Rosolowski v. Clark Refining and Marketing

890 N.E.2d 1011, 383 Ill. App. 3d 420, 322 Ill. Dec. 92, 38 Envtl. L. Rep. (Envtl. Law Inst.) 20146, 2008 Ill. App. LEXIS 591

• Court: Appellate Court of Illinois
• Decided: June 16, 2008
• Docket: 1-07-0048
• Status: Published

Opinions

JUSTICE ROBERT E. GORDON

delivered the opinion of the court:

Plaintiffs, who were residents of Blue Island, Illinois, living near an oil refinery owned by defendant Clark Refining and Marketing, brought a nuisance class action against defendant because of fumes and discharges from the refinery. After the entry of a multimillion dollar jury award in favor of plaintiffs, the trial court decertified the class, vacated the award and ordered a new trial. Plaintiffs appeal the interlocutory order. For the reasons discussed below, we vacate the trial court’s posttrial order and remand for proceedings consistent with this opinion.

BACKGROUND

In October 1995, plaintiffs filed suit against defendant and others for claims arising out of defendant’s operation of a nearby oil refinery, from 1993 until the refinery closed in 2001.

On June 8, 2000, the Honorable Judith Cohen of the circuit court of Cook County granted plaintiffs’ motion to certify the nuisance action as a class action. Although section 2 — 802 of the Code of Civil Procedure permitted the circuit court judge to enter a “conditional” order of certification, she did not do so. 735 ILCS 5/2 — 802(a) (West 2000). The June 8 order stated that the nuisance class, which was also called “Class C,” consisted of all owners and lessees of real property in Blue Island located “in the area between 135th Street on the south, 119th Street on the north, Kedzie on the west, and Hoyne on the east.” Judge Cohen also certified a Class A, of persons physically injured by exposure to catalyst released from the refinery on October 7, 1994; and a Class B, of persons paying medical expenses for minor members of Class A. Classes A and B are not at issue in this appeal. Only Class C is at issue.

On January, 29, 2001, a second circuit court judge, the Honorable Albert Green, denied: (1) defendant’s motion to reconsider the prior certification order; and (2) defendant’s motion, in the alternative, pursuant to Supreme Court Rule 308. 155 Ill. 2d R. 308. Rule 308(a) permitted the trial court to make a finding that its “order involves a question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.” In denying the motion for reconsideration, Judge Green stated from the bench: “[M]ost respectfully, I am going to accede to Judge Cohen’s decision. I find nothing to reconsider. She considered it all.” In denying the Rule 308 motion, Judge Green stated: “I don’t believe that the defendants have met the requirements.”

Shortly before trial, on October 19, 2005, the trial judge, Honorable Cheryl A. Starks, became the third circuit court judge to approve class certification, when she denied another motion by defendant for decertification. After a three-week jury trial in November 2005, the jury rendered a verdict for the nuisance plaintiffs (Class C) and awarded $80 million in compensatory damages. In addition, the jury specifically found that defendant had engaged in “willful and wanton conduct” and awarded Class C an additional $40 million in punitive damages. The jury also found in favor of Classes A and B.

On November 21, 2005, the trial judge issued an order stating that “[jjudgment is hereby entered” in favor of Class C and against defendant in the amount of $80 million, with an additional award of $40 million for punitive damages. The order also entered judgment in favor of Class A and against Class B. On January 25, 2006, defendant filed posttrial motions directed only against Class C. The motions included motions for judgment notwithstanding the verdict, a new trial, decertification, remittitur of the compensatory award to $500,000 and vacation of the punitive award.

