Lavery v. Dep't of Fin. & Prof'l Reg.

230 N.E.3d 750

2023 IL App (1st) 220990

Terrence LAVERY; Illinois Professionals Health Program, LLC; and Anil Ramachandran, Plaintiffs,

v.The DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION, Defendant-Appellant

(Terrence Lavery and Illinois Professionals Health Program LLC, Plaintiffs-Appellees).

No. 1-22-0990

Appellate Court of Illinois, First District, SIXTH DIVISION.

Filed August 25, 2023

Appeal from the Circuit Court of Cook County. No. 2020-CH-01202, Honorable Caroline Kate Moreland, Judge Presiding.

Kwame Raoul, Attorney General; Bridget DiBattista, Assistant Attorney General; and Jane Elinor Notz, Solicitor General, of Chicago, for appellant.

Rick Schoenfield, of DiVincenzo Schoenfield Stein, of Chicago, for appellee.

OPINION

PRESIDING JUSTICE MIKVA delivered the judgment of the court, with opinion.

¶ 1 The circuit court in this case concluded that the Department of Financial and Professional Regulation (Department) wrongfully required Mr. Lavery, a thera- pist called as a witness in proceedings for the reinstatement of his patient’s medical license, to produce personal notes protected as confidential work product under the Mental Health and Developmental Disabilities Confidentiality Act (Confidentiality Act or Act) (740 ILCS 110/1 et seq. (West 2020)). The court entered an award of attorney fees and costs, as provided for in the Act, in favor of Mr. Lavery and his employer, Illinois Professionals Health Program, LLC (IPHP) (collectively, plaintiffs), as the prevailing parties in an action to redress a violation of the Act, and against the Department.

¶ 2 The Department does not challenge on appeal the court’s findings that Mr. Lavery was a therapist as defined by the Act, that the documents in question were personal notes protected from disclosure, that the Department violated the Act by insisting on the production of those notes, or that the amount of fees and costs claimed was reasonable. Its sole contention, which it did not argue below and is making for the first time as the basis for this appeal, is that the circuit court lacked subject matter jurisdiction to enter an award of fees and costs against the Department because of the protection that sovereign immunity affords the State of Illinois.

¶ 3 Plaintiffs maintain that sovereign immunity does not apply to this fee award because (1) an exception to the doctrine applies where the primary relief sought is to enjoin a state actor from engaging in prohibited conduct and this award is ancillary to such injunctive relief, and (2) sovereign immunity only applies to claims made against the State and this order for fees and costs grew out of an administrative proceeding initiated by the Department itself, not plaintiffs. Plaintiffs’ third argument is that, even if sovereign immunity would otherwise apply, there is clear language in the Confidentiality Act waiving sovereign immunity for violations of the Act by the State.

¶ 4 For the following reasons, we agree with plaintiffs that sovereign immunity does not apply here, based on the fact that the fees and costs are ancillary to injunctive relief, and do not reach the two other arguments that plaintiffs make. We affirm the circuit court’s award of fees and costs.

¶ 5 I. BACKGROUND

¶ 6 A. The Mental Health and Developmental Disabilities Confidentiality Act

¶ 7 This case grows out of Mr. Lavery’s assertion of the therapist’s work-product privilege to withhold personal notes he took during his treatment of Dr. Anil Ramachandran in proceedings before the Department in which Dr. Ramachandran sought reinstatement of his medical license. Under the Act, a therapist—defined in part as "a psychiatrist, physician, psychologist, social worker, or nurse providing mental health or developmental disabilities services" (id. § 2)—is not required to but may keep personal notes regarding the recipient of such services (id. § 3(b)). Personal notes include:

"(i) information disclosed to the therapist in confidence by other persons on condition that such information would never be disclosed to the recipient or other persons;

(ii) information disclosed to the therapist by the recipient which would be injurious to the recipient’s relationships to other persons, and

(iii) the therapist’s speculations, impressions, hunches, and reminders." Id. §2.

¶ 8 A therapist’s personal notes will not be considered "confidential communications" or "records" of mental health or developmental disability services—which are separately defined and for which the recipient of such services may waive privilege. Id. §§ 2, 4, 5(a). To qualify as therapist’s notes, they must be "kept in the therapist’s sole possession for his [or her] own personal use" and "not disclosed to any other person, except the therapist’s supervisor, consulting therapist or attorney." Id. § 2. Section 3(b) of the Act provides that such notes "are the work product and personal property of the therapist" and "shall not be subject to discovery in any judicial, administrative or legislative proceeding." Id. § 3(b). Section 15 further provides that "[a]ny person aggrieved by a violation of th[e] Act may sue for damages, an injunction, or other appropriate relief’ and that "[r]easonable attorney’s fees and costs may be awarded to [a] successful plaintiff in any action under th[e] Act." Id. § 15.

