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* Background is here, here, here and here if you need it. From the Illinois Supreme Court…
Petitioner John Tillman filed a petition for leave to file a taxpayer action under section 11-303 of the Code of Civil Procedure (Code) (735 ILCS 5/11-303 (West 2018)) in the circuit court of Sangamon County. In his attached complaint, petitioner alleged that certain general obligation bonds issued by the State of Illinois in 2003 and 2017 were unconstitutional. The circuit court denied the petition to file the proposed complaint, finding that there was no reasonable ground for the filing of such action. The appellate court reversed the circuit court’s judgment and remanded for further proceedings. 2020 IL App (4th) 190611. For the following reasons, we reverse the judgment of the appellate court and affirm the judgment of the circuit court.
* More…
The State issued and sold the 2003 bonds, applied the proceeds as specified in the law, and made payments on the bonds for years while petitioner did nothing. More than 16 years later, petitioner requested that the court declare the bonds invalid and enjoin the State from making future payments on them. The same is true for the 2017 bonds, which were authorized by the General Assembly and issued and sold by the State. The proceeds from the sale were then used to pay billions of dollars in unpaid state vouchers, all while petitioner did nothing to stop any of these actions. It is patently obvious that the State will suffer some prejudice if relief is granted at this extremely late stage. Respondents maintain that granting relief to petitioner would amount to a de facto default on outstanding bonds that are backed by the full faith and credit of the State. We agree. Enjoining the State from meeting its obligation to make payments on general obligation bonds will, at the very least, have a detrimental effect on the State’s credit rating.
Nevertheless, petitioner argues that the State has not suffered prejudice from his delay because his complaint does not seek to undo past payments made by the State on the bonds but, rather, seeks to enjoin only future payments. Thus, according to petitioner, an individual can wait years, or even decades, after bonds are authorized and issued by the State to challenge the issuance of the bonds in court. We reject this argument. The fact that a petitioner requests only prospective relief does not preclude the application of laches where he had constructive notice of his legal claims years before filing his action. See, e.g., Solomon, 48 Ill. 2d at 322 (holding that laches barred a taxpayer action to enjoin the future issuance of bonds and expenditure of bond proceeds); Schnell v. City of Rock Island, 232 Ill. 89, 93, 96 (1907) (holding that laches barred an action to enjoin future municipal bond payments).
We hold that the necessary elements for laches have been met in this case. There is no reasonable ground under section 11-303 of the Code for filing petitioner’s proposed complaint. We therefore affirm the circuit’s order denying the instant petition, although on different grounds than those relied upon by that court.
I’ll update with responses as they come in.
*** UPDATE 1 *** Comptroller Susana Mendoza…
“The Supreme Court of Illinois got it right: The taxpayers of Illinois should not have to suffer financial Armageddon just so rich people who bet against Illinois can profit. Never bet against Illinois.
“The original judge on this case was right to throw out this irresponsible lawsuit brought by former Gov. Bruce Rauner’s No. 1 advisor and Illinois Policy Institute CEO John Tillman. His ridiculous lawsuit was aimed at tanking Illinois’ finances – for the profit of named or unnamed hedge funds.
“As today’s ruling noted, bond counsel and the state Attorney General signed off on all these bonds. They were constitutional. While the fiscally responsible 2017 bond offering that I championed saved taxpayers $4 to $6 billion in late payment interest penalties and served as a lifeline to businesses across Illinois, it hurt the profit margins of those who chose to bet against Illinois. They gambled and lost. Their irresponsible game is over.
*** UPDATE 2 *** Illinois Attorney General’s office…
We are pleased that the court upheld the legality of the general obligation bonds approved by the General Assembly in 2003 and 2017 and rejected the plaintiff’s belated attempt to create unnecessary havoc in Illinois’ fiscal standing. The fact is that the plaintiff filed a lawsuit opposing the state’s issuance of bonds not days, not months, but years after the bonds were issued – in fact, after the money had been spent. Our position has been that, given the delay in filing the lawsuit, the plaintiff lacked a legal basis for filing at all, and we are pleased the court agreed.
*** UPDATE 3 *** Emily Bittner at the governor’s office…
The administration is pleased that the Supreme Court sided with hardworking taxpayers over a frivolous lawsuit designed to grab headlines.
*** UPDATE 4 *** John Tillman…
“I am of course disappointed in the Illinois Supreme Court’s ruling. We are evaluating our options as to how to proceed from here. In the interim, I continue to be profoundly concerned about Illinois’ reckless debt accumulation. All Illinoisans should care about this. If the state doesn’t tackle pension reform now, it will slide into a fiscal crisis beyond repair that will threaten not only taxpayers and the people who depend on government services, but also people who are counting on their public-sector pension in retirement.”