On November 3, 2006, almost a year after entering judgment for plaintiffs, the trial court issued a 13-page opinion which: (1) granted defendant’s posttrial motion to decertify the class; (2) vacated the jury’s awards of both compensatory and punitive damages; and (3) vacated Judge Cohen’s order of June 8, 2000, certifying the class.¹

At a hearing on November 17, 2006, the trial judge announced her decision to amend her November 3 order, for the purpose of granting defendant’s motion for a new trial. At the hearing, she stated that she was “granting a new trial because, again, the issue of these people’s claims are still active and still live based on the law.” She also observed that this was “a case of first [szc] impressions because generally, when cases are decertified they are decertified before trial on the merits.”

On December 8, 2006, the trial court issued a one-page amended order, which (1) vacated the jury awards; (2) ordered “a new trial”; and (3) denied “[a] 11 of Defendant’s other posttrial motions.” The amended order did not refer to Judge Cohen’s order of June 8, 2000. Plaintiffs had 30 days or until the beginning of January to appeal. 210 Ill. 2d R. 306(c).

On January 5, 2007, plaintiffs filed a petition pursuant to Supreme Court Rule 306(a)(1) for leave to appeal the trial court’s posttrial orders. 210 Ill. 2d R. 306(a). On February 22, 2007, this court granted plaintiff’s petition for an interlocutory appeal.

ANALYSIS

The decertification order vacated the judgement of two other circuit court judges about class certification, nullified a jury’s verdict, and reversed the trial court’s own order confirming class certification. As both parties in this case acknowledge, no other circuit court in Illinois has ever decertified a class after the jury reached a verdict and the trial court formally entered judgment on the jury verdict in a written order.

Prerequisites for Decertification

In essence, by decertifying, one circuit court judge sat in review of two other circuit court judges’ decisions along with her own. A circuit court judge is allowed to do this only under two, very limited conditions. First, there must be clearly changed circumstances. Barliant v. Follett Corp., 74 Ill. 2d 226, 231 (1978); Key v. Jewel Cos., 176 Ill. App. 3d 91, 99-100 (1988) (discussing and applying Barliant); Wernikoff v. Health Care Service Corp., 376 Ill. App. 3d 228, 231-33 (2007) (discussing and applying Barliant and Key). In Barliant, 14 Ill. 2d at 231, our supreme court observed that “[b]oth sides in an action would benefit from an early determination of the propriety of a class action.” As a result, our supreme court held that “a second judge” could set aside a prior judge’s class certification only if warranted by “clearly changed circumstances, and not mere feelings of error.” Barliant, 74 Ill. 2d at 231 (decertification reversed for lack of “changed circumstances”); Key, 176 Ill. App. 3d at 99 (decertification affirmed, where “substantial” amendments to the pleadings satisfied the requirement of changed circumstances); Wernikoff, 376 Ill. App. 3d at 232 (decertification reversed, where additional “discovery did not amount to changed circumstances”).

Second, there must have been no decision on the merits. Section 2 — 802 (735 ILCS 5/2 — 802(a) (West 2006)) of the Illinois Code of Civil Procedure states that a trial court’s class certification order “may be amended before a decision on the merits.” 735 ILCS 5/2 — 802(a) (West 2006). Defendant argues that the word “amended” does not include decertification, and thus, the time limit in section 2 — 802 does not apply.

However, our supreme court has held that it is section 2 — 802 which provides a trial court with the authority to decertify a class. In Barliant, our supreme court found that decertification was “within the scope of section 57.3,” which is the predecessor to section 2 — 802. Barliant, 74 Ill. 2d at 231. Our supreme court stated:

“It may be beneficial to the orderly administration of justice for a second judge to set aside an earlier determination of a suitable class action if clearly changed circumstances, and not mere feelings of error, or more complete discovery warranted it; that is within the scope of section 57.3(a).” Barliant, 74 Ill. 2d at 231.

The defendant’s argument flies in the face of the above-quoted words of our supreme court. Thus, the absence of a decision on the merits is the second prerequisite for decertification.

