Thursday, July 30, 2015

Court Deals Blow to Pension Reform Legislation

Last Friday, a Cook County Circuit Court judge dealt a major blow to the State’s pension reform efforts. Judge Rita M. Novak declared recent pension reform legislation unconstitutional, likely putting the final nail in the coffin of the State’s most recent efforts to solve its pension crisis. This decision comes on the heels of a major ruling by the Illinois Supreme Court invalidating another piece of pension reform legislation. As a result of these rulings, many pension funds now find themselves on the brink of insolvency, with some projected to go broke within a decade.

In the case decided Friday, the court considered the constitutionality of Public Act 98-641. That legislation amended the way that two pension funds were financed. The funds, the Municipal Employees Annuity and Benefit Fund and the Laborers Annuity and Benefit Fund of Chicago, provide pensions to employees of the City of Chicago. Currently, those funds provide for annual pension payment increases of three percent. The legislation decreased the amount of these annual increases. It also required both employers and employees to increase their pension contributions.

Members of these pension funds argued that this legislation was unconstitutional because it violated the Pension Protection Clause of the Illinois Constitution. The Pension Protection Clause states that pension benefits cannot be “diminished or impaired.” In its decision last May, the Illinois Supreme Court held that this prohibited the General Assembly from enacting legislation that eliminated annual increases to pension benefits and capped the amount of pension benefits that a pensioner could receive. Since this legislation, the Court held, would diminish the benefits that pensioners had been promised, it was in violation of the Pension Protection Clause.

Similarly, in the case decided on Friday, Judge Novak held that Public Act 98-641 was unconstitutional because it too diminished the amount of pension benefits a pensioner could receive through its elimination of annual increases to pension benefits. She rejected the pension funds’ argument that this legislation actually provided a net benefit to the pension fund members, as it required the City of Chicago, for the first time, to make pension contributions. Judge Novak held that this benefit could be taken away at any time, and therefore would not provide the type of permanent guarantee that pension benefits would not be diminished that the Pension Protection Clause guaranteed.

So, what are the consequences of this decision? In the short run, we can expect an appeal. The chances of this appeal succeeding seem slim, however. Judge Novak’s reasoning in Jones tracked the Supreme Court’s May decision closely. She noted that the facts in Jones were similar to those in the case considered by the Supreme Court, and therefore warranted a similar outcome. Based on the similarities in the facts in Jones to the case considered by the Supreme Court, it seems unlikely that Judge Novak’s decision will be overturned.

In the long run, this decision shows that decreasing the benefits that pensioners receive will be almost impossible. The court made it clear that the Illinois Constitution prevents the General Assembly from decreasing pension benefits in almost any circumstance. Creative legal arguments on the part of the pension funds were not enough to change this. This almost certainly means that pension shortfalls will have to be made up by employers. Local governments should prepare themselves for increased pension contributions in the coming years.

If there is one lesson to be learned from this case, it is that once pension benefits are promised, they are almost impossible to take away. This has resulted in huge financial problems for many local governments, with the City of Chicago being the most prominent example.

Post originally authored by Matthew DiCianni, Ancel Glink

Wednesday, July 29, 2015

Strip Club's Appeal Should be Decided by State Court

Stars Caberet is a nude dancing establishment in Neenah, Wisconsin. When Stars opened in 2006, the County had a zoning ordinance that restricted the location of adult businesses to certain zoning districts and required a conditional use for their operation. In Stars' first lawsuit against the County, it challenged the constitutionality of the 2006 ordinance. During the pending lawsuit, the County amended the ordinance and Stars' dismissed its lawsuit. However, Stars brought a second lawsuit to challenge the 2007 amendment, and the court enjoined the County from enforcing the conditional use requirement, but upheld the remainder of the ordinance based on the ordinance's severability provision. 

Following the decision in the second lawsuit, the County informed Stars that it could not continue its operations because the business was never legal. Stars subsequently filed a third lawsuit asking the judge to declare its operation lawful under federal law or, in the alternative, a legal nonconforming use under state law. The district court ruled against Stars, finding that notwithstanding the ordinance's illegality, the business as unlawful when it opened in 2006. 

