Pension Board Has No Contract Right to a Specific Level of Municipal Funding

Pension Board Has No Contract Right to a Specific Level of Municipal Funding

  Thursday, July 17, 2014    Julie Tappendorf

---

An Illinois appellate court recently held that a municipality was not liable for failing to fully fund its police pension fund, and that the Pension Board was not statutorily and contractually entitled to a specific level of funding by the Village.  Board of Trustees of the Riverdale Police Pension Fund v. Village of Riverdale.

The Board of Trustees of the Riverdale Police Pension Fund filed a lawsuit against the Village claiming that the Village violated its statutory obligations under the Illinois Pension Code to properly and fully fund the police pension by not levying the appropriate taxes for pension contributions for about 10 years.  The Pension Fund also asked the court to order the Village to turn over all pension contributions in its possession, which the Village admitted to collecting and inadvertently not remitting.  The circuit court granted summary judgment to the Village, finding that the Pension Code did not contain any right to enforce certain funding levels and that the “legislature could not have intended to remove all discretion from the municipality in determining the amount of tax levies and contributions to the pension funds in any particular year.” 

The Pension Fund appealed the decision to the appellate court.  That court first looked at Sections 3-125 and 3-127 of the Illinois Pension Code, and determined that although these provisions require a municipality to levy taxes sufficient to cover the cost of the pension fund of the given year and any unfunded accrued liabilities, the law does not require that taxes be levied in strict compliance with the recommended funding levels.  As a result, the court found that the Pension Board was not able to demonstrate that the Pension Code created a contractual right to a specific level of funding. The court did, however, determine that the Village was required to forward all monies actually received as a result of the pension tax levies to the Pension Board.

Post Authored by Tiffany Nelson-Jaworski, Ancel Glink

Read More

NYC Soda Ban Struck Down Again

NYC Soda Ban Struck Down Again

  Wednesday, July 16, 2014    Julie Tappendorf

---

Chicago bans plastic bags and microbeads in personal care products.  San Francisco bans the sale of plastic water bottles on public property.  New York City banned large sodas (or pop, if you are around here) by enacting the "Sugary Drinks Portion Cap Rule," which would become effective in 2013.  That rule prohibits food service establishments from selling any sugary drink in a cup or container larger than 16 ounces.  The new rule was immediately challenged by labor groups and other organizations who claimed that the rule was "arbitrary and capricious" and exceeded the Board of Health's regulatory authority.  

The case made its way to the state's high court, which issued a ruling last week invalidating the rule.  In the Matter of New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Department of Health & Hygiene.  The court of appeals determined that the Board of Health exceeded its regulatory authority by enacting the soda ban.  Specifically, the court found that the ban was in the nature of legislative policy-making rather than the carrying out of preexisting legislative policy.  As a result, the soda ban rule was found invalid, and the Department of Health was enjoined from enforcing it.

The opinion contains a lengthy dissenting opinion that would have upheld the soda ban rule based on the Department's inherent authority to regulate the public health in the City.  The dissent acknowledged that in enacting the ban, the Board identified a "complicated threat to the health of City residents with any interrelated causes; i.e., obesity" that required the Department to enact regulations that would "combat this threat."  

The rationale for the court invalidating the soda ban had nothing to do with the legitimacy or appropriateness of the ban itself, but with the agency's authority to enact it.  It is entirely possible that the outcome of this case would have been different had the New York City Council enacted an ordinance adopting the soda ban (i.e., legislative action) rather than one of its agencies establishing the ban through an administrative policy.   

Post Authored by Julie Tappendorf, Ancel Glink 

Read More

Attorney General's Challenge to Former Chicago Police Supervisor's Pension Benefits Dismissed

Attorney General's Challenge to Former Chicago Police Supervisor's Pension Benefits Dismissed

  Tuesday, July 15, 2014    Julie Tappendorf

---

Former Chicago police supervisor Jon Burge was convicted of committing perjury in a civil lawsuit after he denied having any knowledge of suspects being tortured by police under his command. Following his conviction, the police pension board held a hearing and voted 4-4 to terminate his pension benefits.  Because there was no majority vote in favor of terminating his benefits, Burge continued to receive his pension benefits.

