Appeal from the Circuit Court of Adams County; the Hon.
Richard F. Scholz, Jr., Judge, presiding.
MR. JUSTICE GOLDENHERSH DELIVERED THE OPINION OF THE COURT:
Plaintiff, Kenneth W. Holland, Director of Labor, filed this action in the circuit court of Adams County seeking to permanently enjoin defendant Bleigh Construction Company, a Missouri corporation, from "continuing to carry on public works projects construction in Adams County" for the reason that defendant failed to employ Illinois laborers as required by the "Preference to Citizens on Public Works Projects" Act (Ill. Rev. Stat. 1973, ch. 48, pars. 269 through 275). Defendant moved to dismiss and the circuit court, holding the statute unconstitutional, allowed the motion and dismissed the case. Pursuant to Supreme Court Rule 302(a) plaintiff appeals directly to this court.
Section 3 (ch. 48, par. 271) of the Preference Act provides:
"Every person who is charged with the duty, either by law or contract, of constructing or building any public works project or improvement for the State of Illinois or any political subdivision, municipal corporation or other governmental unit thereof shall employ only Illinois laborers on such project or improvement, and every contract let by any such person shall contain a provision requiring that such labor be used: Provided, that other laborers may be used when Illinois laborers as defined in this Act are not available, or are incapable of performing the particular type of work involved, if so certified by the contractor and approved by the contracting officer."
Section 1 (par. 269) of the Act provides:
"A person shall be deemed to be an Illinois laborer if he is a citizen of the United States or has received his first naturalization papers and has resided in Illinois for at least one year immediately preceding his employment."
The complaint alleged that defendant employed Missouri citizens on public works construction projects in Adams County in violation of section 3 of the Act. The "public works construction projects" involved the construction of public school buildings. Defendant moved to dismiss on the grounds that the Act is in conflict with Title VII of the Federal Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) and with the provisions and intent of the Illinois Fair Employment Practices Act (Ill. Rev. Stat. 1973, ch. 48, pars. 851 through 865), and that the quoted statutory sections contravene the due process and equal protection clauses of the Federal and Illinois constitutions, the privileges and immunities clause and the commerce clause of the Federal Constitution, and the inherent and inalienable rights provision of the Illinois Constitution.
Plaintiff contends that the defendant lacks standing to challenge the validity of the Act. Citing People v. Palkes, 52 Ill.2d 472, he argues that "The defendant employer in this case is not a proper party to represent the alleged constitutional rights of a class of laborers who are not Illinois citizens since it is not a member of that class." We do not agree. Defendant obviously has standing to challenge the validity of the statute upon which the action against it is based.
Plaintiff contends next that defendant should be estopped from attacking the constitutionality of the statute. He argues that it must be assumed that defendant was aware of the existence of the statute when it bid the public works project, that it accepted, and the school district "obviously awarded the contract on the assumption that available Illinois laborers would be utilized by defendant." A foreign corporation, by seeking and obtaining authority to transact business in Illinois does not preclude itself from objecting to the enforcement of statutes which conflict with the Federal or State constitutions (Michigan Millers Mutual Fire Insurance Co. v. McDonough, 358 Ill. 575) and there is no basis upon which to hold that defendant, by bidding and accepting the contract with the Adams County school district, precluded itself from raising constitutional objections to the enforcement of the Preference Act.
Plaintiff next points out that at the time this action was commenced defendant did not have a certificate of authority to transact business in Illinois and that section 125 of the Business Corporation Act (Ill. Rev. Stat. 1973, ch. 32, par. 157.125) provides: "No foreign corporation transacting business in this State without a certificate of authority is permitted to maintain a civil action in any court of this State, until such corporation obtains a certificate of authority." He argues that defendant "should not be permitted to do indirectly (challenge the validity of the act as a matter of its defense to a complaint for injunction) what it did not and could not do directly (request a declaratory judgment finding the preference act invalid)." The answer to this argument is that section 125 also provides: "The failure of a foreign corporation to obtain a certificate of authority to transact business in this State does not impair the validity of any contract or act of such corporation, and does not prevent such corporation from defending any civil action in any court of this State."
