Stasko v. The City of Chicago

ILLINOIS OFFICIAL REPORTS
Appellate Court
Stasko v. City of Chicago, 2013 IL App (1st) 120265
Appellate Court CHRISTOPHER STASKO, STEVEN NAGLER, BURTON CITRON,
Caption PETER LORENZ, CHARLES JENKINS, PAUL VANRID,
AUTOMOTIVE PARTS SERVICE COMPANY, MICHAELINE
PIEKARSKI, GREG DIPIERO, ARTHUR, L. KELLY, Plaintiffs-
Appellants, v. THE CITY OF CHICAGO, Defendant-Appellee.
District & No. First District, Fourth Division
Docket Nos. 1-12-0265, 1-12-1556 cons.
Filed September 30, 2013
Held The City of Chicago’s amusement tax on the sale or transfer of permanent
(Note: This syllabus seat licenses giving license holders the right to purchase tickets for
constitutes no part of Chicago Bears’ home football games was a proper exercise of the city’s
the opinion of the court home rule authority, and the tax is not preempted by section 8-11-6a of
but has been prepared the Municipal Code, which states that, with some exceptions, no home
by the Reporter of rule municipality has the authority to impose a tax on the use, sale or
Decisions for the purchase of tangible personal property based on the gross receipts from
convenience of the such sales or the selling or purchase price of said tangible personal
reader.)
property.
Decision Under Appeal from the Circuit Court of Cook County, No. 09-CH-17167; the
Review Hon. Alexander P. White, Judge, presiding.
Judgment Affirmed and remanded.
Counsel on Keith L. Hunt, of Hunt & Associates P.C., George Grumley and Saul
Appeal Wexler, both of Grumley, Kamin, Rosie & Wexler, and Merle L. Royce
and Brad Faber, both of Law Offices of Merle L. Royce, all of Chicago,
for appellants.
Stephen R. Patton, Corporation Counsel, of Chicago (Benna Ruth
Solomon, Myriam Zreczny Kasper, and Julian N. Henriques, Jr.,
Assistant Corporation Counsel, of counsel), for appellee.
Panel PRESIDING JUSTICE HOWSE delivered the judgment of the court,
with opinion.
Justices McBride and Palmer concurred in the judgment and opinion.
OPINION
¶1 Plaintiffs sought a declaration that the City of Chicago (the City) may not collect or
assess its amusement tax from or against permanent seat license (PSL) owners based on the
sale or transfer of a PSL; an order to the City to disgorge all amusement taxes it collected
before judgment in this case on the purchase, sale, or transfer of any PSL, with interest; and
an injunction against the City enjoining the imposition, assessment, levy, or collection of the
amusement tax on PSLs in the future. On the question of the City’s right to collect its
amusement tax on the sale of PSLs by either the originator of the PSL (the Chicago Park
District) or by an owner of a PSL, the trial court granted summary judgment in favor of
defendant. For the following reasons, we affirm the trial court’s judgment, and remand.
¶2 BACKGROUND
¶3 On June 1, 2009, plaintiffs filed their first amended class action complaint for declaratory
judgment and other relief (hereinafter complaint). The complaint sought a declaration that
defendant, the City, may not collect, levy or charge an amusement tax based on the purchase
or sale of a PSL. The complaint named 10 plaintiffs and alleged that each purchased, and
owns or owned, a PSL. The putative class consisted of all present and former owners of PSL
seat licenses, including (1) all original PSL purchasers; (2) subsequent transferees; and (3)
any other person, entity or organization who has paid the amusement tax, or on whose behalf
the tax was paid, or to whom a demand for payment has been made.
¶4 The complaint alleged the Chicago Bears Football Club, Inc. (Bears), began selling PSLs
in 2002 as a means of financing renovations at Soldier Field. The Chicago Municipal Code
(Chicago Municipal Code § 4-156-020 (amended Nov. 19, 2008)) imposes a 9% tax on the
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admission fees or other charges paid for the privilege to enter an amusement (amusement
tax). In May 2009, the City sent letters to approximately 1,700 PSL holders stating the
amusement tax applies to transfers of PSLs and that the PSL holders may have tax balances
due. The complaint alleges the Bears paid the amusement tax on the PSLs it sold, but the
City is attempting to collect the amusement tax on subsequent transfer sales of PSLs by
original purchasers from the Bears, specifically such sales occurring between 2004 and 2008,
by making a demand for payment.
¶5 According to the complaint, a “PSL merely confers on the license holder the right to
acquire tickets rather than providing the license holder with any right to admittance or to gain
entry into an event.” The complaint alleged the City may not properly collect an amusement
tax from PSL holders for several reasons including, but not limited to, the following: (a) a
PSL does not confer any right to enter or to attend any event which constitutes an amusement
under the Chicago Municipal Code; (b) PSLs are not admission fees within the meaning of
the amusement tax; (c) a PSL is merely a right to purchase tickets and is not a right to gain
entry or admittance to any event which constitutes an amusement; (d) the City’s attempt to
collect the tax is time barred by section 13-205 of the Illinois Code of Civil Procedure (Code)
(735 ILCS 5/13-205 (West 2008)); and (e) the amusement tax on PSLs is a tax on tangible
personal property in violation of section 8-11-6a of the Illinois Municipal Code (65 ILCS
5/8-11-6a (West 2008)) and the City is not authorized to tax the sale or purchase of tangible
personal property. Plaintiffs allege the City was never entitled to collect the amusement tax
on the original sale or transfer of PSLs, and thus, to the extent the City collected the
amusement tax from the Bears on original sales, the City wrongfully collected those taxes.
¶6 On June 10, 2009, plaintiffs moved to certify the putative class of plaintiffs.
¶7 On June 18, 2009, defendant filed a motion to dismiss the complaint pursuant to section
2-619.1 of the Code (735 ILCS 5/2-619.1 (West 2008)). Defendant moved to dismiss
pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2008)) on the grounds the
complaint fails to state a claim for relief. Defendant moved to dismiss pursuant to section 2-
619 of the Code (735 ILCS 5/2-619 (West 2008)) on the grounds plaintiffs failed to exhaust
their administrative remedies under the City’s Uniform Revenue Procedures Ordinance
(URPO) (Chicago Municipal Code § 3-4-010 et seq. (added Nov. 14, 1991)); plaintiffs’
claims are invalid as a matter of law because plaintiffs’ exclusive remedy is under URPO;
even if URPO does not apply, plaintiffs’ claims are barred by the statute of limitations and
a lack of standing to seek refunds of taxes paid; and, alternatively, plaintiffs’ claims are
barred by the voluntary payment doctrine. On August 6, 2009 defendant voluntarily withdrew
its section 2-619 motion without prejudice and the trial court scheduled briefing and
argument on defendant’s section 2-615 motion to dismiss.
¶8 Plaintiffs filed a motion to strike defendant’s section 2-615 motion to dismiss on August
27, 2009, contending that defendant’s motion was in effect an answer denying various
allegations and stating its reasons for taking contrary positions. On February 8, 2010, the trial
court granted plaintiffs’ motion to strike defendant’s section 2-615 motion to dismiss. On
February 11, 2010, defendant filed a second motion to dismiss pursuant to section 2-619 for
failure to exhaust administrative remedies. Defendant’s motion argued that to the extent
plaintiffs challenge the assessment of the amusement tax against future sales of PSLs or to
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the past assessment of the amusement tax, URPO provides an exclusive administrative
procedure and provides for appeal to the circuit court under the Administrative Review Law
(735 ILCS 5/3-101 et seq. (West 2012)). On May 6, 2010, the trial court denied defendant’s
motion to dismiss pursuant to section 2-619 for failure to exhaust administrative remedies
for plaintiffs’ claims regarding taxes already paid on the original PSL purchases and
plaintiffs’ claims regarding future PSL sales.