The Attorney General, on behalf of the State of Illinois, filed a complaint in circuit court alleging that the pension board was violating the Pension Code by continuing to pay pension benefits to Burge following his felony convictions.  Burge, the pension board, and the pension board trustees were all named as defendants in the case.  The Attorney General asked the court to order the pension board to stop all pension payments and require Burge to repay benefits.  The defendants argued that the circuit court did not have jurisdiction to consider the Attorney General's complaint. The circuit court agreed, and dismissed the Attorney General's complaint on the basis that the pension board has exclusive jurisdiction to decide whether pension benefits should be terminated. The appellate court reversed, finding that both the pension board and circuit court have jurisdiction to decide pension benefits. 

On appeal, the supreme court agreed with the circuit court that the Attorney General's complaint should be dismissed for lack of jurisdiction.  Although section 1-115 of the pension code does provide the Attorney General with some authority to bring a civil action, that authority does not the include the power to decide whether pension benefits should be terminated.  The power to grant or terminate pension benefits is exclusively the pension board's, not the Attorney General's and not the circuit court's.  The pension board's decision was subject to appeal only through the administrative review process, not through a separate new proceeding in the circuit court.  As a result, the Supreme Court upheld the circuit court's dismissal of the Attorney General's complaint.

The dissent argues that the Attorney General did have authority to bring a separate action against the pension board to challenge the pension board trustees' fiduciary duties.  In the dissent's view, allowing a convicted felon to continue to draw pension benefits violates the trustees' duties to the fund and its beneficiaries.

You can read the case here:  Madigan v. Burge, 2014 IL 115635 (July 3, 2014).

Post Authored by Julie Tappendorf, Ancel Glink

Read More

Statute Barring Felons from Holding Public Office is Constitutional

Statute Barring Felons from Holding Public Office is Constitutional

  Monday, July 14, 2014    Julie Tappendorf

---

General Parker filed nominating petitions to run for office on the local school board. The county states attorney filed a quo warranto proceeding to block his candidacy based on his previous conviction of felony theft.  Illinois statute prohibits a "person convicted of an infamous crime...from holding any office of honor, trust, or profit unless such person is again restored to such rights by the terms of a pardon for the offense or otherwise according to law."  10 ILCS 5/29-15.  The states attorney argued that felony theft was an "infamous crime" under that statute and, therefore, Parker was barred from running for elected office on the school board.

Parker argued that the statute barring those convicted of infamous crimes from holding office does not apply to school board members, that the states attorney was selectively enforcing the statute, and that the hearings were unjust.  The circuit court rejected his arguments and ordered Parker's name removed from the ballot.  

While Parker's appeal of the circuit court's decision was pending, he filed another lawsuit in federal court against the state's attorney, the county, and a variety of other defendants claiming that (1) the quo warranto proceeding violated his rights to due process and (2) the state statute violates his constitutional right to run for public office.  The district court dismissed all claims, and the case was appealed to the Seventh Circuit.

On appeal, the Seventh Circuit determined that the state's attorney had absolute prosecutorial immunity in bringing the quo warranto proceeding to enforce the state law.  With respect to Parker's facial challenge to the constitutionality of the state law, the Court found the Illinois statute to be constitutional.  First, the right to run for or hold public office is not a fundamental right, and felons are not a suspect class.  Consequently, a ban on felons running for elective office is valid if it is rationally related to a legitimate state interest.  The state's interest in barring felons from elective office is to ensure "public confidence in the honesty and integrity of those serving in state and local offices."  The U.S. Supreme Court has previously held that states can deprive convicted felons of the right to vote, a right that is fundamental.  The right to run for office is not a fundamental right, so a similar bar would likely pass constitutional muster.  

The Court also rejected Parker's argument that the law has a disproportionate impact on African American men.  The Court was also not persuaded that the ban violates the First Amendment.  

You can read the case at Parker v. Lyons (7th Cir. July 7, 2014)

Read More

Health Insurance Subsidies Protected by Pension Clause of IL Constitution

Health Insurance Subsidies Protected by Pension Clause of IL Constitution

  Friday, July 11, 2014    Julie Tappendorf

---

We've written quite a bit lately about the state's pension crisis and the various legislative actions that have been taken to attempt to address the shortfall in many state and local government pension funds.  One of these legislative "fixes" was P.A 97-695 that amended the State Employees Group Insurance Act of 1971 to eliminate standards for the state's contributions to health insurance premiums for 3 state retirement systems.  In place of these statutory standards, the Director of the Illinois Department of Central Management Services (CMS) would be authorized to determine the annual health insurance contribution required by the state and retirees.  