*** UPDATE 5 *** Bloomberg…
Illinois bonds rose in active trading after the ruling, driving the average yield on some sold in 2017 to 1.12% from 1.4% and the price jumped to more than $1.20 from about $1.19 a day earlier. The case has been closely watched by investors in the $3.9 trillion municipal bond-market, where it was seen as a potential harbinger of potential lawsuits elsewhere if it prevailed.
“Even though the probability was low that the challenge was going to be successful, it wasn’t zero,” said Dan Solender, director of tax-free fixed income for Lord, Abbett & Co., which holds $34 billion in muni assets. “The expectation was this was not going to be a problem but still the bonds are moving up because there is now some definite resolution to the situation.” […]
With the outcome of the case now behind the state, it “can move forward in addressing the more pertinent fiscal issues,” said Dennis Derby, a portfolio manager for Wells Fargo Asset Management, which owns Illinois debt that was challenged as well as other bonds issued by the state as part of a $40 billion municipal-bond portfolio.
* Related…
* National Review: John Tillman Shows How Conservative Activism Can Work
posted by Rich Miller
Thursday, May 20, 21 @ 9:20 am
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Somebody is still paying Tillman to fail?
Comment by Feldy Thursday, May 20, 21 @ 9:22 am
“Somebody is still paying Tillman to fail?”
Sure ain’t nobody paying him to succeed.
– MrJM
Comment by @misterjayem Thursday, May 20, 21 @ 9:25 am
A unanimous opinion by the way.
Comment by Numbers Guy Thursday, May 20, 21 @ 9:26 am
This is good. Any other ruling would have upset a lot of apple carts
Comment by RNUG Thursday, May 20, 21 @ 9:29 am
How impressive of a grifter is Tillman AND is IPI that they are first wholly and consistently dishonest, and lose repeatedly, and they still get money from people.
If I look at it that way, this is another success for Tillman.
Comment by Oswego Willy Thursday, May 20, 21 @ 9:34 am
=== * National Review: John Tillman Shows How Conservative Activism Can Work===
… As A Top Rate Grift
Tillman knows… losing… losing means more money than winning.
It’s an up day for Tillman
Comment by Oswego Willy Thursday, May 20, 21 @ 9:44 am
What OWilly said. It’s a win for Tillman.
Comment by walker Thursday, May 20, 21 @ 9:49 am
Tillman almost as impressive as the folks who have working the remap hustle for a decade or more than a decade.
Comment by Annonin' Thursday, May 20, 21 @ 9:56 am
He should have talked with Darren Bailey about who to retain as an attorney.
Comment by Skeptic Thursday, May 20, 21 @ 10:06 am
Yep, @OW and @WAlker have it dead to rights, he is a grifter and the loss is a win. It is the grifter equivalent of a perfect game.
I wish I could make so much losing all of the time. But then I would be a Cub (sorry, I had to).
Comment by JS Mill Thursday, May 20, 21 @ 10:31 am
Out of the loop here. Is the complaint that the issuance of the bonds was for a general purpose (ie: to fund operational costs) and not a specific purpose (ie: to fund a bridge replacement)?
I can see how that is kinda poor financial planning (to fund general operating costs with debt), but how would that be unconstitutional?
Comment by California Guy Thursday, May 20, 21 @ 10:47 am
===John Tillman Shows How Conservative Activism Can Work ===
Bold to call what Tillman is doing “conservative activism” since he’s running a propaganda machine literally funded by billionaires that repeats demonstrably false information.
The National Review might be having some growing pains trying to increase their audience among the current fold of conservatives in the United States. Maybe that’s why they attribute Madigan’s downfall to Tillman.
Nice of them to run a puff piece. I wonder if he had to pay them for it.
Comment by Candy Dogood Thursday, May 20, 21 @ 10:54 am
@ California Guy - don’t know how they do it in the Golden State, but in the Land of Lincoln and on this board we don’t ask other people to do our work for us.
When the post starts “Background is here, here, here and here if you need it” that’s where you can get your question answered.
Comment by Moe Berg Thursday, May 20, 21 @ 10:58 am
Thanks, Moe.
Comment by Rich Miller Thursday, May 20, 21 @ 11:08 am
Interesting that they avoided ruling on the “specific purposes” argument, but rather on the timing. Is another similar lawsuit going to pop up again on the next bond issuance?
Comment by Anonymous Thursday, May 20, 21 @ 11:18 am
The court also issued a decision on the Mautino campaign fund issue.