On appeal, the Seventh Circuit noted that the County's ordinance was an illegal prior restraint on expressive speech in violation of the First Amendment.  However, the Court noted that the ordinance included a severability provision, which could allow a court to sever the unlawful provisions of the ordinance from the remainder of the ordinance. Therefore, the Seventh Circuit held that the district court should have dismissed the state law claims because the application of the severance provision is a question of state law, especially where local land use matters are often resolved in state court, absent an overriding federal-law question. Accordingly, the Seventh Circuit dismissed the state law claims, so that the parties may (if they wish) pursue them in state court.  Green Valley Investments, LLC v. Winnebago County (7th Cir. July 27, 2015)

Post Authored by Julie Tappendorf & Dan Bolin, Ancel Glink

Tuesday, July 28, 2015

Upcoming Webinar on Affordable Housing

Webcast— Housing and Takings: A Look at the U.S. Supreme Court's Inclusive Communities Project and Horne Decisions

The Planning and Law Division of the American Planning Association is pleased to host the upcoming webcast Housing and Takings: A Look at the U.S. Supreme Court's Inclusive Communities Project and Horne Decisions. Date/time below:

Aug 4, 2015, Tuesday
1:00 – 2:30 pm Eastern Time (noon to 1:30 pm Central Time)

In June, the U.S. Supreme Court decided two cases which are likely to have significance for planners. In Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., the Court upheld the use of disparate impact analysis in Fair Housing Act claims. Among other groups, local governments will continue to have potential disparate impact liability, particularly now that the federal Department of Housing and Urban Development has finalized a rule requiring increased scrutiny of zoning and other local regulatory practices as a condition of local governments' receipt of funds through HUD grant programs. In Horne v. Department of Agriculture, the Court found that a raisin producer was entitled to compensation for a taking of property where the federal government fined the raisin producer for failing to turn over raisins as required by a price control law. The Court held that the forced turnover of raisins could be considered a physical invasion of property. The Horne decision represents an expansion of takings law, and it could have a ripple effect on other government regulatory programs requiring the turnover of private property as a condition of market participation. The webinar will cover both cases, including a description of each case's background and holding, the likely consequences for practicing planners.

Monday, July 27, 2015

Appellate Court Rules Against Attorney General in Illinois Budget Dispute

The budget crisis in Illinois has garnered quite a bit of attention in the press lately. One of the most recent issues involves the question whether the state can pay its employees even though no budget has been approved.  This issue has pitted the Democratic-controlled General Assembly and Attorney General's office (who say no) against the Republican Governor (who says yes), with the unions siding with the Governor in this dispute. Multiple lawsuits have been filed by the unions to force the state to pay their members, with different results in Cook County (court sided against the unions) and St. Clair County (court sided with the unions). 

On Friday, in an unreported decision, the Fifth District Appellate Court issued a ruling in the St. Clair  appeal, finding that  the trial court had jurisdiction to grant the unions request for a TRO to compel the state to pay state employees. AFSCME v. State of Illinois, 2015 IL App (5th) 150277-U.

In its opinion, the court goes into some detail about the background that led to this dispute. The legislature and Governor have failed to agree to a budget and, as a result, no appropriations bill exists that would allow the state to pay its bills, including salaries to state employees. Several unions filed suit, including the lawsuit in St. Clair County that is the subject of this appeal, requesting the court to order the state to pay union members. The state comptroller stated that she would not issue paychecks unless ordered by the court, which the trial court did in entering a temporary restraining order directing her to pay all state employees at their regular rate. 

The Attorney General had argued at the trial court level that the state has no authority to issue checks for state employee salaries absent an appropriations bill. The AG acknowledged that under federal law (the FLSA), the state would be obligated to pay state employees at least a minimum wage if those employees were ordered to work. 

In Cook County, the trial court agreed with the AG, and ordered that the state could not issue paychecks beyond the minimum requirements of the FLSA. 

However, in St. Clair County, the trial court ruled against the AG, and ordered the state to pay all state employees (not just union workers) their regular salaries. 

In the latter case, the AG appealed on several bases. The AG argued first that the trial court had no jurisdiction to enter the TRO. The appellate court rejected that argument. The AG also argued that the St. Clair decision conflicts with the Cook County ruling. Again, the appellate court disagreed with the AG, finding that the two cases did not raise the same arguments and that the First District Appellate Court had vacated the Cook County circuit court's ruling. Finally, the appellate court held that the unions satisfied the elements for a TRO, and upheld the order that state workers be paid. The appellate court did, however, note that a TRO is intended to be of limited duration, so the court remanded the case back to the circuit court to set a hearing date.

Post Authored by Julie Tappendorf 

Friday, July 24, 2015

Upcoming Seminar: Are Your Exempt Employees Still Exempt?

Let the Labor and Employment Attorneys from Ancel Glink Get You Ready for the New Rules that Govern Overtime Eligibility

When:  August 4, 2015 8:30 a.m to 10:00 a.m.