Standard of Review

An appellate court will reverse a trial court’s decision concerning class certification only if the trial court abused its discretion or applied erroneous legal criteria. Health Cost Controls v. Sevilla, 365 Ill. App. 3d 795, 805 (2006); Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 125-26, 135 (2005) (reversing trial court’s grant of plaintiffs’ motion for certification, as an abuse of discretion). In the case at bar, we must reverse because the trial court applied erroneous legal criteria. Namely, the trial court failed to make a finding about whether there had been changed circumstances or whether the jury verdict was a prior decision on the merits. In addition, to the extent that defendant argues that the trial court’s order represents an implicit finding of changed circumstances, such a finding was an abuse of discretion.

Changed Circumstances

In the case before us, there were no “clearly changed circumstances” in the weeks between when the trial court upheld certification on the eve of trial and when it decertified the class after trial. Barliant, 74 Ill. 2d at 231. The opinions in Barliant, Key and Wernikoff all provide guidance concerning what constitutes “clearly changed circumstances.” Barliant, 74 Ill. 2d at 231; Key, 176 Ill. App. 3d at 99; Wernikoff, 376 Ill. App. 3d at 232.

The “changed circumstances” requirement was first announced in Barliant, 74 Ill. 2d at 231. In that case, the representative plaintiff of the class became a partner in the law firm representing the class during the time between certification and decertification. Barliant, 74 Ill. 2d at 231. Our supreme court held that this change did not qualify as a “clear change of circumstances.” Barliant, 74 Ill. 2d at 231. Instead of decertification, the proper course would have been to disqualify the law firm and permit substitution of counsel. Barliant, 74 Ill. 2d at 231.

In Key and more recently in Wernikoff, this court had occasion to apply the “changed circumstances” requirement. Key, 176 Ill. App. 3d at 99-100; Wernikoff, 376 Ill. App. 3d at 232-33. In Key, we upheld decertification, finding that the “substantially amended” pleadings constituted the “changed circumstances” that Barliant required. Key, 176 Ill. App. 3d at 99-100 (discussing Barliant). In Wernikoff, we reversed decertification, finding that the additional discovery did not amount to “changed circumstances” because the newly discovered facts affected only “each class member’s possible recovery or ability to ultimately establish a cause of action against defendant.” Wernikoff, 376 Ill. App. 3d at 232. This discovery “did not rise to the level of such a change as in Key, where the pleadings were amended after class certification.” Wernikoff, 376 Ill. App. 3d at 232-33.

In the case before us, during the time between the trial court’s pretrial decision confirming certification and its posttrial order reversing certification, there was no change in party plaintiffs, their counsel, the pleadings or discovery. Defendant argued that there was a change in both facts and law. Factually, defendant claimed “what Judge Starks only realized after the trial was over — was that plaintiffs would not be able to prove either the existence of a class-wide nuisance or damages.” However, defendant does not name any new facts presented at trial that were not known from prior discovery. As our supreme court held in Barliant, “mere feelings of error” are insufficient to justify decertification. Barliant, 74 Ill. 2d at 231. Legally, defendant points to our supreme court’s decision in Avery v. State Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100 (2005), as marking a change in the law governing class action. However, this decision was issued a couple of months before the trial court’s approval of certification on October 19, 2005. Avery was decided on August 18, 2005. In addition, our supreme court in Avery specifically stated: “we have not fashioned any changes to the legal rules governing class actions, let alone ones that are ‘hostile’ to this procedural device.” Avery, 216 Ill. 2d at 154. Thus we are not persuaded by defendant’s claims of legally and factually “changed circumstances” because they do not exist. Barliant, 74 Ill. 2d at 231.