To no-one's surprise, this legislation was challenged in court.  Pensioners claimed that the legislative change in how health insurance contributions would be determined violates the pension protection clause of the Illinois constitution, among other claims.  The Illinois Supreme Court recently agreed with that argument, finding that the constitutional pension protections apply to health benefit contributions.  Kanerva v. Weems, 2014 IL 115811 (July 3, 2014)

At issue was an interpretation of the state constitutional provision protecting pension rights.  That provision (Article XIII, section 5 of the Illinois constitution) provides as follows:

Membership in any pension or retirement system of the State...shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

The pensioners argued that this language protects not only the pension benefits, but all other retirement benefits provided to state retirees.  The supreme court agreed, finding that health insurance benefits are part of the "package" of retirement benefits provided to members of state public pension systems.  The court held that this constitutional provision was intended to eliminate the uncertainty for retirees, and to protect their rights from future changes that would impair those rights.  In short, the court concluded that the pension rights protected by the Illinois constitution include the provision of health insurance premium subsidies.

The dissent, on the other hand, concluded that subsidized health insurance premiums are not pension benefits, so would not be covered by the constitutional provision that protects pension benefits from impairment.  In the dissent's view, the majority was reading language into this provision that does not exist.  

Post Authored by Julie Tappendorf, Ancel Glink

Read More

California Court to Decide Whether Public Officials' Private Emails Are Releasable

California Court to Decide Whether Public Officials' Private Emails Are Releasable

  Thursday, July 10, 2014    Julie Tappendorf

---

We reported previously on a California court of appeals case that held that a government officials' emails on private accounts were not subject to public inspection or release.  It appears that this case is now going to the California supreme court, which will decide the requester's appeal of the court of appeals' decision. 

In the California case, a requester filed a public records request with the City of San Jose asking for "voicemails, emails or text messages sent or received on private electronic devices" used by the Mayor and City Council members.  The City denied the request, and the requester filed a lawsuit. The trial court ordered the Mayor and City Council members to turn over the electronic communications.  

On appeal to the California Court of Appeals, the City argued that the electronic communications were not "public records" under the definition of California's public record law because the messages and devices are not "prepared, owned, used, or retained" by the City.  The appellate court agreed, finding that because the City cannot access or control messages on private devices, the messages are not public records under the law.  The court acknowledged that its ruling could result in public officials using private devices to conduct public business, but left the issue to the legislature to address.  The court also acknowledged the privacy concerns, as well as practicality, of requiring the disclosure of communications sent and received on privately owned devices.

We have discussed the issue of government communications on private devices in Illinois in a number of previous blog postings in this post, this post, and this post.  The PAC had issued an opinion that all electronic communications are releasable to the public, regardless of the device.  The Illinois appellate court limited that opinion so that only those communications sent on private devices that meet certain criteria will be subject to public release:  (1) the communications were sent to a majority of a public body; (2) the communications were sent during a meeting of the public body; (3) the communications were forwarded to/from an official government account.  

The rulings by the Illinois appellate court and California court of appeals were based on two different definitions in the state records law.  In Illinois, the Illinois appellate court looked at the definition of "public body" in determining whether or when FOIA might apply to individual public officials.  Only when individual public body members are acting as a public body in sending a communication, would those communications be subject to release.  In the California case, the City is relying on the definition of "public record" to argue that communications sent and received on private devices do not meet the state's definition of public record. The City argues that it would be nearly impossible to track the electronic communications on the private devices of 5,000 city employees.

It will be interesting to see how California's high court addresses this issue.  

Post Authored by Julie Tappendorf, Ancel Glink

Read More

U.S. Supreme Court to Hear Sign Case

U.S. Supreme Court to Hear Sign Case

  Wednesday, July 09, 2014    Julie Tappendorf

---

We don't see a lot of land use cases at the Supreme Court level.  For those of us who practice in this area, we get a little excited when the Supremes decide to tackle a land use case.  I can still remember the anticipation of last year's ruling in Koontz.  So, you can imagine the interest in the Supreme Court's recent decision to grant cert. (meaning they will hear the appeal) in Reed v. Town of Gilbert, a case involving a challenge to a town's sign ordinance.  

The Town of Gilbert's ordinance restricts the time period that temporary signs can be maintained.  It also distinguishes between different types of temporary signs, categorizing them as (1) political signs; (2) event signs; and (3) other noncommercial signs.  A local church, Good News, received a notice of violation for placing about 17 signs in the area surrounding its place of worship in Gilbert announcing the time and location of its services. The notice stated that the signs violated the town’s sign ordinance because “the signs were displayed outside the statutorily-limited time period.” Good News subsequently filed suit in federal court in Arizona alleging that Gilbert’s Sign Code violated the Free Speech Clause of the First Amendment and the Equal Protection Clause of the Fourteenth Amendment. The case made its way to the Ninth Circuit Court of Appeals, which upheld the Town of Gilbert's sign ordinance.  

