Piccioli v. Board of Trustees of the Teachers' Retirement System , 2019 IL 122905 ( 2019 )

2019 IL 122905
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 122905)
DAVID PICCIOLI, Appellant, v. THE BOARD OF TRUSTEES OF THE TEACHERS’
RETIREMENT SYSTEM et al., Appellees.
Opinion filed April 4, 2019.
JUSTICE BURKE delivered the judgment of the court, with opinion.
Chief Justice Karmeier and Justices Kilbride and Neville concurred in the
judgment and opinion.
Justice Theis dissented, with opinion, joined by Justices Thomas and Garman.
OPINION
¶1 Plaintiff, David Piccioli, appeals directly to this court from an order of the
Sangamon County circuit court holding a 2007 amendment to the Illinois Pension
Code (Code) (Pub. Act 94-1111 (eff. Feb. 27, 2007) (adding 40 ILCS
5/16-106(10)) unconstitutional and entering summary judgment in favor of
defendants, the Board of Trustees of the Teachers’ Retirement System (TRS) and
its individual trustees. We reverse the circuit court’s judgment and remand with
directions to enter summary judgment in favor of plaintiff.
¶2 BACKGROUND
¶3 On February 27, 2007, Public Act 94-1111 (eff. Feb. 27, 2007) (2007 Act) was
enacted into law. Among other things, the 2007 Act added a new provision to
article 16 of the Code, which governs the TRS. Id. (adding 40 ILCS 5/16-106(10)).
This provision allowed an officer or employee of a statewide teachers’ union, such
as the Illinois Federation of Teachers (IFT) or the Illinois Education Association
(IEA), who was a certified teacher as of the effective date of the amendment, to
establish service credit in the TRS for his or her union work prior to becoming
certified as a teacher. 1 Id. To obtain this benefit, an individual had to meet three
requirements: (1) be certified as a teacher on or before the effective date of the
legislation (i.e., Feb. 27, 2007), (2) apply in writing to the TRS within six months
after the effective date of the legislation, and (3) pay into the system both the
employee contribution and employer (State) contribution, plus interest, for his or
her prior union service. Id.
¶4 According to the legislative debates, the goal of the 2007 amendment was to
allow employees of teachers’ unions to “pick up their service” in the TRS for the
period during which they worked for the union prior to becoming certified as a
teacher. 94th Ill. Gen. Assem., House Proceedings, Nov. 28, 2006, at 68-69
(statements of Representative Hannig); 94th Ill. Gen. Assem., Senate Proceedings,
Nov. 30, 2006, at 50 (statements of Senator Martinez).
¶5 Plaintiff worked as a lobbyist for the IFT from 1997 until his retirement on
December 31, 2012. In December 2006, plaintiff obtained a substitute teaching
certificate. On January 22, 2007, he worked for one day as a substitute teacher in
the Springfield public schools. By taking these steps, plaintiff met the statutory
1
The 2007 Act also amended the Code to allow officers or employees of state employee unions
who had previously earned creditable service in the State Employees’ Retirement System of Illinois
(SERS) to purchase service credit in that system for both their prior union service and their union
service going forward. See Pub. Act 94-1111, § 5 (eff. Feb. 27, 2007) (adding 40 ILCS
5/14-103.05(c)). These provisions have not been altered and are still part of the Code.
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criteria to qualify as a certified teacher prior to February 27, 2007, the effective date
of the 2007 amendment. 105 ILCS 5/21-9 (West 2006); 40 ILCS 5/16-106(10)
(West 2006). Within six months of that date, plaintiff applied in writing to the TRS.
On June 1, 2007, plaintiff officially became a member of the TRS. Plaintiff then
contributed $192,668 to the system for his union service during the period from
1997 through May 31, 2007. 2 It is undisputed that plaintiff complied with all of the
statutory requirements for obtaining service credit in the TRS for his union service
prior to becoming a certified teacher.
¶6 In October 2011, the Chicago Tribune published an article and editorial which
identified plaintiff by name and criticized the law that allowed him to become a
member of the TRS and qualify for a teacher’s pension. In response to the negative
media coverage, Public Act 97-651 (eff. Jan. 5, 2012) (2012 Act) was enacted into
law on January 5, 2012. Among other things, the 2012 Act repealed the 2007
amendment at issue in this case. Id. §§ 5, 97 (amending 40 ILCS 5/16-106(10)).
The 2012 Act stated, in part:
“Retroactive repeal. This amendatory Act *** hereby repeals and declares void
ab initio the last paragraph of Section 16-106 of the Illinois Pension Code as
contained in Public Act 94-1111 as that paragraph furnishes no vested rights
because it violates multiple provisions of the 1970 Illinois Constitution,
including, but not limited to, Article VIII, Section 1 [(Ill. Const. 1970, art. VIII,
§ 1) (‘Public funds, property or credit shall be used only for public
purposes.’)].” Id. § 97.
¶7 The repeal provision also provided for a refund of contributions to employees
who had qualified for benefits pursuant to the 2007 amendment. The provision
stated:
“Upon receipt of an application within 6 months after the effective date of this
amendatory Act of the 97th General Assembly, the System shall immediately
refund any contributions made by or on behalf of a person to receive service
credit pursuant to the text set forth in Public Act 94-1111, as well as any amount
2
Plaintiff also contributed approximately $172,000 to the TRS for his ongoing union service
from June 1, 2007, to December 31, 2012, pursuant to section 16-106(8) of the Code (40 ILCS
5/16-106(8) (West 2006)). Plaintiff’s service credit for this time period is not at issue in this appeal.
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determined by the Board to be equal to the investment earned by the System on
those contributions since their receipt.” Id.
¶8 Pursuant to the 2012 Act, the TRS eliminated the service credits plaintiff had
received for his union service from 1997 through May 31, 2007, and issued a
refund of his contributions. Thereafter, plaintiff filed a complaint against
defendants in the circuit court. Plaintiff sought injunctive relief and a declaratory
judgment that the retroactive repeal of the 2007 amendment violated several
provisions of the state constitution, including the pension protection clause (Ill.
Const. 1970, art. XIII, § 5). The parties filed cross-motions for summary judgment.
In their motion, defendants argued for the first time that the 2007 amendment was
unconstitutional special legislation (Ill. Const. 1970, art. IV, § 13) and, therefore,
that the 2012 Act repealing that provision was constitutionally valid.