Decision on the Merits

The trial court’s decertification order was also precluded by a “decision on the merits,” namely, the jury’s verdict and the trial court’s order entering judgment on the verdict. 735 ILCS 5/2 — 802(a) (West 2006). First, this court notes that the legislators chose not to add the word “final” before the word “decision.” Thus a “decision on the merits” is something different from a final judgment. When the Illinois legislature meant final judgment, it had no problem saying so, as it did, for example, in section 8.1 of the Appellate Court Act. 705 ILCS 25/8.1 (West 2006) (requiring “final judgments” before a party may appeal as of right to the appellate court). Second, the drafters of the federal rules recognized that “decision on the merits” meant something different from “final judgment” when they chose to change the federal class action statute from the former phrase to the latter one. Fed. R. Civ. E 23, Committee Notes on Rules — 2003 Amendments. The Illinois legislature has chosen not to make a similar change, so the “decision” in the statute before us does not have to be “final” to have a limiting effect on the power of the trial court.

Defendant concedes in its brief to this court that “it is true that there was a ‘decision on the merits.’ ” Defendant then argues that “when the class was decertified, there was no longer ‘a decision on the merits’ ” and thus the trial court had the power to decertify. This argument is bootstrapping.

In sum, the trial court applied improper legal criteria by failing to consider whether there had been changed circumstances and a decision on the merits. To the extent that its decision represented an implicit finding of changed circumstances, the trial court abused its discretion. Acting without changed circumstances and after a decision on the merits, the trial court simply lacked the statutory authority to issue the order that it did. As a result, this court must vacate the decertification order.

Other Orders and Issues

Since the orders granting a new trial and vacating the judgment on the jury verdict were based exclusively on the decertification decision, those orders must be vacated as well. 210 Ill. 2d R. 306(a) (“If the petition for leave to appeal an order granting a new trial is granted, all rulings of the trial court on the posttrial motions are before the reviewing court without the necessity of a cross-petition”). The trial court ordered a new trial solely because it decertified. Decertification was ordered on November 3, 2006. A couple of weeks later, at a hearing held on November 19, the trial court decided to amend its prior order and grant new trials. The trial court ordered new trials, in order to make clear that even after decertification, the individual claims were alive and well. The trial court stated: “I’m granting a new trial because, again, the issue of these people’s claims are still active and still live based on the law.” (Emphasis added.)² On appeal, plaintiffs³ and defendant⁴ agree that the new trial order was based solely on decertification. Since the new trial order was based solely on decertification, once the decertification order falls, so does the new trial order.

It is important to understand what we are, and what we are not, deciding in this opinion. We are not reviewing certification. This case came to us, not on a direct appeal, but on a petition from an interlocutory order. Bishop v. We Care Hair Development Corp., 316 Ill. App. 3d 1182, 1189 (2000) (on the appeal of an interlocutory order, reversal is required only if trial court abused its discretion in granting or denying “the requested relief’). We granted the petition to hear a very limited question: the propriety of an interlocutory order decertifying a class after a jury verdict. And that question is easy to answer. The trial court simply had no authority to decertify. The two requirements were not met. There were no “clearly changed circumstances” (Barliant, 74 Ill. 2d at 231) and there was a prior “decision on the merits” (735 ILCS 5/2 — 802(a) (West 2006)). Thus the trial court’s interlocutory order was invalid. To hold otherwise would require us to ignore both supreme court precedent and a statute, which obviously we cannot do.

Our decision today has no preclusive effect, except on the question of whether the trial court had the authority to decertify. Our supreme court has held that the denial of a petition to file an interlocutory appeal has no preclusive effect because it does not represent a decision on the merits. Kemner v. Monsanto Co., 112 Ill. 2d 223, 241 (1986), discussed with approval in Stephens v. Taylor, 207 Ill. 2d 216, 229-30 (2003) (Freeman, J., specially concurring) (denial has no “preclusive effect” because it is not a decision on “the relative merits”).⁵ Since our opinion today is a decision on the merits of the interlocutory order only, our opinion does not have a preclusive effect on other issues, which may be raised later on direct appeal.

