Goral v. Dart , 2019 IL App (1st) 181646 ( 2019 )

2019 IL App (1st) 181646
THIRD DIVISION
June 19, 2019
No. 1-18-1646
IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
MATTHEW GORAL, KEVIN BADON, MICHAEL ) Appeal from the Circuit Court of
MENDEZ, MILAN STOJKOVIC, DAVID EVANS III, ) Cook County.
FRANK DONIS, and LASHON SHAFFER, on behalf )
of themselves and others similarly-situated, )
)
Plaintiffs-Appellants, )
)
v. ) No. 17 CH 15546
)
THOMAS J. DART (Official and Individual Capacity); )
COOK COUNTY, ILLINOIS; the COOK COUNTY )
SHERIFF’S MERIT BOARD; and TONI ) Honorable Sophia H. Hall,
PRECKWINCKLE (Official and Individual Capacity), ) Judge Presiding.
)
Defendants-Appellees )
JUSTICE ELLIS delivered the judgment of the court, with opinion.
Presiding Justice Fitzgerald Smith and Justice Cobbs concurred in the judgment and
opinion.
OPINION
¶1 Plaintiffs here are employees of the Cook County Sheriff, whom the Sheriff has charged
with disciplinary infractions. From the outset of their administrative cases before the Cook
County Sheriff’s Merit Board (Board), almost all of which remain pending, plaintiffs have
challenged the authority of the Board to hear their cases, based on claims that the Board is
No. 1-18-1646
illegally constituted. They also filed a separate lawsuit—the one before us—likewise challenging
the Board’s authority to adjudicate their cases.
¶2 The trial court dismissed the complaint for lack of subject-matter jurisdiction, reasoning
that plaintiffs were required to first exhaust their administrative remedies before proceeding with
this claim.
¶3 In addition to urging us to affirm on this basis, the Sheriff principally argues that the
complaint’s challenge to the Board’s authority is barred by the “de facto officer” doctrine, which
this court has employed to reject several similar challenges by Sheriff’s employees to the
Board’s authority in the last two years.
¶4 We hold that plaintiffs may proceed with nearly all of their claims in this lawsuit,
notwithstanding their failure to exhaust administrative remedies. And we find the “de facto
officer” doctrine inapplicable to this matter. We affirm in part as modified, reverse in part, and
remand with instructions.
¶5 BACKGROUND
¶6 The sequence of events is critical to our analysis. Some of the facts are subject to judicial
notice. See Thurman v. Department of Public Aid, 25 Ill. App. 3d 367, 370 (1977). Others come
from allegations in the complaint, which we accept as true, as the complaint was dismissed at the
pleading stage. Callaghan v. Village of Clarendon Hills, 401 Ill. App. 3d 287, 290 (2010).
¶7 On February 3, 2016, Sheriff Dart filed charges against one of the plaintiffs in this case,
Frank Donis, and referred him to the Board for termination proceedings. Seven months later, in
September 2016, Sheriff Dart filed individual complaints against four other plaintiffs in this
case—Matthew Goral, Kevin Badon, Michael Mendez, and Milan Stojkovic—seeking to
terminate each employee.
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¶8 Five days after Goral, Badon, Mendez and Stojkovic were charged, on September 23,
2016, we issued our first decision in Taylor v. Dart, 2016 IL App (1st) 143684, vacated, 77
N.E.3d 86 (Ill. 2017). Taylor, a Sheriff’s employee who was terminated by the Board in a final
administrative decision, argued in court that the Board’s actions were void because the Board’s
composition violated state law. He argued that one of the Board members, Mr. Rosales, had been
appointed on an interim basis, but state law did not provide for interim appointments.
¶9 We agreed. We held that the interim appointment of Rosales violated state law. Id. ¶ 36.
And we held that the illegal composition fatally compromised the Board’s authority to act,
rendering its final decision against Taylor void. Id. ¶ 47.
¶ 10 The Sheriff appealed. On January 25, 2017, the supreme court denied review but, in a
supervisory order, directed this court to vacate our judgment and decide an issue we had declined
to consider regarding Cook County’s home-rule authority.
¶ 11 On February 21, 2017, the Sheriff suspended plaintiff David Evans III. The next day, the
Sheriff filed a complaint against Evans with the Board, seeking his termination.
¶ 12 Our second decision in Taylor, 2017 IL App (1st) 143684-B, was issued on May 12,
2017. Our holding was the same: the interim appointment of Rosales violated state law, and the
Board’s final decision terminating Taylor was void, because the Board lacked statutory authority
to issue the decision. Id. ¶¶ 37, 46.
¶ 13 On July 20, 2017, Sheriff Dart suspended without pay the last of our plaintiffs, Lashon
Shaffer, and filed a complaint with the Board seeking Shaffer’s termination.
¶ 14 During the preliminary stages of their administrative proceedings before the Board,
plaintiffs raised arguments challenging the Board’s statutory authority to hear their cases, based
in part but not entirely on Taylor. The Board thus far has declined to consider those arguments.
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¶ 15 More importantly, in November 2017, plaintiffs initiated this lawsuit by filing a verified
complaint for declaratory, injunctive, and monetary relief against the Sheriff. At least in part, the
complaint challenged the legal composition of the Board, and thus the Board’s authority to enter
final decisions against them.
¶ 16 On December 8, 2017, the General Assembly, in response to our decision in Taylor,
amended the state law governing Board appointments. See Pub. Act 100-562, § 5 (eff. Dec. 8,
2017) (amending 55 ILCS 5/3-7002). The amendment worked three changes: (1) it permitted the
Sheriff to make interim appointments to the Board, (2) it abolished all existing terms of each
member of the Board, and (3) it created a new schedule for staggering terms. Id.
