* After going through the standard explanations of why state courts could use the Illinois Constitution’s strict language to strike down most of the pension reforms currently being debated, Laurie Reynolds, the Prentice H. Marshall Professor of Law at the University of Illinois talks about another possibility…
The other interpretive path is that no provision of any constitution is absolute, no matter how absolute its language. The U.S. Constitution, for example, has a “contracts clause” that explicitly states “No State shall make any law … impairing the obligation of contracts.” Just like the Illinois pension clause, that clause appears on its face to impose an absolute ban on any law that would impair contractual obligations.
If you were to read the U.S. Supreme Court’s case law interpreting that provision, however, you would find that the court has interpreted the clause to mean that, “No state shall make any law impairing the obligation of contracts … unless the impairment is reasonable and necessary to serve an important public purpose.”
If the Illinois Supreme Court takes this approach to the interpretation of the pension clause, then the constitutionality of any legislative action to solve the pension crisis is going to depend on how clear and convincing the evidence is that the state is in a disastrous fiscal crisis. If the state of Illinois can establish that there are no reasonable alternatives to reducing benefits that have accrued – and that, for instance, tax increases and spending decreases just can’t fill the hole – then I don’t think the Illinois Supreme Court is going to issue an opinion that would in essence push the state of Illinois into default. If, in contrast, a strong case can be made that the state can meet its unfunded pension obligations without running itself into the ground, then the court is more likely to invalidate the legislative cuts.
* Reynolds was also asked about a recent Arizona case…
Q: Recently, an Arizona Superior Court overruled an attempt to lower cost-of-living-adjustments for existing employees. Arizona also has a constitutional impairment clause similar to the one in Illinois. What, if anything, can we conclude from this precedent?
Reynolds: Each state is the “master” of its own law. Illinois courts do not have to follow the decisions of courts in other states and the court decision in Arizona is technically irrelevant to Illinois. While courts of one state do occasionally cite decisions from another state, there are remarkably few cases in which one state court uses a different state’s court opinion as a persuasive precedent. On the other hand, state courts routinely parrot federal constitutional and statutory interpretation cases in developing their own jurisprudence, which is another reason why we would not be shocked to see Illinois following the U.S. Supreme Court’s line of analysis with regard to the contract impairment issue.
*** UPDATE *** From a subscriber…
There is, of course, the Illinois Supreme Court’s ruling from Jorgensen v. Blagojevich that draws what appears to be a pretty clear line in the sand.
Last line of the next to last graph:
“No principle of law permits us to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem.”