Karmeier authors opinion in overturn of Kardis decision

Steve Gonzalez Dec. 1, 2005, 6:58am

Former Circuit Judge Philip Kardis

A judgment made by former Madison County Circuit Judge Phillip Kardis that invalidated a state statute in a class action case against Illinois Bell, has been reversed by the Illinois Supreme Court.

Kardis made the decision in a case that challenged the constitutionality of a public utility rate structure for telephone companies in Big Sky Excavating v. Illinois Bell on June 4, 2003.

“In undertaking our review, we begin with the well-settled principle that all statutes are presumed to be constitutional. The party challenging the constitutionality of a statute has the burden of rebutting the presumption of validity and clearly establishing a constitutional violation.”

“...The circuit court erred in granting summary judgment in favor of plaintiffs and against Illinois Bell," Justice Lloyd Karmeier wrote in the opinion issued Dec. 1.

"The judgment of the circuit court is therefore reversed, and this cause is remanded to the circuit court for further proceedings consistent with our opinion.”

Because Kardis’ judgment involved a state statute, the appeal was taken directly to the Supreme Court.

On Feb. 6, 1998, Illinois Bell filed a tariff with the Illinois Commerce Commission (ICC) reclassifying many of the business services it provided to small business customers as competitive. After Illinois Bell reclassified its services, it raised rates for which led the ICC to investigate.

The ICC held hearings that determined that Illinois Bell had wrongfully reclassified many of its small business services as competitive and that such reclassification resulted in unwarranted and significant rate increases. The proposed order, dated March 30, 2001, concluded that Illinois Bell should refund the price increases it had charged affected customers.

Telephone companies in Illinois are regulated as public utilities. Before a telephone company can alter the price of its services, it is required to give 45 days notice to the ICC and the public. The ICC could then suspend the effectiveness of the price change for up to 11 months while deciding whether to approve it.

While the matter was still pending, and before the ICC issued a final order in the case, the General Assembly enacted Public Act 92-22. That legislation made numerous changes to various statutes concerning telecommunications and repealed section 13-803 and added an entirely new section to the law, section 13-502.5.

“The sole basis for the circuit court's judgment is that section 13-502.5 denied plaintiffs due process of law under article I, section 2, of the Illinois Constitution," Karmeier wrote.

"In plaintiffs' view, the legislature had no right to abate the Commission proceedings and settle the question of refunds through statutory enactment.”

“The proceeding abated by section 13-502.5 was a regulatory enforcement matter. Plaintiffs were not parties to that proceeding and had not established, definite or ascertainable right to any monetary relief from Illinois Bell.

"They merely hoped to get back some of the money they had paid for telephone service in the event the Commission ultimately agreed with the hearing examiners, determined that Illinois Bell had acted improperly, and ordered it to make refunds to its customers.

"Such expectations clearly do not rise to the level of a legitimate claim of entitlement to benefits under the prior law. Plaintiffs therefore failed to establish that they had a vested property right necessary to support their due process claim.

“In support of the circuit court's judgment, plaintiffs argue here, as they did in the court below, that section 13-502.5 cannot pass special legislation scrutiny because Illinois Bell is the only entity to benefit from its provisions. This argument is without merit.

“If any telecommunications carrier believed that section 13-502.5 afforded Illinois Bell an advantage it was denied, there is no evidence of it in the record before us. Plaintiffs' arguments focus instead on the harm consumers would suffer under the new law. Consumers, however, are not similarly situated to the telecommunications carriers from which they purchase services.

"Accordingly, their harm is not relevant to the question of the law's discriminatory effect.”

Big Sky is represented by Terrance O'Leary of Granite City. Illinois Bell is represented by John Papa of the Callis Firm in Granite City.

Circuit Court Judge Don Weber is now assigned to the case.

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