The Concept of “Consideration” in Illinois Senate Bill 1

  

 

Simply stated, “Consideration is when a claimant promises something in exchange for the defendant’s promise, [or] the inducement to a contract, something of value given in return for a performance or a promise of performance by another, for the purpose of forming a contract…” (Law Dictionary).

Concerning the Non-negotiated Reduced Contribution Rate:

Reducing the contribution rate for current teachers by one percent was not a consideration. It was not negotiated; moreover, modification of contract principles for retirees was also without consent. “It is well settled that a contract, once made, must be performed according to its terms, and that any modification of those terms must be made by mutual assent and for consideration” (Ross v. May Co., 377 Ill. App. 3d 387, 389 (2007)).

Concerning the Non-guaranteed “Guaranteed Funding”: 

Contracts supported by consideration are often one-sided, advantageous arrangements. Any agreement with the Illinois General Assembly regarding “guaranteed” funding to the pension systems would not be a “valid” consideration for public employees because it would be in exchange for reductions of originally-vested benefits assured by the Illinois Constitution. 

Furthermore, there is no question that with the passage of Senate Bill 1, Illinois legislators have reneged on a contractual promise made to public employees and retirees based upon similar antedated court cases.

We already know that legislators can rewrite or undo any bill they pass. A conversation with any representative will verify this incongruous reality; consequently, any "Quid Pro Quo" (one thing in return for another) guaranteed by legislators can also become a "Failure of Consideration."

Even if the funding of public employees’ pensions is written into the Illinois Pension Code (40 ILCS 5/) and considered a “benefit” guaranteed by the State Constitution, legislators can (and will) create another bill to challenge the language of the contract.

According to Elaine Nekritz: “The so-called pension payment guarantee has wiggle room. If the state fails to make a pension payment, a retirement system could file action in the Illinois Supreme Court to compel the state to make the required payment. But if the state faces a crisis, it could simply vote to change what the required payment would be; [thus], effectively working around that guarantee.”

Despite what Nekritz believes, it has been ruled that “No principle of law permits [the Illinois General Assembly] to suspend constitutional requirements for economic reasons, no matter how compelling those reasons may seem” (Jorgensen v. Blagojevich, 211 Ill. 2d 286, 316 (2004)). (Consider that House Speaker Michael Madigan and Senate President John Cullerton depended on case law when suing Governor Patrick Quinn for stopping their remuneration because they had not passed so-called "pension reform" at that time).

“Neither the legislature nor any executive or judicial officer may disregard the provisions of the constitution even in case of a great emergency” (People ex rel. Lyle v. City of Chicago, 360 Ill. 25, 29 (1935)).  Unless, of course, judges ignore case law.

Undeniably, “the consideration doctrine is a moving target, different [understandings will] yield different [interpretations]… Courts have considerable latitude in determining whether to find consideration (or not), and hence whether to enforce a promise (or not)… [Nonetheless], it would be highly undesirable to allow public officials to extract benefits in return for the performance of their existing legal duties” (National University of Singapore Professor Mindy Chen-Wishart, Contract Law).

In Illinois, the Supreme Court “has consistently invalidated amendments to the Pension Code where the result is to diminish benefits” (McNamee v. State, 173 Ill. 2d 433, 445 (1996)). “Any alteration of the pension system amounts to a modification of an existing contract between the State (or one of its agencies) and all members of the pension system, whether employees or retirees. A member is contractually protected against a reduction in benefits” (Kuhlmann v. Board of Trustees of the Police Pension Fund of Maywood, 106 Ill. App. 3d 603, 608 (1st Dist. 1982)).

Let us remain confident the Supreme Court judges will uphold the Illinois and U.S. Constitutions as they have in the past; that these judges are not capable of illegal and immoral thievery like the political opportunists who voted for SB 1 (from Illinois Senate Bill 1, the So-called “Pension Reform”Bill (or Attempt to Break a Constitutional Contract with Public Employees and Retirees)).

-Glen Brown

For a précis (Antedated Court Cases), Click Here.

The aforementioned, predated court cases are from Fitzgerald, John M. and Katherine M. O’Brien. “Four Things Every Retired Teacher Should Know about the Pension Protection Clause of the Illinois Constitution.” Tabet, DiVito & Rothstein LLC. PowerPoint presentation. IRTA, 21 Oct 2013.

State Supreme Court justices rake in cash tied to pension-law players by Dave McKinney

 

“If a lawsuit challenging Illinois’ new pension-reform law reaches the state Supreme Court, the overwhelming majority of justices might first want to extend a ‘thank you’ before hearing arguments about the constitutional merits of the case. That’s because they’ll be listening to their campaign contributors — literally — make a case for and against the historic new law that the General Assembly and Gov. Pat Quinn put on the books last month.