¶ 17 On December 13, 2017, the Sheriff appointed a new Board (many of whom had been on
the previous Board as well).
¶ 18 On January 23, 2018, the Sheriff filed, and the new Board received, “amended”
complaints against each of the plaintiffs.
¶ 19 On February 26, 2018, plaintiffs filed a second amended verified complaint against the
Sheriff, the one before this court now, to which we will refer simply as the “complaint.” The
complaint, among other things, challenged the legal composition of the Board—both the
previous Board before which their charges were originally brought and the new Board hearing
the “amended” charges against them.
¶ 20 The complaint’s allegations involving the previous Board were that (a) some members
were illegal interim appointees, essentially a Taylor objection; (b) the Board had only five
members, not the required seven; (c) some of the members’ terms were not staggered as required
by state law; and (d) the Board’s chairperson and secretary held their positions longer than
permitted under state law.
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¶ 21 The complaint’s allegations against the new Board were (a) the Board’s previous lack of
authority could not be “cured” by filing “amended” charges with a new Board; (b) the Board’s
political composition violates state law; (c) the Board’s chairperson and secretary continue to
hold their positions longer than permitted under state law; (d) the Board created “fatal due
process problems” by now requiring plaintiffs to pay the costs of their own hearing transcripts;
and (e) the Board is biased, in “lockstep” with the Sheriff’s wishes.
¶ 22 On the Sheriff’s motion, the circuit court dismissed the complaint for lack of subject-
matter jurisdiction. The court ruled that plaintiffs were required to exhaust their administrative
remedies before raising these claims outside the context of administrative review.
¶ 23 Since that ruling and while this appeal was pending, the Board decided Evans’s case. The
Board found in favor of Evans and ordered him reinstated effective February 22, 2017. The
Sheriff has appealed that decision, but that decision is not before us.
¶ 24 ANALYSIS
¶ 25 The trial court dismissed the complaint for lack of subject-matter jurisdiction pursuant to
section 2-619(a)(1) of the Code of Civil Procedure. See 735 ILCS 5/2-619(a)(1) (West 2018). A
section 2-619 motion admits the legal sufficiency of the complaint; we accept as true the
complaint’s allegations and interpret them in the light most favorable to plaintiffs. American
Family Mutual Insurance Co. v. Krop, 2018 IL 122556, ¶ 13; In re Appointment of Special
Prosecutor, 2019 IL 122949, ¶ 28. Our review is de novo. Krop, 2018 IL 122556, ¶ 13.
¶ 26 The basis for the trial court’s ruling was that each plaintiff had pending an administrative
hearing that had not been completed, and that plaintiffs were required to exhaust their
administrative remedies before they could challenge the agency’s statutory authority before a
court. The Sheriff defends that ruling but adds other bases for affirmance as well, as we may
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affirm on any basis in the record. McDonald v. Lipov, 2014 IL App (2d) 130401, ¶ 14. We will
begin with the basis articulated by the trial court, lack of subject-matter jurisdiction based on
plaintiffs’ failure to exhaust administrative remedies, because the question of the court’s
jurisdiction should be resolved as a threshold question. People v. Shinaul, 2017 IL 120162, ¶ 7.
¶ 27 I
¶ 28 The court’s subject-matter jurisdiction refers to its power to hear and resolve cases. In re
Luis R., 239 Ill. 2d 295, 300 (2010). Generally, the constitution gives the court original subject-
matter jurisdiction over all “justiciable matters.” Ill. Const. 1970, art. VI, § 9. One exception,
however, is the review of administrative actions, which is governed by statute. Id.; see Belleville
Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 334 (2002).
¶ 29 The Administrative Review Law governs judicial review of most final administrative
decisions, including final decisions of the Board here. See 735 ILCS 5/3-101 et seq. (West
2018). More to the point, the Administrative Review Law is “the sole and exclusive method to
obtain judicial review of a final administrative decision” by the Board. Stykel v. City of Freeport,
318 Ill. App. 3d 839, 843 (2001).
¶ 30 Thus, generally speaking, a party aggrieved by agency action cannot involve the courts
until the administrative process has run its course—that is, until the plaintiff has exhausted all
administrative remedies. Castaneda v. Illinois Human Rights Commission, 132 Ill. 2d 304, 308
(1989). But the exhaustion requirement is subject to six exceptions. Id. at 309. Two are relevant
here. First, a party need not exhaust when “the agency’s jurisdiction is attacked because it is not
authorized by statute.” Id. Second, exhaustion is excused when “the agency cannot provide an
adequate remedy or where it is patently futile to seek relief before the agency.” Id.
¶ 31 A
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¶ 32 We first consider whether the exhaustion exception for challenges to an agency’s
authority applies to this case. In the context of administrative agencies, the term “jurisdiction”
refers to an agency’s statutory authority to act. Van Dyke v. White, 2019 IL 121452, ¶ 43 n.4;
Business & Professional People for the Public Interest v. Illinois Commerce Commission, 136
Ill. 2d 192, 243 (1989); Mercury Sightseeing Boats, Inc. v. County of Cook, 2019 IL App (1st)
180439, ¶ 54 (“When we speak of an administrative agency’s ‘jurisdiction,’ we mean its
authority to act.”). Agencies have no inherent or common-law authority; their power is limited to
that given them by the legislative body that created them. Mercury, 2019 IL App (1st) 180439, ¶
54. So if an agency acts beyond its statutory authority—if it acts without “jurisdiction”—its
actions are invalid and void.
¶ 33 At oral argument, the Sheriff’s counsel suggested that agency jurisdiction is merely a
question of whether the enabling statute granted the agency power to regulate in a particular
field. But that only tells half the story. True enough, as counsel argues, agency jurisdiction often
involves a question of whether and to what extent an agency is substantively empowered to act.
