Tillman v. Pritzker

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Appellate Court Date: 2021.02.10
14:34:12 -06'00'
Tillman v. Pritzker, 2020 IL App (4th) 190611Appellate Court JOHN TILLMAN, Plaintiff-Appellant, v. J.B. PRITZKER, in His
Caption Official Capacity as Governor of the State of Illinois; MICHAEL W.
FRERICHS, in His Official Capacity as Treasurer of the State of
Illinois; and SUSANA A. MENDOZA, in Her Official Capacity as
Comptroller of the State of Illinois, Defendants-Appellees.
District & No. Fourth District
No. 4-19-0611
Filed August 6, 2020
Decision Under Appeal from the Circuit Court of Sangamon County, No. 19-CH-235;
Review the Hon. Jack D. Davis II, Judge, presiding.
Judgment Reversed and remanded.
Counsel on John E. Thies, of Webber & Thies, P.C., of Urbana, and Raoul G.
Appeal Cantero III, of White & Case LLP, of Miami, Florida, for appellant.
Kwame Raoul, Attorney General, of Chicago (Jane Elinor Notz,
Solicitor General, and Richard S. Huszagh, Assistant Attorney
General, of counsel), for appellees.
Panel JUSTICE STEIGMANN delivered the judgment of the court, with
opinion.
Justices Turner and Holder White concurred in the judgment and
opinion.
OPINION
¶1 In July 2019, plaintiff, John Tillman, filed a petition for leave to file a taxpayers’ suit
against defendants, J.B. Pritzker, Governor of the State of Illinois; Michael Frerichs, Treasurer
of the State of Illinois; and Susana Mendoza, Comptroller of the State of Illinois, in their
official capacities (collectively, the State Officers), pursuant to section 11-303 of the Code of
Civil Procedure (Code) (735 ILCS 5/11-303 (West 2018)). The complaint attached to the
petition alleged, in relevant part, that the State had issued bonds in 2003 and 2017 without
providing an appropriate “specific purpose” as required by section 9(b) of article IX of the
Illinois Constitution. Ill. Const. 1970, art. IX, § 9(b). Tillman’s complaint sought to enjoin the
State Officers from making any future payments on the 2003 and 2017 bonds.
¶2 Later that month, the Attorney General of the State of Illinois entered his appearance on
behalf of the State Officers. The Attorney General filed an objection to Tillman’s petition, and
Tillman filed a response.
¶3 In August 2019, the trial court conducted a hearing on the petition. After considering
arguments from the parties, the court took the case under advisement. Shortly thereafter, the
court entered a written order denying Tillman’s petition for leave to file a complaint, finding
(1) the statutes authorizing the 2003 and 2017 bonds set forth their specific purpose with
sufficient detail, (2) the filing of the complaint would be an unjustified interference with the
application of public funds, and (3) Tillman was asking the court to address a “political
question” regarding a judgment made 20 years prior by the legislature, which would “violate
the separation of powers.”
¶4 Tillman appeals, arguing the trial court erred by denying him leave to file his complaint.
Tillman contends that the court improperly reached the merits of his case rather than addressing
whether the complaint was frivolous or malicious. Tillman asserts that his complaint was not
frivolous because the 2003 and 2017 bonds were unconstitutional.
¶5 The State responds that the trial court properly rejected the claim because (1) the statutes
are constitutional, (2) Tillman could never state a claim for relief, (3) the complaint would be
barred by (a) the statute of limitations and (b) laches, and (4) Tillman failed to join
bondholders as necessary parties.
¶6 We conclude that because Tillman’s complaint was not frivolous or malicious, the trial
court erred by denying his petition for leave to file it. Accordingly, we remand the case for
further proceedings.
¶7 I. BACKGROUND
¶8 A. The Petition and Proposed Complaint
¶9 In July 2019, Tillman filed a petition for leave to file a taxpayers’ suit against the State
Officers pursuant to section 11-303 of the Code (735 ILCS 5/11-303 (West 2018)) and attached
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a copy of the proposed complaint to his petition. In essence, Tillman asserted that the State of
Illinois had issued unconstitutional bonds in 2003 and 2017 because the authorizing statutes
(see 30 ILCS 330/7.2, 7.6 (West 2018)) failed to provide a specific purpose as required by
section 9(b) of article IX of the Illinois Constitution of 1970. According to the complaint,
article IX of the constitution provides a limit on the legislature’s authority to incur debt in the
form of bonds. Section 9(c) through (e) contains limitations on short term borrowing of general
funds to cover budget deficits or refinance existing debt. Ill. Const. 1970, art. IX, § 9(c)-(e).
