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Underground Contractors v. Chicago

OPINION FILED APRIL 5, 1977.

UNDERGROUND CONTRACTORS ASSOCIATION, APPELLEE,

v.

THE CITY OF CHICAGO, APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. Raymond K. Berg, Judge, presiding.

MR. JUSTICE MORAN DELIVERED THE OPINION OF THE COURT:

This is an appeal from a summary judgment order entered against the city of Chicago, invalidating certain procedures used for bidding on and awarding contracts. The circuit court of Cook County ruled the procedures violated the statutory requirement that public works contracts be awarded to the lowest responsible bidder. (Ill. Rev. Stat. 1973, ch. 24, par. 8-10-3.) The city was granted a direct appeal to this court.

Underground Contractors Association, Inc., a not-for-profit trade association of underground construction companies located in the Chicago area, brought this action for declaratory relief. In its complaint, Underground sought to have declared invalid, as violative of the statutory requirements governing the awarding of public works contracts, a plan devised and used by the city's purchasing agent to encourage the hiring of minorities by firms which bid on public works projects. This plan, which is referred to as the "Canvassing Formula," allows the city's purchasing agent to reduce a bid by a limited amount determined by the percentage of total labor hours minority workmen will be employed on the project. It then permits the purchasing agent to determine the successful bidder on the basis of that reduced amount, but to award the contract at the originally bid price. Thus, the recipient of the contract need not actually be the lowest responsible bidder as purportedly required by statute and as implemented by the city's ordinance.

The city filed a motion to dismiss challenging Underground's standing to maintain the action. In its memorandum in support of its motion to dismiss, the city argued no actual or justiciable controversy existed between it and Underground because the association was not in the construction business, did not compete for public works contracts, and did not allege injury or a threat of injury to itself. Underground replied to the city's argument by pointing to Illinois decisions wherein an association was a party to a declaratory action, and argued that under the expanded theory of standing recognized in the Federal courts>, associations have standing to sue as representatives of their members who are injured or threatened with injury by government action. The court denied the city's motion to dismiss and ordered it to file an answer.

The city filed its answer, and again denied Underground's standing to proceed in a representative capacity. Underground then filed a motion for summary judgment supported by a memorandum of law. Finding no genuine, disputed issue of fact but only a question of law, the court entered an order of summary judgment in favor of Underground. The court ruled the "Canvassing Formula" was invalid as it purportedly gave the city and its purchasing agent the power and discretion to award a contract to a responsible bidder who was not necessarily the "actual" lowest responsible bidder as required by section 8-10-3 of the Municipal purchasing act for cities of 500,000 or more population (Ill. Rev. Stat. 1973, ch. 24, par. 8-10-3), and by chapter 26-1 of the Municipal Code of the city of Chicago. It is from this order that the city appeals.

Again, the city challenges Underground's standing to maintain this action for declaratory relief. It argues that inasmuch as plaintiff is not an underground construction contractor, does not compete for public works contracts, and has not alleged any injury or threat of injury to itself, the association does not have an interest in the controversy and is not, therefore, a proper party to challenge the city's authority by way of a declaratory judgment action. We agree.

Essentially, there are two main, general requirements for standing to bring an action for declaratory relief. First, there must be an "actual controversy." (Ill. Rev. Stat. 1973, ch. 110, par. 57.1(1).) "Actual" in this context does not mean that a wrong must have been committed and injury inflicted. Rather, it requires a showing that the underlying facts and issues of the case are not moot or premature, so as to require the court to pass judgment on mere abstract propositions of law, render an advisory opinion, or give legal advice as to future events. (Exchange National Bank of Chicago v. County of Cook (1955), 6 Ill.2d 419, 421-22; Spalding v. City of Granite City (1953), 415 Ill. 274, 283; Saline Branch Drainage District v. Urbana-Champaign Sanitary District (1948), 399 Ill. 189, 192-93. As applied, see Gibraltar Insurance Co. v. Varkalis (1970), 46 Ill.2d 481, 484-86; Slack v. City of Salem (1964), 31 Ill.2d 174, 177-78.) The case must, therefore, present a concrete dispute admitting of an immediate and definitive determination of the parties' rights, the resolution of which will aid in the termination of the controversy or some part thereof. A.S. & W. Club of Waukegan v. Drobnick (1962), 26 Ill.2d 521, 524; Saline Branch Drainage District v. Urbana-Champaign Sanitary District (1948), 399 Ill. 189, 195-96.

