Cases Pending, co-chaired by Gretchen Harris Sperry (left) and Catherine Basque Weiler, has been updated to discuss the Illinois Supreme Court's May Term, which begins Monday, May 14, 2018, with oral arguments scheduled for May 15-17, 2018 and May 22-23, 2018. A total of 15 cases will be heard – 10 criminal and 5 civil. The following 5 civil cases are scheduled for argument this term:
Oswald v. Beard, No. 122203: May 22
People ex rel. Schad, Diamond & Shedden v. My Pillow, Inc., No. 122487: May 22
American Family Mutual Insurance Co. v. Krop, No. 122556: May 22
Cassidy v. China Vitamins, LLC, No. 122873: May 23
Ameren Transmission Co. v. Hutchings, No. 122973 (cons.): May 23
Below is a summary for one of the civil cases, People ex rel. Schad, Diamond & Shedden v. My Pillow, Inc. Summaries for this case and others pending with the Illinois Supreme Court can be found in our Cases Pending publication, accessible to ALA members on the ALA's website.
FALSE CLAIMS ACT – ATTORNEY FEES
People ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc.
The issue in this appeal is whether a relator bringing a qui tam action is entitled to attorney fees under the Illinois False Claims Act (“the Act”) when relator is itself a law firm.
The relator brought a qui tam action under the Act alleging that the defendant failed to collect certain taxes as required by State law. The trial court found that the defendant violated the Act and awarded the relator damages and attorney fees, even though the relator, which is a law firm, represented itself in the suit.
The First District Appellate Court affirmed the trial court’s finding of liability under the Act, but reversed the attorney fee award. The appellate court relied on Hamer v. Lentz, 132 Ill. 2d (1989), holding that an attorney bringing a pro se action under the Illinois Freedom of Information Act could not recover attorney fees, in concluding that the relator was not entitled to attorney fees. The appellate court noted that the Act’s purpose in providing attorney fees for a successful relator was to remove the hurdle of significant legal fees in order to expose fraud and waste. However, the appellate court found, that purpose was not furthered by awarding a law firm relator its own fees since it does not have to pay its own fees. The appellate court also emphasized that allowing law firm relators to collect attorney fees could encourage abusive fee generation and unnecessary litigation.
In its petition for leave to appeal, the relator argues that the appellate court’s decision undermines the Act’s purpose of using private relators to pursue fraud claims because it provides a disincentive for law firms to file qui tam actions. The relator also argues that the potential for abusive fee generation is diminished by the fact that the Illinois Attorney General retains complete control over qui tam actions filed under the Act.
Finally, the relator argued that under the federal False Claims Act, law firm relators are permitted to collect attorney fees.
Appellate Court Decision: 2017 IL App (1st) 152668. Ellis, J., with McBride and Burke, JJ., concurring.
PLA Allowed: 09/27/17