See, e.g., Crittenden v. Cook County Commission of Human Rights, 2013 IL 114876, ¶ 34
(rejecting agency’s claim that it possessed statutory authority to award punitive damages);
Abatron, Inc. v. Department of Labor, 162 Ill. App. 3d 697, 701 (1987) (holding that Department
of Labor was not authorized to initiate enforcement proceedings under authorizing statute); City
of Chicago v. Fair Employment Practices Commission, 65 Ill. 2d 108, 115 (1976) (“We hold the
Commission was without power to award attorney fees and that its order doing so was void and
subject to the collateral attack made upon it is the circuit court.”).
¶ 34 But there’s also a procedural aspect to agency authority. Sometimes, an agency’s
enabling statute creates procedural steps that an agency—or the parties wishing to appear before
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the agency—must follow. The failure to follow those steps deprives the agency of authority—
i.e., jurisdiction—to hear the case. Mercury, 2019 IL App (1st) 180439, ¶¶57-61; Austin Gardens,
LLC v. City of Chicago Department of Administrative Hearings, 2018 IL App (1st) 163120, ¶ 23;
Modrytzkji v. City of Chicago, 2015 IL App (1st) 141874, ¶ 14.
¶ 35 Indeed, in Taylor, 2017 IL App (1st) 143684-B, ¶¶ 37, 46, we found the Sheriff’s interim
appointment of Rosales procedurally impermissible under the Code, which rendered the entire
validity of the Board’s proceedings in Taylor’s case void, rather than voidable—a telling
distinction, because only decisions that were entered without jurisdiction are void.
¶ 36 Likewise, in Vuagniaux v. Department of Professional Regulation, 208 Ill. 2d 173, 186
(2003), our supreme court invalidated the decision of a board to fine and reprimand Vuagniaux,
because that board had appointed a temporary member to replace a disqualified one in hearing
Vuagniaux’s case. The enabling statute (the Medical Practice Act) allowed only the governor to
appoint members to the board, and the board’s authority, derived from that statute, was thus
limited by that statute. Id. Because the board “had no authority” to appoint the temporary
member, “it was not lawfully constituted at the time it recommended that Vuagniaux be
reprimanded and fined.” Id. As a result, our supreme court held that the Department’s decision
was “invalid and cannot be given effect.” Id.
¶ 37 Similarly, in Daniels v. Industrial Commission, 201 Ill. 2d 160, 166-67 (2002), the
supreme court held that two members of the Industrial Commission were illegally appointed, and
thus that commission’s final decision was invalid and void.
¶ 38 As in Vuagniaux, Daniels, and Taylor, the complaint here alleges several defects in the
Board’s composition, which plaintiffs claim would nullify the Board’s authority to adjudicate the
administrative actions against plaintiffs. As noted earlier, plaintiffs allege that “the Board has
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either had illegally-appointed members with unlawful terms of less than six years, had illegally-
appointed members with non-staggered terms, been composed of only five members, failed to
meet the Act’s political affiliation requirements, and/or had a chairperson and secretary who
occupied such positions in excess of the statutory limit.”
¶ 39 At this stage, the merit of these allegations is beside the point. The important point here is
that these allegations unquestionably challenge the Board’s lawful composition, and thus its
authority to act. They clearly fit within the authority exception to the exhaustion requirement.
Castaneda, 132 Ill. 2d at 308.
¶ 40 The reasons that parties need not exhaust administrative remedies before challenging the
statutory authority of the agency should be obvious. For one thing, if the Board lacks the
authority to hear the case, the merits of the underlying case are irrelevant, so there is no reason
why a court should wait for a developed underlying record to decide that legal question. See
County of Knox ex rel. Masterson v. Highlands, L.L.C., 188 Ill. 2d 546, 552 (1999) (“This court
has explained that where an agency’s statutory authority to exercise jurisdiction is at issue, no
questions of fact are involved. The agency’s particular expertise is not implicated in the
necessary statutory interpretation.”). And second, agencies generally do not decide questions of
their own statutory authority. Id. at 554 (“The determination of the scope of the agency’s power
and authority is a judicial function and is not a question to be finally determined by the agency
itself.”); see also Cinkus v. Village of Stickney Municipal Officers Electoral Board, 228 Ill. 2d
200, 210 (2008) (“[A]n agency’s decision on a question of law is not binding on a reviewing
court. For example, an agency’s interpretation of the meaning of the language of a statute
constitutes a pure question of law. Thus, the court’s review is independent and not deferential.”).
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¶ 41 This case is a perfect example. The complaint alleges that each plaintiff has raised
statutory-authority questions before the Board, but the Sheriff has taken the position that the
Board can’t decide such questions, and thus far the Board has not. The Board’s (alleged) refusal
to even address plaintiffs’ statutory authority claim within the confines of the agency’s hearing
process is strong evidence that the claim is not subject to the usual exhaustion requirement. See
Mercury, 2019 IL App (1st) 180439, ¶¶ 70-71. And anyway, even if an agency were inclined to
decide such an issue, these questions would be subject to de novo review by a court.
¶ 42 That is not to say that a party can’t exhaust its administrative remedies before raising
such questions. To the contrary, parties often exhaust their administrative remedies and then
raise the statutory-authority question to the court on administrative review. One such example is
Taylor, 2017 IL App (1st) 143684-B, ¶ 10. Another is Daniels, 201 Ill. 2d at 866. Each of those
plaintiffs played out the administrative proceeding to its conclusion, then raised the statutory-
authorization question on administrative review. It is a perfectly appropriate course of action.
But the law does not require that of a party challenging the legal composition of the governing
agency or board. The law allows parties to go straight to court, in advance of the conclusion of
administrative proceedings, should it choose to do so. Castaneda, 132 Ill. 2d at 308.
