Securus Technologies, Inc. v. Illinois Commerce Commission

2014 IL App (1st) 131716SIXTH DIVISION
May 16, 2014
No. 1-13-1716
) Petition for Review of Orders
SECURUS TECHNOLOGIES, INC, ) of the Illinois Commerce
) Commission
Petitioner, )
)
v. )
)
ILLINOIS COMMERCE COMMISSION and )
CONSOLIDATED COMMUNICATIONS ENTERPRISE )
SERVICES, INC., d/b/a Consolidated Communications ) ICC Docket No. 12-0413
Public Services, )
)
Respondents. )
JUSTICE REYES delivered the judgment of the court, with opinion
Presiding Justice Rochford and Justice Lampkin concurred in the judgment and opinion.
OPINION
¶1 Petitioner Securus Technologies, Inc. (Securus), directly appeals to this court from orders
of the respondent Illinois Commerce Commission (Commission) entered upon a verified petition
for a declaratory ruling filed with the Commission by respondent Consolidated Communications
Enterprise Services (Consolidated), 1 as well as an order denying rehearing on the matter.
Securus argues: (1) the Commission lacked jurisdiction to enter the orders; (2) the Commission's
orders violate Illinois law; (3) the Commission's procedures prior to entry of the orders violated
1
Consolidated is not a party to this appeal.
1-13-1716
Sercurus's right to due process of law; and (4) the Commission's findings were against the
manifest weight of the evidence. The Commission not only takes the contrary position to all of
the arguments raised by Securus, but also argues this court lacks jurisdiction to hear this appeal.
For the following reasons, we conclude this court has jurisdiction to hear the appeal, the
Commission lacked jurisdiction to enter the orders at issue, and the Commission's orders must be
vacated.
¶2 BACKGROUND
¶3 The record on appeal discloses the following facts. On July 3, 2012, Consolidated filed a
verified petition for declaratory ruling from the Commission, pursuant to section 5-150 of the
Illinois Administrative Procedure Act (5 ILCS 100/5-150 (West 2012)) and section
200.220(a)(1) of the Commission's Rules of Practice (83 Ill. Adm. Code 200.220 (1996)). In the
petition, Consolidated identified itself as a corporation engaged in the provision of
telecommunications services and other telecommunications-related businesses in Illinois. The
petition alleged Consolidated "provide[d] telephone calling services accessible by inmates of
corrections facilities operated by the Illinois Department of Corrections ('IDOC'), so that inmates
may communicate with members of the general public." Consolidated provided these services
through equipment placed in the restricted areas of the IDOC facilities allowing inmates to place
operator-assisted collect calls. The charges for the telephone calls are billed to the members of
the public who have accepted responsibility to pay for the calls. IDOC allows only one such
service provider at each corrections facility.
¶4 Consolidated sought a declaratory ruling from the Commission "as to whether a person or
entity, such as Consolidated," is providing "operator services" and thus is an "operator services
provider[]" under section 13-901 of the Public Utilities Act (220 ILCS 5/13-901 (West 2012))
2
1-13-1716
and section 770.10 of the Commission's regulations (83 Ill. Adm. Code 770.10 (1994)).
Consolidated also sought a declaratory ruling that such operator services providers were thus
subject to the requirements of not only section 13-901 of the Public Utilities Act, but also
sections 770.20(a) and 770.40(c) and (e) of the Commission's regulations (83 Ill. Adm. Code
770.20(a), 770.40(c), (e) (1994)), which set standards of service and maximum rates for
telephone calls.
¶5 Consolidated asserted in its petition that the request for a declaratory ruling was
prompted by an actual controversy. In support of the petition's assertion that an actual
controversy existed, Consolidated alleged it had recently submitted a bid to the Illinois
Department of Central Management Services (CMS) on a contract to provide services described
in the petition to certain IDOC corrections facilities. The contract solicitation required bidders to
submit the rates they would charge and the percent of revenues they would pay to IDOC as a
commission. Consolidated, believing itself to be an operator services provider, specified it
would charge no more than the maximum rates established by sections 770.40(c) and (e) of the
Commission's regulations. CMS awarded the contract to a bidder (the record establishes this
bidder was Securus) that represented it would charge rates above those maximum rates. On May
31, 2012, Consolidated protested the contract award. The chief procurement officer of CMS
(CPO) denied the protest, based on his review of prior orders issued by the Commission and a
review of the Commission's regulations.
¶6 Consolidated further asserted in the petition that Consolidated needed to know "whether,
in the future, it would be acting in violation of a Commission regulation if it were to charge
higher rates than those established pursuant to section 770.40(c) and (e) to members of the public
in connection with the provision of the inmate telephone calling services described" in the
3
1-13-1716
petition.
