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Johnson v. Allstate Insurance Co.

September 17, 2010

ROBERT L. JOHNSON, SR., ET AL., PLAINTIFFS,
v.
ALLSTATE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Reagan, District Judge.

MEMORANDUM AND ORDER

On September 30, 2009, the Court granted in part the motion of Defendant Allstate Insurance Co., dismissing Plaintiffs Sheila Sydnor and Deborah Sparks with prejudice for lack of standing but allowing the rest of the suit to go forward. (Doc. 124.) Sydnor and Sparks have moved for the Court to reconsider the order, and so has Allstate. (Docs. 125, 129.) Sydnor and Sparks also want the Court to strike affidavits in Allstate's motion to reconsider that are also used as affidavits for class certification. (Doc. 227.) The Court will grant the motion to strike but will deny the motions to reconsider. The Court will also, on its own motion, modify its order dismissing Sydnor and Sparks with prejudice so that it dismisses them for lack of subject-matter jurisdiction.

Plaintiffs' Motion to Strike

The Plaintiffs have moved for the Court to strike affidavits submitted by Allstate both for its motion for reconsideration and its opposition to the motion for class certification (Doc. 209). These affidavits are from six former employees of the Illinois Department of Insurance: Philip O'Connor, Richard Mathias, Zach Stamp, Mark Boozell, Steven Selcke and Robert Heisler. Before the Court turns to the arguments on the motion to strike, the Court needs to address Allstate's argument that the motion should be denied as untimely. It is true that the motion to strike was formally presented several months after the Plaintiffs' response to the motion to reconsider. However, in their response to Allstate's motion to reconsider and thereafter, the Plaintiffs have consistently contested the appropriateness of the affidavits upon which Allstate wants the Court to rely. The reason for the latter formal motion was because the affidavits, while not used in Allstate's initial opposition to class certification, were reused in Allstate's opposition to the restated or updated motion for class certification. Even if the Plaintiffs had not presented the formal motion to strike, the Court would have to decide to consider the affidavits or not when deciding this motion and the motion to certify the class. Addressing the matter now, once and for all, is better than taking care of the issue in series.

Although the rules of procedure only address striking pleadings and parts of pleadings, not motions or affidavits, see Fed. R. Civ. P. 12(f) ("The court may strike from a pleading . . . ." (emphasis added)), that does not mean that a motion to strike an affidavit is improper. Motions to strike affidavits examine the affidavit for purposes of evidentiary admissibility, and decisions on those motions are committed to the Court's sound discretion. See Holbrook v. Norfolk S. Ry. Co., 414 F.3d 739, 745 (7th Cir. 2005). (reviewing a district court's decision on a motion to strike affidavit as inadmissible for abuse of discretion, noting that decisions "that are reasonable, i.e., not arbitrary, will not be questioned" (quoting O'Regan v. Arbitration Forums, Inc., 246 F.3d 975, 986 (7th Cir. 2001))).

The Plaintiffs argue that the Court should ignore the affidavits entirely as unhelpful. They cite United States v. Carroll in support of their argument, which but for one issue is on all fours for this case. 320 F. Supp. 2d 748, 755 (S.D. Ill. 2004) (Herndon, J.). Former employees of the U.S. Department of Health and Human Services submitted their affidavits on the interpretation of federal regulations. The Court held that it could not consider these materials because they were not entitled to deference under Chevron U.S.A., Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837 (1984). The reason that they were not entitled to deference was that "courts must only give deference to agency interpretations contained in 'notice-and-comment rulemaking,'" and at best the affidavits submitted "equate to an opinion letter." Carroll, 320 F. Supp. 2d at 755 (citing Am. Fed. of Gov't Employees v. Rumsfeld, 262 F.3d 649, 658 n.10 (7th Cir. 2001)). The Court went further:

More importantly, the experts' opinions do not amount to "agency" interpretations since they are not officials within these agencies and are no longer even employed by the federal government. Therefore, the experts' opinions are not authoritative to the extent they interpret and apply Congressional statutes relevant to the governmental groups for which they were formerly employed.