¶9 The trial court agreed with defendants’ argument and entered summary
judgment for defendants and against plaintiff. The court first rejected plaintiff’s
claim that defendants lacked standing to attack the constitutionality of the 2007
amendment. The court then held that the effective-date cutoff in the 2007
amendment, which limited benefits to employees who met the eligibility criteria as
of the effective date of the legislation, rendered that provision special legislation.
Accordingly, the court declared the provision unconstitutional and void ab initio.
Plaintiff appealed the trial court’s decision directly to this court. Ill. S. Ct. R.
302(a)(1) (eff. Oct. 4, 2011).
¶ 10 ANALYSIS
¶ 11 I. Standing
¶ 12 Plaintiff first contends that defendants lack standing to attack the
constitutionality of the 2007 amendment. The doctrine of standing ensures that
courts decide actual controversies and not abstract questions. People v. $1,124,905
U.S. Currency & One 1988 Chevrolet Astro Van, 177 Ill. 2d 314, 328 (1997) (citing
In re Marriage of Rodriguez, 131 Ill. 2d 273, 279-80 (1989)). Under Illinois law,
standing requires “some injury in fact to a legally cognizable interest.” Greer v.
Illinois Housing Development Authority, 122 Ill. 2d 462, 492 (1988). “To have
standing to challenge the constitutionality of a statute, *** one must have sustained
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or be in immediate danger of sustaining a direct injury as a result of enforcement of
the challenged statute.” Wexler v. Wirtz Corp., 211 Ill. 2d 18, 23 (2004). “The
claimed injury must be (1) distinct and palpable; (2) fairly traceable to defendant’s
actions; and (3) substantially likely to be prevented or redressed by the grant of the
requested relief.” Chicago Teachers’ Union, Local 1 v. Board of Education of the
City of Chicago, 189 Ill. 2d 200, 207 (2000) (citing Glisson v. City of Marion, 188
Ill. 2d 211, 221 (1999)). Questions of standing are reviewed de novo. Wexler, 211
Ill. 2d at 23.
¶ 13 As he did in the circuit court, plaintiff argues that defendants have no personal
interest in the controversy because they are in no danger of suffering an injury to
their personal rights. Plaintiff maintains that the TRS is merely a fiduciary for the
benefit of its members and, thus, has no personal interest in the fund it administers.
Accordingly, plaintiff argues, defendants “lack[ ] power to unilaterally attack the
2007 Act’s constitutionality.” We agree with the circuit court that plaintiff’s
standing argument is without merit.
¶ 14 Defendants are not seeking judicial redress for any alleged violations of their
personal rights. The party seeking judicial review and enforcement in this case is
plaintiff, not defendants. In arguing that the 2007 amendment is unconstitutional,
defendants are simply defending the constitutionality of the 2012 Act and the
actions they took pursuant to that legislation. Defendants complied with the 2007
Act by allowing plaintiff to join the TRS as a member and make contributions for
his past union service. Defendants then complied with the 2012 Act by voiding
plaintiff’s service credits and refunding his contributions. Defendants have the
right to defend the validity of the 2012 Act by virtue of the fact that plaintiff has
filed a lawsuit against them seeking a declaratory judgment that the enactment is
unconstitutional. Thus, we reject plaintiff’s argument that defendants lack standing
to challenge the constitutionality of the 2007 amendment.
¶ 15 II. Special Legislation
¶ 16 We now turn to the central issue raised in this appeal. The question before this
court is whether the 2007 amendment to section 16-106(10) of the Code is special
legislation in violation of the state constitution. Our answer to this question will
dictate whether the 2012 Act, which repealed the 2007 amendment and required
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that beneficiaries have their benefits revoked and their contributions refunded,
violated the pension protection clause (Ill. Const. 1970, art. XIII, § 5).
¶ 17 The constitutionality of a statute is a question of law subject to de novo review.
Board of Education of Peoria School District No. 150 v. Peoria Federation of
Support Staff, Security/Policeman’s Benevolent & Protective Ass’n Unit No. 114,
2013 IL 114853, ¶ 41. Statutes carry a strong presumption of constitutionality.
Moline School District No. 40 Board of Education v. Quinn, 2016 IL 119704, ¶ 16.
It is this court’s duty to uphold the constitutionality of a statute if reasonably
possible. Id. As the party alleging that the 2007 amendment is unconstitutional,
defendants bear the burden of establishing the statute’s constitutional infirmity. Id.
¶ 18 Special legislation is expressly prohibited by our state constitution: “The
General Assembly shall pass no special or local law when a general law is or can be
made applicable. Whether a general law is or can be made applicable shall be a
matter for judicial determination.” Ill. Const. 1970, art. IV, § 13. “The special
legislation clause prohibits the General Assembly from conferring a special benefit
or privilege upon one person or group and excluding others that are similarly
situated.” Crusius v. Illinois Gaming Board, 216 Ill. 2d 315, 325 (2005). The clause
prevents the legislature from making classifications that arbitrarily discriminate in
favor of a select group. Id. To determine whether a law constitutes special
legislation, we apply a two-part test. First, we must decide whether the statutory
classification at issue discriminates in favor of a select group and against a similarly
situated group. Second, if the classification does so discriminate, we must
determine whether the classification is arbitrary. Id.; Big Sky Excavating, Inc. v.
Illinois Bell Telephone Co., 217 Ill. 2d 221, 235 (2005).
¶ 19 There is no question that the 2007 amendment discriminates in favor of
employees who began working for statewide teachers’ unions prior to its effective
date and discriminates against employees who began after that date. The 2007
amendment creates a cutoff date whereby those individuals who were not
employed by one of the unions on or before February 27, 2007, were excluded from
availing themselves of the benefits in the statute. In addition, the amendment
distinguishes between employees of statewide teachers’ unions who were certified
as teachers on or before the effective date and those who were not, and it confers a
benefit on the former that is unavailable to the latter. See Pub. Act 94-1111 (eff.