¶9 On June 1, 2010, defendant filed its answer and counterclaim to plaintiffs’ complaint.
Defendant’s answer asserted affirmative defenses of (1) failure to exhaust administrative
remedies, (2) the statute of limitations as to plaintiffs’ claim for refunds, (3) the tax refund
claims were not filed by the party who paid the tax, (4) the voluntary payment doctrine, and
(5) lack of standing to seek refunds of taxes paid by the Bears. Defendant counterclaimed
against “all named plaintiffs and plaintiff class members who did not pay the City’s
amusement tax *** on the charges they paid to obtain PSLs after 2003.” Defendant prayed
for a judgment declaring the PSLs are subject to the amusement tax, and a monetary
judgment against those who did not pay the tax on the charges they paid to obtain PSLs after
2003. On August 18, 2010, plaintiffs filed a motion to dismiss defendant’s counterclaim for
failure to state a cause of action because the matter is not appropriate for class certification
under section 2-801, any counterclaim is premature, and plaintiffs are not being sued
individually. Plaintiffs also argued a lack of personal jurisdiction over the counterdefendants.
¶ 10 On July 16, 2010, the trial court entered an order certifying plaintiffs’ class pursuant to
sections 2-801 and 2-802 of the Code (735 ILCS 5/2-801, 2-802 (West 2010)). The court’s
order certifies two classes of plaintiffs: (1) the persons who seek refunds of taxes that the
Bears paid to the City in 2002, when PSLs were first issued, and (2) the persons who seek
an injunction against any effort by the City to collect taxes on charges paid on subsequent
transfers of PSLs.
¶ 11 On July 20, 2010, defendant filed a motion for partial summary judgment on plaintiffs’
request for a declaratory judgment that it may not impose the amusement tax on the purchase
or sale of a PSL and on plaintiffs’ request for a refund of taxes paid on the original sale of
PSLs. Defendant attached an affidavit by Karen Murphy, senior director of finance and
treasurer for the Bears. Ms. Murphy averred that the Bears began selling PSLs in 2002 as an
agent of the Lakefront Improvement Fund. A person may purchase season tickets or
individual tickets without purchasing a PSL. A person may purchase individual tickets
without purchasing season tickets. If a person purchases a PSL, “the PSL gives that person
the right to purchase a season ticket for a specific seat location” for home games. PSL
owners have the right to transfer a PSL by, for example, “aftermarket” sale.
¶ 12 On July 26, 2010, plaintiffs filed a motion for summary judgment on the issue of liability
as to their complaint for a declaratory judgment that the City’s amusement tax is invalid,
unconstitutional, and/or inapplicable to the purchase or sale of a PSL at Soldier Field for
Bears football games.
¶ 13 On August 12, 2010, defendant filed a motion to certify a counterdefendant class
consisting of “all persons who seek an injunction against any effort by the City to collect
taxes on charges paid in connection with subsequent transfers of PSLs.” The motion stated
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that the relief sought against the counter-defendant class, which is identical to the second
plaintiffs’ class, is the relief set forth in defendant’s counterclaim.
¶ 14 On August 26, 2010, the trial court entered an agreed order to clarify the class definition.
The court’s order provided the following class definition:
“All persons and entities who purchased and own or owned a Permanent Seat License
(‘PSL’) at Soldier Field for Chicago Bears football games including: (1) all original PSL
purchasers; (2) all subsequent transferees; and (3) any other person or entity who has paid
the amusement tax, or on whose behalf the tax was paid, or to whom a demand for
payment has been made.”
¶ 15 On October 26, 2010, after full briefing by the parties, the trial court took the motions for
summary judgment under advisement. On December 14, 2010, the court entered a
memorandum decision and judgment making the following orders:
“1. Plaintiffs’ motion for summary judgment, barring enforcement of the Ordinance
on proceeds of sales of PSLs, as to sales of PSLs from the Bears to a patron, is DENIED.
2. Plaintiffs’ motion for summary judgment, barring enforcement of the Ordinance
on proceeds of sales of PSLs, as to sales of PSLs from a patron to another buyer, is
GRANTED.
3. The City’s motion for partial summary judgment, requesting enforcement of the
Ordinance, as to sales of PSLs from the Bears to a patron, is GRANTED.
4. The City’s motion for partial summary judgment, requesting enforcement of the
Ordinance, as to sales of PSLs from a patron to another buyer, is DENIED.
5. The City’s motion for partial summary [judgment] regarding whether the URPO
acts to bar patrons who have sold their PSLs to a patron, or bought their PSLs from a
patron, from seeking a refund of the Amusement Tax is GRANTED.”
¶ 16 On December 23, 2010, plaintiffs filed a motion for leave to file a second amended
complaint. The motion states “Plaintiffs seek to file a Second Amended Complaint *** to
add a cause of action based on 42 U.S.C. § 1983 predicated on a violation by Defendants of
the Takings Clause of the Fifth Amendment.” Plaintiffs attached a proposed second amended
complaint that contains a count for declaratory judgment (count I) and a count on behalf of
the class of subsequent transferees based on the takings clause (U.S. Const., amend. V)
(count II). On January 7, 2011, the trial court granted the motion and granted plaintiffs leave
to file a second amended complaint.
¶ 17 On January 12, 2011, plaintiffs filed a notice of motion for reconsideration. Plaintiffs
asserted that the trial court should reconsider its order sustaining the collection of defendant’s
amusement tax on the initial sale of PSLs.
¶ 18 On January 13, 2011, defendant filed a motion to reconsider the January 11, 2011 order
granting plaintiffs leave to file a second amended complaint and a separate motion to
reconsider portions of the trial court’s December 14, 2010, summary judgment order.
Specifically, defendant sought reconsideration of the portions of the order holding that the
City may not enforce its amusement tax with regard to sales of PSLs from a patron to another
buyer and holding that plaintiffs’ refund claims are not barred by the voluntary payment
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doctrine.
¶ 19 On February 23, 2011, plaintiffs filed a second amended complaint. On March 28, 2011,
plaintiffs filed a response to defendant’s motion to reconsider the trial court’s order granting
plaintiffs leave to file a second amended complaint. On April 8, 2011, defendant moved to
dismiss count II of plaintiffs’ second amended complaint and a separate reply in support of
its motion to reconsider the order granting leave to file the second amended complaint.
Defendant’s reply addressed plaintiffs’ argument that the issue of finality was moot because
of the parties’ motions to reconsider, which plaintiffs raised in response to the City’s
argument that the motion to file a second amended complaint was erroneous because the trial
court entered a final judgment and the amended complaint adds a new cause of action under
the takings clause. Also on April 8, 2011, defendant filed a separate motion to strike counts
III and IV of the second amended complaint on the grounds plaintiffs’ motion for leave to
file a second amended complaint attached the pleading plaintiffs sought to file which, along
with the motion, made clear plaintiffs only sought leave to add a count II based on the
takings clause. Therefore, plaintiffs failed to obtain leave of court to file the additional
counts.
¶ 20 On April 26, 2011, plaintiffs moved for a permanent injunction against the City,
enjoining it from “imposing, assessing, levying and/or collection [sic] an Amusement Tax
on the sale or transfer of PSLs where the sale takes place between a PSL owner (other than
the Chicago Park District and the Chicago Bears Football Club, Inc., as agent for the Chicago
Park District) and any subsequent purchaser or transferee.”