In addition, defendant’s decision to request a new trial does not bar it from raising on direct appeal any claimed trial errors. In Stephens, our supreme court held that when a party moved for a new trial and that motion was granted, the party’s “tactical decision to request a new trial foreclosed appellate review of all claimed errors in the first trial.” Stephens, 207 Ill. 2d at 224. In other words, if you ask for a second trial and you receive it, you cannot complain about the first one. However, in the case at bar, since defendant is not receiving a second trial, it can still complain about the first and only trial and can still attack the certification of the class, on direct appeal.

The dissent does not challenge our rulings on the issues that we decide today: that there were no changed circumstances, that there was a decision on the merits, and that the trial court thus lacked authority to issue its decertification order. The dissent would have us review the pretrial certification orders and other issues raised in the posttrial motions. There is a good policy reason for us not to review the pretrial certification orders. It is the same policy reason that underlies the Illinois Supreme Court’s requirement of “clearly changed circumstances” and the Illinois statute’s requirement of no decision on the merits. Barliant, 74 Ill. 2d at 231; 735 ILCS 5/2 — 802(a) (West 2006). Namely: law of the case. At this late date, after everyone has relied on these certification rulings for years, it makes no sense to take the case away from the plaintiffs in the end zone — to rob them of even the opportunity of offering a plan to apportion damages. We are a court of review. It is not up to us, in the first instance, to imagine what plan the litigants and the trial court will work out. However, we will review it when we are asked to do so.

We are aware that Rule 306(a) gives us the authority to review “all rulings of the trial court on the posttrial motions.” 210 Ill. 2d R. 306(a). There is no mandatory requirement in the rule that we engage in that review under all circumstances. While the Illinois Code of Civil Procedure requires a trial court to “rule upon all relief sought in all posttrial motions,” no such requirement is placed upon an appellate court. 735 ILCS 5/2 — 1202(f) (West 2006). In the case at bar, the trial court’s attention was focused almost entirely on the class decertification issue. In fact, the trial court’s memorandum order states: “in light of the Court’s ruling as to Class C Certification, the remaining issues raised by defendant are moot.”

Our reluctance to go further than we have in this opinion does not reflect an unwillingness to decide issues that must be decided. We simply conclude that the fair and orderly administration of justice requires that in this case we review important issues that have been thoroughly and seriously litigated and considered. That has not happened yet. The record below is not adequate.

We share the dissent’s concern for the age of the litigation and the costs to the parties, but we cannot allow that concern to distract us from our duty to decide issues when they are ready for decision.

CONCLUSION

For the reasons stated above, the trial court’s posttrial orders are vacated, the judgment on the verdict is reinstated, and this case is remanded for further proceedings consistent with this opinion.

Reversed and remanded with instructions.

WOLFSON, J., concurs.

1 The last page of the November 3, 2006, opinion stated: “The court’s certification order of June 8, 2000 is vacated.”

2 The dissent disputes that the trial court’s new trial ruling was based solely on decertification, since the trial court stated that the new trial was granted because the claims of the individual class members were “still alive.” The point was that the claims were still alive, even after decertification.

3 In its petition for leave to appeal, plaintiffs stated that the trial court “ordered a new trial based solely on the decertification ruling.”

4 Defendant agreed that the purpose of the new trial order was simply to preserve plaintiffs’ individual claims after decertification. In its appellate brief, defendant explained: “Because it found that individual issues predominated, *** the court decertified the class. [Defendant] Clark suggested that the court should enter judgment against the named plaintiffs because they had chosen not to ask for individual verdicts. The court rejected that alternative, granting the named plaintiffs a new trial based on their individual claims and allowing former class members to intervene to try individual nuisance claims.”

5 An earlier supreme court case, Robbins v. Professional Construction Co., 72 Ill. 2d 215 (1978), reached the opposite conclusion from Kemner. However, the appellate court stated that “the Kemner opinion overruled Robbins sub silentio.” Craigmiles v. Egan, 248 Ill. App. 3d 911, 918 (1993), discussed with approval in Stephens, 207 Ill. 2d at 229-30 (Freeman, J., specially concurring).