¶7 Consolidated attached to its petition a copy of the CPO's June 25, 2012, decision
rejecting Consolidated's protest as to the contract awarded to Securus. The CPO determined the
key inquiry is whether the services at issue were within the Commission's regulatory jurisdiction
and subject to the restrictions of section 770.40, as the award would be required to be rescinded
if the services were not exempt. The CPO relied on two prior orders issued by the Commission,
Inmate Communications Corporation, Ill. Commerce Comm'n, No. 96-0131 (June 5, 1996)
(Inmate Communications), and Infinity Networks, Inc., Ill. Commerce Comm'n, No. 05-0429
(Oct. 19, 2005) (Infinity Networks), in which the Commission ruled: (1) telecommunications
providers that do not locate pay telephones in public areas are not public utilities and are not
subject to the Commission's regulation with respect to such services; (2) prisoners are not
members of the public and thus pay telephones for inmate-only use are not a public utility or
telecommunications carrier under section 13-202 of the Public Utilities Act; and (3) operator
services associated with the provision on nonpublic telephones in correctional institutions were
exempt from the operator services requirements of Part 770 of Title 83 of the Illinois
Administrative Code.
¶8 The CPO noted the only opposing material Consolidated presented was an email from
Kathy Stewart, who was employed by the Commission as an "Engineering Analyst IV." The
CPO observed he was not provided the question Consolidated presented to Stewart or any
explanation for why Stewart was requested to provide a legal opinion. This "conundrum"
prompted the CPO to contact the Commission's general counsel's office, which replied the
opinion of any single employee was not the opinion of the Commission, and explained there is a
formal mechanism called a declaratory ruling which allows the Commission to issue opinions
4
1-13-1716
regarding the applicability of its rules. Thus, the CPO concluded the Commission's prior orders
were determinative and the services at issue were not subject to regulation.
¶9 On July 30, 2012, Securus transmitted a letter regarding Consolidated's petition for a
declaratory ruling to an administrative law judge (ALJ) at the Commission. The letter requested
the summary dismissal of Consolidated's petition, arguing: (1) after the CPO rejected
Consolidated's protest of the contract award, Consolidated filed a lawsuit in the circuit court of
Sangamon County regarding the contract bid dispute, which Consolidated failed to disclose in its
verified petition; (2) the Commission had already ruled upon the issue raised in Consolidated's
petition; and (3) Consolidated was not an "affected person" with standing to request a declaratory
ruling from the Commission. Securus attached a copy of Consolidated's July 3, 2012, complaint
filed in the circuit court against CMS, the CPO, Securus and other parties, challenging the award
of the contract to Securus. The ALJ recorded the letter as an ex parte communication from an
interested party.
¶ 10 On July 31, 2012, during a prehearing conference on Consolidated's petition, the ALJ
informed counsel for Securus they would be required to file a petition to intervene if they wished
to participate in the proceedings on Consolidated's petition.
¶ 11 On August 30, 2012, Securus filed a verified petition to intervene and be treated as a
party in the proceedings on Consolidated's petition for a declaratory ruling. Securus asserted its
interest was based on its then-ongoing negotiation of the terms of the contract Securus was
awarded to provide inmate pay telephone services at IDOC facilities. Securus proffered
appearances of counsel and attached a copy of its July 30, 2012, letter to the ALJ. On September
14, 2012, the ALJ granted Securus's petition to intervene.
¶ 12 On August 31, 2012, the Commission's staff filed a response in support of Consolidated's
5
1-13-1716
verified petition for a declaratory ruling. The response, prepared by Stewart, stated it would not
respond directly to the points raised by Securus, because Securus had yet to file a petition to
intervene when the response was drafted. The response, however, asserted Consolidated's
litigation of the contract bid in the circuit court was immaterial to the issues raised by the
petition. The Commission's staff also argued the Commission should revisit its prior decision in
Inmate Communications Corporation, noting: (1) the Commission's orders are not res judicata
on the Commission; (2) the relevant portion of the order was dicta; and (3) the Commission
staff's opinion was that the services at issue should be subject to regulation to protect members of
the general public who pay for telephone calls from inmates. The Commission's staff further
asserted Consolidated was an "affected person" insofar as the rate regulation affected not only
Consolidated's past contract bid, but also future bids.
¶ 13 On September 7, 2012, Consolidated filed a verified reply in support of its verified
petition for a declaratory ruling. Responding to Securus, Consolidated observed it had filed an
amended complaint in the circuit court alleging numerous flaws in the bid proposal submitted by
Securus. Consolidated asserted the controversy prompting its petition was the award of the
contract to Securus, which Consolidated disclosed in its verified petition. Consolidated also
asserted its litigation was not relevant to the Commission's resolution of the question in the
petition for a declaratory ruling. Consolidated further argued the Commission should revisit its
prior decisions in Inmate Communications and Infinity Networks. Consolidated additionally
argued it was an "affected person" for the purpose of seeking a declaratory ruling because the
contract award was in litigation and not final, and as the CPO indicated in his decision, the award
must be rescinded if the rate regulations applied to the services at issue in the contract.