¶ 21 On December 22, 2011, the trial court entered a memorandum decision and judgment on
the parties’ cross-motions for reconsideration. The issues to be decided by the court in its
December 22, 2011, judgment included whether plaintiffs’ motion for leave to file a second
amended complaint should be granted, whether count II of plaintiffs’ second amended
complaint should be dismissed, and whether counts III and IV of plaintiffs’ second amended
complaint should be stricken. The court’s judgment made the following orders:
“1. The City’s motion to reconsider portions of the Court’s December 14, 2010
Decision is DENIED as to the Court’s Decision the City does not have the statutory
authority to tax Resales of PSLs.
2. The City’s motion to reconsider portions of the Court’s December 14, 2010
Decision is DENIED as to the Court’s Decision, even if the City’s Uniform Revenue
Procedures Ordinance did not apply, Plaintiffs’ refund claims would not be barred
pursuant to the voluntary payment doctrine.
3. The City’s motion to reconsider portions of the Court’s December 14, 2010
Decision is GRANTED as to the Court’s Decision, the City’s home rule authority to tax
Resales has been preempted by 65 ILCS 5/8-11-6a.
4. Plaintiffs’ motion for summary judgment, barring enforcement of the Ordinance
on proceeds of Resales of PSLs is DENIED.
5. Plaintiffs’ motion to reconsider whether the Court’s Decision the language of the
Ordinance is applicable to the Refund Class, original purchases of PSLs is DENIED.
6. Plaintiffs’ motion to reconsider whether the City does not possess the statutory
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authority to tax original purchases of PSLs is GRANTED.
7. Plaintiffs’ motion to reconsider whether the City’s Uniform Revenue Procedure
Ordinance does not bar Plaintiffs’ refunds is GRANTED.
8. The City possesses the statutory authority to tax the Refund Class, original
purchases of PSLs.
9. Plaintiffs’ argument that the City’s Uniform Revenue Procedure Ordinance does
not bar Plaintiffs’ refunds is moot.
10. The City’s motion to reconsider the Court’s January 11, 2011 Decision granting
Plaintiffs’ motion for leave to file a second amended complaint is GRANTED.
11. Plaintiffs’ motion for leave to file a Second Amended Complaint is DENIED.
12. The City’s motion to dismiss Count II of Plaintiffs’ Second Amended Complaint
is GRANTED.
13. The City’s motion to strike Counts III and IV of Plaintiffs’ Second Amended
Complaint pursuant to 735 ILCS 5/2-615 is DENIED.”
¶ 22 On January 23, 2012, plaintiffs filed a notice of appeal from (a) the December 14, 2010
judgment with respect to the cross-motions for summary judgment, (b) the December 22,
2011 judgment with respect to the cross-motions to reconsider the summary judgment order,
and (c) the December 22, 2011 order granting defendant’s motion to reconsider the order
granting plaintiffs leave to file a second amended complaint and denying plaintiffs’ motion
for leave to file a second amended complaint. This court docketed the appeal under case
number 1-12-0265.
¶ 23 On March 12, 2012, defendant filed a motion for an order pursuant to Illinois Supreme
Court Rule 304 (Ill. S. Ct. R. 304 (eff. Feb. 26, 2010)) making an express finding that there
is no just reason for delaying enforcement or appeal of the trial court’s December 22, 2011
judgment. Defendant’s motion states that although the court’s judgment disposed of the key
issues in the case, defendant’s counterclaim for tax, interest and penalties on the resale of
PSLs remained pending. On April 24, 2012, the court entered an order finding no just reason
to delay enforcement or appeal of the December 22, 2011 judgment.
¶ 24 On May 24, 2012 plaintiffs filed a second notice of appeal based on the trial court’s April
24, 2012 order. This court docketed the May 24, 2012 notice of appeal in case number 1-12-
1556. The notice of appeal in case number 1-12-1556 specifies the following orders: (1) the
December 14, 2010 judgment on the parties’ cross-motions for summary judgment; (2) the
December 22, 2011 judgment on the parties’ cross-motions to reconsider portions of the
December 14, 2010 judgment on the cross-motions for summary judgment; and (3) the
December 22, 2011 judgment granting defendant’s motion to reconsider the January 11, 2011
judgment granting plaintiffs leave to file a second amended complaint.
¶ 25 Defendant has not filed a notice of cross-appeal of any issues or judgments. On July 24,
2012, we allowed defendant’s motion to consolidate the appeal in case number 1-12-0265
with the appeal in case number 1-12-1556.
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¶ 26 ANALYSIS
¶ 27 Before reaching the merits of the parties’ arguments on appeal, a question as to this
court’s jurisdiction must be resolved. “Whether the appellate court has jurisdiction to
consider an appeal presents a question of law which we review de novo.” EMC Mortgage
Corp. v. Kemp, 2012 IL 113419, ¶ 39. Defendant argues this court lacks jurisdiction over the
appeal docketed in case number 1-12-0265 because when plaintiffs filed their notice of
appeal, the City’s counterclaim was still pending and the trial court had made no findings
pursuant to Illinois Supreme Court Rule 304 (Ill. S. Ct. R. 304 (eff. Feb. 26, 2010)). Plaintiffs
did not reply to defendant’s jurisdictional argument. Defendant admits this court has
jurisdiction of the appeal docketed as case number 1-12-1556 pursuant to Rule 304(a).
¶ 28 We agree with defendant that this court has no jurisdiction over the appeal docketed in
this court as case number 1-12-0265. “If multiple claims are involved in an action, an appeal
may be taken from a final judgment as to one or more but fewer than all of the claims only
if the trial court makes an express written finding of no just reason to delay either
enforcement, appeal, or both. [Citation.] Without a Rule 304(a) finding, a final order
disposing of fewer than all the claims is not an appealable order and does not become
appealable until all of the claims are resolved.” In re Marriage of Gaudio, 368 Ill. App. 3d
153, 156 (2006). There is no dispute that the City’s counterclaim for a money judgment for
taxes on subsequent transfers of PSLs was and is pending before the trial court, or that the
court did not make any findings pursuant to Rule 304 before plaintiffs filed the notice of
appeal in appellate case number 1-12-0265. Therefore, the January 23, 2012 notice of appeal
is insufficient to confer jurisdiction on this court. In re Marriage of Gaudio, 368 Ill. App. 3d
at 158 (“A premature notice of appeal does not confer jurisdiction on the appellate court.”).
¶ 29 We did, however, grant defendant’s motion to consolidate the two appeals. Compare In
re Marriage of Gaudio, 368 Ill. App. 3d at 158. The May 24, 2012 notice of appeal is
sufficient to invoke this court’s jurisdiction. Waugh v. Morgan Stanley & Co., 2012 IL App
(1st) 102653, ¶ 51 (“When a trial court makes a finding pursuant to Rule 304(a) that there
is no just reason for delaying enforcement or appeal of a final judgment, any notice of appeal
from that final judgment must be filed within 30 days.”). Accordingly, the appeal docketed
as case number 1-12-0265 is dismissed and we will proceed to resolve the issues under case
number 1-12-1556. See Ameren Illinois Co. v. Illinois Commerce Comm’n, 2012 IL App
(4th) 100962, ¶ 172 (dismissing one of three consolidated appeals and resolving the
remaining two appeals on the merits).
¶ 30 1. Standard of Review
¶ 31 “We must remain mindful *** that this matter was decided in the context of motions for
summary judgment, and the purpose of summary judgment is not to try questions of fact but
simply to determine if triable questions of fact exist. Summary judgment should not be
granted unless the moving party’s right to judgment is clear and free from doubt. If the
undisputed material facts could lead reasonable observers to divergent inferences, or where
there is a dispute as to a material fact, summary judgment should be denied and the issue
decided by the trier of fact.” Pielet v. Pielet, 2012 IL 112064, ¶ 53. “When parties file cross-
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motions for summary judgment, they agree that only a question of law is involved and invite
the court to decide the issues based on the record. [Citation.] However, the mere filing of
cross-motions for summary judgment does not establish that there is no issue of material fact,
nor does it obligate a court to render summary judgment.” Id. ¶ 28. “Where a case is decided
through summary judgment, our review is de novo.” Id. ¶ 30. “[T]he principal issues we are
asked to resolve involve matters of statutory construction. We review issues of statutory
construction de novo.” NDC LLC v. Topinka, 374 Ill. App. 3d 341, 358 (2007).
