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IL: When judges are plaintiffs, who decides pension case?

By   /   September 19, 2012  /   8 Comments

By Scott Reeder | Watchdog.org

SPRINGFIELD — Public employees worried about their pensions being reduced are looking for lawyers and lead plaintiffs who once wore black robes.

CONFLICT: Who should decide pension lawsuits when judges themselves are the plaintiffs?

“Public employee unions are extremely powerful entities and increasingly they want judges to believe that their own pensions may be in jeopardy if they rule against the public employees,” said John Eastman, director of the Center for Constitutional Jurisprudence at the Claremont Institute in Claremont, Calif.

Judges ruling on the constitutionality of their own pension reductions is a drama playing out across the United States.

In fact, in July, the New Jersey  Supreme Court ruled that the state’s  judges are constitutionally protected from a law requiring state employees to contribute more toward their health and retirement benefits.

The court ruled that the increased contributions amounted to a salary cut and that sitting judges were protected from such cuts by the state constitution.

New Jersey Gov. Chris Christie, branded the jurists “unelected, unresponsive public servants,” the New York Times reported.

While in the New Jersey case, judges made a distinction between their own pensions and those of other state workers, in other states litigants hope to bolster the case for all public employee pensions by having retired judges and sitting judges interspersed among the plaintiffs in class action cases.

For example, in July, former Illinois Appellate Judge Gordon Maag became the lead plaintiff in a class-action against the state of Illinois.

The 61-year-old state retiree, who is pulling in an annual pension of $98,000, is suing the state for more.

In addition to the pension he began collecting at age 55 and his annual guaranteed cost of living adjustments, he contends he is entitled to free health insurance for life.

In June, Illinois Gov. Pat Quinn signed legislation that  calls for requiring retired state employees, university workers, lawmakers and judges to begin paying premiums for state health insurance.

It’s one of the state’s first steps toward reducing retirement costs.

But Maag, who not only lost an election to the Illinois Supreme Court but was removed by the voters from his appellate judgeship during a 2004 retention race, says he shouldn’t see a reduction in his benefits.

According to news accounts, the retired judge contends the new law “abolishes free health insurance to Illinois retirees who were and are entitled to free health insurance on account of working for the state for 20 or more years of service, or, in the case of retired legislators, four years, and in the case of retired judges, six years.”

So he is inviting fellow state retirees to join in his lawsuit in which his son, Peter, is the lead attorney.

Maag is making a play for sympathy from his former judicial colleagues who will likely rule on the constitutionality of the retirement benefits reductions, said Ed Murnane, a vocal critic of Maag and president of the Illinois Civil Justice League, a group lobbying for Illinois tort reform.

It’s hardly a unique approach, said Eastman, who lost an Orange County , California, pension case in 2010.

“Basically we were arguing that certain pension enhancements being offered to Orange County deputy sheriffs were unconstitutional. … A former judge serving as a lawyer for the other side stood up and told the appellate judges, ‘This could affect your pensions.’”

Eastman said although he believes the lawyer’s statement wasn’t truthful, the deputies won their case.

Judges ruling on cases that could affect their own pensions is not just a problem in California but across the nation, he said.

Murnane said  that he doesn’t dispute that former judges have standing to bring these lawsuits.

“A retired judge is no different from a retired prison guard,’ he said.  ”They have the same rights to bring a case to court. The question is, will judges ruling on their cases be more likely to rule in their favor because it is the case involving a fellow judge? I don’t know the answer to that question.”

One person who does have a definite opinion on it is Frank Keegan, editor of State Budget Solutions.

“Obviously, the reason public employee unions are picking retired judges as lead plaintiffs and as the attorneys in their cases is because they want to influence sitting judges,” Keegan said. “They want judges to rule in their own self-interest and rule that pension benefits cannot be reduced.”

Keegan said it is inevitable a lawsuit will be filed  in every state that tries to reduce its pension burden by cutting.

“There will be a lawsuit – whether it has any legal merit or not. And every time a judge who will be collecting a pension will rule on it. This is a clear conflict of interest. It’s something our Founding Fathers never could have anticipated because back then they didn’t have pensions like they do today. There are some judges who I know who can rule objectively on a case involving themselves – but there are a lot of judges out there who can’t,” he said.

But from a legal standpoint, is there an alternative?

