Judicial Rulings

Illinois Supreme Court

Public Aid lacks power in Medicaid fraud

The state Department of Public Aid may not suspend or end health care providers' participation in the Medicaid program, the Illinois Supreme Court ruled October 17. The court ruled unanimously in Bio-Medical Laboratories v. James Trainor that no state law allows for the public aid agency to weed out doctors, pharmacists, laboratories or other vendors from the Medicaid program, even if they cheat the government. Such action may only be taken if a health care vendor has already been convicted of abuse. "We find that the total absence of standards criteria or procedures for terminating or suspending vendors, coupled with the express delegation of enforcement responsibilities, is persuasive evidence that the legislature did not intend to confer on the [department] the authority now claimed," opined Justice Thomas J. Moran for the court.

It was apparent from the ruling that the court wished the General Assembly to provide new statutory powers to the IDPA if it chose to continue administering the federal Medicaid program. Within a few hours of the ruling, Illinois Public Aid Director Arthur Quern had met with the governor and announced that the administration would seek a new law to close the loophole when the legislature came back October 24. It is estimated that fraud in the Medicaid program in Illinois ranges from $100 million to $300 million annually.

Attorney general is legal officer for EPA and PCB

The state Supreme Court ruled October 5 that the attorney general is to be legal representative for both the Environmental Protection Agency (EPA) and the Pollution Control Board (PCB), even when the two agencies are in conflict with each other over some environmental pollution issue. This ruling on Environmental Pollution Agency v. Pollution Control Board case affirms prior orders made by two appellate courts preventing the PCB from substituting state appointed counsel with outside or private counsel whose fees would be paid by the Attorney General's Office. One of the decisions, made by the 4th District Appellate Court, was in response to a petition for review by the EPA after the PCB dismissed a complaint filed by the EPA against Peterson/Puritan, Inc. for allegedly discharging contaminated waste waters. Since the petition was filed through the attorney

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general, his appearance as counsel to the PCB was considered by the EPA a conflict of interest. The appellate court approved the attorney general's withdrawal and allowed any PCB member, licensed to practice law, to represent the board. Another petition for review, filed in the 1st District Appellate Court by the attorney general on behalf of the EPA posed the same conflict of interest problems. The PCB which at the time had no "in-house" counsel was told by the attorney general that it could represent itself at its own expense. The PCB interpreted that as approval to appoint a substitute counsel who was not employed with the board. But the appellate court denied the PCB's decision. The Supreme Court, noting that neither of the petitions for review filed with the appellate courts are actions by the attorney general against the PCB, said the constitutional duty of the attorney general is to represent and advise all agencies of the state, even when agencies represent opposing claims.

Urbana's downtown redevelopment bonds serve public welfare

The state Supreme Court (The People ex rel. The City of Urbana v. Hiram Paley) affirmed a writ of mandamus issued by the Champaign County circuit court to the mayor of Urbana. The writ ordered the mayor to execute general obligation bonds and interest coupons as approved by the city council for the acquisition of downtown area land for an urban development plan. The mayor refused to sign the bonds on the grounds that public funding and lending of public credit for the purchase of private property used by private parties is in violation of the U.S. Constitution as well as the Illinois Constitution, which states in Article VIII, sec. 1(a) that, "public funds, property or credit shall be used only for public purposes." But in the court's opinion, delivered by Justice Ryan, the city's plan to eliminate urban blight and to reverse economic deterioration does serve the public welfare. The court also referred to an explanation of Article VIII made by a constitutional convention committee points out that public funds or credit arrangements can be made with either "governmental or non-governmental organizations whenever a public purpose will be served thereby." The court did not agree with the mayor's claim that the redevelopment plan under contention is in part "designed to bring financial reward to private developers"; though it did acknowledge that benefit to private parties was an incidental byproduct of the project aimed primarily to enhance the public welfare.

Plumbing law invalid

The Illinois Supreme Court dismissed (Illinois v. Francis Johnson) charges in a criminal complaint against a man who installed plumbing pipe and fixtures without a plumber's license. Agreeing with a circuit court dismissal, the ruling concluded that "the Illinois Plumbing License Law (Ill. Rev. Stat. 1973, ch. 111 1/2, sec. 116.36 et. seq.), as implemented by the regulations in force at the time of the offense with which the defendant is charged, was invalid." Furthermore, the state Supreme Court ruled that the director of Public Health, who is, by law, supposed to define precisely what constitutes "an approved course of instruction" for plumbers and to insure that adequate plumbing skills are taught, "has not fulfilled his duty."