¶ 32 2. Taxation Principles
¶ 33 The Illinois Constitution of 1970 delineates the powers of home rule units of government,
including the City, and gives such units the authority to “exercise any power and perform any
function pertaining to its government and affairs including, but not limited to, the power ***
to tax.” Ill. Const. 1970, art. VII, § 6(a). Section 6(g) of article VII provides that “[t]he
General Assembly *** may deny or limit the power to tax.” Ill. Const. 1970, art. VII, § 6(g).
Article VII, section 6(e), of the Illinois Constitution requires authorization by the General
Assembly before a home rule unit can impose a tax upon occupations. Commercial National
Bank of Chicago v. City of Chicago, 89 Ill. 2d 45, 51-52 (1982). The power of home rule
units to tax is also limited, pursuant to section 6(g) of article VII, by section 8-11-6(a) of the
Illinois Municipal Code (Municipal Code) (65 ILCS 5/8-11-6(a) (West 2008)). Section 8-11-
6(a) prohibits a home rule municipality from imposing a tax on the use, sale or purchase of
tangible personal property based on the gross receipts from such sales or the selling or
purchase price of said tangible personal property. 65 ILCS 5/8-11-6(a) (West 2008). The City
may impose a tax that is beyond its home rule taxing authority if the tax is specifically
authorized by the General Assembly. Commercial National Bank of Chicago, 89 Ill. 2d at
50-51 (“The power to raise revenue in the enumerated methods stems not from home rule
powers but from legislative grant of authority.”); City of Chicago, Illinois v. StubHub, Inc.,
622 F. Supp. 2d 699, 704 (N.D. Ill. 2009) (“even if home rule authority is preempted, a home
rule municipality can still impose whatever taxes the General Assembly has granted all
municipalities the power to impose”).
¶ 34 The City has exercised is authority to tax with, among others, a tax on amusements in
Chicago Municipal Code title 4, division VI, chapter 4-156. Section 4-156-010 of the
Chicago Municipal Code defines an amusement as “any exhibition, performance,
presentation or show for entertainment purposes *** including *** any *** athletic contest
*** such as *** football.” Chicago Municipal Code § 4-156-010 (amended Nov. 19, 2008).
Section 4-156-020 imposes “an amusement tax *** upon the patrons of every amusement
within the city.” Chicago Municipal Code § 4-156-020(A) (amended Nov. 19, 2008). The
rate of the tax is a percentage1 “of the admission fees or other charges paid for the privilege
1
The percentage tax rate changed between the original sale of PSLs by the Bears in 2002 and
2003 and any subsequent transfers beginning in 2004. In this appeal, the percentage tax rate is not
germane. Defendant’s counterclaim for payment of taxes on subsequent transfers of PSLs remains
pending and is not a subject of this appeal. In light of our disposition, the appropriate tax rate must
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to enter, to witness, to view or to participate in such amusement.” Id.
¶ 35 3. Authority to Tax PSLs
¶ 36 Before we may determine if the amusement tax is applicable to either the original sale
or subsequent transfer of a PSL, we must first determine whether the tax is preempted.
Section 8-11-6a of the Municipal Code states that, with certain exceptions, “no home rule
municipality has the authority to impose, pursuant to its home rule authority, a *** tax on
the use, sale or purchase of tangible personal property based on the gross receipts from such
sales or the selling or purchase price of said tangible personal property.” 65 ILCS 5/8-11-6a
(West 2008). Plaintiffs argue that section 8-11-6a preempts the City’s home rule authority
to tax PSLs because a PSL is tangible personal property under our decision in Mr. B’s, Inc.
v. City of Chicago, 302 Ill. App. 3d 930 (1998). Plaintiffs also argue that the tax on PSLs is
analogous to the attempt to tax membership fees that was rejected in Chicago Health Clubs,
Inc. v. Picur, 124 Ill. 2d 1 (1988). Plaintiffs argue that applying the tax to the sale of a PSL
“is not on the activity of attending a football game, but on the activity of selling certain rights
or amenities which are incidental to attendance.” Plaintiffs characterize the sale of PSLs as
a service performed by the Bears to raise funds for the renovation of Soldier Field and argue
that the application of the amusement tax is a tax on that service; thus, Chicago Health
Clubs, Inc. is applicable. Plaintiffs assert the Bears did not sell the PSLs for entertainment,
but to finance renovations, and the Bears were subject to the same responsibilities for the
collection and remittance of the tax as were the plaintiffs in Chicago Health Clubs, Inc.
¶ 37 First, we reject any implicit argument that the fact revenue from PSL sales was used to
finance lakefront improvements or renovations to Soldier Field has any bearing on the
validity of the City’s amusement tax. The purpose of the underlying taxable transaction has
no bearing on the validity of the tax on that transaction. “For this tax, levied by the city of
Chicago, to be valid it must *** be for a corporate purpose–that is, in aid of a public object
which is within the purposes for which such government is established.” People v. City of
Chicago, 413 Ill. 83, 87-88 (1952). Plaintiffs have made no argument the City does not use
its tax revenue from the amusement tax for a corporate purpose.
¶ 38 Second, we find that Mr. B’s, Inc. is not controlling on this issue and in fact conflicts
with our supreme court’s decisions as to what constitutes tangible personal property for
taxation purposes. The sole basis of plaintiffs’ argument that PSLs are tangible personal
property is that the transaction to purchase a PSL is allegedly similar to the transaction to
purchase a ticket from a ticket broker in Mr. B’s, Inc. Plaintiffs argue that the prices charged
for PSLs are over and above the amount paid for the season ticket, therefore, the original
purchase of a PSL should be treated the same as the tickets sold by ticket brokers over and
above the face value of the tickets. Plaintiffs argue that, like the transaction between ticket
brokers and their patrons, the purchase of a PSL from the Bears is incidental to the purchase
of season tickets. Plaintiffs argue that the subsequent transfer of a PSL by an original
purchaser is even more similar to the transaction at issue in Mr. B’s, Inc. because “[n]ot only
be determined on remand.
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is the charge independent from that of the tickets, but the price of the PSL is determined
solely by market forces.”
¶ 39 We do not find Mr. B’s, Inc. compelling authority in favor of finding that a PSL is
tangible personal property. The Mr. B’s, Inc. court found that the tickets in that case were
tangible personal property in response to the plaintiffs’ argument that tickets are not tangible
personal property under this court’s decision in Soderholm v. Chicago National League Ball
Club, Inc., 225 Ill. App. 3d 119 (1992). Mr. B’s, Inc., 302 Ill. App. 3d at 937. The Mr. B’s,
Inc. court found that the plaintiffs’ reliance on Soderholm was misplaced because “[t]his
court in Soderholm did not conclude that tickets are not tangible personal property; rather,
this court addressed the issue of whether a season ticket is a license that permits the holder
to enter a ball park subject to its terms and conditions. Thus, Soderholm does not stand for
the proposition that all tickets are licenses.” Mr. B’s, Inc., 302 Ill. App. 3d at 937. While
Soderholm may not stand for the very broad and general proposition that all tickets are
licenses, we find that Soderholm does support finding that a PSL is not tangible personal
property.
