Johnson v. Municipal Employees', Officers' , & Officials' Annuity & Benefit Fund of Chicago

2018 IL App (1st) 170732

124 N.E.3d 515

429 Ill.Dec. 319

Jeffrey JOHNSON, Robert Orlich, Terry T. White, Frank T. Lowery, and Municipal Employees Society, as Associational Representatives for Its Members, Plaintiffs-Appellants,

v.The MUNICIPAL EMPLOYEES', OFFICERS', & OFFICIALS' ANNUITY & BENEFIT FUND OF CHICAGO and The Laborers' & Retirement Board Employees' Annuity & Benefit Fund of Chicago, Defendants-Appellees.

No. 1-17-0732

Appellate Court of Illinois, First District, Second Division.

Opinion filed December 26, 2018

Modified Upon Denial of Rehearing filed February 19, 2019

Mary Patricia Burns and Vincent D. Pinelli, of Burke Burns & Pinelli, Ltd., of Chicago, for appellee Municipal Employees’, Officers’ and Officials’ Annuity and Benefit Fund of Chicago.

John F. Kennedy, Cary E. Donham, and Graham C. Grady, of Taft Stettinius & Hollister LLP, of Chicago, for appellee Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago.

Michael D. Freeborn, John T. Shapiro, and Dylan Smith, of Freeborn & Peters LLP, of Chicago, for other appellees.

Edward N. Siskel, Corporation Counsel (Benna Ruth Solomon and Jane Elinor Notz, Assistant Corporation Counsel, of counsel), Michael B. Slade, R. Chris Heck, and Douglas Smith, of Kirkland & Ellis LLP, and Richard Prendergast and Michael Layden, of Richard J. Prendergast, Ltd., all of Chicago, for intervenor-appellee City of Chicago.

JUSTICE HYMAN delivered the judgment of the court, with opinion.

¶ 1 After the Illinois Supreme Court ruled that Illinois Pension Code amendments violated our constitution's pension protection clause, plaintiffs' counsel in one of the consolidated cases petitioned for attorneys' fees. The firm sought over $ 200,000 under the Illinois Civil Rights Act and an additional $ 750,000 from a "common fund." The trial court denied the fee petition in its entirety as impermissible under the Illinois Pension Code. We agree and affirm.

¶ 2 Background

¶ 3 As summarized in Jones v. Municipal Employees' Annuity & Benefit Fund , 2016 IL 119618, 401 Ill.Dec. 454, 50 N.E.3d 596, Illinois has established public pension systems for public employees of the City of Chicago, including the Municipal Employees', Officers', and Officials' Annuity and Benefit Fund (MEABF) ( 40 ILCS 5/8-101 et seq. (West 2012) ), and the Laborers' and Retirement Board Employees' Annuity and Benefit Fund (LABF) ( 40 ILCS 5/11-101 et seq. (West 2012) ). Jones , 2016 IL 119618, ¶ 3, 401 Ill.Dec. 454, 50 N.E.3d 596. The benefits under MEABF and LABF come from three sources: the City, the employees, and investment returns. Id. ¶ 6. Historically, the public pensions have been underfunded. Id. ¶ 7. Uncertainty associated with deficiencies led to the adoption of the pension protection clause in the Illinois Constitution ( Ill. Const. 1970, art. XIII, § 5 ). Actuarial valuation of the funds continued to show serious shortfalls, however. Jones , 2016 IL 119618, ¶ 10, 401 Ill.Dec. 454, 50 N.E.3d 596.

¶ 4 The General Assembly adopted legislative strategies to deal with some of the underfunded pensions. Public Act 98-641, passed in 2014, consisted of a comprehensive set of provisions designed to reduce annuity benefits for MEABF and LABF members. Id. ¶ 18.

¶ 5 After Public Act 98-641 became law, MEABF participants challenged its constitutionality and sought to enjoin enforcement: Jones v. MEABF , No. 2014-CH-20027, 2015 WL 4662009 (Cir. Ct. Cook County), and Johnson v. MEABF , No. 2014-CH-20668, 2015 WL 4997980 (Cir. Ct. Cook County). Both complaints sought a declaration that Public Act 98-641 violated the pension protection clause by diminishing pension benefits of the fund's participants.

¶ 6 The Jones v. MEABF plaintiffs included 14 individual participants in the MEABF, including current employees and retirees receiving an annuity, and four labor unions whose members participated in the MEABF. The defendants included MEABF and its board of trustees. The law firm of Freeborn & Peters LLP represented the plaintiffs. Ten days later, Krislov & Associates, Ltd. filed the Johnson v. MEABF lawsuit on behalf of one current participant in the MEABF, three retired participants receiving annuities from the LABF, and the Municipal Employees Society of Chicago. The defendants included MEABF and LABF. The City of Chicago and the State intervened, and the cases were consolidated. Ultimately, the parties filed cross-motions for summary judgment, with the State adopting the City's motion.

¶ 7 The trial court declared that Public Act 98-641, by reducing the value of annual annuity increases, violated the constitution's pension protection clause. The City, the State, MEABF, and LABF appealed directly to the Illinois Supreme Court under Rule 302(a). Ill. S.Ct. R. 302(a) (eff. Oct. 4, 2011). In March 2016, the supreme court affirmed, declaring the entire statute unconstitutional. Jones , 2016 IL 119618, ¶ 61, 401 Ill.Dec. 454, 50 N.E.3d 596.