The second, and somewhat related requirement, is that the party seeking the declaration must be "interested in the controversy." (Ill. Rev. Stat. 1973, ch. 110, par. 57.1(1).) The word, "interested" does not mean merely having a curiosity about or a concern for the outcome of the controversy. Rather, the party seeking relief must possess a personal claim, status, or right which is capable of being affected. (E.g., Clark Oil & Refining Corp. v. City of Evanston (1961), 23 Ill.2d 48, 51-2; Retail Liquor Dealers Protective Association v. Fleck (1951), 408 Ill. 219, 227-28; Dean Milk Co. v. City of Aurora (1949), 404 Ill. 331, 334.) The dispute must, therefore, touch the legal relations of parties who stand in a position adverse to one another. Exchange National Bank of Chicago v. County of Cook (1955), 6 Ill.2d 419, 422.

Underground argues that, as the representative of its members, it need not have a direct interest in the controversy in order to maintain an action for declaratory relief so long as it can show that one or more of its members would have had standing had they individually brought the action. To illustrate this contention, Underground has brought to our attention several Illinois decisions wherein an association was a party to an action for declaratory relief. (Electrical Contractors Association v. Illinois Building Authority (1966), 33 Ill.2d 587; Illinois News Broadcasters Association v. City of Springfield (1974), 22 Ill. App.3d 226; Antioch Community High Teachers' Association v. Board of Education (1971), 2 Ill. App.3d 504; Fox Lake Hills Property Owners Association v. Fox Lake Hills, Inc. (1970), 120 Ill. App.2d 139.) We note, however, that in none of these decisions was the question of standing raised. Those decisions, therefore, are not authority for the position urged by the plaintiff. In fact, in two of the decisions cited, interests peculiar to the associations themselves were involved. In Antioch, for example, the association as well as its members had an interest in the controversy, for the association's right and ability to negotiate with the board of education concerning paid personal leaves was directly involved. Fox Lake involved the interpretation of a restrictive covenant and a subdivider's authority to release certain homeowners from an obligation to pay dues to the plaintiff association.

In Lake County Contractors Association v. Pollution Control Board (1973), 54 Ill.2d 16, 21, a case cited by the defendants, this court expressly reserved ruling on the question of the association's standing to maintain the action as it was not necessary to the disposition of that case.

Illinois decisions which have discussed an association's standing to maintain, on behalf of its members, an action for declaratory relief clearly indicate that an association's representational capacity alone is not enough to give it standing, absent a showing that it has a recognizable interest in the dispute, peculiar to itself and capable of being affected. This was most aptly noted in Retail Liquor Dealers Protective Association v. Fleck (1951), 341 Ill. App. 283, 289-90. In that case, two associations representing member retail liquor dealers, together with certain individuals, brought a declaratory judgment action against the members of the Illinois Liquor Control Commission challenging the Commission's authority to deny State liquor licenses to dealers who had been issued local liquor licenses. The defendant denied the associations' standing to maintain the action as representatives of their members. The appellate court held that inasmuch as the associations were not engaged in the retail liquor business, were not seeking State licenses, and had no other direct interest in the action, they were not proper parties to seek declaratory relief. On appeal, this court affirmed the appellate court's ruling, relying on the reasoning of Retail Liquor Dealers Protective Association v. Schreiber (1943), 382 Ill. 454, a mandamus action, and held that an association could not maintain an action for declaratory relief where it was not shown to have had a direct interest in the action. (Retail Liquor Dealers Protective Association v. Fleck (1951), 408 Ill. 219, 227-28.) Applying Fleck to the facts in the instant case, we note that, as the city alleges, Underground is not engaged in the construction business, does not compete for public works contracts, and has not alleged any injury or threat of injury to itself. It, therefore, does not have standing to maintain this action.

Underground urges, however, that we adopt and apply the Federal court's position which allows an association standing, in limited situations, to maintain suits solely for the benefit of its members. Despite Underground's urging, we need not address ourselves, at this time, to the merits underlying the Federal rule, for, as evidenced by the United States Supreme Court's most recent pronouncement in Warth v. Seldin (1975), 422 U.S. 490, 45 L.Ed.2d 343, 95 S.Ct. 2197, Underground's complaint is insufficient to give it standing even under the Federal rule.

In Warth, certain individuals and organizations brought suit against the town of Penfield, New York, and members of Penfield's zoning, planning, and town boards. The plaintiffs claimed that Penfield's zoning ordinance, by its terms and as enforced, effectively excluded persons of low and moderate income from living in the town in contravention of plaintiff's rights guaranteed by the United States Constitution and certain Federal statutes. Relief sought included a declaration that the ordinance was unconstitutional, an injunction against further enforcement, and a prayer for $750,000 in actual and exemplary damages. Rochester Home Builders Association, Inc., an association of construction contractors in the Rochester, New York, area, sought leave to intervene as a party plaintiff. In its petition, Home Builders alleged that the Penfield zoning restrictions, together with refusals by the town officials to grant variances and permits for construction of low- and moderate-cost housing, had deprived some of its members of business ...


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