Considering Consideration: and other legal implications SB1

Considering Consideration: and other legal implications

Preparing for a court battle means anticipating just where your opponent will argue the case they present before a judge as well as putting forth your own best case.  Of course, all that time, you must remember they are working to blunt the reasoning you think best.  A good legal team knows early on that it’s always 99.9% perspiration and .1% inspiration.  So it will likely be with the pension court case in Illinois.

Remember also, ambiguity is the lifeblood of these suits.  The sentence “Starving lions can be dangerous” comes to mind when pondering the implications of an upcoming suit over the recently enacted “pension reform-theft” in Illinois.  Does the previous sentence mean possibly injurious to the poor lions?  Or certainly fatal to anyone starving them?

Article XIII, Section 5. Illinois Pension Clause:  Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

Even Article XIII, Section 5, which appears transparently clear to a retired pensioner like myself, will be broken like shards into a kaleidoscope of intended meanings by the various lawyers trying to present their unique perspectives/interpretations….and of course win.  Parsing the meanings of the clause will be an integral part of the arguments against and for the bill Governor Quinn signed on Thursday. 

Does “membership” mean active workers or only those who have already retired?  Does an “enforceable contractual relationship” allow for adjustments to be made given an argument of statewide fiscal crisis?  Or a case that changes are necessary to keep the system from imploding?  Does “diminish or impair” prevent any perceived negative alteration to a benefit expectation after employment, retirement, by collective bargaining unit or by individual? 

This litigation may take far more time than anyone might suppose.  But, we can expect the court and its competing lawyers to debate carefully the concept of consideration in contractual law when it comes to SB1 and its numerous provisions for current and future workers as well as retirees.  (For a review of those changes, please see Glen Brown’s blogs(teacher/poet/musician glen brown).

Consideration:  (n)  in law, something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances (West’s Encyclopedia of American Law).

According to the Tribune, Speaker Madigan ticked off several reasons why he feels the bill (now law) meets the question of consideration: “Workers would contribute 1 percentage point less toward their retirement, the state would kick in more money to better fund pensions, the retirement system could go to the Illinois Supreme Court if the lawmakers failed to make required payments, and some workers could choose a 401(k)-style option” (5 December 2013).  In other words, the Speaker feels that any offer of improvement (on his part and from his perspective) is enough to satisfy consideration.

Senate Leader Cullerton and his legal counsel Eric Madiar may not be so sure.  And their concern may be justified.

In the Speaker’s analysis, he proposes the court accept what should be deemed a unilateral contract, one lacking the necessary intent between both parties necessary to reach what most courts deem a suitable level of consideration.  In simple (English teacher) language, the Speaker’s law acts impossibly for both sides at once – both the General Assembly and the unions – by delivering and exchanging some increased benefits and some impairments as trade offs, but none of it with any agreement or promise by the other party in exchange.

For example, instead of exchanging gifts valued at $5 during the office party this year, as we have all agreed to every year, Boss Mike informs you he doesn’t want your present worth $5, but instead is going to give you a picture of himself (he paid nearly $10 for it) and he’s going to take ten minutes out of your lunch break.  That’s a unilateral offer of contract.  Once you perform your part of the agreement(?), placing his picture on your wall and skipping your dessert, you’ve have achieved consideration under the law. 

Are you starting to comprehend the bristling response of the IRTA and WeAreOne?

On the other hand, a bi-lateral contract, like those historically binding benefits and contributions for Illinois public sector workers, are agreements binding both parties the minute the parties exchanged promises, as each promise was deemed sufficient or of valuable consideration in itself. 

For decades after the drafting and adopting of Article XIII, Section 5 in the 1970 Illinois Constitution, consideration has been considered “valuable.”  That is, a thing of value parted with, or a new obligation assumed, at the time of obtaining the thing, which is substantial compensation for that which is obtained thereby.  It is also simply called ‘value’” (Black’s Law Dictionary).

Exchanges were agreed to and settled on for the Early Retirement Option, death benefits, and even the COLA; but those were all bilateral contracts consisting of mutual consent in the establishment of a valuable consideration(s). 

It appears to me, SB1 does not meet the acceptable requirements for consideration.

Preliminary Injunction: After the Black Tuesday REPRISE from 6/2013

Preliminary Injunction

Noun – an injunction, simply, is an order (or a writ) issued by the court that demands an individual or person(s) to act -  or restrains an individual or person(s) from acting.