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Feb. 27, 2007) (amending 40 ILCS 5/16-106(10)) (restricting benefit to an officer
or employee of a statewide teachers’ union who was “certified as a teacher on or
before the effective date of this amendatory Act”); see also Crusius, 216 Ill. 2d at
325-26. However, the existence of a cutoff date in the statute does not necessarily
render the law unconstitutional. Under the second step of the special legislation
analysis, we must consider whether the classification created by the cutoff date is
arbitrary. Id. at 325.
¶ 20 Whether a classification is arbitrary is generally determined under the same
standards that are applicable to an equal protection challenge. Moline School
District No. 40 Board of Education, 2016 IL 119704, ¶ 24. Where, as here, a statute
does not affect fundamental rights, we use the rational basis test to assess its
constitutionality. Id. Under this test, we ask whether the statutory classification is
rationally related to a legitimate state interest. Id. The classification does not need
to be supported by evidence or empirical data. Big Sky Excavating, Inc., 217 Ill. 2d
at 240. In determining whether a statute satisfies the rational basis standard, a court
does not engage in “courtroom fact finding.” People ex rel. Lumpkin v. Cassidy,
184 Ill. 2d 117, 124 (1998). “Under the rational basis test, the court may
hypothesize reasons for the legislation, even if the reasoning advanced did not
motivate the legislative action. [Citation.] If there is any conceivable basis for
finding a rational relationship, the law will be upheld.” (Emphasis added.) Id.
Moreover, the fact that a law may be ill-conceived does not create a constitutional
problem for the courts to fix. Moline School District No. 40 Board of Education,
2016 IL 119704, ¶ 28. “[W]hether a statute is wise and whether it is the best means
to achieve the desired result are matters for the legislature, not the courts.” Id.
(citing Crusius, 216 Ill. 2d at 332).
¶ 21 The inclusion of a cutoff date in a statute, especially a statute that confers
benefits or establishes a government program reliant on public funding, is entirely
rational. Since state and local governments operate with limited resources and
budgets, restricting benefits to a finite number of participants is not only reasonable
but necessary. Advancement of the State’s economic goals clearly is a legitimate
rationale for legislation. See Crusius, 216 Ill. 2d at 327 (holding that promotion of
the State’s economic goals is a reasonable legislative objective that withstands a
special legislation attack); Moline School District No. 40 Board of Education, 2016
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IL 119704, ¶ 27; Jacobson v. Department of Public Aid, 269 Ill. App. 3d 359,
368-69 (1994).
¶ 22 Under the circumstances in this case, the legislature reasonably could have
chosen to impose a cutoff date for the purpose of budgetary responsibility and
preservation of the State’s pension funds. It certainly is not unusual for the
legislature to make pension benefits contingent upon an individual’s eligibility as
of the statute’s effective date. See, e.g., Pub. Act 97-651 (eff. Jan. 5, 2012)
(amending 40 ILCS 5/16-106(8)) (allowing a teachers’ union employee to establish
service credit in the TRS for future union service if “the individual first became an
officer or employee of the teacher organization and becomes a member before the
effective date of this amendatory Act of the 97th General Assembly”); Pub. Act
96-889 (eff. Apr. 14, 2010) (establishing “Tier 1” annuity benefits for persons who
became members of public retirement systems prior to January 1, 2011, and “Tier
2” annuity benefits for persons who became members on or after January 1, 2011).
Accordingly, we find that the cutoff date in the 2007 amendment was rationally
related to a legitimate government interest in offering pension benefits to current
employees while, at the same time, containing costs by excluding future employees
from those benefits.
¶ 23 Moreover, even if the 2007 amendment were totally revenue-neutral, that is, it
neither imposed costs on the State nor saved the State any money, it would still
survive constitutional scrutiny. It is perfectly reasonable for the legislature to
include a cutoff date in a statute establishing a public program or benefit. We are
aware of no constitutional rule that requires a government program to continue in
perpetuity. Nor does the failure of a statute to extend particular benefits to all
eligible employees, for all time, render the law unconstitutional. In order to satisfy
the rational basis standard, a statutory classification requires “[n]either perfection
nor mathematical nicety.” Maddux v. Blagojevich, 233 Ill. 2d 508, 547 (2009). The
mere fact that a law could have gone further than it did does not offend rational
basis. Id.; see also Chicago National League Ball Club, Inc. v. Thompson, 108 Ill.
2d 357, 372 (1985) (“Classifications are not required to be precise, accurate or
harmonious so long as they accomplish the legislative purpose.”). In general, there
is nothing arbitrary about using a cutoff date to limit benefits to a finite number of
individuals. Therefore, since a rational reason for the classification in the statute is
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conceivable, it is not special legislation. See Big Sky Excavating, Inc., 217 Ill. 2d at
240.
¶ 24 Despite the foregoing, defendants nevertheless contend that the 2007
amendment is special legislation. Defendants make three arguments. First, they
contend that numerous IEA employees were unaware of the 2007 amendment until
after it was passed. According to defendants, these employees were unfairly
deprived of the opportunity to participate in the benefits, and therefore, the statute
is special legislation. We reject this contention.
¶ 25 An individual’s knowledge or ignorance of a law has no relevance to whether it
is special legislation. “[I]t is well settled that ‘[a]ll citizens are presumptively
charged with knowledge of the law.’ ” People v. Boclair, 202 Ill. 2d 89, 104 (2002)
(quoting Atkins v. Parker, 472 U.S. 115, 130 (1985)). 3 On its face, the 2007
amendment made the benefit available to any current employee who met its criteria
on or before the effective date. There was nothing preventing eligible employees
from doing exactly what plaintiff did, i.e., obtain a substitute teaching certificate
for purposes of attaining TRS membership and purchasing credits for past union
service. The same benefit available to plaintiff was available to other employees.
They simply chose not to avail themselves of it. The fact that an employee does not
choose to opt in to a particular benefit by the deadline does not, in some way, render
the statutory benefit special legislation.
¶ 26 Defendants raise a second argument that the cutoff date was arbitrary, i.e., not
rationally related to a legitimate government interest. According to defendants,
fiscal responsibility was not the legislature’s actual reason for including the cutoff
date. Defendants point to two comments from the legislative debates indicating that
the 2007 amendment would not impose any additional costs on the State. See 94th
Ill. Gen. Assem., House Proceedings, Nov. 28, 2006, at 68 (statements of
Representative Hannig) (stating that no part of the legislation would “cost the State
of Illinois any additional pension moneys”); 94th Ill. Gen. Assem., Senate
Proceedings, November 30, 2006, at 51 (statements of Senator Martinez) (stating
3
In response to defendants’ argument, plaintiff has filed a motion to take judicial notice of a
legislative record that purportedly indicates that the IEA was, in fact, aware of the 2007 legislation
before its passage. That motion is denied. See Rural Electric Convenience Cooperative Co. v.