¶ 40 The Soderholm court expressly held that “a season ticket is a revocable license.”
Soderholm, 225 Ill. App. 3d at 124. The court reasoned as follows:
“A license grants the licensee a right to enter upon the licensor’s land and use it for
a specific purpose, without giving up the licensor’s legal possession and control over the
property ***. [Citation.] A license is revocable at any time at the will of the licensor
[citation], and mere permission to use land does not ripen into a prescriptive right
regardless of the length of time that such enjoyment is permitted. [Citation.]
It is clear that a Cubs season ticket consists of a series of revocable licenses ***. ***
Each individual ticket permits the holder to enter the ball park on the date and at the time
stated on the ticket for the specific purpose of attending the identified game and sitting
in the specified seat, subject to all terms, conditions and policies established by the
Chicago Cubs.” Soderholm, 225 Ill. App. 3d at 124-25.
¶ 41 We note here that for reasons set out fully below, the price paid for a PSL constitutes part
of the charge paid to view an amusement. Thus, just as in Soderholm, the price paid for a
PSL is part of the total charges which permit the holder to enter the stadium for the specific
purpose of attending a Bears game and of sitting in the specified seat. The fact that an
additional step is required to obtain that privilege–the purchase of the season tickets
associated with the PSL seat–does not change the nature of the rights obtained by the
purchase of a PSL, which is a personal privilege that carries with it no vested property right.
See Weinstein v. Daley, 85 Ill. App. 2d 470, 481 (1967) (involving revocation of a retail
liquor license and holding that “[a] license is purely a personal privilege to do what would
otherwise be unlawful and hence carries with it no vested property right”).
¶ 42 The decisions of our supreme court provide additional authority in support of finding that
a PSL is not tangible personal property. In Colorcraft Corp. v. Department of Revenue, 112
Ill. 2d 473 (1986), the issue was whether the plaintiff’s business, which developed film for
retail dealers, was a service occupation or whether it was engaged in manufacturing. Id. at
476.
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“[A] standard has been developed to determine whether a business is a service or a retail
occupation. The test *** provides:
If the article sold has no value to the purchaser except as a result of services rendered
by the vendor and the transfer of the article to the purchaser is an actual and
necessary part of the service rendered, then the vendor is engaged in the business of
rendering service and not in the business of selling at retail. If the article sold is the
substance of the transaction and the service rendered is merely incidental to and an
inseparable part of the transfer to the purchaser of the article sold, then the vendor is
engaged in the business of selling at retail. [Citations.]” (Internal quotation marks
omitted.) Id. at 481-82.
¶ 43 Our supreme court held that the plaintiff-taxpayer was not in the business of selling
tangible personal property. Colorcraft Corp., 112 Ill. 2d at 483. The court reasoned that “the
article sold in the instant case, the finished prints, have no value to the customer except as
a result of the services rendered by Colorcraft. *** [A]lthough the transfer of the prints ***
is an actual and necessary part of the service rendered, it is the service of creating the prints
which is the essence of the transaction.” Id. The court found that “[t]he customer is really
paying for the skill, labor, and use of the machinery and equipment of the photofinisher.” Id.
at 484. “Therefore, Colorcraft is not in the business of selling tangible personal property.”
Id.
¶ 44 Similarly, here, the purchaser of a PSL is really paying for the privilege of viewing an
amusement. The Colorcraft Corp. court noted that “[i]t is unlikely that the average person
would be even remotely interested in purchasing prints developed for another.” Colorcraft
Corp., 112 Ill. 2d at 484. It is similarly unlikely that the average person would be even
remotely interested in purchasing a PSL, then never viewing a Bears game. Although, for
some, the purchase of the PSL is an actual and necessary part of obtaining the privilege of
viewing a Bears game, it is the privilege to view the game which is the essence of the
transaction, not the transfer of the PSL. See Colorcraft Corp., 112 Ill. 2d at 483 (citing First
National Bank of Springfield v. Department of Revenue, 85 Ill. 2d 84, 91 (1981) (“the sale
of computer software *** is, in substance, the transfer of intangible personal property”)). In
First National Bank of Springfield, the court looked to the “essence of the transaction” to
determine whether the transfer involved tangible personal property. First National Bank of
Springfield, 85 Ill. 2d at 90. The privilege of viewing a Bears game is the substance of a
transaction involving a PSL.
¶ 45 The true benefit of the sale or purchase of a PSL is to view a Bears game from a
particular seat. This is evident from the fact that the PSL becomes void if the season ticket
for its seat is not purchased. Therefore, the true substance of the transaction is the privilege
of viewing a Bears game. See generally Communications & Cable of Chicago, Inc. v.
Department of Revenue, 275 Ill. App. 3d 680, 685 (1995) (“the transfer of tangible property
will not result in sales tax liability where such transfer is merely incidental to the rendering
of a service, which is the true substance of the transaction”).
¶ 46 We find that under our supreme court’s reasoning in First National Bank and Colorcraft
Corp., as well as Soderholm, a PSL is not tangible personal property. Neither City of
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Chicago, Illinois v. StubHub, Inc., 622 F. Supp. 2d 699, 703-04 (N.D. Ill. 2009), nor City of
Chicago v. eBay, Inc., No. 08 C 3281 (N.D. Ill. Dec. 21, 2009), is binding on this court.
Moreover, each case relied solely on Mr. B’s, Inc. for its conclusion that the sale of
amusement tickets at prices above face value constitutes tangible personal property. See
StubHub, Inc., 622 F. Supp. 2d at 703-04. For the reasons stated above, we find that Mr. B’s,
Inc. is unpersuasive in light of conflicting supreme court authority on this topic.
¶ 47 Finally, the amusement tax on PSL sales is not an occupation tax. Kerasotes Rialto
Theater Corp. v. City of Peoria, 77 Ill. 2d 491, 500 (1979) (holding that a tax upon the
privilege of participating in or witnessing an amusement was not a tax on an occupation
(citing Town of Cicero v. Fox Valley Trotting Club, Inc., 65 Ill. 2d 10 (1976))). In Fox Valley
Trotting Club, Inc., 65 Ill. 2d at 14, our supreme court found that a tax “upon all amusements
within the town of Cicero at the rate of 10 cents per person witnessing, participating in or
entering the grounds or enclosure of a place of amusement or entertainment” was not a tax
upon given occupations. Id. The court recognized that “some of those who are taxed by the
Ordinance may be said to be engaged in the occupation of presenting or conducting
amusements.” Id. at 23. The court held that “[i]t is not sufficient *** that the burden of the
tax fall upon those engaged in occupations ***. Rather, the ordinance must be designed to
impose, and in fact impose, a tax upon given occupations.” Id.
¶ 48 “[A]n occupation tax has one of two missions: either to regulate and control a given
business or occupation, or to impose a tax for the privilege of exercising, undertaking or
operating a given occupation, trade or profession.” (Internal quotation marks omitted.) Fox
Valley Trotting Club, Inc., 65 Ill. 2d at 23. The court held that the ordinance at issue was not
so designed because the tax did not have a regulatory purpose and was not otherwise
designed to tax those engaged in a given occupation, trade, or profession. Id. Similarly, in
this case, we find that the City’s amusement tax has no regulatory purpose. Nor is the tax
designed to tax those engaged in a given occupation, trade, or profession. The tax is not
designed to tax the occupation of presenting professional football games. The tax is on the
privilege to view or to participate in a professional football game, which is indisputably an
amusement within the meaning of the ordinance. The duty to pay the tax is not predicated
upon the generation of revenue; therefore, the tax is not confined to those who are “engaged
in businesses for profit.” Fox Valley Trotting Club, Inc., 65 Ill. 2d at 22. Rather, the tax is
on the charges paid for the privilege of viewing an amusement. Moreover, the incidence of
the tax is on the consumer, although responsibility for collecting and remitting the tax may
fall to the wholesaler and retailer. Our supreme court has found that similar taxes are not an
occupation tax. Kerasotes Rialto Theater Corp., 77 Ill. 2d at 500.