For an historical example, recall the attempted desegregation in 1957 of the Little Rock Central High School in Arkansas.  Segregationist groups were able to convince a local chancellor/judge to issue an injunction against the admission of non-white students to the school in the coming fall based on their “concerns” for potential violence. 

Another injunction, delivered by Federal Judge Davies nullified the earlier writ with a command that forced the school to move forward with the planned integration and removed the National Guard brought in ostensibly to uphold law and order. 

Injunctions a born of other issues and conflicts, and are not a matter of legal right(s).  In fact, a request for an injunction can as easily be denied as approved.  The facts in each case determine whether an injunction will be issued, and the potential details for consideration (no puns intended) in the case of a not-so-distant pension bill cutting benefits will provide many. And now it's here.  We can expect Quinn's signature within a few days on the bill.  

There will of course be the central argument provided by Helen Kinney and Henry Green (thank you) in the 1970 Illinois Constitutional Convention: Article XIII, Section 5.

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

While the General Assembly has acted with impunity in the cutting of benefits to the future public workers in Illinois, they have yet to pass a bill curtailing the benefits of active workers and current retirees.  That is, until Black Tuesday, December 3, 2013.  Indeed, much of the concern raised by those who practice law in the General Assembly has been, as Representative Lou Lang tried to remind the Chicago Tribune, “whether or not it is constitutional.”  Whether it’s legal.  The Tribune is not concerned with legality – or morality.  Evidently, in the end, Representative Lang conveniently disremembered his earlier stance on constitutional legality. 

Illinois Supreme Court

Bills that may emerge from the “new” summer pension working-group may be an amalgam of Madigan’s benefit-cutting bill SB1 or Cullerton’s union-backed bill SB2404.  In any case, any changes in the wording to SB2404 will provide an immediate refusal to endorse by the unions, and subsequent passage will likely produce a preliminary injunction.  Remember, however, even union-backed SB2404 will face a legal reaction by the Illinois Retired Teachers Association, and such a response might start as described below.  The passage of Madigan's last mutation of SB1 on Black Tuesday makes possible variable responses to the earlier union-backed SB2404 moot.  We know await Quinn's signing of the bill into law. 

Because of the enormity of impact in the passage of such a bill –one that will affect hundreds of thousands of Illinois families and millions of citizens – all the unions would likely seek a restraining order immediately.  “A Restraining Order is granted to preserve the status quo of the focus of controversy until the hearing on an application for a temporary injunction.  A Temporary Restraining Order is an extraordinary remedy of short duration that is issued to prevent unnecessary and irreparable injury” (http://legal-dictionary.thefreedictionary.com/injunction ).  On the other hand, as the law's effect would take place on June 1, 2014, there may be enough time to beyond "temporary" immediately.    

The Restraining Order, even if Temporary, suspends further proceedings until a determination whether an injunction is permissible can be filed with the court.

Remember, Restraining Orders have life-spans, and in the case of a Temporary, such a provision can quickly sunset. 

During that interim, union officials would seek a Preliminary Injunction, which would act much like a Restraining Order, accept that such a writ would stop all proceeding until legal determinations could be made. 

 Such an injunction freezes or holds the conflicting matter in its present state to preserve the existing condition and  “ensures the ability of the court to render a meaningful decision and serves to prevent a change of circumstances that would hamper or block the granting of proper relief following a trial on the merits of the case” (  http://legal-dictionary.thefreedictionary.com/injunction).

Then, it’s the court’s turn to consider the legality of the proposed bill.

Get Up and Fight: Integrity

Mr. Gary Elman

Integrity: Gary Elman, IRTA President

Integrity (n);  a quality of being honest and/or fair; also, having strong moral principles.

On what would turn out to be a probably busy and very discouraging day for IRTA leader Gary Elman, he took the time to send out a few notes of thanks to the many who have been fighting this one-more assault and thievery of our constitutionally protected rights as public sector workers in Illinois. 

According to Mr. Elman, “integrity dictates our (IRTA) stance.”  Sadly, it does not everywhere.  Especially for the majority in Springfield.

I recall Elman’s exhortation at the IRTA Convention in Springfield, this fall that “We will sell our shoes” to fight against anything like this latest unconstitutional pension theft (SB1) in the courts.  Today, Black Tuesday, is the day to begin selling our shoes – if symbolically.

Dear Gary,

I wear New Balance Heritage/992 running shoes that retail at $149.95.  Please find enclosed a check for the IRTA Defense Fund for $149.95.

My hope is that my and your efforts will not only prove victorious in the battles to come, but that we will also expose the kind of ethical, immoral, and fiscal scapegoating of which so many are ignorant and so many are culpable.

