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January 29, 2014

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Trial Lawyers Say Illinois May Not Be As Bad Off As Claimed
From the Dispatch-Argus
Illinois' business environment and economy are not as bad as Gov. Bruce Rauner says, according to the Illinois Trial Lawyers Association.
Stephen Phillips, past president of the Illinois Trial Lawyers Association, spoke Wednesday with editors from The Dispatch and The Rock Island Argus about Gov. Rauner's positions, particularly his proposed changes in tort and workers' compensation laws.
He said the group has heard about what it expected since Gov. Rauner's election in November.
"There's a lot of thunder, there's a little bit of lightning, but there's not a lot of substance," Mr. Phillips said.
A "Bring Back Blueprint" on Gov. Rauner's website contends Illinois has a bad business climate and is losing jobs and population because of it. The site says Chief Executive magazine lists Illinois 48th out of 50 states for business in 2014. The site's stated goals include changing workers' compensation policies to reduce the cost to employers and changing where lawsuits can be filed.
Mr. Phillips said his group contends Illinois is more business-friendly and has a stronger economy that has been portrayed. The group's own report cites CNN as listing Illinois as the headquarters of 33 companies among America's largest on the 2014 Fortune 500. It also cites the Kaiser Family Foundation as ranking Illinois fifth in the U.S. for gross state product in 2011.
In 2011, Illinois enacted workers' compensation reforms that Gov. Rauner's report contends have not gone far enough. His report contends Illinois workers' compensation requirements remain among the most expensive in the U.S. and its rules must be changed to help ensure companies pay for actual work-related injuries.
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January 30, 2014

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As Rauner Readies Cuts, Social-policy Groups Go On Offense
From Crain's Chicago Business
A pair of left-leaning social policy groups is trying to go on the offensive as Gov. Bruce Rauner prepares to unveil a proposed Illinois budget for fiscal 2016 that many experts suspect will whack spending on social services in a major way.
In separate reports, Voices for Illinois Children and the Heartland Alliance contend that a state with substantial wealth is not doing what it should to help low-income people, in part because its tax level is relatively low.
Chicago-based Voices for Illinois Children specifically cited data that it says indicate that, relative to personal income, Illinois was in the middle of the states in levying taxes, ranking 22nd, and near the bottom in terms of actual spending, 37th by its count.
Beyond that, the organization argues, "There is no consensus among experts that state tax cuts improve economic growth," and, in fact, taxes alone rarely are the reason people move to other states. Florida, for instance, lost population to 15 states between 1993 and 2011 even though it has no income tax.
The group did not directly comment on Rauner's pledge to boost spending on elementary and high schools, but did note that funds for universities and safety-net programs, like anti-homelessness efforts, also are in jeopardy.
Meanwhile, Heartland's Social Impact Research Center cited data showing that 33 states have fewer households paying over half of their income on rent than Illinois, 24 states have a lower poverty rate than Illinois' 14.7 percent, and 22 have a lower health insurance rate among children and working-age adults. Their report is titled "Poor by Comparison: The Dreary State of the Prairie State."
"If our state leaders want to build Illinois' reputation as the best place to live, go to school, work and play, they mast make intentional long-view decisions that shore up the well-being of all Illinoisans, especially the nearly one-third with low incomes," Sid Mohn, president of Chicago-based Heartland, said in a statement.
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February 2, 2014