Consolidated reiterated it required further guidance regarding whether it would be violating a
6
1-13-1716
Commission regulation in the future if it charged rates higher than those established by sections
770.40(c) and (e) of the Commission's regulations. In addition, Consolidated asserted Securus
had failed to challenge any of the underlying facts or policy considerations asserted by
Consolidated and the Commission's staff in the proceedings.
¶ 14 On October 23, 2012, the ALJ issued a proposed order recommending Consolidated's
petition for a declaratory ruling be granted. Securus filed a motion requesting briefing of
exceptions to the proposed order be deferred, due to outstanding discovery requests. On
November 13, 2012, the ALJ denied Securus's motion to defer briefing. Securus sought
interlocutory review of the ALJ's decision. On December 19, 2012, the Commission denied
interlocutory review.
¶ 15 On November 16, 2012, Securus filed its brief of exceptions to the ALJ's proposed order.
Securus again argued Consolidated is not an "affected person" entitled to request a declaratory
ruling. Securus observed Consolidated's lawsuit was dismissed by the circuit court on the basis
Consolidated lacked standing to sue. 2 Moreover, Securus and IDOC entered into their contract
and the transition from Consolidated to Securus had already begun. Thus, Securus concluded,
granting the petition would have no bearing on the litigation or IDOC's contract with Securus. In
addition, Securus argued Consolidated could not seek an advisory opinion from the Commission
regarding unspecified future activities.
¶ 16 Securus also argued the proposed order was contrary to the Commission's prior orders on
the subject. Securus disputed the Commission staff's assertion that a lack of regulation resulted
2
A copy of the October 24, 2012, circuit court order dismissing Consolidated's complaint
included in the record indicates the complaint was dismissed based not only on Consolidated's
lack of standing to sue, but also on the ground of sovereign immunity.
7
1-13-1716
in excessive and exorbitant prices for inmate telephone services, arguing the additional
technological requirements for providing inmate-only telephone service, which are not required
for ordinary collect telephone calls, accounted for the differences in pricing the telephone calls.
Securus additionally sought a hearing and oral argument on the matters raised in the proposed
order.
¶ 17 On November 20, 2012, the Commission's staff moved to strike the portions of the brief
of exceptions filed by Securus referring to facts outside the record of the proceedings on
Consolidated's petition. On December 18, 2012, the ALJ granted the Commission staff's motion,
ruling Securus had not timely filed or sought other relief regarding the Commission staff's
response. The ALJ also observed that in contested cases, parties must be notified and given the
opportunity to contest materials which may be the subject of administrative notice (see 5 ILCS
110/10-40 (West 2012)). The ALJ did not specifically state this matter was a contested case.
¶ 18 On December 21, 2012, Consolidated filed its reply to the exceptions to the proposed
order. Consolidated argued it was an "affected person" entitled to request a declaratory ruling.
Consolidated noted it had previously provided the services at issue in its petition. Consolidated
also noted it had appealed the dismissal of its lawsuit by the circuit court and filed a complaint
with the Illinois Procurement Policy Board. Consolidated distinguished case law cited by
Securus on the issue of whether an order from the Commission would affect the litigation or the
contract between IDOC and Securus.
¶ 19 Consolidated's reply also argued services offered to members of the general public are
operator services subject to the Commission's rate regulation. Consolidated maintained
Securus's reliance on Part 771 of the Commission's regulations was inapposite. Consolidated
further argued that the Commission's prior orders generally addressed whether inmate pay
8
1-13-1716
telephone services providers were "telecommunications carriers" under the Public Utilities Act,
not whether such providers were "operator services providers." In Consolidated's view, the
Commission's decision in Inmate Communications Corporation was the only order addressing
the precise issue presented in Consolidated's petition and should not be followed.
¶ 20 On January 9, 2013, the Commission denied Securus's request for oral argument on the
proposed order. On January 18, 2013, Securus sought interlocutory review of the ALJ's ruling
striking portions of its brief of exceptions. On January 29, 2013, the Commission denied
interlocutory review of the ruling. On January 31, 2013, Securus renewed its request for a
hearing on the proposed order.
¶ 21 On February 14, 2013, Consolidated's petition was placed on the Commission's regular
meeting agenda. During the public comment portion of the meeting, Securus's counsel argued
there would be detrimental effects if the Commission declared inmate pay telephone services
subject to Part 770 of the Commission's regulations. At the request of a commissioner, the
Commission held the matter over, as there was no deadline for taking action on the petition.
¶ 22 On March 6, 2013, the petition was placed on the Commission's bench session agenda.
During the public comment portion of the meeting, IDOC's deputy chief of operations spoke
regarding the need to restrict inmate telephone service to a single provider to facilitate the
monitoring and regulation of such telephone calls to protect the safety and security of IDOC
facilities and personnel. When Consolidated's petition was called for discussion during the
public utility portion of the meeting, a commissioner requested the ALJ to discuss her
conclusions in the matter. The ALJ explained the issues raised by Consolidated's petition and
observed the Commission's prior orders contained no factual basis or discussion of its findings
regarding inmate telephone service. A commissioner inquired of the ALJ whether the proposed
9
1-13-1716
order would be limited to this case and would have no precedential value moving forward should
someone attempt to cite it as authority in the future. The ALJ responded the proposed order
would apply to inmate calling services unless someone filed another petition establishing the
underlying facts were different. The Commission's chairman indicated the matter would be held
for later disposition.