Eastman said in some cases judges should recuse themselves and defer to others in the judiciary who have less of a conflict. But he concedes there may be times when all judges may have a conflict of interest and a decision from them is necessary.

Keegan said he believes someone other than judges should make the ultimate decision on pensions.

“Judges aren’t the ones who will end up paying for these pensions. It will be up to the taxpayers to pay these pensions. In the case of a state like Illinois, it will be the grandchildren of current taxpayers who will be paying for these benefits. Maybe the taxpayers should vote on it rather than have a judge decide. But if you are going to pick someone to decide whether these pension cuts are constitutional, have a steelworker who has lost his entire pension decide on these public employees. That is who should decide.”

Contact Scott Reeder at sreeder@illinoispolicy.org.

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  • Real Watchdog

    This has already been settled by the Illinois Supreme Court. Taxpayers have already set up the protections of pensions by voting for the Illinois Constitution. Perhaps Mr Reeder should access the Illinois Commission for Government and Fiscal Responsibility set up by the state legislature as it has all the information he lacks in this piece of pseudo-journalism.

  • eatingdogfood

    Keep Voting For Low Life Lying Thieving Backstabbing Bloodsucking Double Dealing Tax and Spend Liberal Corrupt Democrats!

  • IW 63

    The problem we have here in Illinois is the same one that we have in Washington. The government has grown too big and is no longer sustainable.

  • A. Szakmary

    If taxpayers rule on the pensions of state employees, they will have a strong financial incentive to immediately cut the pensions to zero and save themselves money. There would be at least as much of a conflict of interest as if judges rule. I regret that the grandchildren of current taxpayers will have to pay for pensions in Illinois, just as I regret that our grandchildren nationally will have to pay for the gargantuan federal deficits we are running today. That is what we bring upon ourselves for decades of listening to the likes of Grover Norquist and not raising the tax revenue we need to fund the government we have. However, since Americans currently pay substantially less in taxes than people in any other developed nation, I suspect we will survive.

  • merice53

    I’m with real dog. Who funds this rag? Karl Rove?

  • bross71760

    I would volunteer to be on a panel to decide, just as judges decide for others, I would judge (impartially) for them. There should be no reason I couldn’t, in fact my stake in the matter is 1/12,000,000 – which means whatever I decide has to be borne by the other 12 million or so citizens of Illinois. If I decide to give a Judge an extra $1000 per month, so what? It impacts me about – close to nothing. So the comment that a citizen would have as much influence to give a judge nothing as they would to give more to themselves doesn’t seem accurate.If a Judge decides on their own pension it is a direct 1 to 1 influence. Seems reasonable to me…but it doesn’t seem to matter because it is written in the Illinois Constitution that pensions are protected. So if some of the smartest companies in the world figured out that pensions were no longer sustainable for a private enterprise doesn’t that tell us something about the sustainability of public pensions? I sure wouldn’t want to be someone owed a future retirement by the State of Illinois..but if I did, I’d move to Florida and smile every time my pension check shows up.

  • Professor

    Mr. Reeder seems to believe, as does the Chicago Business Roundtable, that since private business was able to not pay the pensions they owed to their long time employees, the state should be able to do the same. Shame on you Mr. Reeder. Thousands of public employees have worked for many years at subpar wages believing that it was worth it because they were earning a decent pension. Now you want to tell them, sorry we lied.

  • bross71760

    Unfortunately that logic leads to – millions of taxpayers have also worked
    for years at subpar wages with little or no pension. The retirement they get is
    based on what they earned, what they were able to sock away and their investment gains. It seems as though the original idea of pensions was – work long and
    hard and there is a retirement awaiting you. Now it seems – it’s how do I game
    the system to get the last few years as high as possible so my retirement $$ are
    based on higher comp. Why aren’t pensions simple? You earn and contribute $X,
    your account grows by $Y. You quit you get a pension based on $X and $Y. If the
    returns of the funds are not keeping up – you are impacted. If people are let
    into the system who don’t deserve it there would be a huge up roar. If the
    investment firm is taking too much off the top, they are held accountable. If
    the State doesn’t fund their part (?) then contact your local
    politician….they’re the ones who gave you the pension and then didn’t fund
    them. I guess they just pulled a fast one on all of us…now – who pays?