¶ 43 Having found that the authority exception to the exhaustion requirement applies, we must
determine which of plaintiffs’ claims actually challenge the Board’s authority.
¶ 44 1
¶ 45 First and most obviously, as already noted, plaintiffs’ allegations that the Board “had
illegally appointed members,” that the Board’s members were not “legal members,” and was
“illegal and unlawfully constituted,” all call into question the propriety of the Board’s
composition and thus authority to act. Those claims are not barred by the exhaustion doctrine.
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¶ 46 2
¶ 47 We also find that plaintiffs’ claims for backpay are included within this exception to the
exhaustion requirement, though at first blush that might not appear to be the case.
¶ 48 The gist of plaintiffs’ backpay claim is this: Because the Board was improperly
constituted when the Sheriff originally filed charges with the Board (per Taylor), the filing of
those charges was a nullity—the Board couldn’t transact any business. And at that time, state
law, according to plaintiffs, did not permit the Sheriff to suspend an employee for more than 30
days without filing written charges. They claim, in other words, that the Sheriff had only two
choices as of day 31 of an employees’ suspension: file written charges or reinstate the employee.
Because he couldn’t file written charges without a valid Board in place, his only option was
reinstatement of these employees. Thus, plaintiffs claim, they are entitled to their salaries
(backpay, at this point) for every day they were suspended after day 30.
¶ 49 Even stopping right there, the backpay claims argues a lack of statutory authority in two
distinct ways. First, the written charges were invalid, because the Board was invalid and lacked
authority to act, per Taylor. And second, the Sheriff lacked authority to suspend for more than 30
days without formally charging them, which he could not do absent a validly composed Board.
¶ 50 Plaintiffs further claim that nothing changed when the Sheriff reconstituted the new
Board under the new state law and filed “amended” charges against them. First, because the new
Board also has fatal composition defects, so the charges remain a nullity. And second, they say,
because you can’t “amend” a charge that was a nullity in the first place.
¶ 51 We express no opinion whatsoever on the merits of this claim. It was difficult to
untangle, and it has not been fully briefed. But the merits are beside the point. The salient point
is that the claim for backpay is based, in more ways than one, on the Board’s or the Sheriff’s
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statutory authority (or lack thereof) to act, and thus this claim is also excepted from the
exhaustion doctrine.
¶ 52 The Sheriff says the backpay claim requires exhaustion, because the Board, and not a
circuit court, is the proper entity to enter an award of backpay. That would be true if the question
was a factual one that “required the taking of additional evidence.” Cole v. Retirement Board of
Policemen’s Annuity & Benefit Fund of City of Chicago, 396 Ill. App. 3d 357, 372 (2009)
(discussing Mitchem v. Cook County Sheriff’s Merit Board, 196 Ill. App. 3d 528 (1990)). But the
predominant questions here are legal questions—questions of the Board’s and the Sheriff’s
statutory authority to act—which as we have already noted, are claims that need not be raised
before the agency and would be subject to de novo review, in any event. Highlands, L.L.C., 188
Ill. 2d at 554 (1999) (scope of agency’s power is ultimately judicial determination). They are not
barred by the exhaustion doctrine.
¶ 53 And the Sheriff’s argument misunderstands the nature of the backpay claim. Plaintiffs do
not want the Board to do anything, because they do not think the Board has the power to do
anything. Plaintiffs instead claim that they were suspended by the Sheriff without lawful
authority, and that they are therefore entitled to compensation to make them whole for the period
of time that they were unlawfully suspended (which they say continues on even today),
regardless of whether they win or lose their administrative hearings. We find no barrier to the
circuit court’s review of this question.
¶ 54 3
¶ 55 For many of the same reasons, we find that Counts 4 and 5 survive the exhaustion
doctrine. These are claims against the Sheriff for negligent misrepresentation and common-law
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fraud. Again, at first blush, they appear to have little to do with the Board’s lack of statutory
authority. But in fact, that statutory-authority argument is the foundation of each count.
¶ 56 Both counts allege that, by filing charges with a Board that was in fact invalid (per
Taylor), and in permitting those cases to go forward, the Sheriff and the Board made false
representations to plaintiffs regarding the validity and legality of the Board’s composition, and
thus to its ability to legally conduct business. These counts cannot be prosecuted with first
litigating the underlying question of the Board’s statutory authority.
¶ 57 We emphatically restate that we are not saying that these counts state a claim, or that
various arguments that the Sheriff or the Board might raise against these tort claims would or
would not succeed. Our only question is one of jurisdiction, and these tort claims are inherently
based on the Board’s lack of statutory authority. Thus, they survive the exhaustion bar.
¶ 58 B
¶ 59 That leaves three claims, all sounding in due process. One is that the Board’s new fee on
hearing transcripts violates plaintiff’s right to a fair hearing and due process. Another is that the
Board is inherently biased against plaintiffs, as the person charging them with infractions—the
Sheriff—is the one who appointed the members of the Board. And third, the Board is biased
against plaintiffs for filing this lawsuit, as evidenced by several unflattering comments the
Sheriff (in a brief adopted by the Board) has made about plaintiffs in this litigation.
¶ 60 Plaintiffs claim that it would be futile to exhaust administrative remedies as to these
claims. Futility is another exception to the exhaustion doctrine. Castaneda, 132 Ill. 2d at 308–09.
As these three due-process arguments are different, the application of the futility doctrine to each
of them must be considered separately.
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¶ 61 1
¶ 62 First, we consider plaintiffs’ claim that the Board is irretrievably biased against them and
in favor of the Sheriff, because each Board member owes his or her appointment to the Sheriff.
