14224418231_55f6c6c5b5_zEarlier this month, a unanimous Illinois Supreme Court held in Illinois State Treasurer v. Illinois Workers’ Compensation Commission that the State Treasurer, when appealing a workers’ compensation award in a case where he appears as custodian of the Injured Workers’ Benefit Fund, must file an appeal bond.

If this sounds like a minor procedural flaw, easily remedied – well, no. Understanding why requires a bit of a bit of background on the nature of appellate jurisdiction under Illinois law. Courts have jurisdiction in Illinois over all justiciable matters as a matter of constitutional law. But administrative law is different. In the administrative arena, courts have the jurisdiction the legislature says they do. So when a court sets out to review a workers’ compensation award, the prerequisites for invoking the court’s jurisdiction must be followed exactly. And one of those prerequisites is – you guessed it – is filing an appeal bond. So no appeal bond, no subject matter jurisdiction. Our detailed summary of the facts and underlying court decisions in Illinois State Treasurer is here. Our report on the oral argument is here.

Illinois State Treasurer began when a home healthcare provider to an elderly man was injured on the job. Because the patient didn’t have workers compensation insurance at the time of her injury, the claimant looked to the Injured Workers’ Benefit Fund for relief. The Fund consists of money from penalties and fines collected from employers and insurance companies pursuant to the Workers’ Compensation Act, and is intended to serve as a source of payment for employers lacking coverage. The State Treasurer serves ex officio as custodian of the Fund.

The arbitrator awarded benefits to the claimant. The Treasurer appealed, and the Commission unanimously affirmed. The Treasurer then appealed to the Circuit Court. That court affirmed, and the Treasurer sought to appeal to the Appellate Court. The Appellate Court initially reversed the award, but on rehearing, the claimant raised two arguments: first, that the award was in effect against the State, and therefore no appeal was possible, and second, that the Treasurer’s failure to file an appeal bond, as required to invoke the Appellate Court’s jurisdiction under 820 ILCS 305/19(F)(2), deprived the Appellate Court of jurisdiction. The Appellate Court rejected the first argument but agreed with the second.

In an opinion by Justice Karmeier, the Supreme Court affirmed. According to the Treasurer, the statutory requirement that “one against whom the Commission shall have rendered an award for the payment of money” must post a bond in order to invoke the court’s jurisdiction was aimed at employers and insurers, not the State Treasurer. But the Supreme Court pointed out that the legislature had used the terms employer and insurer throughout the statute. It could have easily used the same terms in Section 19(f)(2), but it deliberately used broader language. The Treasurer pointed out that awards against the State aren’t appealable unless they arise from claims by current and former employees and appointees of the Workers Compensation Commission, and argued that it was unreasonable to treat him differently. But he was different, the Court pointed out – the Treasurer was only in the litigation as the custodian of the Fund.

The Treasurer argued that he should be exempt from the bond requirement since the State is generally excused from paying court costs and analogous litigation expenses. But once again, the Court pointed out, the Treasurer was in a materially different position. In those cases, the State was a party to the litigation – here, the Treasurer was merely present in his ex officio capacity. Besides, since court costs are essentially a charge levied to help pay for the judicial system, assessing costs against the State essentially charged the taxpayers twice. An appeal bond, on the other hand, was intended for a very different purpose – to secure the payment of the award and any applicable costs if the appeal is ultimately unsuccessful. If the legislature disagreed with the Court’s construction, the Court said, it was free to amend the statute for purposes of future cases.

But in the meantime, no bond meant no jurisdiction, the Court held.

Image courtesy of Flickr by Dark Day (no changes).