Chicago Mayor Rahm Emanuel wins right to end retiree health benefits as he gives away everything FREE FOR BLACKS AND ILLEGALS.
By David Thomas
Law Bulletin staff writer
Law Bulletin staff writer
A state appeals panel last week gave the city of Chicago the go-ahead to further phase out retiree health-care benefits for city employees who were hired after Aug. 23, 1989.
The 1st District Appellate Court’s decision is the latest chapter in a 30-year legal battle between the city and retirees who have been fighting over whether the municipal government must subsidize its workforce’s health care.
The plaintiffs — a group of at least 300 retired city workers — attempted to stop the city from implementing its 2016 plan for retiree health-care benefits that would, they claimed, create hardship for them.
The plaintiffs sought to thwart the city’s action through a preliminary injunction; the plaintiffs have asserted the city’s three-year retiree health-care plan violates the Illinois Constitution, among other things.
But Cook County Associate Judge Neil H. Cohen ruled in December that city workers who were hired after Aug. 23, 1989, had no expectation of having permanent health-care benefits when they retired, a finding the 1st District panel affirmed.
“[T]he benefit always came with an expiration date,” Justice John B. Simon wrote. “The time period was part of the benefit itself.”
The panel’s 13-page opinion deals only with the plaintiffs’ request for a preliminary injunction, and it does not touch the other legal issues in the case.
The Illinois General Assembly amended the pension code in 1983 and 1985 to require the four pension funds for different groups of city workers to provide health-care coverage to retirees at a subsidized rate. The city subsidized the rate through a certain tax.
In 1987, however, the city sought a court order declaring it did not have to provide health-care coverage to the retired workers. Both the pension funds and groups of the retired workers countersued.
As the 1st District panel noted, City v. Korshak, et al., 87 CH 10134, was never “judicially resolved.” The city and the pension funds entered a 10-year settlement over the objection of the retirees. Under the settlement, the city would pay at least half of the retirees’ health-care coverage.
But the settlement wasn’t codified into law until Aug. 23, 1989 — which has become an all-important date in the litigation. That settlement — and every subsequent one — included language on “time-limited health-care benefits,” Simon wrote.
Two more settlements would be reached in 1997 and 2003, the latter of which expired in June 2013. At that point, the city told the pension funds that it would be phasing out its health-care subsidy by the end of 2016, which led to the current lawsuit.
The plaintiffs consist of four different subclasses of city workers that are distinguished by their date of hire and the type of health-care coverage they received while they were working.
Clinton A. Krislov, owner of Krislov & Associates and the attorney for the plaintiffs, said the city’s phase-out plan affects city workers who retired after Aug. 23, 1989, even if they had coverage under the 1983 and 1985 amendments.
In the current lawsuit, the plaintiffs have argued the city’s phase-out plan violates Article XIII, Section 5 of the state constitution, which prohibits the diminishment or impairment of pension benefits.
After three years of litigation, it’s really the only surviving claim in the underlying lawsuit before Cohen.
The lawsuit has had a complicated legal history on its own, having been before federal courts for two years before being removed to the state court system.
It was in December 2015 that Cohen found retired city workers hired before Aug. 23, 1989, were entitled to some kind of permanent benefit under the 1983 and 1985 amendments. Workers who started after that date have no such entitlement.
That same month, the plaintiffs filed the preliminary injunction at issue in this 1st District ruling.
Cohen and the 1st District panel denied the plaintiffs’ request for the same reasons.
None of the different subclasses of plaintiffs can meet all of the elements in order for the court to grant a preliminary injunction stopping the city from phasing out its subsidies this year.
This included the retired workers who are entitled to some kind of coverage under the 1983 and 1985 amendments, the 1st District panel found. Even though their health-care benefits aren’t time-limited, they were unable to prove they would be worse off under the city’s 2016 plan.
“The court discussed the possibility that the retirees were actually better off under the 2016 plan,” Simon wrote. “Its finding that the retirees failed to demonstrate that they had a likelihood of succeeding on the merits for a claim that the 2016 plan was a diminishment of anything that they were entitled to was not an abuse of discretion.”
The panel also rejected the plaintiffs’ argument that their health-care coverage was protected as a pension benefit, similar to what the Illinois Supreme Court found in Kenerva v. Weems, 2014 IL 115811. But the panel reiterated that for many of the plaintiffs, the notion that the benefits would expire was baked into all of the settlements from 1989 and onward.
“The retirees did not make a sufficient showing that they have a clear right to anything other than what is in the 1983 and 1985 amendments,” Simon wrote.
“That being so, the trial court reviewed the 2016 plan side by side with what is provided for in the amendments, compared them and exercised its discretion to determine that the 2016 plan did not constitute any diminishment of the benefit the retirees are entitled to,” Simon added.
Krislov said he will appeal the denial of the preliminary injunction to the Illinois Supreme Court, noting there are many issues of law in this case that need to be decided.
Moreover, a final resolution in the case will not be reached before the end of the year. If a preliminary injunction is not implemented, many retirees will have to pay more money for coverage, Krislov added.
“Bottom line: They worked for the city all of these years, and they were assured they were going to have health-care coverage,” Krislov said. “Now the city and the pension funds want to leave them by the side of the road.”
Bill McCaffrey, a spokesman for the city Law Department, expressed satisfaction with the court’s ruling.
“The city is in the final year of the three-year phase-out of current city-subsidized health-care benefits for certain city retirees,” McCaffrey said. “To provide city retirees with additional options beyond what is available in the marketplace for their 2017 coverage, the city has coordinated with Blue Cross Blue Shield of Illinois to offer a number of group insurance plans, which retirees can select and pay for with Blue Cross Blue Shield of Illinois.”
Krislov was critical of this plan, however, saying his clients have asked to be included in those conversations but they have been denied.
The plaintiffs were also represented by Kenneth T. Goldstein of Krislov & Associates Ltd.
The city was represented by First Assistant Corporation Counsel Jane E. Notz, Deputy Corporation Counsel Benna Ruth Solomon and Chief Assistant Corporation Counsel Myriam Zreczny Kasper.
The city was also represented by Richard J. Prendergast and Michael T. Layden of Richard J. Prendergast Ltd. and Joseph M. Gagliardo, Jennifer A. Naber and James J. Convery of Laner, Muchin Ltd.
Justices Maureen E. Connors and Sheldon A. Harris concurred with the opinion.
The case is Michael W. Underwood, et al., v. City of Chicago, et al., 2016 IL App (1st) 153613.