One might view this as a facial due process challenge to the statute that permits the Sheriff to
appoint members of the Board, because what is true for plaintiffs is true for every litigant who
comes before the Board: they are facing a Board appointed by the Sheriff—the prosecutor, so to
speak. See People v. Thompson, 2015 IL 118151, ¶ 36 (discussing facial, compared to as-
applied, constitutional challenges). That distinction is important, because a facial challenge to
government action is another exception to the exhaustion bar. See Castaneda, 132 Ill. 2d at 309.
¶ 63 But plaintiffs emphatically disavow any suggestion that they are raising a facial
challenge. They claim to be raising an as-applied challenge, which means that they seek only a
determination that their due process rights have been violated. Thompson, 2015 IL 118151, ¶ 36.
And as we’ve said, they rely not on the facial-challenge exception to the exhaustion bar but on
the futility exception.
¶ 64 “An aggrieved party may seek judicial review of an administrative decision without
complying with the exhaustion of remedies doctrine *** where the agency cannot provide an
adequate remedy or where it is patently futile to seek relief before the agency.” Castaneda, 132
Ill. 2d at 308–09. Plaintiffs are claiming here that they can’t get a fair hearing before a Board that
was appointed by the very person who wants them fired, the Sheriff.
¶ 65 The parties have cited little case law on this topic, and in this specific context, little exists
within this jurisdiction. There is no doubt, however, that an agency’s bias could, in the proper
setting, serve as a basis for claiming that going through the exercise of an administrative hearing
before that agency is pointless, a preordained outcome—futile. See McCarthy v. Madigan, 503
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U.S. 140, 148 (1992) (“[A]n administrative remedy may be inadequate where the administrative
body is shown to be biased or has otherwise predetermined the issue before it.”).
¶ 66 For example, if the agency or agency head has already publicly stated the outcome, the
litigant has demonstrated the futility of going through a kangaroo hearing. See, e.g., Houghton v.
Shafer, 392 U.S. 639, 640 (1968) (in view of Attorney General’s submission that challenged
prison rules were “validly and correctly applied to petitioner,” requiring administrative review
through a process culminating with Attorney General “would be to demand a futile act”); Carter
v. Signode Industries, Inc., 688 F. Supp. 1283, 1287 (N.D.Ill.1988) (ERISA claim seeking
adjustment of benefits was not barred by failure to exhaust administrative remedies; exhaustion
was futile, as plan director had already “made it clear that no adjustments were forthcoming”).
¶ 67 We don’t have that situation here. The complaint does not allege that the Board has pre-
announced its conclusions. Plaintiffs merely allege a conflict of interest, nothing more. Yes, that
opens the door to the possibility of bias—as is true of any conflict of interest—but courts that
have considered the question have never found the possibility of bias to be sufficient.
¶ 68 “Administrative review is not futile if the plaintiff's allegations of bias are purely
speculative.” Joint Board of Control of Flathead, Mission & Jocko Irrigation Districts v. United
States, 862 F.2d 195, 200 (9th Cir. 1988). Courts require “‘[o]bjective and undisputed evidence
of administrative bias [that] would render pursuit of an administrative remedy futile.” (Internal
quotation marks omitted.) Artis v. Greenspan, 223 F. Supp. 2d 149, 154–55 (D.D.C. 2002). “A
pessimistic prediction or a hunch that further administrative proceedings will prove
unproductive” is not enough to bypass the exhaustion requirement. Portela-Gonzalez v.
Secretary of the Navy, 109 F.3d 74, 78–79 (1st Cir. 1997). In the Seventh Circuit, the futility
exception requires plaintiffs to show “ ‘that it is certain that their claim will be denied on appeal,
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not merely that they doubt an appeal will result in a different decision.’ ” Citadel Securities, LLC
v. Chicago Board Options Exchange, Inc., 808 F.3d 694, 700 (7th Cir. 2015) (quoting Smith v.
Blue Cross & Blue Shield United of Wisconsin, 959 F.2d 655, 659 (7th Cir.1992)).
¶ 69 The fact that the Board members adjudicating plaintiffs’ cases were appointed by one of
the parties to the administrative proceeding, the Sheriff, certainly leaves open the possibility that
the Board members may be biased in favor of the Sheriff. But that is not nearly enough to avoid
the exhaustion bar. And we hasten to take judicial notice (without objection from the parties) that
one of the plaintiffs in this case, Evans, has now had his case adjudicated by the Board, and he
prevailed. True, there appears to be some unhappiness with the victory relating to backpay, but
the point remains that this allegedly biased Board ruled, at least in large part, in favor of one of
the plaintiffs and against the Sheriff. This only underscores that plaintiffs have alleged nothing
more than the possibility of bias, which is not sufficient to overcome the exhaustion bar.
¶ 70 Thus, plaintiffs’ due process argument relating to the Board’s bias, based on the Sheriff’s
appointment of the Board members to their positions, is barred and was properly dismissed.
¶ 71 2
¶ 72 We would say the same of plaintiffs’ other due process argument sounding in bias,
namely the Board members’ hostility to plaintiffs stemming from this lawsuit, and the Board’s
joining of the Sheriff’s appellate briefs, which contain unflattering remarks about plaintiffs.
¶ 73 The fact remains that it is mere speculation that the Board members will not do their jobs
and give plaintiffs fair hearings. And speculation is not enough. “[A] party’s suspicion of ‘bias
on the part of a *** commission,’ based on members’ allegedly hostile comments, ‘does not
render pursuit of administrative remedies futile.’ ” Holt v. Town of Stonington, 765 F.3d 127, 132
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(2d Cir. 2014) (quoting Simko v. Ervin, 661 A.2d 1018, 1023 (Conn. 1995)). As plaintiff Evans’s
victory shows, it is nowhere near a preordained conclusion that plaintiffs will lose their cases.
