Supreme Court Summaries
Opinions filed July 3, 2014
Kanerva v. Weems, 2014 IL 115811
Direct appeal from the circuit court of Sangamon County.
JUSTICE FREEMAN delivered the judgment of the court, with opinion.
Chief Justice Garman and Justices Thomas, Kilbride, Karmeier, and Theis concurred in the judgment and opinion.
Justice Burke dissented, with opinion.
On July 1, 2012, Public Act 97-695 took effect. It eliminated the statutory standards for the State of Illinois’ contributions to health insurance premiums for members of three of its retirement systems and established, instead, a new system under which the Director of the Department of Central Management Services (Malcolm Weems, one of the named defendants here) would make an annual administrative determination as to the amounts to be charged to the State and to its retirees. This statute thus fundamentally altered the State of Illinois’s obligations to contribute toward the cost of group health insurance benefits for these retired state employees.
Four putative class actions were filed challenging the validity of this legislation under, among other things, the pension protection clause of the Illinois Constitution of 1970. They were consolidated in the circuit court of Sangamon County. The circuit court dismissed each of them for failure to state a cause of action, without certifying any classes. The Illinois Supreme Court allowed direct appeal. This is an issue of first impression.
The “pension protection” clause states that “membership in any pension or retirement system of the State *** shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” In this decision, the Illinois Supreme Court held that the State’s provision of health insurance premium subsidies for its retirees is a benefit of membership in a pension or retirement system under this provision, which the General Assembly was precluded from diminishing or impairing.
The supreme court said that the plain language of the constitution supports this conclusion. When the provisions of the 1970 Constitution were formulated, the group insurance statute then in effect provided health insurance subsidies to members of the State’s retirement systems, and the drafters of the Constitution are presumed to have known that. Health care benefits are not referred to in the pension clause, but neither is there any limitation imposed concerning them. The Illinois Supreme Court said in this decision that it is a well settled principle that pension rights should be liberally construed in favor of the rights of the pensioner.
The circuit court erred in dismissing, for failure to state a cause of action, the plaintiffs’ claims that the challenged statute is void and unenforceable under the pension protection clause. Plaintiffs are entitled to proceed on their claims that their rights are governed by the version of section 10 of the Group Insurance Act which was in effect prior to the enactment of the challenged statute.
Other common law and constitutional claims had been raised by the plaintiffs, but the supreme court refrained from addressing them here. The dismissal of the actions was reversed.