3899715321_797047dc69_zDuring its May term, an apparently skeptical Illinois Supreme Court heard oral arguments in Walker v. McGuire, a constitutional challenge to a fee (735 ILCS 5/15-1504.1) on foreclosure filings to support a state foreclosure prevention program.

Walker began when the plaintiff paid the fee and filed suit for a refund, challenging the constitutionality of the fee on a variety of grounds: that it created a fee office within the bar of Article VI, Section 14 of the state constitution, that it unreasonably benefited the City of Chicago and that it created an unreasonable classification. The Illinois Attorney General intervened and moved to dismiss.

The Circuit Court struck down the statute as a violation of the fee office provision because it required the Circuit Court Clerk which administered the fee to retain 2% of the funds. The Attorney General appealed directly to the Supreme Court, and the plaintiff cross-appealed on the grounds that the Court had ruled only on the original form of the statute before it was amended in 2013.

Counsel for the State began the argument, saying that the issue before the Court was narrow: whether the pre-amendment form of the statute created a fee office under Article VI. Because the challenge was to the statute on its face, the Circuit Court could only be affirmed if the Court concluded that the statute wasn’t valid under any circumstances. Counsel argued that the Circuit Court erred because Section 14 of Article VI doesn’t apply to Circuit Court clerks – read in context, it refers to adjudicatory personnel (judges and magistrates) alone. The history of the provision reflects a desire to bar persons involved in litigation from having a financial interest. But even if the provision did apply to the Clerk, the statute would still not amount to a fee office. Justice Burke asked whether the Court’s precedents require 100% of the fees collected under the statute to be distributed to others, and counsel explained that all that was required is that funds from the fee be used for some purpose related to the court system. Justice Theis pointed out that the plaintiff appeared to be saying that even placing a small part of the fee receipts in the Clerk’s operations fund ran afoul of the fee office provision. Counsel argued that there was no basis for that, since merely retaining a small portion to defray expenses doesn’t create a litigation conflict of interest. Justice Burke asked what standard the Court should apply to reviewing the plaintiff’s claim that the statute violated Article I, Section 12, which guarantees all Illinoisans’ right to “obtain justice by law, freely, completely, and promptly.” Counsel argued that only a rational relationship was needed. Justice Theis asked whether that issue was even before the Court, and counsel said no – since the lower court hadn’t decided the due process or equal protection challenges, neither issue was before the Court. Counsel reviewed the timeline of the case, and pointed out that the lower court had strictly limited its finding of unconstitutionality to the pre-amendment version of the statute. Plaintiffs were seeking before the Supreme Court to challenge the version of the statute currently in force, even though they had never even sought to amend the complaint below.

Counsel for the plaintiffs followed. Justice Theis asked counsel which version of the statute he was challenging. Counsel explained that when the amendment to the statute was enacted, the Attorney General had appeared and argued that a new statute was in force, clarifying the intent of the legislature. Justice Theis asked counsel whether he filed an amended complaint after the statute was amended, and counsel responded that the trial court had said it wasn’t necessary. After the Attorney General had argued that the 2013 statute clarified and supplemented the earlier version, the only statute before the court was the 2013 version. Justice Theis pointed out that the lower court had not engaged in any way with the 2013 version in its order; counsel answered that the court had asked for briefing on the impact of the 2013 amendment, and he thought it was error for the Circuit Court not to extend its order to that version of the Act. That issue was the subject of the plaintiffs’ cross-appeal.  Justice Thomas asked counsel whether he had a standing problem in challenging the 2013 statute; counsel responded that no standing objection had ever been raised. The plaintiffs had attacked the entire concept of fees being applied outside of the court system – they were attacking the 2011 statute, as amended in 2013. Justice Theis suggested that the plaintiffs hadn’t really responded to the State’s argument that the fee office clause is limited to adjudicatory officers. What was the plaintiff’s definition of a fee office? Counsel pointed out that Article IX bars all fee offices. Justice Theis asked why the issue wasn’t limited to Article VI, since the clerks were part of the judicial branch. Counsel answered that the State’s claim that the bar on fee offices was limited to adjudicatory officers made the final sentence of the Section surplusage – clerks are part of the judicial system, and the clause says there can be no fee offices in the judicial system. When counsel once again suggested that the clerks were also covered by Article IX, Justice Theis pointed out that the general ban on fee offices found in Article IX addresses local governments. Counsel argued that the language wasn’t so restrictive. Justice Theis asked whether the fee office clause was violated if the clerk put a portion of the fee in its operations fund. Counsel answered that where the money goes isn’t the issue – it’s where the money comes from. Justice Theis asked whether Crocker v. Finley, one of the principal cases on which the plaintiff relied, required strict scrutiny of the Act. Counsel answered that it did not, but other cases made it clear that the issue of free access to the courts was reviewed under strict scrutiny. Nevertheless, even if the standard was rational basis, the Act was unconstitutional, according to counsel. The Act was a general revenue raising measure, but the constitution clearly barred using court funds for a general welfare purpose. Justice Karmeier asked whether the Court wasn’t really dealing with a narrow holding that the pre-2013 version of the statute was a fee office under Article VI, Section 14. Counsel answered that since the remaining challenges to the statute had been fully briefed, the Court could address those as well. Justice Thomas asked whether the record supported the plaintiffs’ view that the lower court had always intended to address the post-amendment version of the statute. Counsel answered that the record reflected the court’s request that the parties brief the 2013 statute, as were the parties’ briefs themselves.

The State’s counsel pointed out in rebuttal that nothing in the statute created a fund or a program; the 2% hold-back was for implementation of the section of the statute, not implementation of the foreclosure program. Counsel argued that there was nothing in the record to suggest that the lower court had mistakenly forgotten to address the post-amendment version of the statute. Counsel concluded by arguing that the general fee office bar in Article IX was inapplicable to the statute, since Circuit Court clerks are not local officials.

Counsel for the plaintiffs concluded the argument with rebuttal on the cross-appeal. He argued that Circuit Court Clerks are paid and elected locally. Justice Theis suggested that counsel was addressing the fee office issue rather than his cross appeal. Counsel disagreed, arguing that the statute was still infirm, even post-amendment. Justice Theis pointed out that the Court had been asked not to rule on the plaintiffs’ cross-appeal on the grounds that the only basis for the Circuit Court’s holding striking down the statute was that it violated the judicial fee office clause, Article VI, Section 14. Counsel answered that the issue before the Court was whether the order below was proper, and the Court could consider any argument in support of the lower court’s order.

We expect Walker to be decided in three to four months.

Image courtesy of Flickr by Taber Andrew Bain (no changes).