruction as to what makes such an application timely, so the timeliness determination has historically been left in the discretion of the circuit court. See In re Bailey, 2016 IL App (5th) 140586, ¶ 18. When evaluating timeliness, courts have generally considered "when the intervenor first became aware of the litigation, the amount of time that elapsed between initiation of the circuit court proceedings and the filing of the petition to intervene, and the reason for failing to seek intervention at an earlier date." Id. (citing Freesen, Inc. v. County of McLean, 277 Ill.App.3d 68, 72 (1995)).
¶ 9 The circuit court in this case observed that the Department had been aware of and monitoring this case since its inception more than 20 years ago and had waited 9 months after the supreme court's ruling in Lewis IV to seek intervention. The circuit court concluded that, "[g]iven [the Department's] awareness of the underlying case and the lapse of time between the Supreme Court's decision and this petition, the petition is not timely." This was not an unreasonable or arbitrary conclusion. See Gulino v. Zurawski, 2015 IL App (1st) 131587, ¶ 64 ("[A] ruling will only be deemed an abuse of discretion where it is unreasonable and arbitrary or where no reasonable person would take the view adopted by the circuit court (citations)."
¶ 10 The Department had more than 20 years to observe the litigation and assess whether, and under what circumstances, it might want to intervene. The Department claims that it was not until the supreme court's most recent ruling in Lewis IV that the Plaintiffs could no longer protect the Department's interest, but that decision was hardly a novel development or surprise. Even if we ignore the first 17 years of the Department's inaction, the Department knew as early as 2017 that the Plaintiffs' role as class representatives was in jeopardy when the circuit court granted the Defendants' motion for summary judgment on the grounds that the Plaintiffs had failed to demonstrate any economic harm. But that event did not prompt the Department to act, and it instead chose to sit back and wait for further adverse events. But that is a course of action that even the State cannot take. See In re Marriage of Kueteman, 273 Ill.App.3d 77, 79 (1995) (affirming ruling that a petition to intervene filed by the Department was untimely when the Department had been aware of the issues in the case but "chose to sit back and let [the plaintiff] take the initiative"). Given the Department's long-running awareness of the issues in the case and its multi-year delay in seeking intervention even after the asserted impetus for the intervention came to the fore, it was entirely reasonable for the circuit court to conclude that the Department failed to act in a timely manner.
¶ 11 Accordingly, for the foregoing reasons, we affirm the circuit court's order denying the Department's petition to intervene and granting the Defendants' motion for entry of final judgment.
¶ 12 Affirmed.