Haage v. Zavala, Docket No. 125918

CourtSupreme Court of Illinois
Writing for the CourtJUSTICE NEVILLE delivered the judgment of the court, with opinion.
Parties Rosemarie HAAGE, Appellee, v. Alfonso Montiel ZAVALA et al., (State Farm Mutual Automobile Insurance Company, Appellant).
Docket NumberDocket No. 125918
Decision Date23 September 2021

2021 IL 125918
183 N.E.3d 830
451 Ill.Dec.
373

Rosemarie HAAGE, Appellee,
v.
Alfonso Montiel ZAVALA et al., (State Farm Mutual Automobile Insurance Company, Appellant).

Docket No. 125918

Supreme Court of Illinois.

Opinion filed September 23, 2021.


183 N.E.3d 835

Glen E. Amundsen and Michael Resis, of SmithAmundsen LLC, of Chicago, for appellant.

Robert D. Fink and Kenneth A. Koppelman, of Collison Law Offices, Ltd., of Chicago, for appellees.

Patrick D. Cloud and Ann C. Barron, of Heyl, Royster, Voelker & Allen, P.C., of Edwardsville, and Laura A. Foggan (pro hac vice), of Crowell & Moring LLP, of Washington, D.C., for amicus curiae National Insurance Crime Bureau.

William J. Leonard, of Wang, Leonard, Condon & Seyfried, LLP, and Cynthia S. Kisser, of Lawrence H. Hyman & Associates, both of Chicago, for amicus curiae Illinois Public Research Group.

Sofia Zneimer, of Zneimer & Zneimer P.C., of Chicago, for amicus curiae Illinois Trial Lawyers Association.

JUSTICE NEVILLE delivered the judgment of the court, with opinion.

183 N.E.3d 836
451 Ill.Dec. 379

¶ 1 In each of two automobile personal injury actions, plaintiffs moved for entry of a qualified protective order (QPO) pursuant to the Health Insurance Portability and Accountability Act (HIPAA) ( Pub. L. No. 104-191, 110 Stat. 1936 (1996) (codified as amended in scattered sections of Titles 18, 26, 29, and 42 of the United States Code)) and its implementing regulations (45 C.F.R. pts. 160, 164 (2018)) (hereinafter Privacy Rule). Plaintiffs’ proposed QPOs would allow protected health information (PHI) to be released, but subject to the following restrictions: (1) nonlitigation use or disclosure of PHI is prohibited and (2) PHI must be returned or destroyed at the conclusion of the litigation. See 45 C.F.R. § 164.512(e)(1)(v) (2018). State Farm Mutual Automobile Insurance Company (State Farm), the liability insurer for the named defendants, intervened in each lawsuit and sought entry of its own protective order, which expressly allowed insurance companies to use, disclose, and maintain PHI for purposes beyond the litigation and expressly exempted insurers from the "return or destroy" requirement.

¶ 2 In both cases the circuit court of Lake County granted plaintiffs’ motions, entered their QPOs, and denied State Farm's motions. State Farm filed an interlocutory appeal in each case. Ill. S. Ct. R. 307(a)(1) (eff. Nov. 1, 2017). The appellate court consolidated the two cases and affirmed. 2020 IL App (2d) 190499, 442 Ill.Dec. 136, 158 N.E.3d 1171.

¶ 3 State Farm petitioned this court for leave to appeal as a matter of right ( Ill. S. Ct. R. 317 (eff. July 1, 2017)) or, alternatively, as a matter of discretion ( Ill. S. Ct. R. 315 (eff. Oct. 1, 2019)). We granted State Farm leave to appeal. For the following reasons, we now affirm the judgment of the appellate court and remand the cases to the trial court for further proceedings.

¶ 4 I. BACKGROUND

¶ 5 A. Underlying Complaints

¶ 6 In November 2017, plaintiff Rosemarie Haage filed a multicount complaint (No. 17-L-897) against defendants Alfonso Montiel Zavala, Patricia Santiago, Jose Pacheco-Villanuevo, Okan Esmez, and Rosalina Esmez. Haage sought to recover damages for bodily injuries sustained in a multiple-vehicle collision near the intersection of Lakeview Parkway and Route 60 in Vernon Hills.

¶ 7 In January 2018, plaintiffs Agnieszka Surlock and Edward Surlock filed a two-count complaint (No. 18-L-39) against defendant Dragoslav Starcevic. The Surlock plaintiffs sought damages for Agnieszka's bodily injuries and Edward's loss of consortium as a result of a collision between an automobile driven by Agnieszka and an automobile driven by Starcevic at the intersection of Grand Avenue and Route 45 in Lindenhurst.

