Gordon Maag sues over new retiree health insurance law, seeks class action

Bethany Krajelis Jul. 10, 2012, 8:21am


If a Sangamon County circuit judge agrees with him, Gordon Maag could find himself before the court he unsuccessfully sought election to in the nation's most expensive judicial race in history.

Maag, a former Fifth District Appellate Court justice who lost his bid for the Illinois Supreme Court in 2004, filed a lawsuit late last month in Sangamon County Circuit Court challenging a new law that will start charging state retirees premiums for their health insurance.

Gov. Patrick J. Quinn signed the measure, Senate Bill 1313, into law on June 21 and Maag filed his suit four days later. He wants the circuit court to deem the law unconstitutional, a ruling that would hand him an automatic and immediate appeal to the state high court.

Maag also seeks class action status for his suit on behalf of all state retirees affected by the law, which took effect July 1. If approved, the class would include at least 80,000 members, according to Maag's suit.

Under the new law, retired state employees, as well as former judges, lawmakers and university workers, will have to pay premiums for their state health insurance. These premium payments have not yet been set or approved, but will likely leave those with large state pensions paying more for health insurance than those with smaller pensions.

Previously, retired judges were entitled to free health insurance after six years of service, according to Maag's suit. It also notes that retired lawmakers didn't have to pay premiums after four years, as well as employees who worked for the state for 20 years.

Maag contends that the new law changes benefits for members of the state's pension and retirement systems in violation of the Illinois Constitution, a clause of which dubs membership in these systems as an "enforceable, contractual relationship, the benefits of which shall not be diminished or impaired."

This same argument was used during past legislative debates over proposals to change pension benefits for current employees. Based on those debates, lawmakers discussed changing future benefits for current employees, a move some believe would be legal as long as employees would be able to keep the benefits they already earned.

Though the controversial issue garnered much debate in the past two legislative sessions, lawmakers have yet to come to an agreement on how to reform the pension systems in an attempt to reduce the state's pension obligation, which carries a multi-billion price tag.

Maag's lawsuit names Quinn and Treasurer Dan Rutherford as defendants.

Illinois Attorney General Lisa M. Madigan's office, which typically defends constitutional challenges against state laws, will likely represent Quinn and Rutherford in their official capacities as governor and treasurer.

In his lawsuit, Maag asks the Sangamon County Circuit Court to enjoin enforcement of the new law, declare it unconstitutional and order the defendants to pay members of the proposed class the sums they were charged under the new law, "which is believed to be well in the excess of $50,000," as well as court costs and attorneys' fees.

Maag's son, Peter Maag of the Maag Law Firm LLC in Wood River, submitted the suit on his father's behalf. According to the Sangamon County Circuit Court website, no hearing dates have been set and the case, 2012 L162, has been assigned to Circuit Judge John Schmidt.

Maag joined the Illinois judiciary in 1989, when he was appointed to an associate judgeship in the Third Circuit. He was appointed to fill a vacancy on the Fifth District Appellate Court in 1992 and was elected to a 10-year term two years later.

He has been out of the media spotlight since about 2007, when he dropped a $110 million defamation suit against a handful of business groups over campaign flyers and information used in the 2004 Supreme Court race that he lost to Republican Lloyd Karmeier.

The two candidates put more than $9 million into their campaigns, giving it the distinction of being the most expensive judicial race of its kind in the nation's history. In that same election, Maag also lost his bid to stay on the appellate court.

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