“All told, state records show six of seven justices have taken close to a combined $3 million in campaign contributions tied to those with a stake in the pension debate: labor unions, business groups and a political committee controlled by House Speaker Michael Madigan, D-Chicago, who last month said the legislation could not have passed without his muscle… 

“The largest beneficiary of pension-related money is Democratic Justice Thomas Kilbride, a former chief justice of the court who in 2010 was immersed in the nation’s most expensive judicial retention battle in nearly a quarter century. During that fight, Kilbride took in $1.47 million from the Democratic Party of Illinois, which is controlled by Madigan, the state party chairman. That fund chipped in another $688,000 in 2000, when Kilbride was first elected as a justice, assuring another decade-plus of Democratic control of the state’s highest court.

“In his 2010 retention battle, Kilbride accepted another $467,360 from the Illinois Federation of Teachers, $100,300 from AFSCME Council 31 and $16,000 from the Illinois AFL-CIO, all of which fought aggressively against the pension legislation Quinn signed.

“Another member of the court who accepted substantial donations from groups involved in the pension fight is Justice Lloyd Karmeier, a Republican from downstate Nashville. In his 2004 ascension to the Supreme Court, a battle that centered on tort reform and became the most expensive state Supreme Court election in U.S. history up to that point, Karmeier accepted $210,500 from the Illinois Chamber of Commerce, $35,000 from the Illinois Manufacturers’ Association, $15,000 from the Chicagoland Chamber of Commerce and $5,861 from the National Federation of Independent Businesses. All of those groups lobbied at the Statehouse for the pension legislation Quinn signed.

“The longest-tenured member of the court, Justice Charles Freeman, also took in significant contributions from a Madigan-led committee during his 2000 retention campaign. The Democratic Party of Illinois gave the Chicago Democrat $63,000. Those funds are on top of less than $3,000 from the Illinois AFL-CIO and the Service Employees International Union, which are both members of the We Are One Illinois coalition that fought the pension bill…

“Other justices on the court who have taken $15,000 or less in contributions from groups involved in the pension fight include Chief Justice Rita Garman, Mary Jane Theis and Anne Burke. Justice Bob Thomas is the only member of the high court who does not appear to have taken money from players in the pension battle.

“In the December issue of Chicago Lawyer magazine, Garman said there is no correlation between campaign fundraising and ‘judicial logic’ on the bench. ‘I think politics plays no role in any of the issues that we have before us,’ said Garman, who has received $6,750 in contributions from business groups that fought the pension bill. If a legislative challenge goes up or down, (it’s) based upon whether it meets the standards of our constitution. And I think our court will analyze it that way. I know from time to time that there is speculation about the party split on the court. That is not an issue with the court,’ Garman [said].

“Justices now face no statutory limitations on the source of campaign contributions. However, the Judicial Code of Conduct established by the state Supreme Court bars judicial candidates from personally soliciting or accepting contributions, assigning those tasks instead to a campaign committee. In 2003, Obama led an effort to impose new campaign fundraising rules on the state Supreme Court, but Madigan blocked the measure…

“Ironically, when the pension legislation was being deliberated on the House floor, Madigan was pressed about why judges weren’t being asked to sacrifice in the same manner as current and retired state workers, university employees, lawmakers and downstate and suburban teachers. The Judges Retirement System was the only one of five state pension systems carved out of the bill.

“‘The intent was to eliminate the possibility of a judicial conflict during the adjudication of this matter through the court system,’ the Southwest Side Democrat said when asked about the judges on the House floor by Rep. Dan Brady, R-Bloomington.

“In other words, the debate seemed to show Madigan didn’t want the state’s seven Illinois Supreme Court justices being tempted to rule against a controversial pension-reform package because their own state-funded pensions were on the line.

“But the speaker was silent on the other ‘judicial conflict’ that Obama and others have cited and that could emerge once the court wades into a case that pits the interests of 750,000 current and retired government employees against a prospective state budget meltdown caused by its $100 billion pension crisis.

“‘If it’s a conflict for judges to be in the pension bill,’ Rep. Brady told the Sun-Times, ‘then it’s a conflict they’re taking money from the groups they’ll make rulings about... Brady continued. ‘But you’re OK to collect campaign contributions and remain fair and impartial, but you can’t be fair and impartial and be in the pension bill? I’d be interested in how the speaker answers that,’ he said.”

from State Supreme Court justices rake in cash tied to pension-law players 

 

Pension Analyses and Commentaries Most Viewed in 2013

10. Illinois Pension Reform Is Without Legal and Moral Justification (Dec. 1^st) 

…To possess a right to a promised deferred compensation, such as a pension, is to assert a legitimate claim with all Illinois legislators to protect that right. There are no rights without obligations. They are mutually dependent. Fulfilling a contract is a legal and moral obligation justified by trust among elected officials and their constituents… Click Here. 