Section 9(b), on the other hand, provides as follows:
“State debt for specific purposes may be incurred or the payment of State or other debt
guaranteed in such amounts as may be provided *** in a law passed by the vote of
three-fifths of the members elected to each house of the General Assembly ***. Any
law providing for the incurring or guaranteeing of debt shall set forth the specific
purposes and the manner of repayment.” Ill. Const. 1970, art. IX, § 9(b).
¶ 10 The complaint alleged that, when read in context with the structure of article IX, the term
“specific purpose” in section 9(b) imposed two requirements. According to the complaint, the
second sentence sets forth a “procedural” requirement that the specific purpose be set forth in
sufficient detail. The first sentence, by contrast, sets forth a “substantive” limitation, requiring
the bonds be issued for a purpose other than general funds. That is, specific purposes amount
to special projects, capital improvements, and other nonrecurring costs, as distinguished from
regularly recurring costs paid out of the general fund.
¶ 11 The complaint alleged that the 2003 bonds were issued and used as a method of increasing
general revenue funds. The revenue from the 2003 bonds was “to be used for the purpose of
making contributions to the designated retirement systems.” See 30 ILCS 330/7.2(a) (West
2018). Tillman asserted that such payments were typically made from the general revenue fund
and the State incurs them every year. Accordingly, the purpose of the bonds was general and
not specific.
¶ 12 Regarding the 2017 bonds, the complaint alleged that the purpose was to “pay[ ] vouchers
incurred by the State prior to July 1, 2017.” See id. § 7.6(b). Tillman contended that the statute
was both substantively improper—in that the money to pay past debts, without regard to the
type of debt, was unquestionably general and not specific—and procedurally improper because
the statute did not state with the required specificity which vouchers were to be paid. The
complaint requested the trial court to find the 2003 and 2017 bond statutes unconstitutional
and to enjoin the State Officers from making further payments on the bonds.
¶ 13 B. The Objection
¶ 14 In July 2019, the Attorney General filed an objection to Tillman’s petition, requesting the
trial court to deny the request to file a complaint on several grounds. First, the Attorney General
argued that Tillman was barred by the doctrine of laches because he was aware of the cause of
action at the time it arose—when the statutes authorizing the bonds were passed and the bonds
issued—but delayed bringing the action for years after the bonds had been sold and the State
had made substantial payments on them. Second, the Attorney General asserted that Tillman’s
claims regarding the 2003 bonds were barred by the five-year statute of limitations for civil
actions. See 735 ILCS 5/13-205 (West 2018). Third, the Attorney General claimed Tillman
had failed to join all necessary parties to the action by failing to name bondholders as
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defendants. The Attorney General asserted that the bondholders had a direct financial interest
in the outcome of the suit and would be harmed if not joined as defendants.
¶ 15 Finally, the Attorney General argued that the 2003 and 2017 bond statutes were
constitutional. More specifically, the Attorney General contended that Tillman’s reading of
section 9(b) was incorrect because the constitution did not place any “substantive” restriction
on the legislature’s ability to issue bonds. Instead, all the legislature was required to do was
pass the law with a three-fifths majority and set forth the law’s “specific purpose” with
sufficient detail. The Attorney General relied upon the Illinois Supreme Court’s decision in
People ex rel. Ogilvie v. Lewis, 49 Ill. 2d 476, 274 N.E.2d 87 (1971), to support this position
and to demonstrate that the statutes in question met the standard set forth by the supreme court.
¶ 16 Tillman filed a response in which he argued that laches and the statute of limitations were
inapplicable because (1) the suit sought to enjoin only future payments and (2) each payment
on the bonds constituted a new injury for limitations purposes. Tillman also argued that the
bondholders were not necessary parties.
¶ 17 C. The Trial Court’s Ruling
¶ 18 In August 2019, the trial court conducted a hearing on Tillman’s petition at which it heard
extensive arguments from the parties and took the case under advisement. Shortly thereafter,
the court issued a written order denying Tillman’s petition. In the order, the court first set forth
the standards applicable to taxpayer lawsuits and identified the issue as “whether or not
reasonable grounds exist for filing the suit.” The court noted that Tillman was challenging the
constitutionality of two statutes and whether reasonable grounds existed could be ascertained
only by examining the language of the statutes to determine if they set forth specific purposes.