Where:  Heartland Community College, 1500 West Raab Road, Normal, IL 61761

Who:  All local governmental officials, managers, administrators or directors

What: The regulations of the Fair Labor Standards Act defining exempt status are undergoing drastic changes. The Department of Labor anticipates that the new regulations will result in the reclassification of most currently exempt employees to non-exempt status.

In our no-cost "breakfast briefing," the labor and employment attorneys from Ancel Glink, a premiere Illinois local government law firm, will explain the new regulations and how to apply them to your employees so that you stay in compliance with state and federal wage laws. We will discuss topics such as:
  • What is the new salary test for exempt status?
  • What do I do with my exempt employees who will not meet the new salary threshold?
  • What is the duties test for white collar exemptions and how will changes affect the status of my currently exempt staff?
  • What do I have to do to comply with new record keeping requirements for exempt employees?
  • What is the best way for an employer to implement these new changes in the law?
Wage claims can be costly to resolve. This breakfast briefing is free. Let us prepare you to accurately determine whether your exempt employees will remain exempt under the new FLSA regulations.
How:  Seating is limited. Reserve your spot at the breakfast briefing now by emailing us here.  

Thursday, July 23, 2015

Former Governor Blagojevich Wins Part of His Appeal

Allegations of political wrongdoing can come from all levels of government: federal, state, and local. Some of them can even land an official in jail, which is what happened to Illinois' former Governor Rod Blagojevich a few years ago.  

The former Governor became famous (infamous?) for his hair, his wife's stint on a reality show, his difficult-to-pronounce name, and more importantly, allegations that he tried to trade his appointment power over President Obama's vacated senate seat. The latter landed him in prison, convicted of 18 crimes, including attempted extortion, solicitation of funds, wire fraud, and lying to federal investigators. He was sentenced to 168 months imprisonment, and he appealed to the Seventh Circuit Court of Appeals.

On Monday, the Seventh Circuit issued an opinion on his appeal, and reversed 5 of his convictions and vacated his sentence.  USA v. Blagojevich. Specially, the appellate court found that the jury instructions on the count relating to Blagojevich's proposal to appoint Valerie Jarrett to the Senate in exchange for an appointment to the Cabinet were improper because the instructions did not distinguish between a proposal to trade one public act for another (a form of logrolling, which is not illegal) and a swap of an official act for private payment (which is illegal). Because it was not clear that the jury would understand the difference between the illegal and legal actions, the court reversed the five counts related to this jury instruction. 

The court rejected Blagojevich argument that his 168 month sentence was too long, noting that the recommended range for sentencing was 360 months to life imprisonment.  

Based on the reversal of five of his convictions, this case will now go back to the district court for resentencing. The federal government could choose to retry him on the five counts, but that may not be very likely given that his sentence of 168 months is still within the sentencing range, even removing these 5 convictions.

Post Authored by Julie Tappendorf 

Wednesday, July 22, 2015

PAC Dismisses Complaint for Lack of Authority

We haven't heard much from the Public Access Counselor (PAC) this year, at least not in the form of binding opinions (there have been only 4 of those in all of 2015).  As reported previously, most of the PAC's opinions come in the form of advisory, or non-binding opinions.  These opinions are not, unfortunately, available on the Illinois Attorney General's website, so we only hear about these if they are reported on by the local press or if one of our clients receives one. I thought one of these non-binding opinions might be interesting to report on today, because the opinion points out that the PAC's jurisdiction to review and issue an opinion on a request for review is limited to its express authority under the Freedom of Information Act and Open Meetings Act.

In 2015 PAC 36225, the former village president filed a request for review to challenge a village board's override of a veto she delivered to the board while still serving in office. She claimed that the board's action to override her veto violated Section 3.1-40-45 of the Illinois Municipal Code because the action was taken at a rescheduled regular meeting (which she termed a special meeting) rather than at a regular meeting. 

The PAC first noted that it does not have authority to review whether a board's actions comply with the Illinois Municipal Code. The PAC stated that its authority is limited to resolving disputes concerning FOIA and the OMA. Because the allegations in the complaint did not provide a summary of facts supporting any allegation that the board violated the OMA, the PAC dismissed the request for review.

Post Authored by Julie Tappendorf

Disclaimer: Ancel Glink represents the municipality that was the subject of the complaint.