Id.

As Allstate seeks to have the Court defer to the opinions of former employees not expressed in agency actions as to the interpretation and application of statutes and regulations, Carroll would apply entirely to this situation but for one exception: Carroll dealt with federal laws, regulations and former government employees, not Illinois laws, regulations and former government employees. Because Illinois courts defer to administrative interpretations of Illinois statutes in the same way as the federal courts do of federal statutes, see, e.g., County of Du Page v. Ill. Labor Relations Bd., 900 N.E.2d 1095, 1104 (Ill. 2008) ("[C]courts afford considerable deference to the interpretation of an ambiguous statute by the agency charged with its administration." (citing Lauer v. Am. Family Life Ins. Co., 199 Ill.2d 384, 388 769 N.E.2d 924 (2002); Phoenix Bond & Indemnity Co. v. Pappas, 194 Ill.2d 99, 106, 741 N.E.2d 248 (2000))), the Court has no trouble applying Carroll to this case.

Allstate attempts to get around the Carroll problem by arguing that the affiants are fact witnesses, not expert witnesses, and as individuals who, at the time, were charged with interpreting and drafting insurance regulation in Illinois can testify to the factual circumstances of interpreting, drafting and applying regulations for Illinois insurance. After-the-fact utterances of the circumstances of the enactment, enforcement and interpretation of statutes and regulations are "subsequent legislative history," which "is is not helpful as a guide to understanding a law" because the utterances "may be nothing but wishful thinking, and unless they are uttered as part of the process of enacting a later law . . . they are of no account." Covalt v. Carey Canada Inc., 860 F.2d 1434, 1438 (7th Cir. 1988) (citing Pierce v. Underwood, 487 U.S. 552, 566--67 (1988); Quern v. Mandley, 436 U.S. 725, 736 (1978)); see also Carroll, 320 F. Supp. 2d at 755 (applying the standard in Covalt also to expert witnesses seeking to provide legal opinion on the circumstances of the enactment of regulations and laws).

So, if Allstate's seeks to have the Court consider these affiants as expert witnesses, their opinion is unavailing. If Allstate seeks to have the Court consider these affiants as fact witnesses, they provide information that is, on the matter in which it is being used, "of no account." The affidavits will be stricken.

Motions to Reconsider

Both parties ask the Court to reconsider its prior ruling on Allstate's motion to dismiss. Although the Court granted Allstate's motion to dismiss with respect to Sydnor and Sparks, it denied Allstate's motion to dismiss in all other respects, including on Allstate's argument that the complaint failed to state a claim for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505 (2008).

As the order denying the motion to dismiss adjudicated "fewer than all the claims or the rights and liabilities of fewer than all the parties," it did not "end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." Fed. R. Civ. P. 54(b); accord Marconi Wireless Tel. Co. of Am. v. United States, 320 U.S. 1, 47--48 (1943). Even though the Court "may" modify an interlocutory order, that does not mean that it must. The Seventh Circuit has a restricted view of motions to reconsider interlocutory orders, stating that they serve a limited purpose: "to correct manifest errors of law or fact or to present newly discovered evidence." Publishers Res., Inc. v. Walker--Davis Publ'ns, Inc., 762 F.2d 557, 561 (7th Cir. 1985) (quoting Keene Corp. v. Int'l Fidelity Ins. Co., 561 F.Supp. 656, 665 (N.D. Ill. 1982), aff'd, 736 F.2d 388 (7th Cir. 1984)). Examples of manifest errors of law or fact include when "the Court has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the Court by the parties, or has made an error not of reasoning but of apprehension." Quaker Alloy Casting Co. v. Gulfco Indus., Inc., 123 F.R.D. 282, 288 (N.D. Ill. 1988) (quoting Above the Belt, Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)): Reconsideration motions may also be entertained when "a controlling or significant ...


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