¶ 19 After stating it was relying on the Illinois Supreme Court’s ruling in Lewis, the trial court
wrote the following:
“In 2003, the legislature’s specific purpose for issuing bonds was to contribute to
funding the State’s five pension systems. In 2017, the stated specific purpose was to
make good on health insurance vouchers the State promised to pay to vendors that
accepted State issued insurance for services rendered prior to July 1, 2017. This court
finds the legislature stated with reasonable detail the specific purposes for the issuance
of the bonds and assumption of the debt as well as the objectives to be accomplished
by enactment of the legislation.”
¶ 20 The trial court found no reasonable grounds existed for filing the proposed complaint and
that “to allow the filing of the complaint would result in an unjustified interference with the
application of public funds.” The court concluded, “Tillman asks this court to address a
non-justiciable political question and substitute its judgment for the Illinois Legislature some
two decades after it occurred. To do so would be improper and would violate the separation of
powers.”
¶ 21 II. ANALYSIS
¶ 22 Tillman appeals, arguing the trial court erred by denying him leave to file his complaint.
Tillman contends that the court improperly reached the merits of his case rather than addressing
whether the complaint was frivolous or malicious. Tillman asserts that his complaint was not
frivolous because the 2003 and 2017 bonds were unconstitutional.
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¶ 23 The State responds that the trial court properly rejected the claim because (1) the statutes
are constitutional, (2) Tillman could never state a claim for relief, (3) the complaint would be
barred by (a) the statute of limitations and (b) laches, and (4) Tillman failed to join
bondholders as necessary parties.
¶ 24 We conclude the trial court erred by denying the petition for leave to file Tillman’s
complaint; accordingly, we decline to address the merits of either parties’ further assertions.
¶ 25 A. The Applicable Law and Standard of Review
¶ 26 Section 11-301 of the Code permits “any citizen and taxpayer” to maintain an “action to
restrain and enjoin the disbursement of public funds by any officer or officers of the State
government.” 735 ILCS 5/11-301 (West 2018). Section 11-303 of the Code states as follows:
“Such action, when prosecuted by a citizen and taxpayer of the State, shall be
commenced by petition for leave to file an action to restrain and enjoin the defendant
or defendants from disbursing the public funds of the State. Such petition shall have
attached thereto a copy of the complaint, leave to file which is petitioned for. Upon the
filing of such petition, it shall be presented to the court, and the court shall enter an
order stating the date of the presentation of the petition and fixing a day, which shall
not be less than 5 nor more than 10 days thereafter, when such petition for leave to file
the action will be heard. ***
Upon such hearing, if the court is satisfied that there is reasonable ground for the
filing of such action, the court may grant the petition and order the complaint to be filed
and process to issue. The court may, in its discretion, grant leave to file the complaint
as to certain items, parts or portions of any appropriation Act sought to be enjoined and
mentioned in such complaint, and may deny leave as to the rest.” Id. § 11-303.
¶ 27 “One of the purposes of [section 11-303] was to provide a check upon the indiscriminate
filing of taxpayers’ suits.” People ex rel. White v. Busenhart, 29 Ill. 2d 156, 161, 193 N.E.2d
850, 854 (1963). Accordingly, section 11-303 provides for a “summary proceeding” to
determine if the complaint “is justified and should be filed, and by that proceeding seeks to
prevent unwarranted interference with the performance of certain public duties.” Hill v.
La Salle County, 326 Ill. 508, 515, 158 N.E. 112, 115 (1927). The appellate court reviews a
trial court’s decision that no reasonable grounds exist to permit a taxpayer suit to be filed for
an abuse of discretion. Busenhart, 29 Ill. 2d at 161. For the purposes of evaluating the petition,
all well-pleaded allegations in the complaint are taken as true, but the court is not required to
consider allegations that are vague, conclusory, or irrelevant. Id. at 161, 165. A trial court may
deny leave to file if, among other things, the complaint (1) fails to state a claim (id. at 165;
Flynn v. Stevenson, 4 Ill. App. 3d 458, 460, 281 N.E.2d 438, 440 (1972)), (2) is barred by
res judicata or constitutes an improper collateral attack on a judgment (Busenhart, 29 Ill. 2d
at 165; Flynn, 4 Ill. App. 3d at 460; Hamer v. Dixon, 61 Ill. App. 3d 30, 33-34, 377 N.E.2d
820, 823-24 (1978)), or (3) is barred by the statute of limitations (Flynn, 4 Ill. App. 3d at 461).