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Bruce Rauner Almighty?
From the Wall Street Journal
Republican Gov. Bruce Rauner won election in November with a mandate to reinvent Illinois, and last week he teed up some of his plans.
Mr. Rauner took a warm-up swing at the unions with a speech in Decatur, which happens to be the home turf of AFL-CIO President Michael Corrigan. For starters, he wants to do away with project labor agreements (PLAs) “that are basically what the unions have worked out with the politicians” who “they influence with campaign cash and then impose those contracts on the businesses that contract with the state.” Mr. Rauner complained that PLAs, which usually require contractors to pay union wages and benefits on public construction projects, increase costs by about 18%.
Also on his agenda are “right to work zones” that allow local voters and governments to decide whether workers should be required to join a union and pay membership dues as a condition of employment. While the Republican doesn’t intend to make Illinois a right-to-work state—he wouldn’t have the votes in the heavily Democratic legislature—he fundamentally supports “employee empowerment,” which is his preferred term for right-to-work. So cities like Decatur could pass their own right-to-work ordinances without the state enacting legislation.
His other ideas to make Illinois more business friendly include cutting workers’ compensation and unemployment insurance costs. He also wants to curb “lawsuit abuse,” which he says is “pushing doctors and health care providers out of the state.” One problem is “we’re one of the few states that elect our judges” and “we have unlimited ability for trial lawyers to donate political campaign cash to judges in their elections, the same lawyers who argue cases in front of those judges.”
Mr. Rauner’s more urgent, and less glamorous, job will be closing a $5 billion deficit over the next two years without raising taxes. The personal income and corporate tax increases that Democrats passed in 2011 partially sunset this year, and the governor has suggested extending the sales tax to some services to fully phase out the income-tax hike and close the budget gap. That will be a heavy lift in the legislature. A source says Mr. Rauner will likely deal with the deficit by sharply cutting state agency budgets and farming out government contracts to private businesses.
The governor next month will flesh out his agenda in his budget, which judging by his sneak preview may rank among the boldest in the country. If Mr. Rauner’s goal is fixing the most ill-governed state in the union, nothing less will do.
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February 3, 2014

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Rauner Says He Wants To Curb Government Unions
From the Associated Press
Gov. Bruce Rauner said Monday Illinois must curb government union powers and reduce spending on state employees' salaries and benefits, stepping up what labor leaders said is an attempt to "vilify" workers ahead of the Republican's first major policy speech.
In a memo to legislators, Rauner pointed to rules for federal employees as the kind of "common-sense bipartisan reform" he'd like to see in Illinois, and asked lawmakers to review them in advance of his Wednesday State of the State speech. Those rules say employees may collectively bargain over work conditions such as hours and assignments, but not over wages, benefits and pensions. They also say workers can't be forced to participate in a union and are prohibited from strikes or work slowdowns.
While he said he doesn't plan to propose salary cuts for government employees, Rauner also repeated claims that state workers are paid more than their peers in the private sector and said lawmakers must "prevent any future imbalances and unfair practices."
"These levels are unsustainable and unfair to working families, small businesses and other taxpayers in Illinois," the multimillionaire private equity investor from Winnetka said. "They limit our ability to grow our economy and to fund much needed social services."
The proposals are likely to face serious opposition in the Legislature, where labor unions have strong alliances with some Republicans as well as the Democrats who control both chambers.
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February 4, 2014

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Rauner Expected To Propose Limits On Union Bargaining
From the Springfield State Journal-Register
Gov. Bruce Rauner will formally outline his vision for the state’s future on Wednesday, after taking a final jab at state worker salaries and public employee unions in the lead-up to his first state of the state speech.
Rauner will deliver the speech beginning at noon, and previously said it will include some of the slides he’s been using while traveling the state the last two weeks offering previews.
The last two slides in the series were released Monday along with a letter to state lawmakers asking them to review the information.
One of the slides outlines the federal service labor-management relations statute of 1978 that places limits on what federal employees are allowed to negotiate. Among the things they are not allowed to collectively bargain over are wages, benefits, pensions and personnel decisions.
The other slide repeats Rauner’s belief that state workers are overpaid in comparison to similar jobs in the private sector.
“I think that every working person deserves a livable wage,” said Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees, which represents the most state workers. “Driving down wages won’t make Illinois more prosperous or a better place.”
“I would say the comments the governor has made so far regarding working people betray a very unsophisticated understanding of labor,” added Dan Montgomery, president of the Illinois Federation of Teachers, which represents a small number of state workers. “We’re still looking at this governor, going, 'Where is your vision for improving the economy of Illinois?'”
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Illinois: Magnet For Trial Lawyers?

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From the Associated Press

High on Rauner’s agenda is making Illinois more business-friendly and creating jobs.

He said during his inaugural speech last month that he’d ask the Legislature to work with him on a “comprehensive jobs and economic package that will get Illinois working again.”

That’s likely to include lowering the cost of workers’ compensation and unemployment insurance, and addressing a legal climate Rauner says is a magnet for trial lawyers.

Rauner also has signaled he’ll take on government “bureaucracy,” whether in education or by eliminating or consolidating some of Illinois’ roughly 7,000 units of government. High on Rauner’s agenda is making Illinois more business-friendly and creating jobs.