¶ 49 We are not persuaded by plaintiffs’ reliance on Chicago Health Clubs, Inc. In Chicago
Health Clubs, Inc., our supreme court found that the tax at issue imposed an occupation tax
(Chicago Health Clubs, Inc., 124 Ill. 2d at 11) and was not a tax on an amusement and,
therefore, was not authorized by section 11-42-5 of the Municipal Code (Chicago Health
Clubs, Inc., 124 Ill. 2d at 13-14). Chicago Health Clubs, Inc. is distinguishable. First, our
supreme court found that “although the tax may ostensibly fall on individuals receiving the
clubs’ services, the tax truly is an ‘occupation’ tax within the meaning of section 6(e) [of
article VII].” Chicago Health Clubs, Inc., 124 Ill. 2d at 10. The court reached that conclusion
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considering that the clubs are responsible for collecting and remitting the tax, responsible for
paying the tax regardless of whether their patrons refuse to do so, and are subject to penalties
for delays in submitting tax payments. Id. The court concluded that “it is clear that a tax on
membership fees on health and racquetball club memberships is a tax on those occupations.”
Id. at 12.
¶ 50 Next, our supreme court turned to the meaning of “amusement” for purposes of section
11-42-5 of the Illinois Municipal Code (Ill. Rev. Stat. 1985, ch. 24, ¶ 11-42-5) to determine
if the statute authorized the tax on health clubs as “amusements” or “places of amusement.”
Chicago Health Clubs, Inc., 124 Ill. 2d at 12. In that case, the court found that the
membership fees that were subject to the tax “covered a wide variety of both amusement and
nonamusement activities.” Id. at 13. The nonamusement services provided by the clubs
included “nutritional instructions, weight loss counseling, diet counseling, cardiovascular
examinations and counseling, and instruction in weightlifting and other physical fitness
activities.” Id. at 13-14. The court held that “in view of the wide variety of nonamusement
activities carried on at these clubs, we simply cannot conclude that a tax on their membership
fees is a tax on either ‘amusements’ or ‘places of amusement.’ ” Id. at 14. The ordinance
could not be saved by attempting to insulate from taxation either service activities or items
purchased at the health clubs. Id. at 14-15. “The plain language of the amended ordinance
*** does not distinguish between service and nonservice components of the entities remitting
the tax, and there is nothing in the amended ordinance to support defendant’s ‘theory’ that
the tax applies to anything less than the gross receipts of health and racquetball clubs.” Id.
at 15.
¶ 51 In this case, the incidence of the tax is not just ostensibly on the patron of an amusement.
The practical operation and effect of the tax is in fact on patrons of amusements who are
responsible for the tax even if the tax collector–which includes the operators of amusements
and the resellers of tickets–fails to collect the tax. Chicago Municipal Code § 4-156-030(C)
(amended Nov. 19, 2008). The placement of responsibility on the operator of an amusement,
the place where an amusement is being held, or on resellers, to collect and remit the tax does
not make the tax a de facto occupation tax. Kerasotes Rialto Theater Corp., 77 Ill. 2d at 500
(“In that case it was held that the incidence of the tax was on the consumer, although the tax
ordinance placed responsibility for collecting and remitting the tax on the wholesaler and
retailer. The tax in that case was held not to be an occupation tax.” (citing S. Bloom, Inc. v.
Korshak, 52 Ill. 2d 56 (1972))). Nor is the tax unique to a particular commercial enterprise,
such as Chicago Bears’ football. Compare Chicago Health Clubs, Inc., 124 Ill. 2d at 11-12
(“by defining ‘amusement’ to include ‘racquetball or health clubs,’ and by further
establishing a tax on those clubs’ membership fees, the city has gone far beyond merely
taxing particular activities [citation], and has imposed a tax unique to those types of
commercial enterprises”).
¶ 52 Also instructive is Justice Ryan’s special concurrence in Chicago Health Clubs, Inc.
Justice Ryan concurred in the judgment that the tax at issue constitutes an occupation tax
which had not been authorized by the General Assembly, but found that “the opinion is not
clear in its analysis for determining whether a tax is an occupation tax within the meaning
of article VII, section 6(e).” Chicago Health Clubs, Inc., 124 Ill. 2d at 16 (Ryan, J., specially
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concurring). In Chicago Health Clubs, Inc., Justice Ryan found determinative the fact that
“a tax on membership fees or dues of health and racquetball clubs is not such a tax as the
delegates to the constitutional convention intended home rule units to levy.” Id. at 18. “These
clubs perform services, and the tax is measured not by participation in or admissions to
individual events, but on membership dues collected by the clubs. It is in the nature of a
service tax and, as such, is similar to those taxes held invalid in Commercial National Bank
v. City of Chicago.” Id. In this case, the tax is measured by the charges paid for admission
to events, not any services performed by the Bears or by the Chicago Park District.
¶ 53 Additionally, we find that the ordinance does not create an occupation tax because it does
not impose a tax on the service of raising renovation funds, the privilege of presenting Bears’
football, or for engaging in professional football as a profession. Illinois Gasoline Dealers
Ass’n v. City of Chicago, 119 Ill. 2d 391, 399 (1988) (“To determine if a tax constitutes an
occupation tax, it must be judged by the standard of whether it regulates and controls a given
occupation, or imposes a tax for the privilege of engaging in a given occupation, trade or
profession [citation], or finally, whether it imposes a tax on the privilege of engaging in the
business of selling services [citation].”). The charge for a PSL is a charge for the privilege
to view an amusement and the City’s tax on those charges is not preempted.
¶ 54 For the foregoing reasons, we conclude that PSLs are an intangible right to purchase a
ticket to enter the stadium to view or attend an amusement and, therefore, section 8-11-6a
does not preempt the tax as a tax on tangible personal property. Nor is the tax on PSLs a tax
on occupations. We find that the City’s amusement tax, as applied to PSLs, is not preempted
by any provision in article VII of the Illinois Constitution. Accordingly, we find that the City
is authorized to tax PSLs. See Commercial National Bank, 89 Ill. 2d at 50 (“any limitation
on the power of a home rule unit to tax must be found within section 6 of article VII of the
Constitution”). Based on our finding, we have no need to reach the question of whether the
City’s tax is specifically authorized by section 11-42-5 of the Municipal Code.
¶ 55 4. Applicability of Ordinance
¶ 56 Having determined that the amusement tax is not preempted, we must now determine
whether the tax is applicable to PSLs under the language of the ordinance. The amusement
tax defines football as an amusement. Chicago Municipal Code § 4-156-010 (amended Nov.
19, 2008). The ordinance imposes the tax on “the admission fees or other charges paid for
the privilege to enter, to witness, to view or to participate in such amusement.” Chicago
Municipal Code § 4-156-020(A) (amended Nov. 19, 2008). The question in this case is not
whether the activity involved is an amusement, but whether the price paid for a PSL is a
charge to enter, to witness, to view or to participate in such amusement.
