Saturday, August 22, 2015

Lisa Madigan: Will She File with US Supreme Court To Curtail Pension Benefits?

Lisa Madigan: Will She File with U.S. Supreme Court to Curtail Pension Benefits?

Although my wealthy friend Ernesto would remind me that all of my posts are unimportant and meaningless, this is one that I hope follows his hurtful description.

Within the next 18 days, Solicitor General Carol Shapiro, acting as the agent of Attorney General Lisa Madigan, may file a request for a writ of certiorari with the United States Supreme Court.  Emphasis on the verb “may.” 

In the media and newspapers, you will hear or read the term informally called a cert petition, but it is essentially a serious request by the losing party of a suit asking that the Supreme Court review the decision of the lower court.  The Solicitor General of Illinois has requested and received an extension from Justice Elena Kagan of the Supreme Court to allow until September 10th to file for a writ of certiorari asking the nine justices for a review of the unanimous decision of the Illinois seven justices in their decision of May 8th. 

You’ll remember that their decision struck down SB1 and the legal application PA 98-599 as unconstitutional.

The petition for Writ of Certiorari will contain a list of all the parties, a statement of the facts of the case, the legal questions presented for review, and arguments as to why the Court should grant the writ.  

Ms. Shapiro’s earlier request to allow for more time before filing included a brief explanation of the state’s earlier case of “sovereign powers,” an argument for the need for more time, and the 38-page decision of Illinois Justice Karmeier as Exhibit A.

Even if a formal request is filed in the next 18 days, the U.S. Supreme Court can refuse to consider the case.  In fact, the Court receives thousands of "Cert Petitions" per year, and denies all but about one hundred.  If the Court accepts the case, it grants a Writ of Certiorari.  That means the U.S. Supreme Court agrees to hear – or review – the decision of a lower court; in this case, the Illinois Supreme Court.

Think of “certiorari” as the legal term for the phrase “being certain.”  In other words, the higher court can make itself acquainted with the facts, the documents, and the arguments in a lower case ruling.  If the court has become sufficiently acquainted and agreeable, the court can call for argument or render a decision to overrule the earlier decision or possibly hold with it.

Cert. Denied is the term that will be tossed about if the U.S. Supreme Court refuses to hear or consider the May 8th  decision by the Illinois Supreme Court.

Finally, remember that all of this is moot if the Solicitor General does not file a formal request by September 10th.

In her letter requesting a stay until September 10th (for time to accomplish a possible request for a writ of certiorari), S.G. Shapiro included two earlier cases, which bolstered her argument for the stay: 

United States v. Winstar and, more importantly, United States Trust Company of New York v. New Jersey.  In both cases, arguments of state’s sovereignty are presented; in the former, a case for a certiorari review, and in the latter, the more important argument:

“A private contract can be modified by the legislature under its police powers when necessary to serve a legitimate public interest and the regulation is reasonable and narrowly tailored to promote that interest."

Within the carefully worded 38-page judicial response to the challenge against SB1 by We Are One and the IRTA, Justice Karmeier reminds the reader(s) “The State protests this conclusion is tantamount to holding that the State has surrendered its sovereign authority, something it may not do. The State is incorrect.  Article XIII, Section 5, is in no sense a surrender of any attribute of sovereignty.  Rather, it is a statement by the people of the State of Illinois, made in the clearest possible terms, that the authority of the legislature does not include the power to diminish or impair the benefits of membership in a public retirement system.  This is a restriction the people of Illinois had every right to impose.”

Likewise, it would appear that the Justices of our Illinois Supreme Court do not occupy the clean, thin air of only judicial philosophy.  They too recognize the unsettling and queasy financial position the State, after years of reneging on expected payment to the promised systems, bears. 

“The financial challenges facing state and local governments in Illinois are well known and significant.  In ruling as we have today, we do not mean to minimize the gravity of the State’s problems or the difficulty facing our elected representatives.  It is our obligation, however, just as it is theirs, to ensure the law is followed….Crisis is not an excuse to abandon the rule of law.  It is a summons to defend it.”

Beyond the moral and legal argument, the Illinois Justices offered suggestions and insights that the state had not yet done what met the criteria for the case United States Trust Company v. New Jersey:

Article XIII, Section 5 is hardly a “A private contract"; rather, it is a constitutional promise ratified by the people of Illinois.     It might be modified, therefore, but it cannot be undermined (diminished or impaired).  And, as the Illinois Justices have explained on no less than two occasions, if it were acceptable to be "narrowly modified," the consent to do so would have been clearly worded within the Pension Protection Clause.  