He said during his inaugural speech last month that he’d ask the Legislature to work with him on a “comprehensive jobs and economic package that will get Illinois working again.”

February 5, 2014

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Rauner's Plans Get Mixed Review By Business Leaders, Pushback From Others
From the Chicago Tribune
The pro-business positions that Republican Gov. Bruce Rauner outlined Wednesday in his first State of the State message may be eclipsed only by the size of the political mountain he must scale to move them from rhetoric to reality.
The rookie chief executive and venture capitalist put his official stamp on proposals to let communities vote on right-to-work zones where jobs are scarce, scale back workers' compensation, rein in lawsuit damage awards and lower unemployment insurance rates.
Rauner also offered his own proposal to boost the state's minimum wage from $8.25 to $10 by bumping it up a quarter annually for seven straight years. That pace is slower and ends at a lower level than two other measures: the Chicago ordinance approved last year that will raise the city minimum to $13 by mid-2019 and a bill that advanced in the Democratic-led Senate on Wednesday to raise the minimum wage to $11 over four years.
Republican legislative leaders hailed Rauner for rolling out an agenda that would steer Illinois away from the pro-labor policies that have been in vogue in Springfield. But they also nodded to the idea that sweeping change will be difficult to accomplish with the House and Senate in Democratic hands.
"There's a lot of hope and optimism," said Senate Republican leader Christine Radogno of Lemont. "Obviously, we're all going to be tested significantly in the coming few months."
House Speaker Michael Madigan, D-Chicago, did not summarily dismiss the Rauner proposals.
"I wouldn't characterize anything as a non-starter," he said. "I agree with the governor that the state of Illinois needs a lot of work, a lot of attention."
Madigan also noted that as a successful businessman, Rauner has "learned about compromise."
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February 6, 2014

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Ready To Rumble
From the Chicago Daily Law Bulletin
Gov. Bruce Rauner described the agenda he presented Wednesday as “bold, aggressive and comprehensive.”
His opponents called it a “declaration of war.”
During his State of the State remarks on the House floor and in documents he gave to lawmakers, the Republican called for laws capping “unreasonable” civil judgments, restricting venue-shopping and preventing trial lawyers from making campaign donations to judicial candidates.
Saying it would “take another step towards trustworthy government,” Rauner also threw his support behind an appointment process for judges.
“This is our last, best chance to get our house in order, to restore good government,” Rauner said. “Let’s approach our 200th year as the great state of Illinois as a proud people, standing tall, with eyes focused on the future.”
Specifics on those ideas — whether they could withstand potential legal challenges or even pass a Democrat-controlled legislature — are unclear.
There’s little doubt how the Illinois Trial Lawyers Association feels about them.
The plaintiff-lawyer group blasted Rauner in a statement after the speech, calling it a “declaration of war” on middle- and lower-income citizens and saying the idea to ban trial lawyer contributions in particular would erode constitutional rights.
“It’s really startling to hear a sitting governor say that some particular class of people cannot participate. What’s next? Nurses can’t participate? Or firemen? Or members of a particular race or religion?” ITLA President John D. Cooney, a partner at Cooney and Conway, said after the speech.
“It isn’t possible that this particular governor is not aware of how unconstitutional or illegal that suggestion is.”
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February 9, 2014

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State Funds Running Out For Court Reporters
From the Chicago Daily Herald
Illinois is set to run out of money at the end of March to pay court reporters, creating the potential for "havoc" in local courts, one suburban judge said.
The budget crunch leaves uncertainty about how the local justice system will operate if lawmakers and Gov. Bruce Rauner don't find a fix by then.
"We need court reporters every day," Lake County Chief Judge John T. Phillips said. "It would be havoc."
DuPage County Chief Judge Kathryn E. Creswell said she doesn't want to cause panic because there's time for the state to fix the problem. Still, she said, judges have to be responsible and start planning for the coming shortfall now so that courts don't shut down in early April.
The problem stems from the budget approved by Democratic lawmakers and former Gov. Pat Quinn last year. State money ran out this week for a program that helps low-income families pay for day care, leaving child-care centers to either drastically raise rates for those families or live with delayed payments.
Rauner spokeswoman Catherine Kelly said the court reporter program is $14.3 million short for the budget year that ends June 30.
"Currently, it will run out of money at the end of March," Kelly said. "The governor is working with the legislature to find a responsible solution to the problem."
A spokeswoman for Democratic Senate President John Cullerton said problems shouldn't be surprising because Cullerton and others called the budget incomplete when it was approved last year.
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February 10, 2014

