State Supreme Court to tackle Chicago public pension reforms, questions of how much legal representation needed at administrative hearings

By Jonathan Bilyk | Nov 9, 2015

The Illinois Supreme Court is set to open its November term on Tuesday, Nov. 10. But many eyes throughout the state have already skipped ahead one week, when the court will hear arguments in a challenge to the city of Chicago’s pension reform measures and, in a separate case, over the question of whether non-lawyers can actually represent corporate entities in municipal administrative proceedings.

On Nov. 17, the state’s high court is scheduled to hear from both sides in the case of Jones vs Municipal Employees’ Annuity ad Benefit Fund of Chicago, which challenges the city’s 2014 reforms of Chicago’s public worker pensions.

The city had argued the pension reforms were needed to keep the pension systems financially afloat and operational. Representatives of retired city workers, however, said the reforms violated protections enshrined in Illinois’ state constitution, preventing the state of Illinois, the city of Chicago and any other unit of government within the state from doing anything that diminishes the amount retirees can expect to collect from their pensions.

In July, a Cook County Circuit Court judge sided with the retirees, relying on very recent precedent from the Illinois Supreme Court to rule the city’s pension reform measures were unconstitutional.

The city had argued its reform measures were different from those enacted by the state and which the high court had rejected, saying it also boosted pension funding while diminishing some benefits, resulting in a “net benefit” to retirees.

Cook County Circuit Court Judge Rita Novack, however, said that reasoning doesn’t pass legal muster.

“Quite simply, the constitution removed diminishing benefits as a means of attaining pension stability … Pension benefits cannot be ‘netted’ against funding schemes regardless of any salutary outcomes they may have,” the judge said. “To do so would render the rights guaranteed by the pension protection clause illusory.”

Following the defeat in circuit court, the city appealed the decision directly to the state Supreme Court.

Justices are scheduled to hear arguments in that case during the court session beginning at 9 a.m. on Tuesday, Nov. 17.

That same morning, justices are also scheduled to hear arguments in the case of Stone Street Partners vs. Chicago.

That case stands as an appeal of the dismissal of a lawsuit brought against Chicago City Hall by a property management company. The litigation stems from a 1999 order by the city against the business over code violations at some of its buildings in Chicago.

According to court documents, notice of the violations had been sent to the property address, rather than to the business’ registered agent or business address, as is required by the city’s ordinance. However, at the scheduled administrative proceedings over the purported violations, a man who was not an attorney appeared purportedly on behalf of Stone Street and entered some written evidence, again supposedly on behalf of the company.

The company was found guilty, and ordered to pay a fine of more than $1,000.

The fine went unpaid, however, as Stone Street later asserted it had no knowledge of the administrative enforcement action against it, until the city moved to register the judgment in Cook County court.

The company then challenged the ruling, saying it was not served proper notice and the man who allegedly appeared on their behalf was not authorized to represent the company in such a capacity. The case was further complicated by the city’s decision to destroy records of the administrative proceedings against Stone Street.

The city moved to dismiss the case, however, and the request was granted by a Cook County judge.

On appeal, a state appellate panel affirmed portions of the dismissal, but also overturned one count, saying Supreme Court rules allowing non-lawyers to represent corporations in certain civil actions in which damages of less than $10,000 are sought cannot be applied to city administrative actions, because the administrative actions are not based on either contracts or tort. Therefore, the appellate justices said, the corporation must be represented by a lawyer in the proceedings, under the court’s rules.

The Supreme Court agreed to take up the matter, and is scheduled to do so in the morning session beginning at 9 a.m. on Nov. 17.

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