Illinois Supreme Court Clarifies Proper Application of Primary Jurisdiction Doctrine

April 10, 2020 8:32 AM | Louis Manetti (Administrator)

By: Richard Harris

The Illinois Supreme Court recently resolved a disagreement in the appellate court as to whether the doctrine of primary jurisdiction authorizes a circuit court to stay the proceedings before an administrative agency. In Hastings Mutual Insurance Co. v. Ultimate Backyard, LLC, 2012 IL App (1st) 101751, the First District answered that question in the affirmative. In West Bend Mut. Ins. Co. v. TRRS Corp., 2019 IL App (2d) 180934, the Second District declined to follow Hastings Mutual and held that the doctrine can only be applied to stay judicial proceedings pending the resolution of a specialized controversy before an administrative agency. The Supreme Court sided with the Second District and overruled Hastings Mutual.

West Bend involved a coverage dispute on a workers’ compensation claim. The injured worker, Gary Bernardino, underwent surgery to repair his torn rotator cuff. When Bernardino later learned he needed a follow-up surgery, he filed an “application for adjustment of claim” in the Illinois Workers’ Compensation Commission (IWCC). West Bend denied its responsibility for coverage, claiming Bernardino’s employers chose to cover his lost wages and medical expenses relating to the first surgery without reporting the injury to West Bend.

West Bend filed a complaint for declaratory judgment in the circuit court of McHenry County, seeking a declaration that it had no duty to defend or indemnify Bernardino’s employers in connection with his IWCC claim. Shortly thereafter, the IWCC scheduled an expedited hearing on Bernardino’s claim, which prompted West Bend to file an emergency motion in the circuit court to stay the IWCC proceedings until the declaratory judgment action was resolved. The circuit court agreed with West Bend that under Hastings Mutual, the doctrine of primary jurisdiction required the entry of an order staying the IWCC proceedings until the coverage dispute was resolved in the circuit court.

However, the Supreme Court agreed with the Second District that Hastings Mutual was wrong to allow the inverse application of the primary jurisdiction doctrine, which may be invoked when two courts share concurrent jurisdiction over the subject matter of the dispute. The doctrine holds that in certain instances, a circuit court should stay its own judicial proceedings pending the referral of a specialized controversy to an administrative agency having expertise in the area. The Supreme Court noted that it had never applied the doctrine to stay an administrative proceeding. The Court held, “[t]he doctrine operates to facilitate, not delay or otherwise hinder, an administrative agency’s resolution of a technical or specialized issue that requires administrative knowledge or expertise.”

Left open was the question of whether a circuit court possesses the inherent equitable power to issue the stay of an administrative proceeding pending judicial review. The Supreme Court declined to consider West Bend’s alternative arguments and remanded the case to the circuit court. Quoting the Second District, the Supreme Court “[took] no position as to what procedures, if any, are available to West Bend if it seeks to renew its motion in the circuit court to stay the IWCC proceedings.”

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