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Rauner Exec Order Takes Aim At Unions
From the Associated Press
Gov. Bruce Rauner has stepped up his campaign against government employee unions by eliminating so-called "fair share" dues paid by workers who don't join a union.
The Republican said Monday he has signed an executive order erasing what he says is a "critical cog in the corrupt bargain crushing taxpayers." He says forcing non-union employees to pay union dues requires them to fund political activity they don't agree with.
He says he took action after a U.S. Supreme Court's decision last year that found the Illinois Public Labor Relations Act violated the First Amendment by mandating involuntary union dues.
Rauner has called for ending political contributions by unions.
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February 11, 2014

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Chicago Litigation Funder Now Largest In World
From the Chicago Daily Law Bulletin
Litigation finance firm Gerchen Keller Capital LLC said Tuesday it raised $475 million for its latest private fund, hiking its assets to more than $800 million and making the nearly 2-year-old investment firm the world’s largest focused on legal and regulatory risk.
And as big as it is, GKC is also nimble.
In a sign of the growth and evolution of litigation finance, which has typically been described as providing non-recourse loans in exchange for a share in litigation awards, GKC’s latest and largest investment fund will offer a different, less-risky type of product.
Rather than investing in lawsuits at early stages, the money will be used to purchase the rights to collect legal fees, judgments and settlements that have largely been resolved. The financing allows companies and law firms to immediately collect awards that, for example, may be waiting on court approval.
The firm has already invested more than $100 million in post-judgment or post-settlement cases where the “legal risk” has largely been eliminated.
“This really grew out of the market demand from our clients, companies and law firms,” said CEO Adam R. Gerchen.
“These opportunities were already coming to us without us necessarily looking for it. It was a product that the market told us was in heavy demand that wasn’t necessarily out there for law firms and companies.”
The new investment fund is just one sign of the growth at GKC.
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February 12, 2014

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Kass: Tragic Little League Tale Adds To Corrupt Chicago Image
From the Chicago Tribune
When the news broke that Chicago's great baseball team — Jackie Robinson West — had been stripped of its national Little League title, the inevitable happened.
America asked: Is there nothing in Chicago — birthplace of the Chicago Way — that isn't corrupt?
The mayor of Chicago weighed in and the president from Chicago too, as did other politicians. Because the team was African-American, certain reverends played the race card. Supporters of the Little League's decision played the rules card.
And there was so much anger that it didn't feel like baseball.
It felt like an election.
At the Jackie Robinson West home field on the Far South Side, in the Washington Heights neighborhood, about 2 feet of snow covered the baseball field.
Marcus Evans, 35, a neighborhood man who said he played for Jackie Robinson West years ago, was grieving.
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February 13, 2014

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Can't Fix Illinois' Finances Without Tax Hikes, Civic Federation Says
From Crain's Chicago Business
Just days before Gov. Bruce Rauner unveils a budget that is expected to include few new revenues, one of the state's leading taxpayer watchdog groups is proposing a sharply different path.
In a report issued today, Chicago's Civic Federation proposes not massive spending cuts but a range of revenue hikes, including a partial rollback of the income tax cut that took effect on Jan. 1; expanding the sales tax base to include services; temporarily eliminating the sales tax exemption for food and nonprescription drugs; and taxing some retirement income.
The group also wants to slow spending growth to 2 percent from the recent 2.7 percent annual level but warns that much deeper cuts than that may be counterproductive.
In an interview, federation President Laurence Msall said the five-year plan is "not a shot across the bow" at Rauner, who is expected to include few if any new revenues when he unveils his fiscal 2016 budget Feb. 18. Rather, Msall said, the report is "a warning call about how dire the state's fiscal condition is."
But given ongoing debate in Springfield, the report is likely to be seized on by ruling Democrats as proof that the new GOP governor is being unreasonable.
Msall said the federation looked for a way to balance the books and pay the state's bills without making the roughly 20 percent across-the-board cuts in discretionary spending that would be needed. "We were not able to do it," Msall said.
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February 16, 2014