¶ 57 Plaintiffs argue that it is not, because the PSL does not give its purchaser the right to
enter, witness, view or participate in the game. Plaintiffs argue that a PSL grants the holder
the right to purchase season tickets annually for a particular seat, and to transfer that right,
but, unlike the season tickets themselves, a PSL does not grant its holder the right to enter,
view, witness or participate in the event. The “bundle of rights” conferred by a PSL are
distinct from the rights conferred by a ticket. Plaintiffs interpret the amusement tax to apply
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only to the charge for actual entry to an amusement and under the ordinance, the right of
entry is defined as a “ticket.” Further, plaintiffs argue the original sales of PSLs are not
within the scope of the amusement tax because the Chicago Park District did not sell PSLs
for an amusement, but to finance lakefront improvements. Plaintiffs argue that the purpose
for the charge is relevant because the plain language of the ordinance limits its reach to
charges for admission to amusements.
¶ 58 According to plaintiffs, it is the price of the ticket, and only the price of the ticket, which
constitutes the “admission fees or other charges paid for the privilege to enter, to witness, to
view or to participate in [the] amusement.” This argument is irreconcilable with the plain
language of the ordinance. Plaintiffs’ interpretation of the ordinance would render the
language “other charges” completely superfluous to “admission fees.” Plaintiffs argue that
both “admission fees” and “other charges” modify “paid for the privilege to enter, to witness,
to view or to participate in such amusement,” and as such the price paid for the PSL cannot
be considered. Plaintiffs’ argument, then, is that the ordinance is superfluous in its use of
“admission fees” and “other charges” but, somehow, in this context superfluidity is
acceptable. We disagree because construing the ordinance in this way would clearly be
inappropriate. Daniels v. Corrigan, 382 Ill. App. 3d 66, 72 (2008) (“Courts apply the
principles of statutory construction to ordinances.”); Catom Trucking, Inc. v. City of
Chicago, 2011 IL App (1st) 101146, ¶ 15 (“We must construe the statute so that each word,
clause, or sentence is given reasonable meaning and not deemed superfluous or void.”
(Internal quotation marks omitted.)).
¶ 59 We find that the price of a PSL represents a charge for the privilege of viewing the
amusement. The record contains the PSL terms and conditions. The terms and conditions are
“deemed a part of the Permanent Seat License Agreement” and are “binding upon [the]
Licensee and Licensor and their respective assigns.” The terms provide that each PSL relates
to a specific seat designated in the PSL agreement and state that in consideration of the
purchase of a PSL, the licensee under the PSL “shall have the right to purchase from the
Team a Season Ticket, and the Team agrees to offer for sale to Licensee a Season Ticket for
the seat to which a PSL applies. Licensee shall have no right to enter the Stadium or to attend
the Team’s games without purchase of a ticket for such game.” The terms regarding “Use of
Seats and Stadium” provide:
“Licensee will have the privilege to enter the Stadium for Team home games and use
the seats to which Licensee’s PSL relates only upon presentation of a ticket for admission
to a Team home game. Licensee’s PSL does not confer upon Licensee any privilege to
enter the Stadium or attend a Team home game.”
¶ 60 The terms and conditions permit the licensee to transfer a PSL and require there to be
only one licensee for a given seat at any given time. The terms contain the following
disclaimer: “The rights licensed under this Agreement are revocable rights of personal
privilege and do not confer upon Licensee any interest in real property or any leasehold
interest in the seat to which the PSL applies or the Stadium.” The termination clause of the
PSL terms and conditions refer to “Licensee’s right to purchase a Season Ticket for each seat
to which a PSL applies.” A PSL terminates upon the failure to purchase a season ticket for
each PSL for any football season. The terms also contain the following provision regarding
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taxes:
“At the option of the Team, any sales, use, service amusement or other tax or
governmental charge imposed on the PSLs or the sale thereof or of Season Tickets to
Licensee may be added to the prices(s) charged to Licensee and shall then be the
responsibility of and paid by Licensee.”
¶ 61 Defendant argued, and, based on the forgoing, we agree, that the charge a PSL ticket
holder pays for the privilege of viewing a Bears game includes the charge for the PSL
because owning the PSL for their seat is a prerequisite to purchasing a ticket for their seat.
A PSL pertains to a seat in the stadium for which only the PSL holder may purchase a ticket.
Therefore, the “admission fees” and “other charges” a fan sitting in a seat subject to a PSL
paid to view a Bears game includes both the season ticket and the fee for the PSL on his or
her seat because that fan would not be able to view the game unless he or she both held the
PSL for the seat and purchased season tickets for the seat.2 This conclusion is supported by
the language of the PSL agreement. Under the PSL terms and conditions, a PSL is a nullity
without a ticket. The following “Representations of Licensee” contained in the terms and
conditions is also relevant:
“(a) Licensee has read and understands the terms of this Agreement;
***
(d) Licensee is acquiring the PSL solely for the right to purchase season tickets to the
Team home games at the stadium”
¶ 62 The only function of a PSL, by its own terms, is to confer the privilege of viewing a
Bears game by being able to buy season tickets. A PSL is not the only means of obtaining
that privilege, but obtaining the privilege of entering the stadium is the only intrinsic reason
for purchasing a PSL. Plaintiffs’ argument that ownership of a PSL is not a prerequisite to
entering the stadium is unavailing. Purchasing the PSL is a prerequisite to viewing the game
from a seat covered by a PSL. Plaintiffs stated that a PSL has value because it requires the
Bears to sell its holder season tickets and gives the holder the ability to transfer that right.
Whatever extrinsic value that right has, our focus is on the purpose of the charge for the PSL
itself. Intrinsically, the only purpose and function of purchasing a PSL is to purchase the right
to view an amusement. On its face, a PSL cannot be separated from the privilege of viewing
a Bears game, because the PSL terminates automatically and without notice if a ticket is not
purchased.
¶ 63 We hold that the amusement tax applies to the price paid for a PSL, either by an original
purchaser or by a subsequent transferee, because that price is a charge paid for the privilege
of viewing an amusement. In light of this holding, we have no need to address the parties’
arguments concerning whether plaintiffs’ claim for refunds of the taxes paid on the original
PSL purchases is time barred. The City properly collected and the Bears voluntarily paid the
2
Unless, of course, the PSL holder who purchased season tickets gifted tickets to a particular
game to a third party. The tax would still apply, because the tax is on the charges paid for the
privilege to enter, not, as plaintiffs argued, on the charges paid for actual entry. For that reason, the
tax applies even if the season ticket holder does not attend the game.
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tax on the original PSL sales.
¶ 64 Plaintiffs’ first amended complaint alleged that the City’s attempt to collect the
tax–presumably against subsequent PSL transfers–is time barred by section 13-205 of the
Code (735 ILCS 5/13-205 (West 2008)). We have held that the City’s amusement tax applies
to resales of PSLs. The City seeks monetary judgment against those who did not pay the tax
on the charges they paid to obtain PSLs after 2003. That claim remains pending in the trial
court, and the trial court’s judgment before this court did not make an express determination
as to whether the City is barred from collecting those taxes. Whether the statute of limitations
applies3, and whether any particular counterdefendant can plead and prove a statute-of-
limitations defense, is a fact-specific determination that will depend on the particular facts
and circumstances of the individual counterdefendant’s purchase or sale of a PSL. See
Rajcan v. Donald Garvey & Associates, Ltd., 347 Ill. App. 3d 403, 410 (2004) (“the statute
of limitations is an affirmative defense to a proceeding and applies only when raised by a
party; the party asserting it has the burden to show it applies” (emphasis and internal
quotation marks omitted)). Those questions have not been addressed in this appeal, and must
be resolved in the trial court in further proceedings on defendant’s counterclaim.
¶ 65 5. Plaintiffs’ Second Amended Complaint
¶ 66 We now turn to the question of whether the trial court properly denied plaintiffs’ motion
for leave to file a second amended complaint. “The decision whether to allow or deny an
amendment is a matter within the circuit court’s discretion, and we will reverse only if the
circuit court abused its discretion.” Illinois State Bar Ass’n Mutual Insurance Co. v.