Comment by Facts Matter Thursday, May 20, 21 @ 11:18 am
Sorry about the previous post. Hadn’t updated my browser.
Comment by Facts Matter Thursday, May 20, 21 @ 11:20 am
(Tips cap to - JS Mill -, humbly)
The grifting of IPI is predicated that wealthy donors feel aggrieved, believe government (in this case the courts) don’t “grasp” their positions, and leading these donors on by telling them “they’re right”… while continually losing over and over.
It’s not the Illinois Policy Institute… IPI stands for Illinois Profiting Institute… profiting off being a place to take money from the aggrieved rich to soothe their egos.
As a grifting operation, I know I’m impressed by its brazenly silly.
Comment by Oswego Willy Thursday, May 20, 21 @ 11:29 am
===As a grifting operation, I know I’m impressed by its brazenly silly. ===
This gave me a good chortle; Heritage Action claims credit for the swift passage of anti-democratic reforms in Iowa to donors in a metting. Claims made constitute a violation of state law. Iowa’s GOP leadership has to deny organization’s involvement, organization’s attorney has to publicly state they made no such efforts.
I’m not sure it’s reasonable to expect Heritage Action to be ethical in how it’s raising funds, but there’s definitely a lot of grift going on in right wing politics.
https://qctimes.com/news/state-and-regional/govt-and-politics/group-denies-aiding-passage-of-new-iowa-elections-law-despite-leader-s-previous-claim/article_b20de1c6-facf-5720-b3d3-8f607ca652e9.html
Comment by Candy Dogood Thursday, May 20, 21 @ 11:36 am
“Somebody is still paying Tillman to fail?”
The people who fund right wing “policy institutes” that are operating in many states, including blue states, have so much money to burn they can take many crap shoots and keep going, regardless of outcomes. These are among the professional phony criers who trash Illinois. How much money does Tillman make in such a “terrible” state, a coupla hunnert grand a year?
Comment by Grandson of Man Thursday, May 20, 21 @ 12:49 pm
Mendoza’s public responses have regained the edginess they had during the Rauner years. Good to see.
Comment by Original Rambler Thursday, May 20, 21 @ 2:08 pm
If Mendoza thinks the Supremes ruled the bonds constitutional, she needs to find better legal counsel.
It’s an artful dodge. Look for a lawsuit to follow the next bond issue to force the courts to answer the real question here.
Comment by JB13 Thursday, May 20, 21 @ 2:19 pm
=== If Mendoza thinks the Supremes ruled the bonds constitutional, she needs to find better legal counsel.
It’s an artful dodge. Look for a lawsuit to follow the next bond issue to force the courts to answer the real question here.===
“Dear JB13,
What is going on with bonds and the ILSC is a travesty.
We at the Illinois Policy Institute can’t agree with you more.
However, agreeing is one thing, for us, together to show all these folks, we need your help.
We take wire transfers, EFTs, money orders, and with your donation, you can tell Comptroller Mendoza how wrong she is.
Keep up the good fight. If you know any like minded individuals, let us know, we’d love to enlist their help too.
The Illinois Policy Institute”
Boy, it *is* easy to find marks.
Comment by Oswego Willy Thursday, May 20, 21 @ 2:40 pm
= Interesting that they avoided ruling on the “specific purposes” argument, but rather on the timing. =
Courts don’t rule on a constitutional basis if they can resolve the case otherwise.
Comment by JoanP Thursday, May 20, 21 @ 2:48 pm
So…
Tillman still perplexed… but bonds rise on the news.
Makes you wonder why Tillman keeps going after this
#GriftingGoals
Comment by Oswego Willy Thursday, May 20, 21 @ 2:50 pm
“Bold to call what Tillman is doing “conservative activism” since he’s running a propaganda machine literally funded by billionaires that repeats demonstrably false information.”
That’s what conservative activism is–caping for the wealthy.
Comment by brugroffil Thursday, May 20, 21 @ 3:15 pm
“If the state doesn’t tackle pension reform . . ” There are those magic conjuring words. This was all about pension reform. Got it.
Comment by Skeptic Thursday, May 20, 21 @ 3:32 pm
== Courts don’t rule on a constitutional basis if they can resolve the case otherwise. ==
Yes. If they can find a simple thing / pre-existing decision to rule on, they will. Rarely do you find them going for groundbreaking if they don’t have to; that’s why they have law clerks to scour the books for past precedent.
Comment by RNUG Thursday, May 20, 21 @ 3:54 pm
== also people who are counting on their public-sector pension in retirement. ==
I’ll trust the IL SC to protect my pension, not IPI.
Comment by RNUG Thursday, May 20, 21 @ 3:56 pm