Illinois Commerce Comm’n, 118 Ill. App. 3d 647, 652 (1983) (declining to take judicial notice of an
irrelevant exhibit).
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that the bill “does not have any unfunded liability”). Based on these two statements,
defendants conclude that the cutoff date in the statute could not further the goal of
fiscal responsibility, since the statutory benefit was not going to cost the State any
money to begin with. Therefore, according to defendants, the classification created
by the cutoff date is arbitrary. We also reject this argument.
¶ 27 There is no evidence that the legislators’ two comments that the bill would not
cost the State any money are accurate. In fact, defendants’ contention that the bill
was revenue-neutral is highly dubious, given the critical media coverage of the
2007 amendment and the legislature’s decision to repeal the amendment in
response to that criticism. As we noted, however, even if it is true that the statute is
revenue-neutral, the legislature does not need a special reason to cut off
government benefits or programs by a certain date.
¶ 28 Finally, defendants argue that the analysis in Peoria School District, 2013 IL
114853, is controlling. That case is factually distinguishable and, thus, has no
bearing on our decision in this case. The statutory amendment at issue in Peoria
School District changed the laws governing labor disputes for “peace officers
employed by a school district in its own police department in existence on the
effective date of this amendatory Act” of the 96th General Assembly (Pub. Act
96-1257 (eff. July 23, 2010) (amending 5 ILCS 315/3 (West 2010))). Peoria School
District, 2013 IL 114853, ¶ 7. The district challenged the amendment as special
legislation because, as of the effective date of the amendment, Peoria School
District No. 150 was the only school district that employed peace officers in its own
police department. Id. ¶ 10. This court held that there was no rational justification
for applying one set of laws to a school district currently employing peace officers
in its own police department and applying a different set of laws to school districts
that may do so in the future. Id. ¶¶ 59-60. Since there was no rational justification
for limiting the reach of the statute to one particular school district, we held the
amendment violated the special legislation clause. Id. ¶ 60.
¶ 29 Defendants contend that the cutoff date provision in Peoria School District is
no different from the cutoff date in the 2007 amendment. Accordingly, defendants
argue, our analysis in this case is subject to the same general principle set forth in
that case:
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“[A] law the legislature considers appropriately applied to a generic class
presently existing, with attributes that are in no sense unique or unlikely of
repetition in the future, cannot rationally, and hence constitutionally, be limited
of application by a date restriction that closes the class as of the statute’s
effective date. Barring some viable rationale for doing so, it would, for
example, violate the proscription of the constitution for the legislature to apply
a law to a person or entity in existence on the effective date of enactment, but
make it inapplicable to a person or entity who assumed those attributes or
characteristics the day after the statute’s effective date.” Id. ¶ 54.
¶ 30 We reject defendants’ argument for the simple reason that the “cutoff date” in
Peoria School District bears no relevant similarities to the “cutoff date” in the case
at bar. The cutoff date in that case was a descriptor, clearly intended to target one
specific school district that, at the time, was involved in a labor dispute with its
peace officers. See id. ¶ 10 (complaint alleged that legislators knew, when they
passed the amendment, that it would only apply to that district); see also Crusius,
216 Ill. 2d at 325-26 (statute discriminated in favor of “licensees that were ‘not
conducting riverboat gambling on January 1, 1998’ (230 ILCS 10/11.2(a) (West
2000)),” of which Emerald Casino, Inc., was the only one). By contrast, the “cutoff
date” in the 2007 amendment was simply a deadline that employees were required
to meet in order to establish eligibility for a particular pension benefit. On its face,
the 2007 amendment applied generally to all eligible employees who met its
criteria. It was not directed at a specific individual. Moreover, the statute in Peoria
School District did not involve a government program or benefit, which, as we have
explained, is not constitutionally required to exist in perpetuity for all future
applicants. Accordingly, the analysis in that case does not apply.
¶ 31 III. Pension Protection Clause
¶ 32 Since the 2007 amendment is not special legislation and the circuit court did not
invalidate the law on any other constitutional grounds, we hold that it confers a
pension benefit protected by our state constitution. See Ill. Const. 1970, art. XIII,
§ 5 (“Membership in any pension or retirement system of the State, any unit of
local government or school district, or any agency or instrumentality thereof, shall
be an enforceable contractual relationship, the benefits of which shall not be
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diminished or impaired.”). Plaintiff followed everything the law required in order
to establish his eligibility to purchase TRS credit for his past union service. While
nothing prevented the legislature from eliminating this benefit for future
employees, there is no legal justification for reducing or eliminating the pension
benefits plaintiff was awarded pursuant to the 2007 amendment. See Carmichael v.
Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund of Chicago,
2018 IL 122793 ¶ 26 (pursuant to the pension clause, “once a person commences to
work and becomes a member of a public retirement system, any subsequent
changes to the Pension Code that would diminish the benefits conferred by
membership in the retirement system cannot be applied to that person”). We hold
that the provision in the 2012 Act (Pub. Act 97-651 (eff. Jan. 5, 2012)) that repealed
the 2007 amendment violates the pension protection clause in the Illinois
Constitution and, therefore, that plaintiff is entitled to summary judgment.
¶ 33 CONCLUSION
¶ 34 For the foregoing reasons, we reverse the decision of the circuit court declaring
the 2007 amendment to section 16-106 of the Code (Pub. Act 94-1111 (eff. Feb. 27,
2007) (adding 40 ILCS 5/16-106(10))) unconstitutional and granting summary
judgment to defendants. We remand the cause to the circuit court with directions to
enter summary judgment in favor of plaintiff.
¶ 35 Circuit court judgment reversed; cause remanded with directions.
¶ 36 JUSTICE THEIS, dissenting:
¶ 37 I agree with the majority that plaintiff David Piccioli’s standing argument lacks
merit. I disagree with the majority that Piccioli’s pension protection clause
argument has merit. In my view, the 2007 amendment to section 16-108(10) of the
Pension Code (Pub. Act 94-1111 (eff. Feb. 27, 2007) (adding 40 ILCS
5/16-106(10)) violates the special legislation clause (Ill. Const. 1970, art. IV, § 13).