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Justice's Legal Foes Continue Their Attack
From the Champaign News-Gazette
Fighting over money is sssooooooooo distasteful.
But when $10.1 billion is up for grabs, what are a bunch of cash-mad lawyers to do?
So it is no great surprise that trial lawyers pursuing the Great White Whale of civil judgments are trying — for the third time — to force a judge they consider unfriendly — Illinois Supreme Court Justice Lloyd Karmeier — off the case.
Led by Stephen Tillery of St. Louis, they filed a legal motion last summer asking Karmeier not to participate in the impending review of Price vs. Philip Morris because of a "perception" that he is biased.
High court justices unanimously denied the motion, Karmeier writing a 16-page decision explaining why the lawyers' charges were false.
"A judge is as much obliged not to recuse himself when it is not called for as he is obliged to when it is," he wrote.
Tillery & Co. then took another tack in their plan for judicial defenestration. They organized a lavish television advertising campaign to defeat Karmeier's bid for retention last November.
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February 17, 2015

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Illinois Hospital Association Urges Rauner To Support Medicaid Program
From the Illinois Hospital Association
The Illinois Hospital Association is urging Governor Bruce Rauner to fund the state's Medicaid program and enable the hospital group to continue recent reforms which helped reduce Illinois' spending on Medicaid by more than $1 billion since 2012.
"As a result of recently enacted reforms, Illinois’ Medicaid program is in the midst of great transformation, with new ways to deliver care, improve outcomes and achieve savings," the IMA said in a letter to news media outlets and others, including the ICJL.
More than 115 hospitals across the state are part of innovative systems, such as Accountable Care Entities and Care Coordination Entities, that coordinate care for Medicaid enrollees to ensure the best outcomes and control costs. These reforms have also reduced Illinois’ spending on Medicaid by more than $1 billion since 2012, the IHA reported.
IHA President Maryjane A. Wurth stated, "Why is that important? Many of our families, friends and neighbors rely on Medicaid for their health and well-being. It’s the only insurance for one out of every two children in Illinois, and one in four Illinoisans – kids, adults, seniors and individuals with disabilities or mental illnesses – are covered by Medicaid.
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February 18, 2015

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Madigan: Rauner Says To Expect 'Tough Medicine' In Budget Speech
From the Chicago Tribune
Gov. Bruce Rauner met with the four legislative leaders Tuesday, and they said the governor warned them he’s prepared to deliver some “tough medicine” in the form of major cuts during his first budget address Wednesday.
The roughly half-hour, closed-door meeting apparently was in lieu of the traditional briefings governors usually hold to give lawmakers a glimpse of the budget before the formal speech.
“We had a very pleasant discussion,” said House Speaker Michael Madigan, D-Chicago. “The governor simply said that he’s got some tough medicine to deliver tomorrow. He understands that some people will not be happy, but he’s committed to reforming the finances of the state. And he has a program and an agenda to accomplish that.”
Rauner faces a budget shortfall of approximately $5 billion in the spending year that begins July 1, on top of a nearly $1.5 billion hole he must grapple with immediately. The shortfalls follow the expiration of a major portion of the state’s income tax increase at the start of the year, a rollback Rauner supported.
While Rauner previously has indicated he’d support expanding the sales tax to various services, Madigan said he doesn’t expect the governor to propose ways to raise new revenue but does anticipate at Rauner push for large spending reductions. Madigan indicated Rauner was in store for a tough fight on that front.
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February 19, 2015

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Rauner's 'Turnaround Budget' Has Cuts Called 'Reckless,' 'Wrong Priorities'
From the Chicago Tribune
Republican Gov. Bruce Rauner on Wednesday dubbed his first spending plan a “turnaround budget” for a financially shaky state, but Democrats rebuffed his proposed cuts to health care for the poor, government worker pensions, state universities, mass transit and cities across Illinois.
“This is our last, best chance to get our house in order,” the governor declared during a speech that drew tepid applause from the lawmakers he addressed. “Let’s get it done, together.”
Rauner went after some of state government’s political sacred cows: Medicaid; money for Mayor Rahm Emanuel’s beleaguered city budget; the CTA and Metra; public employee health insurance and retirement benefits; and the University of Illinois.
All of those interests sounded dire warnings and geared up their powerful lobbying operations to fight the proposed budget. Some Democratic leaders reacted angrily to the rookie governor’s address, hearkening back to his days as a partner in a private equity investment firm.
“One of the things Gov. Rauner has to learn is the Illinois Constitution refers to the General Assembly and the governor as partners,” said Rep. Lou Lang, D-Skokie. “He wants to run the government like it's a business, we're middle management, and he's the CEO, and we must take orders. That's not going to work.”
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Trial Lawyers Whip Rauner, 1260-2 — In Words, That Is