First, the Court of Appeals determined that the sign ordinance “regulates physical characteristics, such as size, number and construction of the signs,” their locations, and the timing of displays, none of which "implicate the content of speech.”  Second, the Court held that the restrictions on time, place and manner imposed by Gilbert on the display of temporary signs advance the aesthetic and safety interests by limiting the size, duration and proliferation of signs.  Third, the Court held that the ordinance left Good News with ample alternative methods of speech.  Finally, the Court rejected Good News' argument that the Town's distinct regulations for different types of speech (for example, political candidate signs can be larger than event signs) was unconstitutional.

Some commentators argue that the Supreme Court agreed to hear the case because the Town's sign ordinance treats political speech more favorably than religious speech - political signs can be up to 32 square feet in size and other signs (including signs of religious organizations such as Good News) could be only 20 square feet or 6 square feet in size, depending on whether the message related to a qualifying event or not, respectively.  Others say that the Ninth Circuit Court of Appeals got it wrong in holding that the ordinance was content-neutral, given the distinctions between political signs and others.  This will certainly be a case to watch for municipalities, as the decision could certainly impact how municipalities regulate temporary signs (or any sign, for that matter). 

Post Authored by Julie Tappendorf, Ancel Glink

Read More

2 PAC Binding Opinions Find Public Bodies in Violation of FOIA

2 PAC Binding Opinions Find Public Bodies in Violation of FOIA

  Tuesday, July 08, 2014    Julie Tappendorf

---

We have two new PAC binding opinions, both dealing with FOIA, and both finding the public body in violation of that statute.  The opinions are summarized below:

PAC Opinion 14-005 (financial contract terms)

The PAC determined that the Illinois Department of Lottery violated FOIA by redacting financial information from contracts with the company that operates the state lottery.  Information that was redacted related to annual and monthly fees, pricing, and compensation paid to the contractor to operate the lottery.  The PAC rejected the state’s argument that this information was considered “confidential data” under the Illinois Lottery Act, and also found that it did not qualify as proprietary or financial information under Section 7(1)(g) of FOIA.  The PAC also rejected the contractor’s argument that confidentiality provisions in the state’s contract with the contractor prohibited release of the confidential data.  

PAC Opinion 14-006 (duty to disclose records of student association)

The PAC determined that Chicago State University violated FOIA by failing to provide public records in its possession to a requester.  Specifically, the requester asked the university to release information relating to the specific amount of money that was collected at a Homecoming dance and how that money was housed and appropriated.  The university had denied the request, stating that the records are not records of a “public body” under FOIA because the records were records of the Student Government Association.  The university further argued that the records are not related to the “transaction of public business” to constitute public records under FOIA.  The PAC rejected the university’s arguments.  First, the PAC determined that because the SGA had distributed the records to the university, they were in the university’s possession and, therefore, subject to release.  Second, the PAC found that the university controls the funding of student associations, including the SGA, because of language in a student association publication that states that funds remaining in a student association account  that are not expended by the end of the fiscal year revert to the university.  

Post Authored by Julie Tappendorf, Ancel Glink

Read More

Be Careful Where You Sit in Honolulu!

Be Careful Where You Sit in Honolulu!

  Monday, July 07, 2014    Julie Tappendorf

---

The Honolulu City Council is considering a proposed anti-loitering ordinance that would ban routinely sitting or lying on public sidewalks in Waikiki.  The ban, proposed by the Mayor of Honolulu, Rick Caldwell, has only been proposed for Waikiki, but the City Council is considering expanding the scope beyond Waikiki, to include the whole island.  The Council is also considering expanding the bill to make the ban effective 24 hours a day, seven days a week, with the only exceptions during parades and protests.  Proponents of the bill argue that a 24 hour ban is necessary due to the presence of numerous 24 hour businesses in the area.  The goal of the bill is to clean up the tourist areas of Honolulu.

The “sit-lie” ban, as it is called, is patterned on a similar ordinance in Seattle.  However, critics are now concerned that expansion of the ban to all of the island, all of the time, opens the City up to potential legal challenges, as similar ordinances have faced First Amendment challenges.  The issue will become whether the sit-lie ban regulates conduct or free speech.  If the ban is found to regulate free speech, it will be found unconstitutional.