Consequently, the 2012 Act (Pub. Act 97-651 (eff. Jan. 5, 2012) (amending 40
ILCS 5/16-106(10))), which repealed the 2007 amendment, does not violate the
pension protection clause (Ill. Const. 1970, art. XIII, § 5).
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¶ 38 As Piccioli’s attorney admitted at oral argument, the optics created by the facts
of this case are not great. The majority’s background, however, whitewashes those
facts. For context, I offer details that the majority overlooks.
¶ 39 Administrators, teachers, and other staffers who work in public schools outside
Chicago participate in the Teachers’ Retirement System (TRS), which was
established and is governed by article 16 of the Code. See 40 ILCS 5/16-101 et seq.
(West 2016). Before 2007, article 16’s definition of “teacher” included officers or
employees of statewide teacher organizations who had “previously established
creditable service” by teaching and who elected to become TRS members. See 40
ILCS 5/16-106(8) (West 2006). That provision allowed former teachers who later
worked for teacher organizations to earn TRS service credit for their union work.
There are two statewide teacher organizations in Illinois—the Illinois Federation of
Teachers (IFT) and the Illinois Education Association (IEA).
¶ 40 In the 94th General Assembly, Senate Bill 36 concerned the Illinois Municipal
Retirement Fund and early retirement benefits. Final Legislative Synopsis and
Digest of the 94th Ill. Gen. Assem. (No. 13), at 41, ftp://12.43.67.2/Digest/94th
FinalDigest.pdf. The bill was introduced on January 26, 2005; it was approved by
the Senate and sent to the House on March 2, 2005. Id. at 42. There, it was referred
to the rules committee and then assigned to the executive committee. Id. The bill
was re-referred to the rules committee and then assigned to the veterans affairs
committee. Id. at 42-43. The bill was again re-referred to the rules committee,
where it stalled. Id. at 43.
¶ 41 The record here contains the discovery deposition of Steven Preckwinkle, the
IFT’s director of political activities. Preckwinkle stated that, shortly after the 2006
general election, he was approached by a House Democratic staff member who
asked if the organization would be interested in reviving a new version of the bill.
Preckwinkle discussed that version with the IFT’s president, who expressed
concerns about its cost to taxpayers and its potential for “damaging exposure” if the
organization supported it. Ultimately, the organization decided to do so.
Preckwinkle admitted that he saw draft language for the bill, but he could not
remember if anyone at the IFT was involved in writing that language. He added:
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“I don’t think anybody in the IFT wrote the words of the amendment. I’m
fairly certain of that. I certainly don’t recall that. I think I would have
remembered some discussion about it.
We did have a lobbyist that worked on pension *** matters and whether or
not he had some involvement, possibly had worked with a legislative staffer
*** on it[,] I don’t know.”
¶ 42 The record also contains an e-mail from that pension lobbyist, the IFT’s
legislative director, Nick Yelverton, to a Legislative Reference Bureau (LRB)
attorney. The e-mail was dated October 19, 2006, and the subject was “1st one is
wrong.” Attached to the e-mail was a document titled “IFT-TRS draft lang
10-18-06” that featured a cut-and-paste of section 16-106 of the Code from the
General Assembly’s website and an underlined paragraph appended to subsection
(8). The paragraph stated that teacher organization employees could establish TRS
service credit for their prior union work if they became certified as teachers before
the legislation went into effect and paid contributions required for such credit. One
minute later, Yelverton sent an e-mail to Preckwinkle with the subject “Language
to LRB.” That e-mail included the same attachment as the e-mail to the LRB
attorney.
¶ 43 On November 9, 2006, Preckwinkle sent an e-mail to approximately 40 IFT
employees who were “not currently participating in a public pension system like
TRS.” Preckwinkle informed them that he had scheduled two meetings concerning
“individuals’ rights under the law” to participate in TRS. At the meetings,
Preckwinkle and Yelverton would review “rights currently provided by law as well
as other related pending legislation that may be considered in the upcoming veto
session.” Preckwinkle noted, “If you received this e-mail it is believed you likely
fall in to this category of employee.” He advised that “Persons who should attend
one of these meetings are those with a bachelor’s degree (or higher) or the interest
in obtaining one while employed by the IFT.” (Emphasis in original.)
¶ 44 Piccioli was a House Democratic staffer between 1987 and 1997, after which he
took a position as a legislative lobbyist for the IFT. His supervisor was
Preckwinkle. Piccioli received Preckwinkle’s e-mail and attended one of the
meetings.
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¶ 45 On November 15, 2006, the House extended the final action deadline for Senate
Bill 36, and it was referred to the personnel and pensions committee. The following
day, that committee scrapped the entire bill and replaced everything after the
enacting clause. As rewritten, the bill included the substance of the IFT’s
paragraph. The bill proposed that teacher organization employees could establish
TRS service credit for their prior union work if they met the definition of “teacher”
in section 16-106(8) of the Code (40 ILCS 5/16-106(8) (West 2006)) and satisfied
three additional conditions: (1) they became certified as teachers before the
legislation went into effect, (2) they applied in writing to the TRS within six
months of the legislation’s effective date, and (3) they paid the TRS contributions
equal to “the normal costs calculated from the date of first full-time employment”
for the union, plus interest. 94th Ill. Gen. Assem., Senate Bill 36, 2006 Sess. The
definition of “teacher” required “previously established creditable service” (40
ILCS 5/16-106(8)(i) (West 2006)), which included work as a substitute (id.
§ 16-130(c)). At the time, certification as a substitute teacher necessitated only a
bachelor’s degree. 105 ILCS 5/21-9 (West 2006). A pension note from the
Commission on Government Forecasting and Accountability stated, “The fiscal
impact of allowing certified teachers to upgrade periods of service in a
non-certified capacity in TRS while employed by a statewide teachers’ union
cannot be calculated, but is expected to be minor.” Final Legislative Synopsis and
Digest of the 94th Ill. Gen. Assem. (No. 13), at 42, ftp://12.43.67.2/Digest/94th
FinalDigest.pdf.