9. A Response to Today's Chicago Tribune Editorial about So-called “Pension Reform” (Nov. 20^th) 

…What is needed to solve the budget problems in Illinois is a better revenue base to pay the state’s self-induced debts. What is easier to do is to evade serious problem solving of the budget issue and to incriminate the state’s public employees… Click Here. 

8. On the Convening of the 98th Illinois General Assembly Today and Senate Bill 1 (Jan. 9^th)

 

…I listened to the speeches re-nominating Michael Madigan as Speaker of the House by five sycophantic members of the House of Representatives. I listened to their gushing platitudes and absurd hyperboles, and to the polite applause that followed… Click Here.

 7. On Breaking a Contract or So-called Illinois “Pension Reform” and Giving the Money to Corporations (Oct. 5^th)

 

"The power of changing the relative situation of debtor and creditor, of interfering with contracts, a power which comes home to every man, touches the interest of all, and controls the conduct of every individual in those things which he supposes to be proper for his own exclusive management, had been used to such an excess by the state legislatures, as to break in upon the ordinary intercourse of society, and destroy all confidence between man and man…” (Chief Justice Marshall)... Click Here.

  

6. Governor Quinn met with labor union representatives about so-called “pension reform” last week (Oct. 15^th)

…The promise to honor commitments and pay for the public employees’ pension is of “sufficient importance” to all citizens of Illinois. To pass pension reform is “an unequivocal manifestation of intention not to perform… legal duties…under a contract… When there is a duty of immediate performance of a promise, failure to perform in full is a breach…” (Professor of Law, Emeritus, Claude D. Rohwer and Professor of Law, Emeritus, Anthony M. Skrocki, Contracts in a Nutshell)… Click Here. 

5. Beware of the Trojan Horse that is SB 2404 (May 17^th)

…Though there are thousands of retirees across the state who will sink deeply into abject poverty without their compounded COLA, partially-paid-for health care or both, Cullerton and the Coalition of Unions are offering a choice for us to keep our compounded COLA, which is constitutionally guaranteed, or diminish this benefit voluntarily for “access” to a state health care program (that is under payment revision) and one that we will most likely have to subsidize fully before long... Click Here. 

4. 12 pragmatic and legal reasons to reject Illinois pension reform (May 17^th)

…“Most states… cannot readily reduce their existing pension obligations to their employees in an effort to solve a fiscal crisis, and until recently few even tried… It is worth noting the inequity inherent in cutting pensions promised to state and local public servants based on alleged underfunding that was substantially caused, in many cases, by funding ‘holidays…’ [Approximately $15 billion was stolen from the Teachers Retirement of Illinois. This amount does not include the possible investment income that would have been earned]” (Douglas L. Greenfield and Lahne, Susan G. (2012), How Much Can States Change Existing Retirement Policy? In Defense of State Judicial Decisions Protecting Public Employees’ Pensions)… Click Here.

3. Constitutional Issues Concerning Senate Bill 2404 (May 8^th)

…Approximately 35,000 retirees are being deprived of an earned and promised benefit. They were not represented at the table when Cullerton and the Coalition made their agreement. They were excluded from the process that affects them. It’s ironic that it is the legislators who owe the outstanding obligations and not the public employees and retirees, and that Cullerton and the Coalition have decided public employees and retirees will provide consideration for the debt. Click Here.

2. Madigan’s and Cullerton’s letter is an example of hypocrisy and irony (July 30^th)

“…We write to inform you that [if and when you pass 'pension reform'] we will file a lawsuit challenging [your unconstitutional actions, for they are] purely political, [opportunistic] and an unconstitutional attempt to coerce [public employees] to comply with [your] demands. This matter is of fundamental constitutional importance, as ['pension reform'] threatens [retired and current public employees’ earned rights and benefits]. The Illinois Constitution protects [these rights and benefits…]” Click Here.

1. Illinois Senate Bill 1, the So-called “Pension Reform” Bill (or Attempt to Break a Constitutional Contract with Public Employees and Retirees) (Dec. 2^nd)

…SB 1 is a foul, insensitive attack on public employees’ and retirees’ rights to constitutionally-guaranteed benefits. An unconscionable challenge of those rights and benefits is a serious threat, not only to current public employees and retirees and their families but, to every Illinois citizen. A pension is a contract. Breaking a contract can never be legally or morally justified… Click Here.