¶ 23 On April 8, 2013, Securus, pursuant to section 200.190 of the Commission's Rules of
Practice (83 Ill. Adm. Code 200.190 (1996)), filed a verified motion to dismiss Consolidated's
petition as moot. Securus asserted that as of March 28, 2013, all telephone services for inmates
at IDOC facilities were transitioned to Securus. Accordingly, Consolidated was no longer
providing the services which were the subject of Consolidated's petition. Securus relied upon
prior Commission orders which declined to issue declaratory rulings where the Commission's
regulations did not apply to the requester and where the petitioner failed to establish business
activities which would be affected by a declaratory ruling.
¶ 24 On April 9, 2013, without ruling on Securus's motion to dismiss, the Commission entered
a 26-page order granting Consolidated's petition for a declaratory ruling. The order is not
identical to the ALJ's proposed order, but similar in substance. The Commission found
Consolidated was an "affected person" entitled to seek a declaratory ruling, based on the
rejection of its contract bid and subsequent litigation as to the denial of the bid protest and the
award of the contract to Securus, as well as its request for future guidance regarding the
applicability of the rate regulation. The Commission also found it had sufficient information to
determine Consolidated's request was within the parameters of the Commission's authority for
issuance of a declaratory ruling and that an actual controversy existed.
¶ 25 The Commission's order adopted the Commission staff's argument that, as a matter of
10
1-13-1716
public policy, the operator services within inmate calling services should be regulated to protect
members of the public who engage in telephone calls with inmates. The Commission's order did
not discuss its prior decisions, other than to note the prior orders are not res judicata and the
record here disclosed the nature of the operator services included in inmate calling services.
Accordingly, the Commission ordered "that an entity providing telephone calling services
accessible to inmates of correctional facilities that include operator services as described herein
is subject to [s]ection 13-901 of the [Public Utilities] Act and [s]ections 770.20(a) and 770.40 of
Part 770."
¶ 26 On April 24, 2013, Securus filed a verified petition for rehearing. On April 25, 2013, the
ALJ issued a memorandum recommending the Commission deny rehearing. On May 1, 2013,
the Commission denied the petition for rehearing and served the parties electronically the
following day. On June 4, 2013, Securus filed a notice of appeal to this court.
¶ 27 ANALYSIS
¶ 28 On appeal, Securus argues: (1) the Commission lacked jurisdiction to enter the orders; (2)
the Commission's orders violate Illinois law; (3) the Commission's procedures prior to entry of
the orders violated Sercurus's right to due process of law; and (4) the Commission's findings
were against the manifest weight of the evidence. The Commission not only takes the contrary
position to all of Securus's arguments, but also argues this court lacks jurisdiction to hear this
appeal, because section 5-150(a) of the Administrative Procedure Act (5 ILCS 100/5-150(a)
(West 2012)) and section 200.220(i) of the Commission's Rules of Practice (83 Ill. Adm. Code
200.220(i) (1996)) provide that declaratory rulings are not appealable. A reviewing court has a
duty to ascertain whether it has jurisdiction before addressing any issues on appeal. Secura
Insurance Co. v. Illinois Farmers Insurance Co., 232 Ill. 2d 209, 213 (2009).
11
1-13-1716
¶ 29 The Commission's authority to issue declaratory rulings is derived from section 5-150(a)
of the Administrative Procedure Act and section 200.220(i) of the Commission's Rules of
Practice. Section 5-150(a) of the Administrative Procedure Act provides:
"Each agency may in its discretion provide by rule for the filing and prompt disposition
of petitions or requests for declaratory rulings as to the applicability to the person
presenting the petition or request of any statutory provision enforced by the agency or of
any rule of the agency. Declaratory rulings shall not be appealable." 5 ILCS 100/5-
150(a) (West 2012).
Pursuant to section 5-150(a), the Commission promulgated section 200.220 of the Rules of
Practice for the Commission, which provides:
"a) When requested by the affected person, the Commission may in its sole
discretion issue a declaratory ruling with respect to:
1) the applicability of any statutory provision enforced by the
Commission or of any Commission rule to the person(s) requesting a
declaratory ruling ***[.]
***
b) A request for a declaratory ruling:
1) shall be captioned as such and shall contain a complete statement of the
facts and grounds prompting the request, including a full disclosure of the
requester's interest; a clear, concise statement of the controversy or uncertainty
that is the subject of the request; the requester's proposed resolution of that
controversy or uncertainty; and citations to any statutes, rules, orders or other
authorities involved[.]
12
1-13-1716
***
i) Declaratory rulings shall not be appealable." 83 Ill. Adm. Code 200.220(a)(1),
(b)(1), (i) (1996).
