S. Buchsbaum & Co. v. Gordon

• Court: Illinois Supreme Court
• Writing for the Court: SMITH
• Citation: S. Buchsbaum & Co. v. Gordon, 389 Ill. 493, 59 N.E.2d 832 (Ill. 1945)
• Decision Date: 20 March 1945
• Docket Number: No. 28416.,28416.
• Parties: S. BUCHSBAUM & CO. et al. v. GORDON, Director of Labor.

389 Ill. 493

59 N.E.2d 832

S. BUCHSBAUM & CO. et al.

v.GORDON, Director of Labor.

No. 28416.

Supreme Court of Illinois.

Jan. 17, 1945.

As Modified on Denial of Rehearing March 20, 1945.

Appeal from Circuit Court, Cook County; Harry M. Fisher, judge.

Proceeding by S. Buchsbaum & Co. on a claim for refund or credit for alleged excessive contributions to unemployment compensation fund filed with Director of Labor. The Director denied the refund and dismissed the claim and claimant brought certiorari to the circuit court, where the cause was consolidated with several suits brought by various employers against the Director for writs of mandamus ordering the Director to expunge from his records the entry fixing contribution rate determined for each petitioner for the year 1944 under the Unemployment Compensation Act. From orders confirming Director's action in disallowing the claim for credit or refund and quashing the writ of certiorari, and, in the mandamus cases, sustaining Director's motions to strike and dismissing the petitions, the claimant and petitioners appeal.

Affirmed.

Moses, Kennedy, Stein & Bachrach, Brown, Fox & Blumberg, Daily, Dines, White & Fiedler, Eckhart, Klein, McSwain & Campbell, Henry J. & Charles Aaron, Kirkland, Fleming, Green, Martin & Ellis, and Pope & Ballard, all of Chicago, and Barr & Barr, of Joliet (Walter H. Moses, Walter Bachrach, and Robert C. Kelso, all of Chicago, of counsel), for appellants.

George F. Barrett, Atty. Gen. (William C. Wines, of Chicago, of counsel), for appellee.

SMITH, Justice.

This cause originated in a claim for refund or credit, filed with the Director of the Department of Labor, under section 25(d) of the Unemployment Compensation Act, Ill.Rev.Stat.1943, c. 48, s 242(d). The claim was filed by S. Buchsbaum & Co. The Director denied a refund and dismissed the claim. The claimant removed the cause to the circuit court of Cook county by certiorari. In the circuit court, thirteen mandamus suits, brought by various employers against the Director, were consolidated with the certiorari case. The petitions for mandamus in each case prayed for a writ ordering the Director of Labor to expunge from his records, kept pursuant to the Unemployment Compensation Act, the entry fixing the contribution rate determined for each petitioner for the calendar year 1944. The circuit court, upon a hearing, confirmed the action of the Director disallowing the claim for credit or refund, and quashed the writ of certiorari. In the mandamus cases, the motions of the Director to strike were sustained, and the petitions were dismissed. This appeal seeks a review of all of those orders.

In all of the cases, the issue was raised as to whether section 18(c)(5)(B) of the Unemployment Compensation Act, as amended in 1943, Ill.Rev.Stat.1943, c. 48, s 234(c)(5)(B), constitutes any part of the law of Illinois. It is contended that said section of the Unemployment Compensation Act, as amended in 1943, was repealed by the subsequent passage of another amendment to the same section, at the same session. It is also contended the said section violates various provisions of the constitution of the State and of the United States. In this opinion, S. Buchsbaum & Co. and the thirteen petitioners in the mandamus cases will be referred to, collectively, as appellants.

The Unemployment Compensation Act, originally enacted in 1937, creates a fund administered by the Director of Labor, available for the payment of unemployment compensation. This fund is maintained by the payment of contributions by employers subject to the act. The portion of the act dealing with the rates and payment of contributions by employers is section 18. Originally, section 18 imposed an arbitrary statutory rate of 2.7 per cent on the wages paid by each employer subject to the act. Thereafter, section 18 was amended so as to provide that the Director should determine the rate of contributions for all employers, based upon their employment experience and upon the employment experience in the State at large. The formula for computing and fixing the variable experience rates of contribution of employers for each year was set out in section 18(c).

