Sovereign immunity

Illinois will recognize another state's claim of sovereign immunity as long as it does not contravene the public policy of Illinois. The Illinois Supreme Court's decision of May 17 was based on the principle of comity, under which one state regards as effective the laws of another state as a matter of deference and respect. The court said. "[W]e have not had occasion to consider whether on the basis of comity our courts should respect another state's statutorily imposed sovereign immunity in a tort context."

An Illinois resident was injured when a piece of equipment sold to the Fermi National Accelerator Laboratory by Purdue University fell during installation. He claimed that the equipment was defective and sued Purdue. Purdue claimed that it was an instrumentality of the state of Indiana and immune from suit in Illinois since Indiana's statutes provide that it can be sued only in Indiana courts.

Article I, section 12 of the Illinois Constitution provides that "[e]very person shall find a certain remedy. . . for all injuries and wrongs." The court held that its decision did not deny the plaintiff remedy since under Indiana law he could sue in Indiana courts.

Justice Howard C. Ryan's opinion in Schoeberlein v. Purdue University (Docket No. 66904) contained an analysis of the principle of sovereign immunity. Justice Horace L. Calvo disseted, pointing out that Indiana law requires 180-day notice in suits against the state. Since the plaintiff could no longer meet this requirement he is denied remedy, in contravention of Illinois law, according to Calvo.

No videotapes in child abuse cases

On June 19 the Illinois Supreme Court ruled unconstitutional a statutory provision (see Illinois Revised Statutes 1987, ch. 38, sec. 106A-2) for videotaping testimony of witnesses under age 12 in cases of child sexual abuse. This was so-called "shield law," designed to protect youthful witnesses from fear, intimidation or confusion if required to testify and undergo cross-examination in the presence of the defendant.

A trial judge in the 20th Circuit denied the prosecutor's motion to record a child's testimony on the ground that it violated the defendant's right to cross-examine. Section 106A-2 (a) allows questioning of the child only by the prosecutor and the judge. The evidence is admissable at trial only if the child is then available for cross-examination (Section 106A-2(a)(7)).

These provisions distinguish Illinois' statute from similar ones in other states. Months could separate the taping and possible cross-examination on it at trial, during which time "the child undoubtedly will have contact with the prosecutor and relatives who, consciously and unconsciously may influence the child." The court concluded, "We think that the challenged statute frustrates the truth-seeking function of the confrontation clause." As an out-of-court statement the videotape is "pure hearsay." The court said that this " plainly is a new exception to the general rule against the admission of hearsay evidence against a defendant."

The decision in People v. Bastien (129 Ill. 2d 64) was unanimous, with an opinion by Justice John J. Stamos.

Business loans for business

Calling a personal loan a business loan in order to impose a higher rate of interest is unlawful, according to the Illinois Supreme Court's decision of June 19.

A husband and wife, unable to meet payments on a personal loan, obtained revision for a longer term, mortgaging their home as security. Besides the note and the mortgage they signed a separate document stating that the new loan was for business purposes. This permitted an interest rate well over the prevailing allowable rate for personal loans (see Ill. Rev. Stat. 1979, ch. 74, sec. 1 et seq.). They claim that the loan officer said that this was the only way to obtain the new loan and indicated that they would have to stick to the story that it was a business loan if bank examiners ever raised questions. The loan officer never denied these statements at trial.

This process was repeated twice, with the interest rate increased to 21 percent. When the couple defaulted, the bank moved to foreclose. The couple raised the affirmative defense that, since the loan was really personal, the interest rate was usurious.

The court found that the loan was personal and that the mortgagees were not prevented from using the usury defense by their participation in an illegal loan because "it is clear. . . that the legislature intended that lenders, and not borrowers, should bear the risk on engaging in a usurious transaction."

Justice Ben Miller wrote the opinion for the unanimous decision in Commercial Mortgage & Finance Co. v. Life Savings of America. (129 Ill. 2d 42).

Chicago can't tax tampons

Illinois does not impose a sales tax on tampons and sanitary napkins; Chicago does. In its June 19 decision on a class action suit the Illinois Supreme Court struck down the city tax.

Under the voluntary payment doctrine a taxpayer cannot recover an illegally charged tax unless he or she did not know that the tax was illegal, or knew it was illegal but paid under duress. The court ruled that "tampons and sanitary napkins, which were created to absorb the consequences which flow from a natural biological process, are necessities." Since stores will not sell anything unless payment, including taxes, is made, purchasers are under duress even if they know that the tax is illegal. Further, "plaintiffs would suffer duress if they had to chose between paying the taxes and scouring the city and State to find a retail store that would allow them to purchase tampons and sanitary napkins without paying the taxes."

City and state laws are worded identically in exempting "medical appliances" from sales taxes. In 1985 the Illinois Department of Revenue began including tampons and sanitary napkins within that category. Since the Chicago City Council expressed the intention to keep its structure consistent with the state's and since its Department of Revenue has consistently altered its rules to run parallel with the state's, the court ruled that it should do so in this instance as well.

Justice Horace L. Calvo wrote the opinion in Geary v. Dominick's Finer Foods (Docket No. 67049); Justice John J. Stamos did not participate.

F. Mark Siebert

August & September 1989 | Illinois Issues | 57