Cavenagh, 2012 IL App (1st) 111810, ¶ 23. Initially, plaintiffs argued that the trial court had
authority to allow their second amended complaint because the court’s order on the parties’
cross-motions for summary judgment was not a final judgment, and the amendment satisfied
the factors applicable to the determination of whether amendment after summary judgment
should be allowed pursuant to section 2-1005(g) of the Code (735 ILCS 5/2-1005(g) (West
2010)). Those factors were identified in Loyola Academy v. S&S Roof Maintenance, Inc., 146
Ill. 2d 263, 272 (1992). Section 2-1005(g) of the Code of Civil Procedure states that
“[b]efore or after the entry of a summary judgment, the court shall permit pleadings to be
amended upon just and reasonable terms.” 735 ILCS 5/2-1005(g) (West 2012). In Loyola
Academy, our supreme court held:
3
See La Pine Scientific Co. v. Lenckos, 95 Ill. App. 3d 955, 958 (1981) (“Statutes of
limitation affect the remedy by limiting the period within which legal action may be brought or
remedies may be enforced; they bar the right to sue for recovery but do not extinguish the debt which
remains as before. [Citations.] *** [T]he assessments in question remain as debts owing to the State
but are not enforceable by means of a lawsuit brought by the State.”). But see Champaign County
Forest Preserve District v. King, 291 Ill. App. 3d 197, 200 (1997) (“As a general rule, the statute of
limitations will not apply to bar a claim by a governmental entity acting in a public capacity.
However, where the entity is acting in a private capacity, its claim may be subject to a limitations
defense.”).
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“[T]o determine whether the trial court has abused its discretion, we must look at four
factors *** adopted by this court. These factors are: (1) whether the proposed amendment
would cure the defective pleading; (2) whether other parties would sustain prejudice or
surprise by virtue of the proposed amendment; (3) whether the proposed amendment is
timely; and (4) whether previous opportunities to amend the pleading could be
identified.” Loyola Academy, 146 Ill. 2d at 273.
¶ 67 Plaintiffs argued the order on the motions for summary judgment was not a final order
because defendant’s counterclaim and plaintiffs’ claim for injunctive relief as to the taxation
of subsequent transfers of PSLs remained pending. As to the Loyola Academy factors,
plaintiffs argued their amendments correct certain defects in the pleading, including
clarification of the relationship between the Bears and the Chicago Park District, the fact that
PSLs were sold independently of season tickets, facts which purportedly obviated the
applicability of the URPO and buttressed the court’s decision regarding the inapplicability
of the voluntary payment doctrine, and the circumstances underlying the alleged lack of
notice to original PSL purchasers of the tax. Plaintiffs also argued defendant could not claim
prejudice or surprise from the amendment, the amendment was timely, and the only prior
amendment was for the purpose of adding additional plaintiffs. Plaintiffs assert the trial court
was mistaken in its belief it acted beyond its authority when it initially granted leave to
amend, therefore its order upon reconsideration denying plaintiffs’ motion for leave to file
a second amended complaint should be reversed.
¶ 68 Defendant concedes its counterclaim remains pending in the trial court. Defendant
focuses on the added counts III and IV and argues plaintiffs never obtained leave to file a
second amended complaint alleging either a due process or an equal protection violation. In
reply, plaintiffs argue defendant waived its argument regarding plaintiffs’ due process and
equal protection claims by failing to file a cross-appeal of the trial court’s denial of
defendant’s motion to strike those counts. Plaintiffs do not refute they failed to obtain leave
to file counts III and IV, but argue that the failure to obtain leave to add claims is not a
jurisdictional defect and, if the trial court believes a pleading is defective, the proper course
is to allow the pleading to be filed and then hear argument as to its efficacy, which is what
the trial court did in this case when it denied defendant’s motion to strike.
¶ 69 Plaintiffs’ second amended complaint contained a count for declaratory judgment (count
I); a count based on the takings clause (count II); a count alleging defendant deprived PSL
purchasers of due process (count III); and a count on behalf of original purchasers of PSLs
alleging that as a result of the court’s summary judgment order, the City has taxed some PSL
purchasers (original purchasers) and not others (subsequent transferees) in violation of the
original purchasers’ right to equal protection (count IV). If a proposed amendment will not
cure a defect in the pleading, the other factors used to determine whether the trial court
abused its discretion in denying leave to amend are superfluous. Watkins v. Office of the State
Appellate Defender, 2012 IL App (1st) 111756, ¶ 34.
¶ 70 In light of our disposition, we find that no amendments to count I of plaintiffs’ complaint
will cure a defect in the pleadings. For the reasons set forth herein, defendant’s amusement
tax is specifically authorized by the General Assembly, and based on the purpose of
purchasing a PSL as embodied in its terms and the nature of the rights conferred, the
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amusement tax applies to any sales of PSLs by any party. Any argument concerning whether
plaintiffs’ claims for a refund are barred by the voluntary payment doctrine or any statute of
limitations, whether the discovery rule or equitable tolling applies to plaintiffs’ claim for a
refund, or whether the City’s URPO bars plaintiffs’ refunds is moot. Plaintiffs are not
entitled to a refund because the City properly collected the tax.
¶ 71 Thus, there is no set of facts that would entitle plaintiffs to the declaratory and injunctive
relief they seek. Accordingly, any amendment to the complaint as to count I would be futile,
and the trial court did not abuse its discretion in denying plaintiffs leave to amend that count.
See Watkins, 2012 IL App (1st) 111756, ¶ 35.
¶ 72 As to count II, the trial court did not abuse its discretion because plaintiffs cannot state
a claim under the takings clause. Empress Casino Joliet Corp. v. Giannoulias, 231 Ill. 2d 62,
81 (2008) (“It is well settled that the takings clauses of the federal and state constitutions
apply only to the state’s exercise of eminent domain and not to the state’s power of
taxation.”). A PSL is not real property and confers no rights in real property. Therefore, a
takings analysis is not applicable. Id. at 83.
¶ 73 Finally, as to counts III and IV of the second amended complaint, the court has held that
“[a]mendments that are filed without leave of court ‘are said to be a nullity which should be
stricken.’ [Citation.]” Kurczaba v. Pollock, 318 Ill. App. 3d 686, 703 (2000). The failure to
obtain leave to amend a complaint is not a jurisdictional defect to the extent a party may
waive its right to object to the defect. Ragan v. Columbia Mutual Insurance Co., 183 Ill. 2d
342, 355 (1998). See also Savage v. Pho, 312 Ill. App. 3d 553, 557 (2000) (“the requirement
of obtaining leave of court may be waived by the parties”). Here, defendant did not waive
its right to object to plaintiffs’ failure to obtain leave to file counts III and IV of their second
amended complaint. Defendant promptly moved to dismiss those counts on that basis. There
is no genuine dispute that plaintiffs did not obtain leave to file counts III and IV of the
second amended complaint. Those counts are a nullity.
¶ 74 The trial court’s judgment denying plaintiffs leave to file the second amended complaint
was not an abuse of discretion.
¶ 75 CONCLUSION
¶ 76 Case number 1-12-0265 is dismissed. We find that the City’s amusement tax is not
preempted and, therefore, is a proper exercise of its home rule authority. We express no
opinion on the City’s counterclaim for a money judgment because that claim remains
pending in the trial court. General Motors Corp. v. Pappas, 242 Ill. 2d 163, 176 (2011) (“A
notice of appeal confers jurisdiction on a court of review to consider only the judgments or
parts of judgments specified in the notice of appeal.”). The trial court’s judgment is affirmed
and the cause remanded for further proceedings.
¶ 77 Affirmed and remanded.
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