"It is our duty as officers of the court to respect this expression of legislative intent."
MidAmerican Energy Corp. v. Illinois Commerce Comm'n, 367 Ill. App. 3d 163, 167 (2006). In
this case, the Commission found it had sufficient information to determine Consolidated's
request was within the parameters of the Commission's authority for issuance of a declaratory
ruling, an actual controversy existed, and Consolidated was an "affected person" entitled to seek
a declaratory ruling. The jurisdictional issue here thus turns on whether the Commission's order
was a declaratory ruling under section 200.220.
¶ 30 Section 200.220 provides that a declaratory ruling regarding a "controversy or
uncertainty" be requested by an "affected person." 83 Ill. Adm. Code 200.220 (1996). These
self-imposed limitations by the Commission do not appear in the text of section 5-150(a) of the
Administrative Procedure Act, and thus the Commission's determination of what is a
"controversy or uncertainty" and who is an "affected person" arguably could be characterized as
the Commission's interpretations of its own regulation. This court has stated that "[a] court may
overturn the Commission's interpretation of its own rules if its construction is clearly erroneous,
arbitrary, or unreasonable." Ameren Illinois Co. v. Illinois Commerce Comm'n, 2012 IL App
(4th) 100962, ¶ 61. Yet we stated this rule in the context of the Commission's interpretation of a
statute it is charged with administering and enforcing. See id. Section 200.220 is a Commission
regulation promulgated pursuant to the Administrative Procedure Act, rather than the Public
Utilities Act. The Commission's interpretation of a statute it is not charged with administering
and enforcing generally is not entitled to any deference and is reviewed de novo. Ameren Illinois
13
1-13-1716
Co., 2012 IL App (4th) 100962, ¶ 62 (citing Business & Professional People for the Public
Interest v. Illinois Commerce Comm'n, 136 Ill. 2d 192, 204 (1989)). Furthermore, even in cases
where some deference is to be afforded to an administrative agency's statutory interpretations,
"our supreme court has consistently indicated that '[a]n agency's interpretation is not binding,
however, and will be rejected when it is erroneous.' " AT&T Teleholdings, Inc. v. Department of
Revenue, 2012 IL App (1st) 113053, ¶ 32 (quoting Shields v. Judges' Retirement System of
Illinois, 204 Ill. 2d 488, 492 (2003)); see also Business & Professional People for the Public
Interest, 136 Ill. 2d at 228 (less deference will be afforded the Commission when its decision is a
departure from the Commission's past practice). Lastly, we are not bound to accept the
Commission's conclusions regarding its jurisdiction. Peoples Gas Light & Coke Co. v. Illinois
Commerce Comm'n, 222 Ill. App. 3d 738, 743 (1991). Accordingly, while we will consider the
Commission's interpretation of section 200.220 in this case, we remain free to reject that
interpretation if it is unreasonable or otherwise erroneous. AT&T Teleholdings, Inc., 2012 IL
App (1st) 113053, ¶ 32. We now turn to address whether the Commission's April 9, 2013, order
was a nonappealable "declaratory ruling" requested by an "affected person" under section
200.220(a)(1).
¶ 31 Securus argues the broad language of the Commission's order, as well as the March 6,
2013, public colloquy between a commissioner and the ALJ, establish the order was intended to
establish a generally applicable Commission policy. Securus contends section 200.220 does not
authorize the Commission to issue industry-wide conclusions regarding policy or practices in the
context of a declaratory ruling. Instead, Securus argues section 10-101 of the Public Utilities Act
governs and provides in part:
"Any proceeding intended to lead to the establishment of policies, practices, rules or
14
1-13-1716
programs applicable to more than one utility may, in the Commission's discretion, be
conducted pursuant to either rulemaking or contested case provisions, provided such
choice is clearly indicated at the beginning of such proceeding and subsequently adhered
to." 220 ILCS 5/10-101 (West 2012).
See also 5 ILCS 100/1-70(ii) (West 2012) (a "rule" does not include "informal advisory rulings
issued under Section 5-150" of the Administrative Procedure Act). Thus, Securus argues, the
Commission cannot establish a generally applicable policy regarding inmate pay telephone
services in an order styled as a declaratory ruling. In response, the Commission asserts its ruling
is a declaratory ruling because it applies only to Consolidated and any references to "an entity" in
the order are limited to Consolidated offering the services set forth in Consolidated's verified
petition for a declaratory ruling.
¶ 32 Securus also maintains Consolidated is not an "affected person" entitled to a declaratory
ruling. Securus argues that Consolidated's interest in the existing contract for inmate telephone
services is moot, as Consolidated no longer provided the services at issue and Consolidated's
lawsuit regarding the contract was dismissed by the circuit court of Sangamon County. Securus
further argues that Consolidated's assertion that it would like to know whether "in the future"
charging rates higher than those provided in Part 770 would be a violation of the Commission's
regulations does not establish Consolidated is an affected person. In response to these
arguments, the Commission contends Consolidated is an affected person, based on the rejection
of Consolidated's contract bid, the ongoing litigation in Sangamon County, and Consolidated's
request for guidance regarding future contract bids.