¶ 74 This due process claim, likewise sounding in bias, was also properly dismissed based on
failure to exhaust administrative remedies.
¶ 75 3
¶ 76 That leaves one final due process claim, which is different than the “bias” claims.
Plaintiffs allege that during the pendency of their cases before the Board, the Board amended its
rules to require that the party requesting a hearing transcript pay for the transcript. The complaint
in this regard is short on details; plaintiffs simply allege that imposing the transcript fee on them
would “violate[] their right to due process and fundamental fairness, and unconstitutionally
burden[] their right to a hearing.”
¶ 77 We again note that this could be a facial due process challenge to the transcript-fee rule,
as it appears to apply equally to all litigants before the Board, but again plaintiffs insist they are
raising no such claim. This is an as-applied challenge, they say, so the facial-constitutional-
challenge exception to exhaustion is not in play. Instead, they again raise what we call the futility
exception, albeit a slight variation on it, where the exhaustion requirement is waived because the
administrative action “cannot provide an adequate remedy.” Castaneda, 132 Ill. 2d at 308–09.
¶ 78 We see this claim differently than the other due process claims. Plaintiffs allege that they
have suffered financially by being suspended without pay for a quite lengthy time, and that
imposing this additional financial cost (mid-stream during the administrative action, no less)
injures their right to a fair hearing. No doubt, parties in litigation often want access to transcripts
of their hearings for various reasons, including preparing for the next day’s hearing, drafting
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cross-examinations of witnesses by reviewing their previous direct testimony, and if nothing else
having the transcripts to prepare proposed findings of fact at the close of the case.
¶ 79 We are sympathetic to plaintiffs who have gone months if not years without a paycheck,
who must hire lawyers to fight for the jobs, and who now are tasked with yet another financial
burden. And we agree that if the imposition of the transcript fee prevents them from obtaining
the transcripts, then in a very real sense they are being denied the right to a fair hearing. It would
be illogical to require plaintiffs to exhaust their administrative remedies in that event, because
their whole point is that they can’t exhaust them, at least not in a fair and meaningful way, not
without one hand tied behind their back. In a real sense, plaintiffs could establish that the
administrative action “cannot provide an adequate remedy.” Castaneda, 132 Ill. 2d at 308–09.
¶ 80 But plaintiffs haven’t pleaded that they can’t afford the transcript fees and thus will be
denied the transcripts. They have pleaded that this fee is unfair and burdensome, but unless they
can plead that they are unable to afford the fees, and thus unable to acquire hearing transcripts,
we do not see how they can fit into this exception to the exhaustion requirement.
¶ 81 Plaintiffs should be given an opportunity to amend their pleading in this regard, if they
can do so in good faith, of course. If they do not so amend, this due process claim should be
dismissed for failure to exhaust administrative remedies. If they so plead, then the exhaustion
requirement does not bar this claim, and the court has jurisdiction to consider it. As always
throughout this discussion, we express no opinion on the merits of the claim.
¶ 82 D
¶ 83 To summarize: The court has subject-matter jurisdiction over counts 1 (declaratory
judgment), 2 (injunctive relief), and 3 (mandamus), except insofar as plaintiffs raise due process
challenges based on the Board’s bias. To the extent those counts include these bias claims, the
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exhaustion doctrine bars them, and those claims should be dismissed. Otherwise, those counts
survive the exhaustion requirement.
¶ 84 As for the due process claim related to the Board’s imposition of a fee on hearing
transcripts, the exhaustion doctrine would not bar it, provided that plaintiffs can allege in good
faith that this fee will prevent them from obtaining hearing transcripts. Plaintiffs should be given
the option to replead if they so wish. If they properly do so, that due process claim is not barred
by the failure to exhaust. If they decline that option or fail to properly plead it, that claim should
be dismissed for failure to exhaust administrative remedies.
¶ 85 The court has subject-matter jurisdiction over Counts 4 and 5, the rather creative tort
claims plaintiffs assert. The exhaustion requirement does not bar them.
¶ 86 Count 6 is a prayer for class certification. At this juncture, there is no basis to dismiss that
count, given that much of the complaint from which it derives has survived.
¶ 87 II
¶ 88 The Sheriff next argues that, even if the court had jurisdiction to hear these challenges,
we should affirm the dismissal of the complaint because it is barred by the “de facto officer”
doctrine.
¶ 89 “The de facto officer doctrine confers validity upon acts performed by a person acting
under the color of official title even though it is later discovered that the legality of that person’s
appointment or election to office is deficient.” Ryder v. United States, 515 U.S. 177, 180 (1995).
“Under the de facto officer doctrine, a person actually performing the duties of an office under
color of title is considered to be an officer de facto, and his acts as such an officer are valid so far
as the public or third parties who have an interest in them are concerned.” Vuagniaux, 208 Ill. 2d
at 186–87. The doctrine “ ‘springs from the fear of the chaos that would result from multiple and
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repetitious suits challenging every action taken by every official whose claim to office could be
open to question, and seeks to protect the public by insuring the orderly functioning of the
government despite technical defects in title to office.’ ” Ryder, 515 U.S. at 180-81 (quoting
63A Am.Jur.2d, Public Officers and Employees § 578, pp. 1080–1081 (1984)).
¶ 90 Simply put, the “de facto officer” doctrine protects the integrity of final agency decisions
handed down before a court has declared a board’s composition illegal. Though in hindsight we
know that those decisions were rendered by an agency with an invalid composition, the law
validates those old decisions, because it would be chaotic to uproot what could be hundreds or
thousands of prior decisions, as parties spring out of the woodwork to piggyback onto the court
ruling. To avoid that floodgate and to protect the finality of previous judgments, the law holds its
nose and deems those old decisions valid, even though in a technical sense they were not.