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By Ed Murnane, Past President of ICJL

The Illinois Trial Lawyers Association used approximately 1,260 words Tuesday to rip Governor Bruce Rauner for opening “a new front in the 40-year war on American workers that has left the average person with less wealth, real income, and economic security, and is undermining the strength of our nation.”

That’s the trial lawyers’ language, by the way.

This horrendous conduct by the new governor of Illinois, these terrible threats to American workers (not just Illinoisans), this plundering of income, economic security and “undermining the strength of our nation” apparently is the result of two words Rauner used in his first Budget Message Wednesday: Lawsuit Reform.

The trial lawyers’ rampage was contained in a 67-line (body text only) statement that apparently was widely circulated, including to legislators and the news media shortly after the governor’s speech. John Cooney, president of ITLA, is credited as the author of the trial lawyers’ statement.

We listened to the governor’s speech, and we reviewed the transcript, and we neither heard nor found anything more than this line:

“To grow our economy, we must enact meaningful workers compensation reform, unemployment insurance reform, lawsuit reform, pension reform and tax reform.”

Most Illinois residents realize and agree there are many reforms needed in Illinois. They see Illinois unfavorably compared with neighboring states, even Michigan, which has seen its major city go through bankruptcy. They realize that Illinois can’t hold a candle to prosperous neighboring states, including Wisconsin and Indiana.

Illinoisans know that their state has a reputation for government corruption; they read about “judicial hellholes” — the court systems at opposite ends of Interstate 55.

They know government itself has been a significant part of the problem — or why would they evict a Democrat from the governor’s mansion in a state that has become — or seemed to have become — solidly Democratic?

The people of Illinois want change. They voted for that change two months ago and there is now a governor who hears their message, who hears their call, and is prepared to tackle each of our short-comings — despite which special interest group may be offended by his actions.

Read the entire ITLA message.

February 20, 2015

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New Rauner Pension Plan Raises Familiar Legal Questions
From the Chicago Daily Law Bulletin
One attorney called it “blatantly unconstitutional.”
A lawmaker said the math doesn’t add up.
And another said he would give it the benefit of the doubt.
Such is the range of reactions regarding Gov. Bruce Rauner’s idea to overhaul the state’s public pension systems, which he called a top fiscal priority regardless of how the Illinois Supreme Court rules on a previous reform plan.
Rauner’s proposal, highlighted early in his budget address to state lawmakers Wednesday, would move all current state employees from their existing pension classification to a group currently entered only by new state workers.
Benefits already earned under their current designation would remain unchanged, including for already retired employees, Rauner said, but any benefits earned going forward would fall under the second pension classification.
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February 23, 2015

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Colleague’s Lie Dooms Legal-mal Coverage
From the Chicago Daily Law Bulletin
Even if you don’t know that a colleague lied on your law firm’s legal-malpractice insurance application, all the attorneys at the firm could lose coverage if the misrepresentation is exposed.
In a 6-1 decision Friday, the Illinois Supreme Court ruled an insurance company could legally rescind a policy because it was procured with a false statement of facts, even though another attorney covered by the policy didn’t know about the misrepresentation.
The dissenting justice, Thomas L. Kilbride, indicated that the ruling will spell trouble for midsize and large law firms.
“Under the majority’s view, a material misrepresentation on an insurance application could cause rescission of the policy as to each and every attorney, despite their reasonable expectations of continued professional liability insurance coverage,” Kilbride wrote.
“Furthermore, as the size of the affected firm increases, so does the potential harm to the public.”
The majority opinion was written by Justice Charles E. Freeman. It overturns a previous ruling authored by Justice Jesse G. Reyes of the 1st District Appellate Court and affirms a decision by Cook County Associate Judge Rita M. Novak.
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