Tuesday, July 21, 2015

Attorney Not Entitled to Identity of Anonymous Poster on Attorney Rating Site

In a recent appellate court decision in Washington state, a court denied a lawyer's request that Avvo (an online attorney rating site) disclose the identity of an anonymous poster who wrote a negative review of the lawyer. Thompson v. Jane Doe (Ct. App. Wash. 2015)

The review stated as follows:
I am still in court five years after Ms. Thomson represented me during my divorce proceedings. Her lack of basic business skills and detachment from her fiduciary responsibilities has cost me everything. She failed to show up for a nine hour mediation because she had vacation days. She failed to subpoena documents that are critical to the division of assets in any divorce proceeding. In fact, she did not subpoena any documents at all. My interests were simply not protected in any meaningful way.
The attorney claimed that the post was designed to impugn her personal and professional reputation, and that she needed the poster's identity in order to proceed with a defamation action. refused to release the identity of the poster, so she filed a lawsuit to compel the release. 

The court reviewed a variety of cases where courts had considered similar requests to divulge the identity of anonymous posters. The court noted that these courts had applied a variety of different standards in determining whether a person was entitled to learn the identity of an anonymous poster. For example, in Virginia, a defamation plaintiff seeking an anonymous speaker's identity must establish a good faith basis to contend that the speaker committed defamation. Other courts applied a "motion to dismiss" standard - in other words, the plaintiff had to demonstrate that his or her defamation claims would survive a motion to dismiss.

The Washington court rejected both standards, however, in favor of a standard that requires the plaintiff to provide supporting evidence beyond the pleading standards before an anonymous speaker's identity is released. Applying this more stringent standard, the court held that Thompson was not entitled to disclosure of the poster's identity.

Post Authored by Julie Tappendorf

Friday, July 17, 2015

UPDATE - More Happy Hour News!

A very astute reader pointed out that the General Assembly passed an immediate amendment to Public Act 99-46 (Public Act 99-47) removing the local government authority to grant exceptions to church/school locational restrictions.  So, I'm reposting this story - thank you Mark Palmer! For an even more in depth analysis of the happy hour law, visit Mark's blog at: Travelblawg

It's Friday, so what could be more appropriate than a "happy hour" blog post?

In an earlier post from June 4, 2015, we presented a summary of the changes to the Liquor Control Act that relaxed the prohibition against happy hours.  Now that Public Act 99-46 (and its companion amendment 99-47) has become law and we have had more time to pour over the amendments, we can explain the other, less publicized, changes the General Assembly has made.

1)  Hotels:  The State will begin issuing a single liquor license for all premises from which a hotel sells alcoholic beverages (e.g. lounges, restaurants, room service, mini-bars) so long as they are all under common ownership.  Formerly, a separate state license was required for each place alcohol was available.  Local governments are not required to operate the same way, but you should expect the local hotels to ask.  This would reduce your local licensing revenue by eliminating a number of licenses.

2)  Sales near Churches/Schools:  The State has granted local governments the ability to exercise control over whether this prohibition should apply on a case-by-case basis.  UPDATED: This portion of the new law was immediately stricken by a subsequent law (Public Act 99-47).

3)  Infusions:  Bars may now sell homemade alcoholic beverages created by “infusing” natural flavors into spirits.  For example, a bar could open and mix several bottles of vodka with fruit, age it for up to 14 days, and sell it by the glass for up to 21 days.  While the ingredients need to be labeled, the proof does not need to be identified.  Talk about happy hour!

4)  Basset Training:  In all the collar counties, all servers are now required to obtain a Basset training certificate by July 1, 2016, or within 120 days of the first day of work, whichever is later.  Smaller counties (pop. < 200,000) have until 2017.  A Basset training certificate is transferable with the employee between restaurants, but cannot be transferred between employees.

Each local government should be familiar with these amendments and decide whether it wishes to modify its local liquor control ordinances in response.

Post Authored by Adam Simon, Ancel Glink

Thursday, July 16, 2015

New Law Changes 911 Funding and Operations

Earlier this month, Governor Rauner signed P.A. 99-0006, which amended certain provisions of state law regarding telecommunications, cable operators, and 9-1-1centers, as follows:

  • The law extends funding for 9-1-1 centers through July 1, 2017. Currently, the Wireless Emergency Telephone Safety Act was scheduled to be repealed on July 1, 2015, but with this extension, 9-1-1 centers will continue to receive funding from the state. 
  • The law creates and implements a uniform statewide 9-1-1 system (except for Chicago) that, effective January 1, 2016, will be administered by the Office of the 9-1-1 Administrator within the Department of State Police.  Until January 1, 2016, administration of emergency telephone systems and distribution of wireless surcharge funds will remain with the Illinois Commerce Commission, and a new Statewide 9-1-1 Advisory Board is created to assist with the transition to a statewide 9-1-1 system.  
  • Effective July 1, 2015, the law establishes a statewide monthly surcharge of $0.87 per network connection that applies to both landline and wireless connections and that will be distributed, in part to local 9-1-1 authorities, by the Department of State Police according to a formula set by the statute.  Prior to July 1, 2015, a statewide surcharge was collected from wireless carriers by the ICC and distributed to local 9-1-1 authorities, while landline charges (and wireless charges set prior to July 1, 1998) at rates set by local jurisdictions were paid directly to local authorities by telephone service carriers.  Local authorities will be permitted to collect locally-imposed surcharges through 2015, but, under the new law, local governments (with certain grandfathered exceptions and except for Chicago) will no longer be able to impose these surcharges after January 1, 2016. 
  • A portion of the statewide monthly surcharge will be allocated to the creation, by the 9-1-1 Administrator with the advice of the Statewide 9-1-1 Advisory Board, of a statewide Next Generation 9-1-1 network.
  • After January 1, 2016, no municipality or county may create an emergency telephone system board unless it is a joint emergency telephone system board created by intergovernmental agreement.
  • By July 1, 2017, a county with no 9-1-1 service (currently, there are nine such counties in Illinois) must provide such service by entering into an intergovernmental agreement with an existing joint emergency telephone system board or for the purpose of creating a new joint emergency telephone system board.
  • By July 1, 2017, consolidation of existing public safety answering points (PSAPs) must take place.  Consolidation depends on the population of the affected county and the number of PSAPs in the county.  For example, the statute provides that, in a county with a population of at least 250,000 but less than 1,000,000 (a definition that includes all of the Chicago-area collar counties – DuPage, Lake, McHenry, Kane, and Will) and that has more than one emergency telephone system board, joint emergency telephone system board, or qualified governmental entity, the number of PSAPs in the county must be reduced by 50% or 2 PSAPs, whichever is greater, by July 1, 2017.  The statute also provides that any 9-1-1 authority serving a population of 25,000 must be consolidated into a new or existing joint emergency telephone system.
  • To aid in the consolidation process, a consolidation grant program is established. 
  • In another part of the statute, the law limits the time period for a municipality to complete an initial finding of an audit on a cable television (CATV) operator to 90 days after the information is given to the municipality or third party. The time limit may be extended for an additional 90 days. A CATV operator will not be liable for any past service fees that were unknown to the CATV operator.  The law provides that any contract between a municipality and a third party audit firm is subject to the Freedom of Information Act.
Post Authored by Don Anderson and Julie Tappendorf

Wednesday, July 15, 2015

Landowners Not Entitled To Injunction Against New Fracking Rules

A group called Southern Illinoisans Against Fracturing Our Environment (SAFE), along with the owners of property in various counties in Illinois, sued the Department of Natural Resources to seek an injunction against DNR's adoption of rules under the Hydraulic Fracturing Regulatory Act. The plaintiffs claimed that DNR failed to follow the statutory rulemaking procedures by:

  1. failing to include a summary of the proposed rules on the agenda; 
  2. failing to give sufficient notice of the public hearings on the proposed rules; 
  3. failing to respond to questions about the rules; 
  4. denying some people the right to speak during the hearings by establishing a predetermined 2 hour period for the hearings; 
  5. failing to disclose studies, reports, and other data used to draft the proposed rules; 
  6. providing false statements in the first notice when it indicated that the proposed rules did not affect units of local government;
  7. not publishing the hearing transcripts in a timely manner;
  8. failing to submit a report to the General Assembly as required by the Act.

The plaintiffs argued that these failures deprived plaintiffs of their rights under the Administrative Procedure Act, and filed a motion for preliminary for injunctive relief to prohibit the state from publishing the rules and enforcing them.  The state objected to the motion, arguing that the plaintiffs did not show they could succeed on the merits of their claim that the state's rulemaking process violated state law.  The trial court agreed with the state, and denied the plaintiffs' request for an injunction. The plaintiffs appealed.

The appellate court also denied the plaintiffs' request for an injunction to stop enforcement of the new rules, finding that the plaintiffs failed to show they would suffer irreparable harm, one of the necessary elements to obtain an injunction. Specifically, the court held that the plaintiffs' claims are too speculative to justify "the extraordinary relief afforded by the issuance of a preliminary injunction."  Smith v. Department of Natural Resources, 2015 IL App (5th) 140583

Post Authored by Julie Tappendorf