¶ 46 On November 28, 2006, the House approved the bill. The next day,
Preckwinkle sent an e-mail to IFT employees:
“Please note that the legislation I referred to in our recent pension meetings ***
passed the House last night ***. It is now in the Senate where a vote is expected
tomorrow afternoon. *** [I]t appears headed for final passage. After that,
approval by the Governor could take place anytime within the next 90 days. I
want to reiterate that the TRS retroactivity section of the bill will only apply to
those who have established TRS service credit on the date the bill is signed by
the [G]overnor.” (Emphasis in original.)
On November 30, 2006, the Senate approved the bill. That day, Preckwinkle sent
another e-mail to IFT employees:
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“Please be advised that [Senate Bill] 36 passed the Senate today and will be sent
to the Governor. I will do what I can to slow down the bill signing process to
allow for everyone who wishes to participate in the TRS provisions the
opportunity to do so. If things go well on that end, the effective date could be as
late as mid-February, but there is really no way to know that for sure.”
And in a January 10, 2007, e-mail, Preckwinkle provided an update:
“[Senate Bill] 36 was sent to the [G]overnor on December 29, 2006. He has a
maximum of 60 days from that date to sign it. At this time I need to know who
is in the pipeline for completing a substitute teaching assignment, your status,
and when you expect to satisfy the requirements of the bill. I will try to ensure
that anyone who wishes to get coverage under this legislation has enough time
to do so prior to his signature.”
¶ 47 Preckwinkle became certified as a substitute teacher on November 2, 2006,
because he was “interested in becoming a member of TRS.” Preckwinkle worked
as a substitute teacher for one day. Piccioli became certified as a substitute teacher
on December 8, 2006. On January 22, 2007, he worked as a substitute teacher in a
Springfield elementary school. He never worked as a teacher again.
¶ 48 On February 27, 2007, exactly 90 days after the bill passed both houses,
Governor Blagojevich signed Public Act 94-1111, which became effective
immediately. See Pub. Act 94-1111 (eff. Feb. 27, 2007) (amending, inter alia, 40
ILCS 5/16-106(10) (West 2006)). According to TRS manager Scott Hepperly, both
Piccioli and Preckwinkle submitted applications to obtain retroactive service credit
for their union work. Preckwinkle was satisfied with a TRS pension from the date
of his substitute teaching through his retirement. Only Piccioli made the required
contributions for past credit. He paid $192,668 in installments over four years.
¶ 49 In late 2011, the Chicago Tribune published an article about Piccioli and
Preckwinkle and their TRS pensions. Ray Long & Jason Grotto, 2 Teachers Union
Lobbyists Teach for a Day to Qualify for Hefty Pensions, Chi. Trib., Oct. 22, 2011,
https://www.chicagotribune.com/news/ct-met-pensions-teacher-perk-20111023-
story.html [https://perma.cc/79EP-BFFV?type=image]. That story, part of an
ongoing investigation by the Tribune and WGN-TV, raised public awareness of
union employees receiving public pensions for private sector work. The General
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Assembly responded with a House bill to roll back a variety of Pension Code
provisions. See 97th Ill. Gen. Assem., House Proceedings, Nov. 29, 2011, at 38
(statements of Representative Cross) (“We are attempting, in this Bill, to address a
variety of problems that came about as a result of some news articles ***.”).
¶ 50 In 2012, Governor Quinn signed the bill as Public Act 97-651 (eff. Jan. 5,
2012). One part of the 2012 Act directly addressed the 2007 amendment to section
16-106(10):
“This amendatory Act of the 97th General Assembly hereby repeals and
declares void ab initio the last paragraph of Section 16-106 of the Illinois
Pension Code as contained in Public Act 94-1111 as that paragraph furnishes
no vested rights because it violates multiple provisions of the 1970 Illinois
Constitution, including, but not limited to, Article VIII, Section 1. Upon receipt
of an application within 6 months after the effective date of this amendatory Act
of the 97th General Assembly, the System shall immediately refund any
contributions made by or on behalf of a person to receive service credit
pursuant to the text set forth in Public Act 94-1111, as well as any amount
determined by the Board to be equal to the investment earned by the System on
those contributions since their receipt.” Id. 4
¶ 51 The posture of this case is unique in that both parties contest the
constitutionality of different statutes. Piccioli’s main argument is that the 2012 Act
is unconstitutional and violative of the pension protection clause because the 2007
amendment to section 16-106(10) is constitutional and not violative of the special
legislation clause. The main argument by TRS is that the 2012 Act is constitutional
and not violative of the pension protection clause because the 2007 amendment is
unconstitutional and violative of the special legislation clause. Both arguments
hinge on whether the 2007 amendment passes constitutional muster.
¶ 52 Article IV, section 13, of the Illinois Constitution provides, “The General
Assembly shall pass no special or local law when a general law is or can be made
applicable. Whether a general law is or can be made applicable shall be a matter for
judicial determination.” Ill. Const. 1970, art. IV, § 13. That section, the so-called
4
The constitutionality of other parts of Public Act 97-651 was addressed in Carmichael v.
Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund, 2018 IL 122793.
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special legislation clause, has deep roots in our jurisprudence. Moline School
District No. 40 Board of Education v. Quinn, 2016 IL 119704, ¶ 19. The special
legislation clause is grounded on “the conviction that governments should establish
and enforce general principles applicable to all their citizens and not enrich
particular classes of individuals at the expense of others.” Id. (citing Best v. Taylor
Machine Works, 179 Ill. 2d 367, 391-92 (1997)). A general law applies to all
persons and entities in the same situation; a special law does not. See Board of
Education of Peoria School District No. 150 v. Peoria Federation of Support Staff,
Security/Policeman’s Benevolent & Protective Ass’n Unit No. 114, 2013 IL
114853, ¶ 48 (Peoria School District).
¶ 53 When a statute is challenged under the special legislation clause, our analysis is
twofold. Initially, we must determine whether the classification created by the
statute discriminates in favor of a certain person or group. Moline School District,
2016 IL 119704, ¶ 23. If so, we must determine whether the classification was
arbitrary. Id.