¶ 8 B. Plaintiffs’ Motions for QPOs

¶ 9 In August 2018, plaintiffs, represented by the same attorney, filed nearly identical motions for QPOs allowing the disclosure of protected health information in their respective lawsuits. HIPAA's privacy standards are known collectively as the "Privacy Rule." Deborah F. Buckman, Annotation, Validity, Construction, and Application of Health Insurance Portability and Accountability Act of 1996 (HIPAA) and Regulations Promulgated Thereunder , 194 A.L.R. Fed. 133, 148 (2004). The

183 N.E.3d 837
451 Ill.Dec. 380

Privacy Rule is codified at parts 160 and 164 of Title 42 of the Code of Federal Regulations (45 C.F.R. pts. 160, 164 (2018)).

¶ 10 Plaintiffs’ QPO motions alleged as follows. First, the treating physicians, hospitals, and other health care providers for Haage and Agnieszka are subject to the Privacy Rule. Second, these covered entities possess their PHI in the form of medical records. Third, both the plaintiffs and the defendants in each case "will require that the parties, their attorneys, their attorneys’ agents, consultants and various witnesses and other personnel receive and review copies of the [PHI]" pertaining to Haage and Agnieszka. Fourth, HIPAA potentially prohibits covered entities from disclosing PHI in judicial proceedings other than by an authorization or QPO.

¶ 11 Therefore, plaintiffs submitted HIPAA QPOs that permit the use and disclosure of the PHI of Haage and Agnieszka. Relevant here, the proffered QPOs found that 45 C.F.R. § 164.512(e)(1)(v)(A), (B) (2018) requires the following two obligations. Paragraph 9 of the proposed QPOs finds that it is necessary to "[p]rohibit the parties and any other persons or entities from using or disclosing the PHI for any purpose other than the litigation or proceeding for which it was requested." Paragraph 10 of the proposed QPOs finds that it is necessary to "[r]equire the return of the PHI to the covered entity or the destruction of the information at the end of the litigation or proceeding."

¶ 12 Accordingly, each proposed QPO ordered: "The PHI of any party in this lawsuit may not be disclosed for any reason without that party's prior written consent or an Order of this court specifying the scope of the PHI to be disclosed, the recipients of the disclosed PHI, and the purpose of the disclosure." Each proposed QPO also ordered as follows:

"Within 60 days after the conclusion of the litigation, including appeals, the parties, their attorneys, insurance companies and any person or entity in possession of PHI received pursuant to this Order, shall return Plaintiff's PHI to the covered entity or destroy any and all copies of PHI pertaining to Plaintiff, including any electronically stored copy or image, except that counsel are not required to secure the return or destruction of PHI submitted to the Court. ‘Conclusion of the Litigation’ shall be defined as the point at which final orders disposing of the entire case as to any Defendant have been entered, or the time at which all trial and appellate proceedings have been exhausted as to any Defendant."

¶ 13 C. State Farm's Petitions to Intervene and File Objections

¶ 14 In September 2018, State Farm filed nearly identical petitions to intervene in each lawsuit. See 735 ILCS 5/2-408(a)(2) (West 2018). State Farm maintained that it was the casualty and liability insurer for at least one of the defendants in the Haage lawsuit and for defendant Starcevic in the Surlock lawsuit. State Farm alleged that plaintiffs’ proposed QPOs would impose upon it significant restrictions and obligations, and the attorney representing its policyholders is not conversant with either the legal issues raised by plaintiffs’ proposed QPOs or the statutes and regulations applicable to State Farm's business operations. The trial courts granted State Farm's petitions to intervene and granted State Farm leave to file objections.

¶ 15 In its objections to plaintiffs’ proposed QPOs, State Farm requested that the trial courts (1) deny plaintiffs’ motions for their QPOs and (2) grant State Farm's motions to enter its tendered alternative

183 N.E.3d 838
451 Ill.Dec. 381

orders (see Ill. S. Ct. R. 201(c)(1) (eff. July 1, 2014)). State Farm initially argued that, as a property and casualty insurer, it is not a "covered entity" under HIPAA. State Farm also argued that plaintiffs’ proposed QPOs contained restrictions that would directly conflict with its obligations and rights under Illinois law, specifically in two ways. First, State Farm argued that requiring it to return or destroy all copies of PHI following the conclusion of the litigation would interfere with its statutory and administrative obligations to maintain complete documentation of all books, records, and accounts, including claim files and claim data, and to make that information available for examination upon request by the Illinois Department of Insurance. Second, State Farm argued that restricting the use of PHI to the litigation at issue would interfere "with State Farm's rights under Illinois law to use a claimant's information to perform certain insurance functions." State Farm asked the trial courts to deny plaintiffs’ proposed QPOs.

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