¶ 91 There is a catch, however, in Illinois. In this state, the first party to identify a legal defect
is entitled to relief, but once that first party secures the court ruling invalidating the Board’s
composition (and gets relief for having done so), any previous final decisions from that illegally-
constituted board are insulated from challenge, at least on that same legal theory. The reason for
this dichotomy is to incentivize parties to identify legal defects in appointed bodies—thus giving
the first one to identify the problem relief—but then promoting the finality of judgments and the
orderly administration of government by denying relief to Johnnies-come-lately.
¶ 92 That has been our take, at least, on some splintered decisions from our supreme court. In
Daniels, 201 Ill. 2d at 166-67, two justices held that Daniels was correct in arguing that the
Industrial Commission was illegally composed—two of the members were improperly
appointed—and thus the Commission’s final decision against Daniels was void. Id. at 166-67.
Two other justices, in a concurring opinion by Justice McMorrow, believed that Daniels was,
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indeed, correct and entitled to relief, but that no other parties should be allowed to challenge
Commission decisions on the same ground under the “de facto officer” rule. Id. at 173-78
(McMorrow, J., specially concurring in judgment, joined by Freeman, J.). One justice believed
that the “de facto officer” doctrine barred all challenges to the Commission’s authority—even
that of Daniels. Id. at 178-181 (Fitzgerald, J., dissenting).
¶ 93 And that same year, in Baggett v. Industrial Comm’n, 201 Ill. 2d 187 (2002), a case
involving that same Commission but not originally involving this doctrine, the losing party
sought a rehearing based on the same legal defect in the Commission’s composition as in
Daniels. While the majority denied the petition for rehearing without comment, three justices
would have granted it and sharply criticized the notion that the denial might be based on Justice
McMorrow’s belief that the first party to identify the Commission’s legal defect would be
entitled to relief, but any later litigant would not. Id. at 204 (Thomas, J., dissenting upon denial
of rehearing, joined by Garman and Fitzgerald, JJ.).
¶ 94 We have taken Justice McMorrow’s special concurrence in Daniels as the current
statement of the law. See Lopez v. Dart, 2018 IL App (1st) 170733, ¶ 58; Cruz v. Dart, 2019 IL
App (1st) 170915, ¶ 37. That is, under the “de facto officer” doctrine, the first party to correctly
identify a legal defect in an agency’s composition is entitled to relief—a voiding of the agency
decision—while others who later raise that same challenge are not.
¶ 95 And thus it has proceeded in cases involving the very Board before us. The first person to
successfully challenge the Board’s composition, Percy Taylor, got the relief he requested as a
result of winning his argument—the Board’s final decision was declared void. See Taylor, 2017
IL App (1st) 143684-B, ¶¶ 37, 46. But other Sheriff’s employees, trying to invalidate previous
final judgments based on the same or nearly same argument as in Taylor, were barred from doing
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so under the “de facto officer” doctrine. See Lopez, 2018 IL App (1st) 170733, ¶ 59 (“Since
[Lopez] is not the first claimant to have brought the illegal appointment of Rosales to light,” de
facto officer doctrine denied Lopez relief); Cruz, 2019 IL App (1st) 170915, ¶ 37 (quoting Lopez
for same point with regard to Cruz); Acevedo v. The Cook County Sheriff’s Merit Board, 2019 IL
App (1st) 181128, ¶ 25 (applying “de facto officer” doctrine to Acevedo’s claim because “he is
not the first one” to challenge appointment irregularity).
¶ 96 The Sheriff, then, argues here for a simple application of the “de facto officer” doctrine,
requiring a dismissal of this complaint. For two reasons, however, we find the “de facto officer”
doctrine inapplicable in this case.
¶ 97 First, there is a significant procedural difference between this case and the decisions cited
above. In each of those decisions, the Sheriff’s employee did not challenge the Board’s authority
until after the Board’s final decision was issued. See Acevedo, 2019 IL App (1st) 181128, ¶¶ 3-4;
Cruz, 2019 IL App (1st) 170915, ¶ 34; Lopez, 2018 IL App (1st) 170733, ¶¶ 37-39, 63.
¶ 98 So those employees’ challenges raised the very specter that the “de facto officer” doctrine
seeks to avoid—parties trying to revive concluded administrative actions based on a new court
ruling that declares invalid the board’s composition. See Lopez, 2018 IL App (1st) 170733, ¶ 58;
Daniels, 201 Ill. 2d at 176 (McMorrow, J., specially concurring). Those employees’ cases
weren’t particularly old, but they had been concluded at the administrative level before the
statutory-authorization issue was raised in court. From the standpoint of the “de facto officer
doctrine,” it would make no difference whether their administrative cases had been concluded six
months ago or six years ago.
¶ 99 Here, in contrast, at the time the complaint was filed, none of plaintiffs’ administrative
actions had gone to a final decision. Plaintiffs have been raising statutory-authorization
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arguments before the Board since their cases began, they continue to raise them, and they raised
them in this separate lawsuit. They have all but shouted them from the mountaintop—before a
final administrative was rendered.
¶ 100 That makes all the difference in the world. The “de facto officer” doctrine is concerned
with the fear of unearthing old decisions, possibly hundreds or thousands of them (depending on
how many decisions the illegally-constituted board decided in the past). But that doctrine is
not—and could not—be concerned with pending or brand-new cases. Once a court decides that a
board is illegally constituted, that board can’t keep hearing pending cases, much less entertain
newly-filed ones. To say otherwise would be to say that court decisions mean nothing.
¶ 101 The “de facto officer” doctrine looks backward. It does not look forward. Once a court
declares a board’s composition invalid, we may protect its old decisions, but we absolutely do
not allow it to keep doing business—illegally—as if we had never issued our ruling.