¶ 28 The seminal case on the trial court’s inquiry at the initial hearing is Strat-O-Seal
Manufacturing Co. v. Scott, 27 Ill. 2d 563, 190 N.E.2d 312 (1963). In that case, the Illinois
Supreme Court reviewed a trial court’s denial of a taxpayer’s petition for leave to file a
complaint pursuant to the predecessor of section 11-303. Id. at 564-65. The taxpayers sought
to enjoin the State from providing assistance to workers or their children when those workers
were unemployed solely because of participation in a labor strike. Id. at 564. The applicable
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statutes applied to persons “who for unavoidable causes” could not maintain a sufficient
standard of living, and they excluded from coverage any “employable person who refuses
suitable employment.” (Internal quotation marks omitted.) Id. at 565. The supreme court wrote
that the “sole question in this case is whether the facts alleged in the petition and proposed
complaint, taken as true, disclose a reasonable ground for the filing of a suit.” Id. at 564-65.
¶ 29 The supreme court also then wrote the following:
“After a careful examination of the proposed complaint and the facts alleged in the
petition we are satisfied that reasonable grounds exist for filing suit. As we have
indicated, the statute governing these proceedings provides that when suit to restrain
the disbursement of public moneys is brought by a citizen taxpayer, it must be
commenced by petition for leave to file. The purpose of this requirement was to
establish a procedure which would serve as a check upon the indiscriminate filing of
such suits. (Barco Manufacturing Co. v. Wright, 10 Ill. 2d 157[, 139 N.E.2d 227(1956)].) Prior to its enactment a taxpayer could file suit as a matter of right, and when
such a suit was brought for an ulterior or malicious purpose it could seriously embarrass
the proper administration of public affairs. As we pointed out in Hill v. County of
La Salle, 326 Ill. 508, 515[, 158 N.E. 112, 115 (1927)], ‘When the right of a public
officer charged with the duty and responsibility of the proper application of public
funds to disburse such fund is challenged by a lawsuit, it is obvious that for his own
protection he will refuse to pay out the money in his custody until the suit is finally
adjudicated.’
While it is important, therefore, that unjustified interferences be prevented, it is
equally important that suits which do not appear unjustified are not barred or
foreclosed. We find nothing in the present record to indicate that the purpose is
frivolous or malicious, or that a filing of the complaint is otherwise unjustified.
In this proceeding we are not concerned, of course, with whether the allegations of
the proposed complaint can, on hearing, be sustained, and we express no opinion
thereon. All we decide is that for the purpose of this inquiry the petition states
reasonable grounds for filing suit.” Id. at 565-66.
¶ 30 B. This Case
¶ 31 Applying Strat-O-Seal, we likewise conclude that nothing in the record indicates that the
proposed complaint was frivolous, filed for a malicious purpose, or is otherwise unjustified.
As in Strat-O-Seal, resolution of Tillman’s claims requires interpreting statutes and a
constitutional provision to determine if those statutes are constitutional. Tillman’s complaint
sets forth a colorable reading of the Illinois Constitution that does not appear to be frivolous
on its face. While we express no opinion on the ultimate merits of Tillman’s claims, we
conclude that the petition and complaint state reasonable grounds for filing suit.
¶ 32 Although the trial court stated in its order that the filing of the suit “would result in an
unjustified interference with the application of public funds,” the court did not support its
finding with reference to any facts or allegations. Before the trial court, the Attorney General
argued that the mere filing of the suit would cause the State Officers to default on the bond
payments. However, the Attorney General does not advance this argument on appeal, and it
appears to us that the most likely course of conduct for the State Officers would be to continue
making all of the required bond payments until a court ordered otherwise. Given this context,
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it is unclear how the filing of Tillman’s complaint would be an “unjustified interference with
the application of public funds.”
¶ 33 We repeat that we express no opinion on the merits of Tillman’s claims. We merely
conclude for the purpose of this proceeding that Tillman should be permitted to file the
complaint. Likewise, we decline to address any of the State Officers’ alternative arguments
because the trial court did not address them below, and we express no opinion on the merits of
those issues. On remand, the State Officers may raise the defenses of the statute of limitations,
laches, the failure to join necessary parties, and any other defenses or bases for dismissal they
may assert.
¶ 34 III. CONCLUSION
¶ 35 For the reasons stated, we reverse the trial court’s judgment and remand the case for further
proceedings consistent with this opinion.
¶ 36 Reversed and remanded.
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