¶ 33 Neither section 5-150(a) of the Administrative Procedure Act nor section 200.220 of the
Rules of Practice for the Commission define the term "declaratory ruling," and section 200.220
15
1-13-1716
does not define who is an "affected person." Accordingly, we resort to basic principles of
judicial interpretation. Administrative regulations are construed according to the same standards
that govern the construction of statutes; accordingly, the best indicator of the agency's intent is
found in the plain, ordinary and popularly understood meaning of the language of the regulation.
See People v. Hanna, 207 Ill. 2d 486, 497-98 (2003). In this regard, we note section 2-701(a) of
the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-701(a) (West 2010)) provides that a
court "may, in cases of actual controversy, make binding declarations of rights *** of the rights
of the parties interested." "By the very terms of the statute, a declaratory judgment action may
not be maintained unless and until an actual controversy exists ***." Great West Casualty Co. v.
Cote, 365 Ill. App. 3d 100, 105 (2006). An actual controversy is one of the essential elements of
an action for declaratory relief. See Beahringer v. Page, 204 Ill. 2d 363, 372 (2003). "As used
in this phrase, 'actual' does not mean that a wrong must have been committed and an injury
inflicted; rather, the term requires a showing that the underlying facts and issues of the case are
not moot or premature with the result that a court passes judgment upon mere abstract
propositions of law, renders an advisory opinion, or gives legal advice concerning future events."
Messenger v. Edgar, 157 Ill. 2d 162, 170 (1993). It is also generally understood that a party
seeking declaratory relief be "interested" in the controversy. Pekin Insurance Co. v. Cincinnati
Insurnace Co., 157 Ill. App. 3d 404, 406 (1987). " '[I]nterested' does not mean merely having a
curiosity about or a concern for the outcome of the controversy [citation]; rather, the party
requesting the declaration must possess a personal claim, status, or right that is capable of being
affected by the grant of such relief [citation]." Messenger v. Edgar, 157 Ill. 2d at 171.
¶ 34 The Commission has relied on these basic principles regarding declaratory relief in its
interpretation of section 200.220(a). Section 200.220 requires a requester of a declaratory ruling
16
1-13-1716
provide a clear and concise statement of the "controversy or uncertainty" prompting the request.
83 Ill. Adm. Code 200.220 (1996). Moreover, in Illinois Industrial Energy Consumers' Request
for Declaratory Ruling pursuant to 200.220 re: Section 16-102 of an Act Entitled "Electric
Service Customer Choice and Rate Relief Law of 1997," Ill. Commerce Comm'n, No. 98-0607
(Mar. 10, 1999), (Consumers' Request), the Commission was asked to clarify the meaning of a
provision of the Public Utilities Act, but the Commission concluded it had "no authority to
declare what a particular statute means in some abstract sense." The Commission concluded that
the " 'controversy or uncertainty' " embodied in section 200.220 "must be sufficiently immediate
or ripe to enable [the Commission] to evaluate and resolve the matter with a declaratory ruling."
Id. (citing Weber v. St. Paul Fire & Marine Insurance Co., 251 Ill. App. 3d 371 (1993)). The
Commission also determined the requesters' allegations failed to establish the requesters were
"affected" persons or constituted "a full disclosure of the requester's interest." (Emphasis added.)
Id.; see 83 Ill. Adm. Code 200.220(b)(1) (1996). Given the requirement that an "affected
person" set forth an actual "controversy or uncertainty," petitions for declaratory relief must
establish the issues of the case are not moot or premature. See Consumers' Request, Ill.
Commerce Comm'n, No. 98-0607; Continental Casualty Co. v. Howard Hoffman & Associates,
2011 IL App (1st) 100957, ¶ 19. It is central to the purpose of a proceeding for declaratory relief
that it allow the decision-making body to take hold of a controversy one step sooner than
normally, i.e., after the dispute has arisen, but before steps are taken which give rise to claims for
damages or other relief. See Kaske v. City of Rockford, 96 Ill. 2d 298, 306 (1983); see also
Beahringer, 204 Ill. 2d at 372-73.
¶ 35 Moreover, in Resource Technology Corp. v. Commonwealth Edison Co., 343 Ill. App. 3d
36 (2003), this court addressed the issue of whether a Commission order was a declaratory
17
1-13-1716
ruling, as well as whether the order was sought by an affected person. This court first observed
Illinois case law and Commission actions did not offer much guidance on the types of issues that
are appropriate subjects for a declaratory ruling, as section 200.220 of the Commission's Rules of
Practice was not promulgated by the Commission until 1996. Id. at 43. We noted the
Commission declined to issue a declaratory ruling in Consumer' Request because the
Commission concluded it had " 'no authority to declare what a particular statute means in some
abstract sense.' " Id. at 44.
