On July 3, 2014 the Illinois Supreme Court issued its Opinion in People ex rel. Madigan v. Burge. Chicago Detective John Burge was convicted of obstruction of justice and making false statements during a police brutality lawsuit in which he was a defendant. The Pension Board held a hearing to determine whether to terminate Burge’s retirement pension as a result of his felony convictions. The Pension Board voted 4-4 to terminate Burge’s pension. The Attorney General subsequently filed a lawsuit against the Pension Board under section 1-115 of the Pension Code alleging that the Pension Board had violated the felony divestiture statute. The trial court dismissed the Attorney General’s complaint because the Pension Board had exclusive jurisdiction to render a decision with respect to the felony divestiture question and the only method in which to challenge the Pension Board’s decision was through Administrative Review. The Appellate Court subsequently reversed the trial court’s order. The Illinois Supreme Court reversed the Appellate Court and affirmed the dismissal of the Attorney General’s complaint. The Supreme Court agreed with the trial court and held that only the Pension Board had the exclusive and original jurisdiction to render a decision as to whether Burge’s pension should be terminated and that decision was only subject to attack through Administrative Review.
On July 3, 2014 the Illinois Supreme Court issued its Opinion in Kanerva v. Weems. The Supreme Court held that Article XIII, Section 5 of the Illinois Constitution (“the Pension Protection Clause) applied to a public employer’s obligation to contribute to the cost of health care benefits for employees covered by a state retirement system. Specifically, a health insurance subsidy provided in retirement qualified as a benefit of membership for purposes of the Pension Protection Clause. As such, the Plaintiff’s stated a cause of action under the Pension Protection Clause where a state law reduced or changed those benefits for current public employees and retirees.
The Supreme Court’s holding strongly suggests that the most recent Pension Reform Law may be unconstitutional, or at the very least that lawsuits challenging the Pension Reform Law should survive a motion to dismiss.
The case came before the Supreme Court upon the trial court’s order granting the Defendant’s 2-615 motion to dismiss for failing to state a cause of action. As such, the matter has been remanded to the trial court for additional proceedings.