¶ 102 It so happens that here, the General Assembly responded rather promptly to the Taylor
decision and changed the statute governing Board appointments. And the Sheriff acted promptly
in appointing a new Board. But what if those things hadn’t happened? What if the Board had
remained in its invalid state for years? Under the Sheriff’s argument before this court, the “de
facto officer” doctrine would allow that Board to continue processing and deciding pending and
new cases forever—as if Taylor was just an interesting discussion and not a binding decision of a
court.
¶ 103 To their credit, the Board and the Sheriff seemed to recognize this very point. The
complaint alleges that the Board, and the Sheriff, essentially held plaintiffs’ pending cases in
abeyance after Taylor was decided. And after the General Assembly amended the statute
governing Board appointments, and a new Board was appointed, the Sheriff filed “amended”
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charges against plaintiffs, though they were essentially the same charges. The Board and the
Sheriff, in other words, properly waited for a new Board before advancing the pending cases
against plaintiffs.
¶ 104 But before this Court, the Sheriff is arguing that the “de facto officer” doctrine protects
these pending cases from a statutory-authority argument like that in Taylor. That position, if
accepted, would inflate the “de facto officer” rule from a practical doctrine that avoids chaos and
promotes finality of old administrative decisions into a doctrine that provides a board with carte-
blanche immunity to continue violating the law, going forward, and perhaps forever, brushing
aside the Taylor decision like a piece of lint on a suit coat.
¶ 105 To put it plainly: Once Taylor was decided, any Sheriff’s employee whose case was then-
pending before the Board, or who was charged in a new case post-Taylor, had every right to
challenge the Board’s composition, for the same reasons as in Taylor (or for different reasons).
Old cases already finally decided, no, but pending or new administrative cases, yes. Plaintiffs’
cases were pending at the time of the Taylor, and the “de facto officer” doctrine did not prevent
them from challenging the Board’s composition.
¶ 106 And even if what we have said above were not true, there is a separate and independent
reason that we would not apply the “de facto officer doctrine” here: The statute governing the
Board’s appointments has now changed, and the Sheriff has appointed a new Board. A new
statute, a new Board—but plaintiffs can’t challenge the composition of this Board because Percy
Taylor challenged the composition of a different Board under a different statute a few years ago?
Nonsense.
¶ 107 It was one thing to prevent countless previous decisions from being challenged under the
same theory as Taylor—the same Board, governed by the same statute, with the same legal
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defect. That is the very point of the “de facto officer” doctrine. Like it or not, it rewards the first
party to correctly identify the legal defect in a board’s composition, and parties aggrieved by
previous final decisions who then try to piggyback on that same legal argument are out of luck.
See, e.g., Lopez, 2018 IL App (1st) 170733, ¶ 59; Daniels, 201 Ill. 2d at 176 (McMorrow, J.,
specially concurring).
¶ 108 But once a new statute governing Board appointments has been enacted, and a new Board
has been appointed pursuant to that new statute, the status quo is re-set. Taylor might have
precedential value, but it no longer directly governs the outcome. A party who challenges the
new Board’s composition under a new statute is that “first” party to whom Lopez and Justice
McMorrow were referring, bringing to the court’s attention potential illegalities in the new
Board’s composition. Those claims might look a lot like those in Taylor, with regard to the old
Board under the old statute, but they are by definition new arguments.
¶ 109 Consider if it were otherwise. Here, the new statute governing Board appointments is not
all that different from its predecessor, but it certainly could have been. The General Assembly
could have made sweeping, wholesale changes to Board appointments. It could have provided,
for example, that members of the Board would now be appointed by the Governor, with the
advice and consent of the Illinois Senate. Imagine that it did, and that plaintiffs’ legal argument
here was that one of the members was not validly appointed because the Senate never confirmed
him or her. Would we even dream of barring that argument under the “de facto officer” doctrine,
because a few years ago, Percy Taylor obtained a ruling from this court based on a completely
different legal theory under a different statute governing a different board? Of course not.
¶ 110 The difference between that hypothetical and the matter before us is simply one of
degree. A new statute brings with it new requirements (even if only slightly new), and ultimately
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a new Board (even if some of the members overlapped). The legal theories attacking this new
Board’s composition may resemble those in Taylor, but they are not the same.
¶ 111 If we were to accept the Sheriff’s application of the “de facto officer” doctrine in this
context, it would have no principled end. No matter how many times the statute governing Board
appointments changed, no matter how much it changed, no matter how many new Board
members came and left, no matter how much time passed, nobody could ever again raise a
challenge to the Board’s composition, because Percy Taylor once won a case challenging the
Board’s composition in 2017. That is an untenable result, to say the least.
¶ 112 For these reasons, the “de facto” officer doctrine does not bar a consideration of the
claims in the complaint.
¶ 113 CONCLUSION
¶ 114 For the foregoing reasons, we affirm the circuit court’s judgment to the extent it
dismissed with prejudice plaintiffs’ claims of a due process violation based on the Board’s bias.
With respect to plaintiffs’ due process claim based on the transcript fee, pursuant to our power
under Illinois Supreme Court Rule 366(a)(5) (eff. Feb. 1, 1994), we affirm the court’s order but
modify the dismissal to be without prejudice. If plaintiffs can plead that they cannot afford to pay
the transcript fee, then the futility exception to the exhaustion requirement would then apply to
this claim; if they cannot so plead, then this claim should be dismissed for failure to exhaust.
With respect to all other claims, we reverse the court’s judgment, finding that neither the
exhaustion doctrine nor the “de facto officer” rule bar the complaint.
¶ 115 Affirmed in part as modified, reversed in part, and remanded with instructions.
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