¶ 36 The Resource Technology Corp. court rejected a broad interpretation of section 200.220
urged by the Commission and petitioner Commonwealth Edison (ComEd), reasoning one could
argue for a declaratory ruling each time the Commission makes a decision concerning the Public
Utilities Act, as almost everything the Commission does involves the applicability of the statute.
Id. Accordingly, this court determined that whether the order was a declaratory ruling must be
determined by examining the substance of ComEd's petition. Id.
¶ 37 Turning to the substance of ComEd's petition, the Resource Technology Corp. court
observed that while ComEd's petition was "dressed up in language that sought the Commission's
view of statutory application," the petition actually sought to have the Commission interpret a
1997 order governing the relationship between ComEd and Resources Technology Corp. (RTC).
Id. The court also observed "[t]he 'affected person' was not ComEd, but RTC." Id. RTC was an
intervenor in the proceedings on ComEd's petition for a declaratory ruling. Id. at 41.
Accordingly, the court concluded the Commission's order was not a declaratory ruling within the
meaning of section 200.220 and denied the Commission's motion to dismiss the appeal. Id. at
44.
¶ 38 In this case, as in Resource Technology Corp., we must determine whether the
18
1-13-1716
Commission's order at issue is a declaratory ruling by examining the substance of Consolidated's
petition. See id. In its petition for a declaratory ruling, Consolidated alleged an actual
controversy existed, based on the fact that Consolidated submitted a bid to CMS for an inmate
services calling contract, which was not accepted. Consolidated also relied upon the CPO's
rejection of Consolidated's bid protest regarding the contract award. Consolidated's petition did
not refer to the lawsuit it subsequently filed in the circuit court of Sangamon County.
¶ 39 Consolidated's petition for a declaratory ruling is contrary to the central purpose of
seeking declaratory relief. At the time of its filing, steps had already been taken which allegedly
gave rise to claims for damages or other relief. See Kaske, 96 Ill. 2d at 306. Consolidated's
petition sought a declaratory ruling regarding the application of a regulation to a contract bidding
process which had already terminated. Indeed, after losing its bid protest, Consolidated filed a
claim for damages or other relief. In this most basic sense, Consolidated's petition for a
declaratory ruling is obviously untimely, as it sought a ruling regarding a course of action
Consolidated had already undertaken. Thus, regarding the submission of the bid to CMS, any
actual controversy or uncertainty is moot. See Continental Casualty Co., 2011 IL App (1st)
100957, ¶ 19.
¶ 40 Consolidated also alleged in its petition that an actual controversy existed because it
needed to know "whether, in the future, it would be acting in violation of a Commission
regulation if it were to charge higher rates than those established pursuant to § 770.40(c) and (e)
to members of the public in connection with the provision of the inmate telephone calling
services described" in the petition. The record establishes Consolidated is no longer providing
the services described in its petition. Moreover, Consolidated's petition fails to identify any
immediate or concrete set of facts regarding the future provision of these services. Furthermore,
19
1-13-1716
the specific nature, terms, and conditions of the telephone services IDOC may seek to provide to
inmates pursuant to future contracts is also unknown. Consequently, it is unknown whether
Consolidated would be successful in any future bid process. Accordingly, Consolidated's
petition can only be construed as seeking an abstract opinion on the applicability of the existing
regulations under some set of unknown future circumstances. Consolidated's claim to be an
affected person thus presents precisely the type of abstract and conjectural interest the
Commission rejected in Consumers' Request.
¶ 41 The Commission concluded Consolidated was an affected person in part because of
pending litigation brought by Consolidated as to the contract award. Although not alleged in the
petition for a declaratory ruling, Consolidated's reply to Securus further relied upon the fact that
the award of the contract is the subject of ongoing litigation. On this point, we note
Consolidated and the Commission staff initially took the position in these proceedings that the
litigation in the circuit court of Sangamon County was immaterial or irrelevant to Consolidated's
statement of its interest in the petition for a declaratory ruling. Securus argued it was improper
for Consolidated to file its verified petition for the purpose of advancing Consolidated's position
in the litigation. Thus, in this case, only the Commission concluded the litigation was material
and a basis to conclude Consolidated was an "affected person" under section 200.220. The
Commission's order, however, contains no explanation for this conclusion.
¶ 42 More significantly, the Commission's conclusion in this respect is inexplicable, given our
decision in Resource Technology Corp. The Commission attempts to distinguish Resource
Technology Corp. as a case where the Commission was interpreting a prior order governing the
relationship between ComEd and RTC, rather than issuing a declaratory ruling. See Resource
Technology Corp., 343 Ill. App. 3d at 44. Similar to Resource Technology Corp., however,
20
1-13-1716
Consolidated has requested a declaratory ruling after litigation has commenced in another forum,
contrary to the basic point of seeking a declaratory ruling. See Kaske, 96 Ill. 2d at 306. In
addition, as in Resource Technology Corp., the actual "affected person" in this case would be the
intervenor and successful bidder, Securus. See Resource Technology Corp., 343 Ill. App. 3d at
44. Accordingly, we conclude Resource Technology Corp. is applicable to this case.
¶ 43 In addition, Consolidated's lawsuit was dismissed by the circuit court of Sangamon
County based on Consolidated's lack of standing to sue and the doctrine of sovereign immunity.
