Two families brought a lawsuit on behalf of oil refinery workers killed in a 1995 fire at the Clark oil refinery in Blue Island, Illinois. Each decedent’s estate received payment from Clark Refining under the Illinois Workers’ Compensation Act. The current case involves a liability suit the decedents’ widows filed against the parent corporation, Clark USA, Inc., of the subsidiary refining corporation. Forsythe, et al. v. Clark USA, Inc., 224 Ill.2d 274 (2007).
The plaintiffs in Forsythe alleged that cost-cutting by the parent company, Clark USA, resulted in dangerous conditions at the refinery that led to the deaths of the two workers. Specifically that the deep budget cuts resulted in improper training of workers, and that two untrained workers began dismantling a pipe without determining whether it was pressurized caused the explosion that killed their husbands.
When the case was in the trial court, the court granted a motion for summary judgment. Plaintiffs appealed this motion at the Illinois appellate court level, and the appellate court reversed and remanded. The defense petitioned the Illinois Supreme Court for leave to appeal the appellate court decision.
The Illinois Supreme Court granted defense’s petition to consider whether a parent company can be held liable under a theory of direct liability for the manner in which it controls its subsidiary’s budget, and if so, then whether the Workers’ Compensation Act’s exclusive-remedy provision immunizes that parent company from liability.
The Illinois Supreme Court upheld the First District Illinois Appellate Court decision and acknowledged for the first time a “direct participation” exception to the rule against client suits against employers. After the Illinois Supreme Court affirmed the Illinois Appellate Court opinion and returned the case to the Circuit Court of Cook County for determination, the case was settled for a total of $12 million.