Of the constitutional issues presented we consider first the question of equal protection. Plaintiff and amicus curiae, The Illinois State Council of Operating Engineers, contend that the statute involves neither a "suspect" classification nor a "fundamental right," that the equal protection test to be applied is the traditional one that the classification in the statute bear some reasonable relationship to a legitimate State purpose, and that the party attacking the classification has the burden of showing an unreasonable relationship or an improper purpose. They argue that the purpose of the statute is to fulfill the desire of the State that its funds be used to help those of its citizens, who have paid taxes for at least a year, to find employment. Relying on Heim v. McCall, 239 U.S. 175, 60 L.Ed. 206, 36 S.Ct. 78, in which the Supreme Court held valid a New York statute similar to the one here considered, they contend that the statute provides reasonable means to achieve this legitimate State purpose. (See also Crane v. New York, 239 U.S. 195, 60 L.Ed. 218, 36 S.Ct. 85.) We do not agree. In our opinion, in defining an "Illinois laborer" as one who "is a citizen of the United States or has received his first naturalization papers," section 1 of the Act discriminates against resident aliens. In Graham v. Richardson, 403 U.S. 365, 29 L.Ed.2d 534, 91 S.Ct. 1848, and Sugarman v. Dougall, 413 U.S. 634, 37 L.Ed.2d 853, 93 S.Ct. 2842, the Supreme Court departed from the rationale of its earlier cases dealing with State statutes which discriminated against aliens. In Graham the court held that State statutes which denied welfare benefits to resident aliens, or to aliens who had not resided in the United States for a specified number of years, violated the equal protection clause of the fourteenth amendment. In reaching this result the court stated:
"Under traditional equal protection principles, a State retains broad discretion to classify as long as its classification has a reasonable basis. [Citations.] This is so in `the area of economics and social welfare.' Dandridge v. Williams, 397 U.S. 471, 485 (1970). But the Court's decisions have established that classifications based on alienage, like those based on nationality or race, are inherently suspect and subject to close judicial scrutiny. Aliens as a class are a prime example of a `discrete and insular' minority (see United States v. Carolene Products Co., 304 U.S. 144, 152-153, n. 4 (1938) for whom such heightened judicial solicitude is appropriate. Accordingly, it was said in Takahashi, 334 U.S., at 420, that `the power of a state to apply its laws exclusively to its alien inhabitants as a class is confined within narrow limits.'
Arizona and Pennsylvania seek to justify their restrictions on the eligibility of aliens for public assistance solely on the basis of a State's `special public interest' in favoring its own citizens over aliens in the distribution of limited resources such as welfare benefits. It is true that this Court on occasion has upheld state statutes that treat citizens and noncitizens differently, the ground for distinction having been that such laws were necessary to protect special interests of the State or its citizens. Thus, in Truax v. Raich, 239 U.S. 33 (1915), the Court, in striking down an Arizona statute restricting the employment of aliens, emphasized that `[t]he discrimination defined by the act does not pertain to the regulation or distribution of the public domain, or of the common property or resources of the people of the State, the enjoyment of which may be limited to its citizens as against both aliens and the citizens of other States.' 239 U.S., at 39-40. And in Crane v. New York, 239 U.S. 195 (1915), the Court affirmed the judgment in People v. Crane, 214 N.Y. 154, 108 N.E. 427 (1915), upholding a New York statute prohibiting the employment of aliens on public works projects. The New York court's opinion contained Mr. Justice Cardozo's well-known observation: `To disqualify aliens is discrimination indeed, but not arbitrary discrimination, for the principle of exclusion is the restriction of the resources of the state to the advancement and profit of the members of the state. Ungenerous and unwise such discrimination may be. It is not for that reason unlawful . . . The state in determining what use shall be made of its own moneys, may legitimately consult the welfare of its own citizens rather than that of aliens. Whatever is a privilege rather than a right, may be made dependent upon citizenship. In its war against poverty, the state is not required to dedicate its own resources to citizens and aliens alike.' 214 N.Y., at 161, 164, 108 N.E., at 429, 430. See Heim v. McCall, 239 U.S. 175 (1915); Ohio ex rel. Clarke v. Deckebach, 274 U.S. 392 (1927). On the same theory, the Court has upheld statutes that, in the absence of overriding treaties, limit the right of noncitizens to engage in exploitation of a State's natural resources, restrict the devolution of real property to aliens, or deny to aliens the right to acquire and own land.
Takahashi v. Fish & Game Comm'n, 334 U.S. 410 (1948), however, cast doubt on the continuing validity of the special public-interest doctrine in all contexts. There the Court held that California's purported ownership of fish in the ocean off its shores was not such a special public interest as would justify prohibiting aliens from making a living by fishing in those waters while permitting all others to do so. It was said: `The Fourteenth Amendment and the laws adopted under its authority thus embody a general policy that all persons lawfully in ...