Insurance director has power to set claim deadline

The director of insurance did not act contrary to the Illinois Constitution in prescribing a rule that suits brought against insurance companies for rejecting claims must be made no later than 12 months after claims are incurred. Based on this judgment a Cook County Circuit Court ruling in favor of two insurance claimants was reversed and remanded by the Supreme Court October 5 in Stoffer v. Motor Vehicle Casualty Co. and Fox v. The Hartford Fire Insurance Co. Two insurance holders filed suit against each of their companies which refused payment of their claims. But the insurance companies rejected their liability to respond because the suits were entered after the 12-month maximum time period expired. The circuit court dismissed the insurance companies' defense on the grounds that the 12-month time limitation is unconstitutional since that rule was prescribed by the director of insurance without the legislature's specific authorization to do so. The circuit court also claimed that the power of the director of insurance in that case is a violation of the principle of separation between governmental branches as mandated by the state Constitution in Article II, section 1. The court, acknowledging the problem of making clear distinctions between legislative and administrative acts when dealing with highly complex and technical issues, did not consider the rule making powers of the director of insurance an infringement of legislative powers. The court said that legislative delegation of authority to other branches of government is valid if it identifies "(1) the persons and activities potentially subject to regulation; (2) the harm sought to be prevented; and (3) the general means intended to be available to the administrator to prevent the identified harm."

Misleading medical advertising

In Talsky v. Department of Registration and Education the Illinois Supreme Court upheld the suspension of a chiropractor who unlawfully advertised his services, offering "FREE CHICKEN," "FREE REFRESHMENTS" and "FREE SPINAL X-RAY." The court reversed a Cook County Circuit Court ruling which said that advertising restrictions under the Medical Practices Act (Ill. Rev. Stat. 1971, ch. 91, secs. 16a(4), 16a (13)) "were overly broad and impermissably restricted freedom of speech in contravention of the first amendment to the United States Constitution." The state Supreme Court disagreed, explaining "in our view, plaintiffs advertisements were uninformative and misleading, they were not entitled to first amendment protection . . ." The court noted that "the advertisements offer free chicken and refreshments, identify with a well-known celebrity [the newspaper advertisement quotes Art Linkletter on drug abuse], and picture a man on his knees praying and asking, 'why didn't someone tell me about chiropractic care sooner' while relaying the message, 'Others get well, so can you.'" Another announcement said, "so we may know how much Chicken to order please call and tell us how many will be in your group." Despite ruling against such overzealous ads, the court indicated it might allow "restrained professional advertising" by some medical practitioners.

In response to the ruling, the Department of Registration and Education plans to enforce the law against false, deceptive and misleading advertising by those in health-related professions. Director Joan G. Anderson said, "We will try to strike a balance between restrained advertising that contains factual information helpful to intelligent decision-making by the public and regulating advertising that is uninformative, false, deceptive and misleading."

Appropriation bill must be limited to appropriations

It appears as if the legislature was trying to put one over on the Illinois Supreme Court and the 1970 Constitution. The legislature's end run around the constitutional provision limiting appropriations bills to appropriations was stacked up at the line.

In an important review of a constitutional test case wherein the legislature attempted to outlaw the operation of unemployment insurance near schools by writing such a ban into a general appropriation bill, the court said such a mixture of purposes is unconstitutional under Article IV, section 8(d), of the 1970 Illinois Constitution. The Constitution says, "Appropriation bills shall be limited to the subject of appropriations."

Yet in this case (Benjamin v. Devon Bank), the leadership of both political parties in both houses of the General Assembly joined in an amicus curiae (friend of the court) brief, claiming that the court had no right to review "Procedural Passage Requirements" concerning appropriation bills. Invoking the "enrolled bill rule," which precludes the courts from scrapping a bill on procedural grounds once it has been "certified" by the presiding officers of the two houses of the legislature, the amici brief argued against enforcement of the constitutional ban on substantive law from appropriations bills; a ban that is clearly stated.

"We hold that the provisions of section 8(d) limiting appropriation bills to the subject of appropriations is not a procedural requirement, but a constitutional limitation subject to Judicial review," the court declared. Thus ended the power sweep play of the legislature.

The next play by the court knocked down an attempted pass by the lawmakers. The court reversed a lower court decision enjoining the comptroller from spending funds to lease an unemployment insurance office at 6220 North California Avenue in Chicago. The court said the legislature should not have passed the substantive ban on locating unemployment offices within 500 feet of a school — not in an appropriations bill. Thus the office space may be rented, with funds appropriated by the bill in question.

TILT! Machine Bites Man!...

See Robert Guthrie. See the new washing machine. See Mr. Guthrie hook up the new washing machine. See the nice doggie. The nice doggie likes Mr. Guthrie. See Mr. Guthrie tilt the new machine. See the nice doggie run. See the nice doggie run and jump on Mr. Guthrie. The nice doggie is not so nice. Machine bites man!

In this case (Sears, Roebuck and Co. v. Industrial Commission), the Illinois Supreme Court upheld a workmen's compensation award granted to Guthrie by the Industrial Commission. Apparently the machine fell backwards and pinned him against the wall, injuring his right shoulder. Sears claimed it was an old football injury.

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