¶ 54 The classification created by the 2007 amendment to section 16-106(10)
satisfies the first step of the analysis. The majority concludes, “There is no question
that the 2007 amendment discriminates in favor of employees who began working
for statewide teachers’ unions prior to its effective date and discriminates against
employees who began after that date.” Supra ¶ 19. In fact, the amendment did more
than that. It discriminated in favor of teacher organization employees who were not
previously TRS members, but who became certified as teachers and established
creditable service before the legislation went into effect, and against teacher
organization employees who were not previously TRS members, and who did not
become certified as teachers and establish creditable service before the legislation
went into effect. The question then becomes whether the classification—i.e., the
effective date cutoff—satisfies the second step.
¶ 55 The hallmark of a statutory classification that violates the special legislation
clause is its arbitrariness. Allen v. Woodfield Chevrolet, Inc., 208 Ill. 2d 12, 28-29
(2003) (citing Best, 179 Ill. 2d at 396); In re Petition of the Village of Vernon Hills,
168 Ill. 2d 117, 122 (1995); Cutinello v. Whitley, 161 Ill. 2d 409, 417 (1994). We
have noted repeatedly that the second step of the special legislation analysis tracks
the analysis for equal protection challenges. See Big Sky Excavating, Inc. v. Illinois
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Bell Telephone Co., 217 Ill. 2d 221, 237 (2005). Where the classification does not
impact a fundamental right or a suspect class, we review it under the rational basis
test. Crusius v. Illinois Gaming Board, 216 Ill. 2d 315, 325 (2005). Under that test,
a classification passes constitutional muster if it is rationally related to a legitimate
government interest. Id. Stated differently, a statutory classification violates the
special legislation clause when it is not based upon reasonable differences in kind
or situation that are sufficiently related to the problem targeted by the statute.
Grasse v. Dealer’s Transport Co., 412 Ill. 179, 195 (1952); In re Belmont Fire
Protection District, 111 Ill. 2d 373, 380 (1986). The rational basis test is deferential
to the findings of the legislature, but it is not toothless. People v. Jones, 223 Ill. 2d
569, 596 (2006) (citing Mathews v. De Castro, 429 U.S. 181, 185 (1976)).
¶ 56 The threshold inquiry is to identify a legitimate government interest animating
the statute. We can only decide that the means chosen by the legislature are
rationally related to the end pursued by the legislature if we know the end. People v.
Johnson, 225 Ill. 2d 573, 584 (2007) (“Under the rational basis test, *** we must
determine whether there is a legitimate state interest behind the legislation, and if
so, whether there is a reasonable relationship between that interest and the means
the legislature has chosen to pursue it.”).
¶ 57 Piccioli suggests that the 2007 amendment was designed to “protect[ ] TRS’[s]
fisc” because it limits “those who qualify to receive annuities from TRS’[s] finite
funds.” In support of his theory, Piccioli points to the pension funding crisis
documented in In re Pension Reform Litigation, 2015 IL 118585. The majority
follows his lead, positing that there is “a legitimate government interest in offering
pension benefits to current employees while, at the same time, containing costs by
excluding future employees from those benefits.” Supra ¶ 22. From there, the
majority backs into a rational relation between that interest and the cutoff:
“The inclusion of a cutoff date in a statute, especially a statute that confers
benefits or establishes a government program reliant on public funding, is
entirely rational. Since state and local governments operate with limited
resources and budgets, restricting benefits to a finite number of participants is
not only reasonable but necessary.” Supra ¶ 21.
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The majority concludes that the legislature “reasonably could have chosen to
impose a cutoff date for the purpose of budgetary responsibility and preservation of
the State’s pension funds.” Supra ¶ 22.
¶ 58 The legislature certainly could have chosen to do so for that purpose. Here, it
did not. The majority even acknowledges that the purpose of the 2007 amendment
to section 16-106(10), as expressed in the legislative debates, was to allow teacher
organization employees to purchase TRS service credit for their union work. Supra
¶ 4.
¶ 59 Representative Hannig, a sponsor of the bill that included what became the
2007 amendment, described it to the House. He stated that the bill “does several
things, none of which will cost the State of Illinois any additional pension moneys.”
94th Ill. Gen. Assem., House Proceedings, Nov. 28, 2006, at 68 (statements of
Representative Hannig). That was because former state employees “would be
required to *** put in the full amount of the cost.” Id. at 76. Regarding article 16, he
observed that the bill
“provides a window for people who in the Teachers[’] Retirement System who
have also worked who have employment in organizations representing
teachers. It would provides [sic] that… it additionally… last year when we did a
technical cleanup on the early retirement option there were two areas that we
failed to actually allow teachers to go back and pick up their service. And so it
corrects this technicality.” Id. at 68-69.
Representative Black, who otherwise questioned the propriety of the bill,
conceded, “Staff on both sides have indicated the long-term liability to any state
pension system would be minimal.” Id. at 74 (statements of Representative Black).
¶ 60 Senator Martinez, a sponsor of the original bill, described the new version of it
to the Senate. She stated that the bill “provides that a [sic] officer or an employee of
the statewide teacher organization or officers of a national teacher organization,
who is a certified teacher, may establish service credit.” 94th Ill. Gen. Assem.,
Senate Proceedings, Nov. 30, 2006, at 50 (statements of Senator Martinez). She
assured her colleagues that the bill “does not have any unfunded liability,”
concluding, “[i]t’s a great bill,” and “[i]t’s a great day.” Id. at 51.
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¶ 61 Those comments indicate that the legislature was not concerned with fiscal
discipline or defense of state revenue. The House and Senate sponsors of the bill
that included the 2007 amendment attested that it would have little or no impact on
state coffers because teacher organization employees would bear any costs. The bill
was intended to be a quick, technical fix of an inadvertent omission in an earlier
statute. A discrete subset of teacher’s organization employees—those who were not
previously TRS members—would have a 90-day window from the date that Senate
Bill 36 passed both houses of the General Assembly to the date that Governor
Blagojevich signed the bill and the law went into effect to become certified as
teachers and establish teaching service, so they could purchase retroactive credit
toward a constitutionally protected public sector pension for their private sector
work. 5
¶ 62 The legislature itself later questioned its earlier aim, opining that the
amendment violated article VIII, section 1(a), of the 1970 Illinois Constitution,
which provides, “Public funds, property or credit shall be used only for public
purposes.” Ill. Const. 1970, art. VIII, § 9; see Pub. Act 97-651, § 97 (eff. Jan. 5,
2012). Assuming, arguendo, that the state interest is legitimate, the question
becomes whether that 90-day window is rationally related to that interest or is,
instead, arbitrary and violative of the special legislation clause.