Thanks for all you do.  All you have done.  And your commitment to this upcoming battle.

May the courts be with us,

John Dillon

By the way, integrity also means the state of being complete or whole.  I’d like to think that this is the perfect description of my fellow workers as we move forward in this battle.

If you’d like to sell your shoes too, please, now's the time!

Send to your checks to:

IRTA  (mention Defense Fund on notation line of check)

620 North Walnut Street

Springfield, IL  62702

Eloquence & Justifiable Anger from Roger Sanders

Eloquence & Justifiable Anger:

From Roger Sanders on the Eve of Possible Pension Reform Vote

WHAT I HAVE SENT TO LEGISLATORS

We find ourselves in a peculiar situation.  Every year, every teacher has paid their required contribution to their pension.  For 60 years Illinois has failed to pay its share into the teacher retirement system.  Consequently, legislators and governors have shortchanged our pensions billions of dollars.

Now we find ourselves faced with the untenable prospect of today’s legislators and governor cutting the very retirement benefits for which every teacher has dutifully worked and paid for.  By our very nature, as teachers, we have a great sense of fairness, loyalty, respect for authority and an innate sense of caring, a drive to protect others from harm.  We became teachers fore altruistic reasons.  These beliefs are central to how we structure our lives, our classrooms, our schools, and the commitment we have to our students and communities.  

We do not seek conflict.  Rather, we seek solutions.  We strive to be well informed and expect that rational thinking and compassion for others are important elements in finding solutions to problems.  We also expect fair play and abiding by the law to be essential.

Legislators and the governor would have us believe that state pensions are the primary reason our state budget is in such dire straights.  We all know this is untrue.  To suggest this is the case is insulting to any informed citizen.  

Of the state’s contribution to the Teacher Retirement System this year, only 18% is for the “normal cost” of retirement benefits for current teachers.  In other words, 82% of the state’s pension payment today is to pay off the debt owed the system.  Since 1939, TRS has never received a full actuarial contribution from the General Assembly.  (Source:  Teacher Retirement System)

The real problem is that legislators over the years have not lived within their means, and even in the most recent dire economic times, have continued to spend, spend, spend.  They have used the pension systems as a credit card to fund other things.  They have placed a culture of corruption and collusion and political cronies above the welfare of the citizens of the state.

With the largest tax increase in the state’s history, we still have billions in unpaid bills and vendors waiting months for payment of services.  At the same time, the legislature continues to appropriate for new programs and give multi-million dollar tax breaks to corporations under the guise of “job creation.”  The last time I looked, jobs are still down and we continue to squander resources through corporate welfare.  A perfect example is the proposed $24 million tax break for ADM that is rumored to be approved hot on the heals of pension cuts to retirees.   The top seven executives compensation at ADM last year was $31,655,517.  Do legislators expect me to take a cut as a retiree and feel good about it when those CEO salaries are so high?  Really?  Not likely.  The General Assembly and One-Term Quinn awarded a $100 million tax break to Motorola Solutions when the CEO’s compensation was $40 million.  Legislators might like to know that Caterpillar CEO Douglas Oberhelman’s compensation last year was $17,738,076 plus, amazingly, a lump sum pension payment of $16,943,243.  Lump sum pension payments due the CEOs of Caterpillar, Boeing, Abbot-Laboratories and Crown Holdings were $129,939,430.  (Source:  SEC proxy)

The General Assembly just appropriated $70 million to purchase land for a Peotone airport.  Hardly a critical need given the fact that not one airline has yet voiced support for it.  I guess the Rockford airport must be a full capacity.  Unlikely.  Of course there is the $900,000 buyout cost for METRA CEO because he wouldn’t bend to Speaker Madigan’s wishes, or the $600,000 for doors at the Capitol.

And the list goes on, and on, and on.

There will be a tipping point.  Perhaps this is it.  As for myself, I have voted in every election for the past 44 years.  I’m a lifelong Illinois resident whose family has been in Illinois for 150 years.  I’ve been an educator in Illinois for 42 years.  My father taught school in Illinois for 53 years.  We have been invested in Illinois, and I expect Illinois to invest in my retirement as well.

Can legislators and the governor just disregard the very people that have served their communities and not expect some type of repercussion?  Are we to learn that fairness, loyalty, and respect for the law are to be discarded?  If that is the case we will find ourselves in a place we do not want to be.

I urge you to vote NO on the proposed pension cuts.

MY PENSION DOES NOT NEED TO BE REFORMED, IT NEEDS TO BE HONORED.