¶ 9 B. The Department’s Licensing Proceedings

¶ 10 The Department initiated licensing proceedings against Dr. Ramachandran in 2014, and in 2015 it suspended his medical and controlled substances licenses pursuant to a consent order. When Dr. Ramachandran petitioned in 2018 to have his licenses restored, he called as a witness Mr. Lavery, the case manager who, for over four years, had been responsible for monitoring his compliance with a substance and alcohol abuse recovery plan.

¶ 11 This case arose out of that administrative action. Mr. Lavery alleged in his complaint that, during his testimony in the licensing proceedings, he disclosed the existence of personal notes kept by him in connection with his provision of mental health services to Dr. Ramachandran. When the Department asked for a copy of the notes, Mr. Lavery explained that they "were not provided because they were ‘work product.’" The administrative law judge (ALJ) presiding over the hearing stated in his order that he then reviewed the relevant discovery requests and responses, halted Mr. Lavery’s testimony, and ordered that the notes be produced.

¶ 12 Mr. Lavery moved for a protective order, asserting that the documents at issue were protected from discovery under the Act as the personal notes of a therapist. Following briefing and a hearing, the ALJ entered a written order denying the motion. The ALJ agreed that, as a licensed clinical professional counselor, Mr. Lavery qualified as a therapist under the Act. He concluded, however, that Mr. Lavery had failed to meet his burden of establishing that the withheld documents fell within the statutory privilege. Despite the fact that Mr. Lavery had asserted the privilege while testifying under oath and subject to cross-examination, the ALJ faulted him for not "attach[ing] an affidavit concerning the records in question" to his motion. On December 12, 2019, the ALJ denied Mr. Lavery’s motion for a protective order and ordered him to produce the withheld notes.

¶ 13 In response to Dr. Ramachandran’s argument that the Department lacked jurisdiction to rule on the applicability of the statutory privilege, the ALJ stated in his order:

"[A]s a general matter, an Administrative Law Judge determines issues of confidentiality and privilege all the time. To the extent that Petitioner [(referring to Dr. Ramachandan)] argues that, in a specific case implicating the therapist’s work product privilege, documents submitted for an in camera inspection require review by a judge from a reviewing court, and not an Administrative Law Judge, Petitioner is correct. 740 ILCS 110/10. However, we have not yet reached this stage."

¶ 14 In a handwritten order entered the following month, the matter was continued "[a]waiting [Mr. Lavery’s] decision on the production of the documents and/or filing of action in chancery."

¶ 15 C. The Present Action

¶ 16 In response to that order, Mr. Lavery and IPHP initiated this action in the circuit court on January 29, 2020. They sought a declaration that the withheld documents were protected by the therapist’s work product privilege codified in section 3(b) of the Act (id. § 3(b)), a protective order stating that Mr. Lavery was not required to produce the documents to the Department, attorney fees and costs pursuant to section 15 of the Act (id. § 15), and "such other and further relief that the Court deem[ed] just, including but not limited to, an in camera inspection." Plaintiffs also asserted, but later withdrew, a claim for administrative review.

¶ 17 According to the parties’ filings in the circuit court, the administrative proceeding on Dr. Ramachandran’s petition for the reinstatement of his licenses was stayed pending the court’s resolution of plaintiffs’ complaint.

¶ 18 The circuit court conducted an in camera inspection, ruled that the withheld documents were indeed the protected notes of a therapist, and granted Mr. Lavery’s request for a protective order.

¶ 19 Plaintiffs then moved for an award of attorney fees and costs under section 15 of the Act (id.). They sought $4079.21 payable to IPHP for payments it had already made to plaintiffs’ law firm, and $6560 payable directly to the firm for amounts still outstanding. Plaintiffs supported their motion with contemporaneous time records and an affidavit from their counsel. Following a hearing, the circuit court granted plaintiffs’ motion. It concluded that plaintiffs were entitled to fees and costs under the Act and agreed that the uncontested amounts sought were reasonable.

¶ 20 This appeal followed.

¶ 21 II. JURISDICTION

¶ 22 The circuit court granted plaintiffs’ amended motion for attorney fees and costs on June...