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Judicial Rulings

Student loan litigation: Cook County no longer exclusive venue

Recognizing that litigation has been the major means across the nation for increased collection of defaulted student loans, the Illinois Supreme Court put some controls on the process in Illinois. In effect, the court's October 18 decision seeks to guarantee due process by breaking the hold the state had on requiring that all cases be litigated in one place Cook County.

The court struck down the statute defining Cook County as the exclusive venue for all lawsuits on delinquent and defaulted student loans (see Illinois Revised Statutes, 1988 Supp., ch. 122, sec. 30-15.12). It also struck the policy of the Illinois Student Assistance Commission (formerly the Illinois State Scholarship Commission) of inserting a venue waiver clause in contracts for guaranteed student loans. The commission's practices and the statute were ruled unconstitutional because they violate due process. The court said that all conflict with the general venue law of Illinois.

The general venue statute provides that action must begin in the county where the defendant resides or the county in which the transaction (or some part thereof) leading to litigation occurred (see Ill. Rev. Stat. 1987, ch. 110, sec. 2-101). The purpose is "to provide a forum that was convenient either to the defendant ... or to the witnesses . . . ." The legislature can determine where venue is proper and enact a special venue statute. The high court had not previously declared any venue statute unconstitutional, although it had noted that such a law could be arbitrary enough to violate due process.

In this class action suit one of the named plaintiffs lived 270 miles from Chicago. The court ruled that since many members of the class are indigent, they would not be able to make such a long trip to defend themselves against the commission. The court noted a growing tendency both in federal courts and in other states to consider the right of access to the courts as being part of due process rights. Central to all details of the decision was the court's conclusion that sec. 30-15.12 and the commission's practice of filing only in Cook County "have the effect of depriving plaintiffs of their right of meaningful access to the courts."

The court rejected the claim that litigation was not the only means of settling delinquent loans. It said that the record showed that the commission had not offered out-of-court means of settlement and failed to respond to plaintiffs who had a legitimate defense. It said, "This evidence exposes the duplicitous nature of defendants' claim that plaintiffs actually have the ability to defend themselves out of court."

Apparently Williams v The Illinois State Scholarship Commission (Docket No. 68869) means that default actions on student loans will have to be brought across the state, following provisions of the general venue statute. Justice John J. Stamos wrote for the majority. Justice Ben Miller, joined by Chief Justice Thomas J. Moran and Justice Howard C. Ryan, dissented. Central to Miller's position was the conclusion that "the majority erroneously equates the private interest of the individual class members in having collection actions brought in convenient forums with a right of judicial access.'' In some of the details of his dissent he disagreed with the majority interpretation of facts in the case.

Timeline: Harold Washington Party status on Cook County ballot

Although the U.S. Supreme Court has yet to hear the case in its regular fashion, the Harold Washington Party ultimately won its place on the Cook County November 6 ballot by the action of the U.S. high court.

  August 29: The Cook County Officers Electoral Board permitted the Harold Washington Party to run candidates for county board president, sheriff, state's attorney, county clerk, county treasurer, assessor, county school superintendent, board of (tax) appeals and 10 seats on the county board from Chicago. It rejected candidates for seven seats on the county board from suburban Cook County and candidates for the water reclamation district board.

  September 30: Cook County Circuit Judge Eugene L. Wachowski (recalled from retirement to help with the overload in Cook County courts) ruled the party and its candidates off the ballot on a technical interpretation of the petition requirements. He held that Chicago and suburban Cook County were separate entities, with the petition requirements applicable to each separately. The suburban petitions were found to lack the required number of signatures which, Wachowski ruled, voided the slate for the entire county. He affirmed that the name "The Harold Washington Party" could be used.

  October 12: The Illinois Supreme Court issued an order in Reed v Norman (Docket No. 70833) that ballots be prepared without the Harold Washington Party or its candidates. It ruled that the party name could not be used. It noted that former Appellate Justice R. Eugene Pincham Sr. had qualified as candidate for Cook County commissioner not only on the Harold Washington Party ticket, but also on the Democratic ticket, and said that he could remain as Democratic candidate (Pincham subsequently withdrew as a Democratic candidate and was replaced on the ballot by Danny K. Davis).

When the order was issued, the opinion of the Illinois Supreme Court was not filed, but dissenting opinions were filed the same day. Dissenting were Chief Justice Thomas J. Moran and Justices Ben Miller and Howard C. Ryan (the three Republicans on the seven-member court), holding that the majority intepretations of the statute were too narrow.

  October 22: U.S. Supreme Court Justice John Paul Stevens issued an order staying or recalling the Illinois Supreme Court's mandate, pending further orders from the U.S. court. The Illinois court recalled its mandate.

  October 25: The U.S. Supreme Court affirmed the decision of the Cook County Officers Electoral Board, pending eventual filing and disposition of a formal appeal. By this date the opinion of the Illinois Supreme Court had not been filed. By this date it was also impossible for the Cook County election officials to prepare the ballot for punch card voting in the usual manner.

  November 6: Election day. Still undecided by election day was the exact disposition of absentee ballots that had been cast without the names of Washington party candidates on them.

F. Mark Siebert

Suit filed to overthrow Illinois' public school financing system

A lawsuit seeking to have Illinois' system of funding public schools declared unconstitutional was filed in Cook County Circuit Court on November 13. The Committee for Educational Rights, representing 47 Illinois school districts, filed the action. The suit claims violations of the Illinois Constitution's Education Article and equal protection clause. Its filing follows successful legal action that overturned school finance systems in Kentucky, New Jersey and Texas.

The lawsuit seeks to prove three constitutional violations:

1.  An equity claim that says differences in property tax wealth mean students receive very different educational opportunities, depending on where they live.

2.  An adequacy claim that says many school districts are so underfunded that they cannot provide an adequate education.

3.   A special needs claim that says children from poor homes who need extra services to succeed are being denied the opportunity.

The lawsuit seeks only to overturn the present school finance system. It says that questions about increasing revenues and reducing property taxes are political.

Michael D. Klemens

30/December 1990/Illinois Issues


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