¶ 8 Krislov, the Johnson v. MEABF plaintiffs' counsel, petitioned for attorneys' fees against the City, MEABF, and LABF under the Civil Rights Act ( 740 ILCS 23/5(c) (West 2016) ) in the amount of $ 219,041 representing the firm's statutory lodestar fee. In addition, under a common fund theory, Krislov sought an additional $ 750,000 from the 3% annual annuity increase for plan members.

¶ 9 Deciding as a matter of law that attorneys' fees were not available under either approach, the trial court denied with prejudice Krislov's petition, as well as a motion for class certification and a motion to compel production of his opponents' time records. Krislov requests that we reverse and remand with directions to award an appropriate fee, considering both statutory lodestar and common fund sources. Krislov also requests we order production of the time records and certification of a class for purposes of applying the common fund doctrine.

¶ 10 Standard of Review

¶ 11 This appeal presents a matter of statutory interpretation, a question of law, which we review de novo . Klaine v. Southern Illinois Hospital Services , 2016 IL 118217, ¶ 13, 400 Ill.Dec. 1, 47 N.E.3d 966.

¶ 12 Analysis

¶ 13 Fee Entitlement

¶ 14 The Illinois Civil Rights Act of 2003 prohibits discrimination based on a person's race, color, national origin, or gender. 740 ILCS 23/5(a) (West 2016). Subsection (b) empowers an aggrieved party to bring a civil lawsuit in federal district or state circuit court "against the offending unit of government." Id. § 5(b). Together, subsections 5(a) and 5(b) create a state statutory cause of action for a claim of discrimination based on a suspect class.

¶ 15 The Act includes a provision for attorneys' fees: "Upon motion, a court shall award reasonable attorneys' fees and costs, including expert witness fees and other litigation expenses, to a plaintiff who is a prevailing party in any action brought: (1) pursuant to subsection (b); or (2) to enforce a right arising under the Illinois Constitution." Id. § 5(c). This language recognizes attorneys' fees when a prevailing party successfully brings a discrimination claim on statutory or constitutional grounds. Thomann v. Department of State Police , 2016 IL App (4th) 150936, ¶ 30, 408 Ill.Dec. 829, 66 N.E.3d 834.

¶ 16 The trial court denied attorneys' fees because the issues raised by the lawsuits have no relation or connection to the Civil Rights Act. We agree.

¶ 17 Krislov argues Grey v. Hasbrouck , 2015 IL App (1st) 130267, 393 Ill.Dec. 75, 33 N.E.3d 819, controls. Grey has no bearing. Grey involved whether the doctrine of sovereign immunity barred attorneys' fees. Id. ¶ 1. In Grey , unlike here, the claim, which involved transgender individuals, fell squarely within section 5 (a). Id. ¶¶ 2-3, 20.

¶ 18 We also reject Krislov's quarrel with Thomann , 2016 IL App (4th) 150936, 408 Ill.Dec. 829, 66 N.E.3d 834. Krislov criticizes Thomann 's narrow interpretation of section 5 (c) to restrict attorneys' fees to discrimination claims based on either section 5(a)(1) or 5 (a)(2) or "race, color, national origin, or gender" under the Illinois Constitution's equal protection clause ( Ill. Const. 1970, art. I, § 2 ). Thomann , 2016 IL App (4th) 150936, ¶¶ 29-30, 408 Ill.Dec. 829, 66 N.E.3d 834 ; see also 740 ILCS 23/5(a), (c) (West 2016). Section 5 (c) makes attorneys' fees available "only where the claimant is a prevailing party on a discrimination claim against a governmental body involving one or more of the identified suspect classes." Thomann , 2016 IL App (4th) 150936, ¶ 29, 408 Ill.Dec. 829, 66 N.E.3d 834. In Thomann , plaintiffs did not bring a discrimination claim against a governmental body. Id. ¶ 33. Nor have the Johnson v. MEABF plaintiffs.

¶ 19 Nevertheless, Krislov insists that the text of section 5(c)(2)—"to enforce a right arising under the Illinois Constitution" ( 740 ILCS 23/5(c)(2) (West 2016) )—opens the way for fees regardless of the nature of the claim as long as it arises under the Illinois Constitution. Krislov characterizes the language as unambiguous and insists it should be interpreted liberally.

¶ 20 A cardinal rule of statutory construction requires that courts ascertain and give effect to the legislature's intent, with the plain language offering the best indication of intent. Acme Markets, Inc. v. Callanan , 236 Ill. 2d 29, 37-38, 337 Ill.Dec. 867, 923 N.E.2d 718 (2009). In doing so, we read the statute as a whole, considering all relevant parts. First American Bank Corp. v. Henry , 239 Ill. 2d 511, 516, 347 Ill.Dec. 682, 942 N.E.2d 1262 (2011) (citing Kraft, Inc. v. Edgar , 138 Ill. 2d 178, 189, 149 Ill.Dec. 286, 561 N.E.2d 656 (1990) ). Also, statutes must be construed to avoid incorporating exceptions, limitations, or conditions contrary to the legislative intent. Thomann , 2016 IL App (4th) 150936, ¶ 30, 408 Ill.Dec. 829, 66 N.E.3d 834. Krislov's argument runs afoul of these tenets.

¶ 21 Thomann got it right in finding an expansive interpretation of the section 5 (c)(2) fee-shifting provision as contrary to the...