¶ 63 This court addressed a similar question in Peoria School District. There, a
school district brought suit against a police union, the Illinois Educational Labor
Relations Board, and the Illinois Labor Relations Board, seeking a declaration that
a new statute violated the special legislation clause. The statute provided that police
and security officers directly employed by school districts on its effective date were
public employees, subject to the Illinois Public Labor Relations Act (5 ILCS 315/1
et seq. (West 2010)). Peoria School District, 2013 IL 114853, ¶ 6. Consequently,
disputes between such districts and the officers’ unions would be sent to interest
arbitration. Id. ¶ 9. At the time that the statute became effective, the school district
challenging it was the only district in the state that directly employed security
5
The actual window was even longer for IFT employees, who had Preckwinkle meeting with
them a week before Senate Bill 36 was taken up again in the House and encouraging them to
substitute teach.
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officers. Id. ¶ 10. The trial court rejected the district’s constitutional challenge, but
the appellate court reversed the trial court’s decision. Id. ¶¶ 21-22.
¶ 64 This court held that the statute was unconstitutional special legislation. Id. ¶ 60.
We observed that, under the first step of the special legislation clause analysis, a
consideration of “those who might occupy a similar position in the future[ ] is not
foreign to our special legislation jurisprudence.” (Emphasis in original.) Id. ¶ 43.
This court has remained “steadfast in analyzing special legislation challenges by
reference to not only classes presently existing, but also those that might be
similarly situated in the future.” (Emphases in original.) Id. ¶ 46. A statute that
creates a “temporal dichotomy” between those who benefit from it on its effective
date and those who cannot benefit from it after that date is not a general law but
rather a specific one that violates the special legislation clause. Id. ¶ 53 (discussing
Wright v. Central Du Page Hospital Ass’n, 63 Ill. 2d 313, 331 (1976)). From our
cases, we distilled
“the principle that a law the legislature considers appropriately applied to a
generic class presently existing, with attributes that are in no sense unique or
unlikely of repetition in the future, cannot rationally, and hence
constitutionally, be limited of application by a date restriction that closes the
class as of the statute’s effective date. Barring some viable rationale for doing
so, it would, for example, violate the proscription of the constitution for the
legislature to apply a law to a person or entity in existence on the effective date
of enactment, but make it inapplicable to a person or entity who assumed those
attributes or characteristics the day after the statute’s effective date.” Id. ¶ 54.
¶ 65 We found no basis for restricting the reach of the statutory amendment at issue
to districts who directly employed police or security officers on its effective date.
Id. ¶ 59. We added that it was irrational not to extend the benefits of the Act to those
school districts that may later employ their own officers. Id. We concluded, “there
is no reason ‘for restricting the advantages’ of the legislation to a district with
characteristics currently qualifying and ‘not extending the same advantages to
those districts’ qualifying ‘at a subsequent time.’ ” Id. (quoting People ex rel. East
Side Levee & Sanitary District v. Madison County Levee & Sanitary District, 54 Ill.
2d 442, 447 (1973)).
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¶ 66 The majority says that the effective date cutoff in Peoria School District “bears
no relevant similarities” to the cutoff in this case. Supra ¶ 30. According to the
majority, the cutoff there was “a descriptor,” while the cutoff here is “a deadline.”
Supra ¶ 30. The majority’s semantics are unconvincing. The statute in Peoria
School District and the 2007 amendment to section 16-106(10) both created
classes, membership in which ended on the effective date of their respective public
acts. Compare Pub. Act 96-1257 (eff. July 23, 2010) (“on the effective date of this
amendatory Act of the 96th General Assembly”), with Pub. Act 94-1111 (eff. Feb.
27, 2007) (“on or before the effective date of this amendatory Act of the 94th
General Assembly”).
¶ 67 Peoria School District clarifies the proper special legislation clause analysis for
statutes with effective date cutoffs. A statute that creates a classification benefitting
only a person or group with certain characteristics on its effective date
discriminates in favor of that person or group and against a person or group who
may obtain those characteristics later. When that classification is based simply
upon the fortuity of falling on the early side of a moment in time, it is arbitrary and
not rationally related to a legitimate government interest.
¶ 68 Like the effective date cutoff in Peoria School District, the cutoff here was
arbitrary. There is no reason for restricting the advantages of the 2007 amendment
to section 16-106(10) to teacher organization employees who met the amendment’s
certification and teaching service requirements before February 27, 2007, and not
extending those same advantages to employees who met those requirements
thereafter. That arbitrariness is manifest in how the subject of possible TRS
eligibility was presented within the IFT. Teacher organization employees who
attended one of Preckwinkle’s meetings were counseled to begin the process of
preemptively satisfying the certification and teaching requirements of a
then-nonexistent proposal for new legislation. They were later advised to complete
that process in a narrow window of time between the date that the bill was passed
by both houses and the date that it would presumably be signed by Governor
Blagojevich and become effective, so they would not be shut out of receiving a
constitutionally protected public sector pension for private sector work. That is,
IFT employees were advised to meet the requirements of a law that was not yet a
law, lest they be excluded from its benefits once it became a law. They even
received assurances from Preckwinkle that he would “slow down the bill signing
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process,” so everyone “who is in the pipeline for completing a substitute teaching
assignment” could “get coverage” under a statute that had not gone into effect.
Slamming a window shut before it ever opened smacks of special legislation.
¶ 69 The trial court correctly held that the 2007 amendment violated the special
legislation clause. Because I would hold that the 2007 amendment was
unconstitutional, I would also hold that it conferred no rights for the pension
protection clause to protect. See People v. Blair, 2013 IL 114122, ¶ 28 (stating that
an unconstitutional statute is “ ‘ “not a law” ’ ” and “ ‘ “confers no rights” ’ ”
(quoting Perlstein v. Wolk, 218 Ill. 2d 448, 454 (2006), quoting Norton v. Shelby
County, 118 U.S. 425, 442 (1886))).
¶ 70 For the foregoing reasons, I respectfully dissent.
¶ 71 JUSTICES THOMAS and GARMAN join in this dissent.
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