These issues are issues unrelated to the subject of Consolidated's petition and the Commission's
order. Thus, even assuming for the sake of argument that the dismissal was reversed on appeal,
the effect of a declaratory ruling upon the litigation—if any—is unknown, as the record on
appeal does not describe all of the issues which may be involved in the litigation. It is also
unclear whether a declaratory ruling issued after the contract was already awarded to Securus
would affect the outcome of the litigation. There is no indication in this record that the
Commission's order would have any effect on the ongoing litigation. Thus, Consolidated's
supposed interest in obtaining a declaratory ruling based on pending litigation ultimately is
hypothetical or conjectural.
¶ 44 In short, Consolidated's allegations regarding the submission of its contract bid do not
establish an actual controversy because that controversy is moot. Consolidated's allegations
regarding its possible future activities are too abstract and hypothetical to constitute a full
statement of the requester's interest. Neither Consolidated nor the Commission established the
ongoing litigation in Sangamon County would be affected by the Commission's order.
Accordingly, for all of the aforementioned reasons, we conclude the Commission's order in this
case was not a declaratory ruling, as the party requesting the order was not an affected person
21
1-13-1716
and there was no controversy or uncertainty within the meaning of section 200.220 of the
Commission's regulations. Accordingly, the Commission's order is not a nonreviewable
declaratory ruling under section 200.220(i). See Resource Technology Corp., 343 Ill. App. 3d at
44.
¶ 45 Our resolution of the jurisdictional question, however, is decisive on the merits of the
propriety of the Commission's order. In evaluating the propriety of an order issued by the
Commission, our scope of review is governed by section 10-201 of the Public Utilities Act (see
220 ILCS 5/10-201 (West 2012)). Section 10-201 provides in relevant part that a reviewing
court shall reverse a Commission's order or decision, in whole or in part, if it finds that: (a) the
findings of the Commission were not supported by substantial evidence based on the entire
record of evidence presented to or before the Commission for and against such order or decision;
(b) the order or decision was without the jurisdiction of the Commission; (c) the order or
decision was in violation of the state or federal constitution or laws; or (d) the proceedings or
manner by which the Commission considered and entered its order or decision were in violation
of the state or federal constitution or laws, to the prejudice of the appellant. 220 ILCS 5/10-
201(e)(iv) (West 2012).
¶ 46 In this case, based on our foregoing analysis, the decisive issue is whether the
Commission's ruling was made outside the jurisdiction of the Commission. " 'The term
"jurisdiction," while not strictly applicable to an administrative body, may be employed to
designate the authority of the administrative body to act ***.' " Business & Professional People
for the Public Interest, 136 Ill. 2d at 243 (quoting Newkirk v. Bigard, 109 Ill. 2d 28, 36 (1985)).
As our supreme court has stated:
"[I]n administrative law, the term 'jurisdiction' has three aspects: (1) personal jurisdiction-
22
1-13-1716
-the agency's authority over the parties and intervenors involved in the proceedings, (2)
subject matter jurisdiction-the agency's power 'to hear and determine causes of the
general class of cases to which the particular case belongs' [citation] , and (3) an agency's
scope of authority under the statutes." Id."Consequently, to the extent an agency acts outside its statutory authority, it acts without
jurisdiction." Id. Thus, for example, this court vacated portions of a Commission order which
constituted a declaratory ruling prior to the promulgation of section 200.220. See Harrisonville
Telephone Co. v. Illinois Commerce Comm'n, 176 Ill. App. 3d 389, 393 (1988).
¶ 47 The Commission purported to act pursuant to section 5-150(a) of the Administrative
Procedure Act and section 200.220 of the Commission's Rules of Practice, which empower the
Commission to issue declaratory rulings. As previously noted, when requested by an affected
person, the Commission may issue a declaratory ruling where there is a clearly stated
controversy or uncertainty. For the reasons already stated, Consolidated was not an "affected
person" entitled to request a declaratory ruling from the Commission and Consolidated failed to
clearly state an actual controversy or uncertainty. Thus, we conclude the Commission's order
was outside the Commission's authority under the Administrative Procedure Act and the
Commission's own implementing regulation. See Harrisonville Telephone Co., 176 Ill. App. 3d
at 393. Accordingly, the Commission's order must be vacated. Moreover, as the Commission
lacked jurisdiction to enter the order at issue in this case, we need not address the merits of the
Commission's ruling as this court was required to do in Resource Technology Corp.
¶ 48 CONCLUSION
¶ 49 For all of the aforementioned reasons, the Commission's April 9, 2013, order is vacated.
The Commission's May 1, 2013, order denying rehearing is similarly vacated.
23
1-13-1716
¶ 50 Vacated.
24