Judicial Rulings

Illinois Supreme Court

Multibank holding companies pass court test

ESTABLISHMENT of community services banking facilities, including automatic teller services, does not constitute branch banking, the state Supreme Court ruled April 16. In the case, McHenry State Bank et al. v. William C. Harris, Commissioner of Banks and Trust Companies, et al., the plaintiffs, a group of small banks, contended that Public Act 82-21 amending the Illinois Bank Holding Company Act of 1957 is unconstitutional because it permits what amounts to branch banking by its authorization of multibank holding companies and community service facilities.

The plaintiffs also argued that the amendment was unconstitutional because it did not pass by the three-fifths majority of the General Assembly required for branch banking by the 1970 Constitution, and because it delegated the power to define branch banking to the Federal Reserve Board, particularly through the automatic incorporation into Illinois law of all future amendments to the Federal Bank Holding Act.

In delivering the high court's ruling, Justice William C. Goldenhersh, noticing that limited-service facilities were authorized before the 1970 Constitutional Convention, said that it was clear from convention proceedings that delegates "were aware of the distinction between a branch bank and the type of facility here under consideration.... and clearly did not intend that the facility be subjected to the restrictions imposed upon branch banking." In the court's view, the amendment did not authorize branch banking, and did not consider whether its enactment complied with the provisions of the 1970 Constitution.

Goldenhersh rejected the argument on the Federal Reserve Board: "Plaintiffs' argument overlooks the fact that the Act does not purport to confer powers on the Federal Reserve Board which it does not already have.... and the inclusion of the provision in the Act here is a recognition of the existence of dual banking systems and concurrent Federal and State jurisdiction."

Rules of Judicial Conduct; Courts Commission upheld

THE ILLINOIS Courts Commission has the constitutional right to interpret the Supreme Court's rules of judicial conduct, and its decisions on cases of judicial misconduct are final, the state's high court said April 16. In the case, The Judicial Inquiry Board v. The Courts Commission, the Judicial Inquiry Board had filed a complaint with the commission charging that a judge had deprived three traffic violation defendants of the right to a jury trial. The commission dismissed the complaint, citing Supreme Court rule 62, which allows dismissal if a complaint is "too insignificant to call for official action." The commission ruled that the judge had shown no "general attitude of arbitrariness" or "gross abuse of the Standards of Judicial Conduct." The board's motion for the commission to reconsider its decision was denied and the board appealed to the high court.

In delivering the court's ruling, Justice William G. Clark noted that an earlier case had established that the commission did not have the authority to interpret a statute after a court had decided on a different interpretation. But in this case, "....there is no possibility that [the commission's] interpretation of [Rule 62] will be at odds with an interpretation by a court," Clark said. "The Courts Commission is the body with the constitutional responsibility for applying the Rules of Judicial Conduct to particular cases. We conclude that its constitutional authority to hear and determine disciplinary cases necessarily includes the power to interpret the rules it applies in deciding cases...."

38 | August 1982 | Illinois Issues