In 1941, the legislature, obviously recognizing the need of a study of the provisions of the act relative to experience rating, enacted section 18(d) of the Unemployment Compensation Act. (Ill.Rev.Stat.1941, chap. 48, par. 234). By this act, the Board of Unemployment Compensation and the Free Employment Office Advisors, created by section 6 of the Civil Administrative Code, Ill.Rev.Stat.1943, c. 127, s 6, were authorized and directed to study and examine the provisions of the Unemployment Compensation Act providing for experience rating, in order to determine whether the rates of contributions for the calendar year 1943, and each year thereafter, would be sufficient to replenish the amount of benefits paid out, and to determine the effect of experience rating upon labor and industry. They were directed to submit their findings and recommendations, based on such findings, to the sixty-third General Assembly. Such investigation was conducted and findings made. A report was transmitted to the Governor and to both Houses of the General Assembly on April 27, 1943. As a basis for determining the purpose of the amendments hereinafter considered, and the evils sought to be remedied, a quotation from that report is pertinent:

‘These war expanded employers under the experience rating plan are being assigned reduced rates of contributions which reduced rates of contribution were earned on the basis of the three prior years of experience which included both non-war and war production and represented much smaller pay rolls. The result is that these war expanded employers during this period would pay contributions at these reduced rates on increased pay rolls and would thus not bear a fair share of the potential postwar burden. Clearly, when these employers contribute at reduced rates they cannot contribute an amount sufficient to take care of the potential liability created by their workers employed in these war expanded industries, who are acquiring benefit rights which are many times greater than the contributions which are being or will be paid on their wages. Moreover, even if these employers are assigned higher rates under the experience rating plan in the postwar period, such higher rates on reduced pay rolls will not result in a sufficient yield of contributions to meet the benefits paid to the workers laid off by these employers.’

On May 6, 1943, two bills were introduced in the Senate. These bills were numbered 398 and 399. Senate Bill No. 398 amended section 18, only, of the Unemployment Compensation Act. Senate Bill No. 399 amended various sections of said act, including section 18. The amendment of section 18, as set out in Senate Bill No. 398, was substantially identical with the amendment of section 18 made by Senate Bill No. 399, except that section 18, as amended by Senate Bill No. 398, contained what is referred to in the record and in the briefs as the ‘War Risk Amendments.’ Said amendments will be hereinafter so designated and referred to in this opinion. By these amendments, it was provided that ‘(B) Any provision of this ection to the contrary notwithstanding,’ certain war risk rates were to be paid for the last six months of the calendar year 1943, applicable to wages paid in excess of $50,000, and for the calendar years 1944 and 1945, applicable to wages paid in excess of $100,000, by certain employers subject to the act.

Treating the War Risk Amendments as a part of section 18, the Director made contribution rate determinations for appellants for the year 1944, in accordance with those amendments. With respect to S. Buchsbaum & Co., and all of the petitioners in the mandamus suits, except four, he determined in each case a rate based upon benefit experience ranging between .5 per cent and 1.5 per cent, applicable to wages paid during 1944, not in excess of $100,000, and an additional rate of 2.7 per cent applicable to wages paid during the year 1944, in excess of $100,000. The record shows that the pay roll of each had increased, in the calendar year 1943, more than 150 per cent over their respective pay rolls for the calendar year 1940. As to the petitioners in the mandamus suits, not included in the above computation, the Director fixed their rates at .5 per cent, applicable to the first $100,000 of wages paid during the year 1944, and an additional rate of 2 per cent, applicable to wages paid in excess of $100,000. The record shows that the pay roll of each of these petitioners increased, in the calendar year 1943, more than 100 per cent but less than 150 per cent over their respective pay rolls for the calendar year 1940. The computations made by the Director are not questions as to their mathematical accuracy. Nor is there any question raised that such computations were made in accordance with the War Risk Amendments of section 18 of the Unemployment Compensation Act, as amended by Senate Bill No. 398. The sole question presented on this branch of the case is whether section 18, as amended by Senate Bill No. 398, was repealed by the passage of Senate Bill No. 399 later on the same day. The legislative history of Senate Bills Nos. 398 and 399 is as follows:

As already observed, the two bills were introduced on the same day. Senate Bill No. 398 was passed by the Senate without amendment, on June 16, 1943. It was passed by the House without amendment, during the morning session of June 24, 1943. Senate Bill No. 399 was passed by the Senate on June 9, 1943. It was amended in the House, and as amended, passed by the House during the morning of June 24, 1943, immediately preceding the passage of Senate Bill No. 398. It was then returned to the Senate for concurrence in the House amendment. The House amendment to Senate Bill No. 399 was concerred in by the Senate on...