People Ex Rel. Sklodowski v. State

674 N.E.2d 81, 284 Ill. App. 3d 809, 220 Ill. Dec. 810
CourtAppellate Court of Illinois
DecidedNovember 26, 1996
Docket1-93-2951, 1-93-3171, 1-93-3172, 1-93-3173 cons.
StatusPublished
Cited by9 cases

This text of 674 N.E.2d 81 (People Ex Rel. Sklodowski v. State) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People Ex Rel. Sklodowski v. State, 674 N.E.2d 81, 284 Ill. App. 3d 809, 220 Ill. Dec. 810 (Ill. Ct. App. 1996).

Opinion

JUSTICE BURKE

delivered the modified opinion of the court upon denial of partial rehearing:

This case involves an action based on an alleged failure to contribute to, and on the alleged impairment of, retirement pension benefits and contractual rights by the State of Illinois and certain state officials.

Plaintiffs Robert Sklodowski, Thomas Hanahan, Sandee Hanahan, Susan Lillis, Robert Negronida and Mark D. Warden, counter-plaintiffs, the State Employees’ Retirement System (SERS), the State Universities’ Retirement System (SURS), the Teachers’ Retirement System of the State of Illinois (TRS) (retirement systems), and intervenor, the Illinois Retired Teachers Association (intervenor), appeal from an order of the circuit court dismissing plaintiffs’ second amended complaint, counterplaintiffs SURS’ and TRS’ amended counterclaim, counterplaintiff SERS’ counterclaim and intervenor’s complaint for a writ of mandamus against defendants, the State of Illinois and its officials, Jim Edgar (Governor), Philip Rock (President of the Senate), Michael Madigan (Speaker of the House of Representatives), Dawn Clark Netsch (Comptroller) and Patrick Quinn (Treasurer), based on the separation of powers doctrine.

On appeal, plaintiffs, counterplaintiffs and intervenor argue that (1) the constitutional separation of powers doctrine does not prevent the judiciary from ordering state officials to perform nondiscretionary duties; (2) they have a contractual interest under the state constitution in the financial integrity of the state retirement systems; and (3) the federal and state contracts clauses prohibit impairment of pension contract rights. Counterplaintiffs SEES, SUES and TES also contend that the constitutional legislative supremacy clause does not prohibit their claims. Plaintiffs also contend that their second amended complaint stated (1) a valid claim against defendants for breach of fiduciary duty and (2) a viable claim for a civil rights violation. For the reasons set forth below, we affirm in part and reverse in part.

In 1963, the State of Illinois created five retirement systems: SEES, SUES, TES, the General Assembly Eetirement System, and the Judges Eetirement System of Illinois. Each retirement system is governed by a separate section of the Illinois Pension Code (Pension Code) (40 ILCS 5/1 — 101 et seq. (West 1992)). In 1989, Illinois Public Act 86 — 273, effective August 23, 1989, added the following language to sections 2 — 124, 14 — 131(f), 15 — 155(a), 16 — 158(b) and 18 — 131(2) of the Pension Code (Ill. Rev. Stat. 1991, ch. IO8V2, par. 1 — 101 et seq. (now 40 ILCS 5/1 — 101 et seq. (West 1992))), which pertain to the five retirement systems:

"Starting with the fiscal year which ends in 1990, the State’s contribution [to the retirement systems] shall be increased incrementally over a 7 year period so that by the fiscal year which ends in 1996, the minimum contribution to be made by the State shall be an amount that, when added to other sources of employer contribution, is sufficient to meet the normal cost and amortize the unfunded liability over 40 years as a level percentage of payroll, determined under the projected unit credit actuarial cost method. The State contribution, as a percentage of the applicable employee payroll, shall be increased in equal increments over the 7 year period until the funding requirement specified above is met.” Pub. Act 86 — 273, eff. August 23, 1989.

Plaintiffs subsequently filed a class action in behalf of the participants of the retirement systems against defendants and naming as nominal defendants the board of trustees of the retirement systems, seeking a writ of mandamus, declaratory judgment and an enforcement order based on defendants’ alleged failure to comply with Public Act 86 — 273. Plaintiffs alleged in their second amended complaint that defendants’ "actions (specifically the State’s failure to contribute as required under P.A. 86 — 273) and the individual Defendants’ past and continuing improper budgeting (Governor) and appropriation (President of Senate and Speaker of the House), contrary to that required by P.A. 86 — 273, constitute unlawful impairment of the participants’ contractual rights under Article 13, § 5 of the 1970 Illinois Constitution [pension protection clause].” 111. Const. 1970, art. XIII, § 5. Plaintiffs further alleged that the State, in failing "to act in accordance with P.A. 86 — 273,” breached its fiduciary duties under the Illinois Pension Code (40 ILCS 5/1 — 109(d) (West 1992)) and that defendants’ "actions in budgeting, appropriating and contributing different lesser amounts than those required by P.A. 86 — 273 constitute the passage of law impairing obligations of contract, in violation with the Contract Clause of the United States Constitution” (U.S. Const., art. I, § 10) "and/or an invalid attempt to grant the State freedom from making its contribution required by P.A. 86 — 273,” thereby violating article I, section 16, of the Illinois Constitution (111. Const. 1970, art. I, § 16). Plaintiffs’ second amended complaint also included a count against the individual defendants alleging that they deprived plaintiffs of property under color of state law in violation of 42 U.S.C. § 1983 (1988).

Intervenor’s motion to intervene was granted on October 2, 1992. On December 21, 1992, counterplaintiffs SUES and TES answered plaintiffs’ second amended complaint and filed an amended counterclaim against the Governor, Comptroller and Treasurer alleging impairment of pension benefits and impairment of contractual rights in violation of article I, section 10, of the United States Constitution (U.S. Const., art. I, § 10) and article I, section 16, of the Illinois Constitution (111. Const. 1970, art. I, § 16). On the same day, intervenor filed a three-count complaint against the State, Governor, Comptroller and Treasurer alleging that they impaired the pension benefits and contractual rights to benefits of participants in SUES and TES in violation of the federal and state constitutions.

On February 19, 1993, the State, Governor, Senate President and House Speaker moved to dismiss plaintiffs’ second amended complaint, arguing that the trial court lacked jurisdiction over the State pursuant to the doctrine of sovereign immunity, the doctrine of separation of powers prevented the court from compelling the General Assembly to appropriate public funds; the doctrine of separation of powers prevented the trial court from compelling the Governor to budget a certain amount of money because budgeting is an executive function; and a writ of mandamus was not available because "plaintiffs do not seek to compel State officials to perform ministerial duties.” On the same day, the Governor moved to dismiss the amended counterclaim filed by counterplaintiffs SUES and TRS, and the Governor and the State moved to dismiss intervenor’s complaint. Both motions were substantially similar in content to the Governor’s and State’s motions to dismiss plaintiffs’ second amended complaint.

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Bluebook (online)
674 N.E.2d 81, 284 Ill. App. 3d 809, 220 Ill. Dec. 810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-sklodowski-v-state-illappct-1996.