Jeff Kehl Wins Case of First Impression Protecting Workers’ Compensation Carriers from Civil Discovery

In Burdess v. Cottrell, Inc., 2020 Il App (5^th) 190279, income partner Jeff Kehl prevailed in a case of first impression before the Illinois Appellate Court on the issue of whether a workers’ compensation lienholder is subject to written discovery from a party in an existing lawsuit. The discovery dispute followed two contempt orders entered against a workers’ compensation carrier who, as an intervenor in a civil suit brought by the insured’s employee, refused to produce contents of 3,300 workers’ compensation claim files to Plaintiff’s counsel. Plaintiff’s counsel sought to discover whether Plaintiff’s employer had employees injured in a similar manner.

Jeff sought the first contempt order so that he could appeal the St. Claire County Circuit Court order requiring the carrier to answer formal interrogatories and a request for production of documents. The court obliged and Jeff appealed.

While the appeal was pending, Plaintiff issued a subpoena to the carrier seeking the same records; the carrier filed a motion to quash the subpoena. When the circuit court ordered the carrier to produce contents from the 3,300 claim files, Jeff again asked for a contempt order to allow for an immediate appeal. The court again obliged and the appellate court consolidated the two appeals.

The appellate court agreed with Jeff’s argument that as an intervenor, a workers’ compensation carrier was not subject to the Supreme Court rules regarding interrogatories and document production requests. The court’s holding that a carrier’s participation as an intervenor did not subject it to the discovery mechanisms intended to apply to parties now stands as clear precedent on that issue.

Turning to the second contempt order, regarding the scope of a record subpoena, the court held that the request for contents of 3,300 claim files was disproportionate to the cost that the carrier would incur in collecting and reviewing the files before turning over non-privileged materials. In one of few appellate decisions addressing the proportionality of record subpoenas scope, the court held that the circuit court abused its discretion in denying the motion to quash the subpoena.

Burdess will be a valuable precedent for employers and carriers in third-party civil suits brought by employees. Not only does the decision clearly establish that an employer/carrier does not open itself up to being considered a party for purposes of discovery, it also stands as precedent that the proportionality limitation on discovery under Rule 201(d)(3) is well-suited for a basis to object to abusive subpoenas directed at employers and carriers.