The Seattle sit-lie ban was both limited as to geographic scope, and was limited to certain places at certain times.  It has survived challenges due to its limited scope, as the 9^th Circuit has found that the ordinance only regulated conduct.  However, a similar ordinance was struck down by the 9^th Circuit in Los Angeles, as the court concluded that a 24 hour ban amounted to cruel and unusual punishment, which criminalized the homeless. 

If the bill is enacted into law, violators face fines up to $1000.00 and up to 30 days in jail.  The Council will review the bill at a future meeting.  

Post Authored by Erin Baker, Ancel Glink

Read More

Court Says New York Towns Can Ban Fracking

Court Says New York Towns Can Ban Fracking

  Thursday, July 03, 2014    Julie Tappendorf

---

The New York Court of Appeals recently upheld two local government bans on fracking. Specifically, the court said that local governments can use their zoning laws to ban hydraulic fracturing within their borders.  An oil-and-gas company had challenged the towns' bans, arguing that New York law gives full power to the state to regulate the industry.  The court rejected that argument, finding that the state's Oil, Gas and Solution Mining Law did not preempt a home rule municipality's authority to regulate land uses.  In the Matter of Mark Wallach v. Town of Dryden.

Post Authored by Julie Tappendorf, Ancel Glink

Read More

Court Upholds Revocation of Local Massage Licenses

Court Upholds Revocation of Local Massage Licenses

  Wednesday, July 02, 2014    Julie Tappendorf

---

The Village of Downers Grove enacted an ordinance that provides that a massage establishment license is subject to suspension or revocation if the "Licensee or any massage therapist practicing at the licensed premises has committed a...Specified Criminal Act...on the Licensed Premises."  After an undercover investigation led to charges of prostitution by massage therapists at two massage establishments, the local commissioner conducted hearings and revoked the establishments' licenses. 

The establishments subsequently sued claiming that the Village's massage business commissioner abused his discretion in revoking their licenses for a "first offense" based on similar cases involving liquor license revocations.  However, both the trial court and appellate court upheld the Village's revocation of the establishments' licenses, finding that the violations were serious and "went to the essence of the problem that the Village's ordinance is aimed to prevent."  The appellate court also rejected the plaintiffs' argument that the revocation violated their due process rights because the owners did not know about the illegal activity involving the massage therapists.  King's Health Spa, Inc. v. Village of Downers Grove, 2014 IL App (2d) 130825 (June 11, 2014).

Post Authored by Julie Tappendorf, Ancel Glink

Read More

Principal Has Immunity For Refusing to Allow Distribution of Candy with Religious Message

Principal Has Immunity For Refusing to Allow Distribution of Candy with Religious Message

  Tuesday, July 01, 2014    Julie Tappendorf

---

Being a teacher is tough. Between unruly students, angry parents, and seemingly unceasing budget cuts, teachers have enough to keep them awake at night. Thankfully, being sued might not be among them. A recent case out of the Fifth Circuit, Morgan v. Swanson, was a major victory for teachers and school officials. 

In this case, an elementary school in Texas had an in-school party during the holiday season. A parent and his son brought candy canes as gifts for the students. The candy canes, however, had a religious message attached to them. When the school’s principal saw the religious message, she told the parent and his son that they could not distribute them. The principal explained that the school had a policy against distributing materials with religious messages.

The father and son sued the principal, alleging that she had violated their First Amendment rights. Both the Fifth Circuit and district court dismissed the case, finding that the principal had immunity from the lawsuit because the law regarding this area of the First Amendment was too complicated for her to know how to handle religious messages at school parties. The court held that teachers and school officials are shielded from liability in lawsuits unless their conduct is “clearly established” as unconstitutional. The court acknowledged that teachers have a difficult job, and that the courts should not make it more so by exposing them to liability for doing things that they did not even know were illegal.

Without a doubt, this case is a victory for school officials. However, it also begs the question: what conduct is “clearly established” as unconstitutional? Forcing a student to say the pledge of allegiance would be a safe bet. But what about issues that are a closer call? What if school officials allow students to sing a disproportionate number of Christmas songs at a holiday program? It is difficult to predict exactly, but based on this holding, it seems as though courts are willing to give teachers the benefit of the doubt. 

Post Authored by Matthew DiCianni, Ancel Glink

Read More