Furthermore, the State of Illinois has recently reduced the revenue stream with a reduction in income taxes -  nor has it sought other means by which to ameliorate its structural revenue shortfall.  The argument by Representative Nekritz that contracts cannot last forever, cannot be held inviolable over time may apply to a world outside of Illinois Constitution, but the Illinois Supreme Court reminds her and the U.S. Supreme Court Justices that the people's Constitution holds sway over a momentary or even self-manufactured crisis.  

One of my good blogger friends tells me that no petition will be filed.  All of this is a theatrical feint to make Lisa Madigan appear caring and capable.  “She did her best, so let’s consider her for governor.”  Ouch!  That’s cynical.

My other good blogger friend says, “They (U.S. Supreme Court Justices) will not contemplate this request seriously because it would impact the constitutional language in other states, impact other decisions like Arizona, and interlope directly into states' matters."

"Yet," he reminds me, "no matter what, they’ll continue to find some way to charge us as culpable for what they’ve done to the state; and they’ll keep coming after our golden egg – the pension funds."  Ouch!  Cynical too!

Ernesto advises I just accept that we will lose in the end.

How’s your summer goin'?


  1. “…The United States Supreme Court has held that particular scrutiny of legislative action is warranted when, as here, a state seeks to impair a contract to which it is itself a party and its interest in avoiding the contract or changing its terms is financial. Committing to a contract does implicate the state’s sovereign power, but: ‘[w]hatever the propriety of a State’s binding itself to a future course of conduct in other contexts, the power to enter into effective financial contracts cannot be questioned. Any financial obligation could be regarded in theory as a relinquishment of the State’s spending power, since money spent to repay debts is not available for other purposes. Similarly, the taxing power may have to be exercised if debts are to be repaid. Notwithstanding these effects, the Court has regularly held that the States are bound by their debt contracts.’ United States Trust Co. of New York v. New Jersey, 431 U.S. 1, 24 (1977)...

    “The State’s police powers defense is fatally flawed for other reasons as well. Just as the legislature is presumed to act with full knowledge of all prior legislation, the drafters of a constitutional provision are presumed to know about existing laws and constitutional provisions and to have drafted their provision accordingly. Kanerva v. Weems, 2014 IL 115811, ¶ 41. The contracts clause had antecedents in the very first Illinois Constitution and in the Constitution of the United States. When the time came to address the protection for public pensions, the drafters of the 1970 Constitution therefore presumably knew of the substantial body of case law involving that clause, including the case law holding that, when warranted, the protections afforded contracts could be modified through the exercise of the State’s police powers. That, however, is not the standard they chose with respect to the benefits of membership in public pension systems…

    “Given the history of article XIII, section 5, and the language that was ultimately adopted, we therefore have no possible basis for interpreting the provision to mean that its protections can be overridden if the General Assembly deems it appropriate (see id.), as it sometimes can be under the contracts clause. To confer such authority on the legislature through judicial fiat would require that we ignore the plain language of the constitution and rewrite it to include ‘restrictions and limitations that the drafters did not express and the citizens of Illinois did not approve.’ Kanerva v. Weems, 2014 IL 115811, ¶ 41. Indeed, accepting the State’s position that reducing retirement benefits is justified by economic circumstances would require that we allow the legislature to do the very thing the pension protection clause was designed to prevent it from doing. Article XIII, section 5, would be rendered a nullity..." (In re PENSION REFORM LITIGATION (Doris Heaton et al., Appellees, v. Pat Quinn, Governor, State of Illinois, et al., Appellants) Opinion filed May 8, 2015, JUSTICE KARMEIER delivered the judgment of the court, with opinion. Chief Justice Garman and Justices Freeman, Thomas, Kilbride, Burke, and Theis concurred in the judgment and opinion).

    1. "She did her best, so let’s consider her for governor”: I give Fred a 60-40% chance that he's correct.

      “No matter what, they’ll continue to find some way to charge us as culpable for what they’ve done to the state; and they’ll keep coming after our pensions": I give myself 100%.

  2. I expect the writ to be filed but hope the fact that the decision was unanimous, along with the reasoning behind it, would influence the Court not to consider it. But I also agree that they'll keep coming after the wrong people as benefits continue to be their main target