By: Mark Glennon*
Straight to the point, we’ll focus in this first part just on the impact of Donald Trump’s appointment of a ninth justice to the United States Supreme Court. That appointment almost surely will be a hard core conservative, as Trump has promised, tipping the balance back towards a reliably conservative majority from the current 4 – 4 ideological deadlock. Many national issues will be determined by the new court that affect all states, but we’ll focus here only on those specifically related to Illinois. For Illinois, the impact most likely will be on labor initially and, in the longer run but more importantly, on bankruptcy and pensions.
The new court will likely take up the issue of “fair share” or “forced share,” depending on your point of view. That’s whether it’s constitutionally permissible to force a worker to pay union dues. An Illinois worker making that claim in Janus v. Afscme hit a dead end when the same issue was decided against a California worker. That decision from the Ninth Circuit appellate court was left unchallenged due to the current deadlock in the Supreme Court (Friedrichs v California Teachers Ass.).
However, the Janus case is now on appeal in our Seventh Circuit Court of Appeals and is expected to end up in the Supreme Court with the new ninth member. A ruling there in favor of workers who choose not to pay dues is regarded by some as the practical equivalent of right-to-work. Prior to Justice Scalia’s death which created the deadlock, the court indicated it would invalidate forced dues. That result now seems probable.
The Supreme Court may also end up hearing a pure right-to-work case originating in Lincolnshire, Illinois. You may recall that Lincolnshire passed an ordinance last December that would bar private employers from requiring workers to join unions. Four unions sued the village in federal court, arguing that right-to-work cannot be adopted at the local level. That case is expected to end up initially in our Seventh Circuit, which is generally conservative and free market. However, given the importance of the issue, it may well go up thereafter to the Supreme Court and meet a new conservative majority that’s unfriendly to labor and inclined to respect local over federal power.
Far more important issues for Illinois probably will be addressed in cases that have not yet arisen pertaining to pensions and bankruptcy.
First, if Illinois addressed its pension crisis by passing a state constitutional amendment deleting the pension state’s protection clause, it would still be challenged in federal court under several provisions of United States Constitution — the contracts clause, the ex post facto clause and the “taking” prohibition. Unions have promised such a challenge. Because of the gravity of the issue and little useful precedent, that challenge would probably go to the Supreme Court. A more conservative court would be less inclined to invalidate a state constitutional amendment, preferring instead to stay out of state matters.
Second, if you’re of the opinion that bankruptcy is inevitable for Chicago and many other municipalities (as we are), you can also assume that any number of issues will be aggressively litigated and appealed. Those issues might include the fundamental one of whether pensions can be cut in bankruptcy. A bankruptcy court ruled they could be for Detroit, but it was settled and never appealed. Other questions likely to arise in a bankruptcy as complex as Chicago’s could end up in the Supreme Court.
Likewise, it’s not at all far-fetched to think Illinois and perhaps other states crippled by pensions will end up asking Congress to amend the Bankruptcy Code to allow states to file. A former Chairman of the FDIC, William Isaac, says Illinois should already have done so. The legislation to authorize that would be extremely contentious. Novel issues would arise and fundamental constitutional issues would apply. It’s difficult to imagine some of it would not reach the Supreme Court.
Finally, proposals have been discussed for a sort of “bankruptcy-light” federal solution to the pension crisis. The Manhattan Institute has suggested federal legislation, discussed here, to directly allow states and municipalities to cut pension benefits. The constitutionality of any such legislation unquestionably would be challenged and appealed to the hilt.
I certainly won’t try to predict how the Supreme Court with a new justice would decide any of these matters where a more conservative influence isn’t apparent, but this much seems clear: With a conservative majority, the Court can be expected to be less protective of unions and pensions, more protective of taxpayers and more deferential to Congressional action (especially legislation that comes out of a Republican Congress).
In our second part of this article, linked here, we will look at other direct effects on Illinois we can expect from policies Trump is likely to implement.
*Mark Glennon is founder of WirePoints. Opinions expressed are his own.