Appellate court affirms St. Clair County's decision to toss class action

Ann Knef Sep. 28, 2005, 10:04am

Justice Stephen L. Spomer

Justice James K. Donovan

The Fifth District Appellate Court upheld a St. Clair County Circuit Court decision to dismiss a class action suit that named the Lawyers Trust Fund (LTF) of Illinois and Illinois Supreme Court Justices over the constitutionality of interest earned on client funds.

Plaintiffs Gregory T. Wieland and Michael Gallagher sued the justices and LTF in 2002 alleging that Rule 1.15(d) of the Rules of Professional Conduct was unconstitutional.

Newly appointed Appellate Justice Stephen L. Spomer authored the court's opinion reached Sept. 15.

"...The circuit court was not in error when it dismissed the plaintiffs's complaint," Spomer wrote.

Wieland and Gallagher claimed the "taking of private property for public use without just compensation" violated the Fifth Amendment to the U.S. Constitution, as applied to the states by the Fourteenth Amendment.

"In particular, the plaintiffs claimed that the mandate of Rule 1.15(d) that a lawyer place client funds into a pooled trust account, with the LTF named as the beneficiary of any interest income, whenever the lawyer deems the possession of those funds to be 'nominal or short-term', resulted in a taking of the interest on their funds without just compensation," the appellate decision released Sept. 27 stated.

The lower court's decision to dismiss the case relied on a U.S. Supreme Court ruling, Brown v. Legal Foundation of Washington, which held that interest on lawyers' trust accounts (IOLTA) does not violate the Fifth Amendment.

St. Clair County Circuit Judge Michael J. O'Malley dismissed the case after defendants argued, among other things, that the justices are entitled to "sovereign immunity."

"We find no meaningful difference in the language of the Washington rule and the language of the Illinois rule," Spomer wrote.

"The just compensation due a client under the terms of the Illinois rule is zero. Therefore, there has been no violation of the just compensation clause of the Fifth Amendment."

Justices James K. Donovan and Terrence J. Hopkins concurred.

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