Cook County Judge Finds Pre-Judgment Interest Unconstitutional & Invalid

On July 1, 2022, pre-judgment interest in tort related lawsuits became law in Illinois (735 ILCS 5/2-1303).  On May 27, 2022, Judge Marcia Maras ruled that law is unconstitutional and invalid. (Hyland v. Advocate, Case No. 17 L 3541). 

The defendant argued the law violated multiple Illinois Constitutional provisions including: (1) the right to a jury trial; (2) the prohibition against special legislation; (3) separation of powers principles; (4) the read three times requirement; and (5) the single issue requirement.  The Court concluded the law is unconstitutional and invalid based on the right of trial by jury and the prohibition against special legislation and did not consider the alternative arguments. 

Violation of Defendant’s Right to A Jury Trial

The defendant argued it is the jury’s right and duty to assess damages to compensate a plaintiff and the new law violates the fundamental right to trial by jury as it improperly strips the function and role of the jury in assessing all issues, including damages, and instead requires an aware of pre-judgment interest after a verdict that exceeds the defendant’s time-limited settlement offer.  The defendant also argued that since pre-judgment interest is designed “to make the plaintiff whole”, the time period between injury and a finding of liability is already subsumed into the jury’s determination of damages as the assessment of damages is the preeminent function of the jury.

The Court agreed with the defendant’s argument and pointed to authority which supports the position that Cook County juries already award interest for the time period between injury and trial as part of damages – citing to a law review article: Michael S. Knoll, A Primer on Prejudgment Interest, 75 Texas Law Review 293 (1996).  The article concluded that on average, juries increased awards over and above inflation as measured by the Consumer Price Index at a rate of 3.7% per year from the time between injury and trial. 

The Court noted the plaintiff was unable to cite any authority to directly support her arguments. 

Violation of Prohibition Against State Legislation

The Illinois Constitution specifically states: (t)he General Assembly shall pass no special or local law when a general law is or can be made applicable.  The Illinois Supreme Court stated the purpose of special legislation “is to prevent arbitrary legislative classifications that discriminate in favor of a select group without a sound, reasonable basis.”  Best v. Taylor Machine Works, 179 Ill.2d 367, 391 (1997).  This clause also prohibits the General Assembly from conferring a special benefit or privilege upon one person or group and excluding others that are similarly situated.  Id.

The Court first determined the new law does not pass the strict scrutiny test for the following reasons:

  • The law was enacted to purportedly permit and injured party to be made whole for an injury from the time of the injury until judgment is entered.  The requirement that prejudgment interest be added to a jury’s award removes the jury from determining questions of fact as to what is reasonable and just compensation for a party’s injury and conditions a defendant’s right to a jury trial on the patient of a penalty.  This cannot be construed as to advance any compelling State interest.
  • The legislature could have used the more restrictive means of permitting the jury discretion to consider and award prejudgment interest.  By requiring it, the legislature removed a litigant’s right to have damages decided by the jury.

The Court next determined that, in the alternative, the law does not satisfy the rational basis test for the following reasons:

  • The law divides tort parties into two groups – personal injury / wrongful death actions which are subject to prejudgment interest and all other tort actions which are not.  It clearly and arbitrarily favors personal injury and wrongful death plaintiffs (while discriminating against those defendants) and is not rationally related to any State interest.
  • Defendants who are not served until more than a year after the case is filed are arbitrarily penalized and deprived the potential benefited afforded by the settlement offer.
  • Any  delays in the case will prevent even a diligent defendant from developing knowledge about the case necessary to evaluate a fair settlement offer so the defendant is penalized even if it did not cause the delay.  The law provides no vehicle in which to measure which party may be at fault for nay delay which may have occurred.

So Now What?

The plaintiffs will likely file an appeal and such an appeal will go directly to the Illinois Supreme Court.  Of course, the Illinois Supreme Court will not have a ruling prior to June 30, 2022, which is the deadline for the first round of written settlement offers in order to comply with the law – for any cases already pending when the law went into effect on July 1, 2021.  Therefore, it is recommended that defendants consider the law enforceable until the Illinois Supreme Court rules otherwise.