* I asked “RNUG,” co-winner of our 2013 Golden Horseshoe for best commenter, to take a look at the lawsuits filed so far against the state pension reform law. And here it is…
As everyone should know, last year’s SB-0001, now Public Act 98-0599, “reformed” the Illinois Pension Code. There was an outcry at the time that it was unconstitutional and various groups were expected to challenge the “reform” via lawsuits. We are currently at three pension lawsuits and counting. It is expected that more suits will be filed, since the ones to date don’t cover every possible affected employee or retiree, most notably those employees or retirees governed by bargaining agreements. I look for union groups like AFSCME, the IEA, the IFt and SEIU to jump in at some point.
While I’m trying to get this right, I may miss things or skip over what someone would consider important. I have every confidence that CapitolFax.com readers will find anything I miss or get wrong. I do know, every time I read the filings, I find an additional item or two.
* First to file (12/27/2013) was a group of individual members of the Teachers Retirement System, and they requested class action for members of TRS who are specifically not members in either the Illinois Federation of Teachers (IFT) or the Illinois Education Association (IEA). Their suit was filed in Cook County.
Next to file (1/2/2013) was the Retired State Employees Association (RSEA) plus individual members, and they requested class action for all SERS members (including current employees) and annuitants (retirees and survivors). This was filed in Sangamon County.
A couple of hours later the Illinois State Employees Association Retirees (ISEA-R) and individual members filed, and they requested class action for annuitants in SERS, SURS, GARS and TRS with a minimum of 20 years service. This was filed in Sangamon County as well.
All three lawsuits make common diminishment claims against the constitutionality of the AAI (cost of living adjustment) calculation change, the age change, and the pensionable salary cap. But once you get past those commonalities, there are significant differences in their claims and approaches.
* The Cook County case takes the nuclear approach, maintaining that the Illinois Constitution Pension Clause overrides everything else and citing the relevant history and case law. They also ask for class action status only for non-bargaining group / non-represented retirees. While they make other minor claims, that pretty much sums up their argument. (Side note: among other things, they cite Senate President John Cullerton’s statement about the law likely being unconstitutional.) Their requested relief is simply to declare PA 98-0599 unconstitutional. If it works, great, but I’m not seeing any obvious fall-back position or appeal strategy. The one unique portion of this suit, alongside the request for simple declaratory relief, is a specific request for a jury trial on those issues that can be tried in front of a jury.
* The RSEA case takes a much broader approach, adding claims of a violation of the Equal Protection Clause (since the judges’ retirement system was not changed), Contract Law violations, and additional specific Contract Law violations for the early retirment groups (1991, 2002 & 2005) to the unconstitutional claim made in the first case by the individual TRS retirees. RSEA asks for class action status for all (Tier 1) SERS members and annuitants. They also ask that all monies that would have been paid under the previous flat 3% AAI law that exceed the payments due under PA 98-0599 be escrowed until such time as the case is resolved. That escrow request, if granted, will negate, at least temporarily, any pension fund savings for at least the next fiscal year. This case is also the one with the most supporting documents filed right up front. Reading between the lines of the RSEA claims, I think they are setting up for an appeal under contract law in the federal court system if they were to lose at the Illinois Supreme Court (IL SC) level.
* The ISEA-R case shares pretty much all the same claims the RSEA suit does, puts a couple of individual twists to it, and makes an additional claim or two. What is most different is their definition of a class: all retirees in all state retirement systems except the Judges Retirement System (JRS) with 20 or more years of service and not subject to a collective bargaining agreement. That’s a much broader class than the other two suits. (As an interesting side note, former state Rep. Gwen Klingler is a party to this suit.) They also make an additional promissory (basically implied contract) claim for the various ERI groups. While it isn’t spelled out, with the ERI / 20 year service reference, I’m wondering if this isn’t a second run at the premium free health insurance promise; a lot of people relied on that promise when they accepted the ERI. ISEA-R’s strategy seems to be very similar to the RSEA case, including the escrow request and appearing to set up, if needed, for a federal appeal under contract law.
Personally, as a non-union SERS retiree with more than 20 years service and a RSEA member, I like the approach being taken by both RSEA and ISEA-R. Given the inclusion of much of what the regulars here have discussed the past year, I have to assume the board members and legal counsel for those two cases are daily readers of the Capitol Fax. I’m also guessing that, even though they filed separate suits, these two groups may have discussed some common strategy.
Assuming Rich provides links to all three suits as filed, you should go read them. Hint: on the RSEA suit, you really only need to read the first 20 pages and the last page or two; the rest is supporting documentation.