Appeal from the Circuit Court of Cook County, the Hon. Raymond
K. Berg, Judge, presiding.
MR. JUSTICE MORAN DELIVERED THE OPINION OF THE COURT:
Rehearing denied December 1, 1978.
On April 17, 1974, twenty-two importing distributors of wine filed an action in the circuit court of Cook County, seeking to have a portion of section 1 of article VIII of the Liquor Control Act (Ill. Rev. Stat. 1969, ch. 43, par. 158) declared unconstitutional. Under the Liquor Control Act, prior to July 15, 1971, distributors of wine made from grapes grown in Illinois enjoyed a lower tax rate than did distributors of wine made from grapes grown elsewhere. Although Public Act 77-295, effective July 15, 1971, amended the statute and eliminated that tax differential (Ill. Rev. Stat. 1971, ch. 43, par. 158), plaintiffs sought relief predicated on their statutory right to be recompensed if the taxes for the period from January 1968 through April 1971 were paid in error. On October 21, 1974, the same plaintiffs filed a substantially similar action based on taxes paid for the period from May 1971 through August 1971. The actions were subsequently consolidated for trial.
In counts I and II of either complaint, plaintiffs sought declaratory relief on the grounds that the taxes imposed upon them violated the commerce, due process and equal protection clauses of the United States Constitution, as well as the uniformity and special legislation clauses of the Illinois Constitution of 1870. Plaintiffs prayed the court to declare the taxes null and void and to further declare that the plaintiffs were entitled to a credit or refund of the taxes paid. In count III of either complaint, plaintiffs alleged that the Department of Revenue (Department) had failed to properly process plaintiffs' claims for credit pursuant to article VIII, section 2a, of the Liquor Control Act (Ill. Rev. Stat. 1971, ch. 43, par. 159a). Plaintiffs sought, among other things, a declaration that the Department should process their claims without considering whether plaintiffs would be unjustly enriched if the claims were allowed. Count IV in either complaint petitioned for a writ of mandamus to (a) compel the Department to hold a hearing with respect to plaintiffs' claims for credit; (b) preclude the Department from considering the issue of unjust enrichment; (c) compel the Department to determine that the taxes in question had been paid in error; and (d) compel the Department to grant plaintiffs' claims for credit.
In an order dated October 15, 1976, the trial court denied the Department's motions to strike and dismiss all four counts of plaintiffs' complaints. The Department elected to stand on its motions and, on December 1, 1976, the circuit court, pursuant to plaintiffs' motion for default judgment on the pleadings, entered its final order. The order granted plaintiffs the relief sought and also declared unconstitutional that portion of article VIII, section 1, of the Liquor Control Act which provided for a tax differential favoring persons who dealt in wine made from grapes grown in Illinois. The Department appealed directly to this court pursuant to Supreme Court Rule 302(a) (58 Ill.2d R. 302(a)).
The issues presented for review are:
(1) Does this court's decision in Consolidated Distilled Products, Inc. v. Mahin (1973), 56 Ill.2d 110, appeal dismissed (1974), 419 U.S. 809, 42 L.Ed.2d 36, 95 S.Ct. 23, bar plaintiffs from litigating this action under the principle of res judicata?
(2) Should plaintiffs be precluded from securing relief by their failure to exhaust their administrative remedies?
(3) Is article VIII, section 1, of the Liquor Control Act, which imposed a lower rate of tax on wine produced from Illinois-grown grapes, constitutional?
Because we hold that, under the principle of res judicata, plaintiffs are barred from relitigating their claim for a reimbursement of taxes paid pursuant to article VIII, section 1, of the Liquor Control Act, we need not address the other issues.
In determining the applicability of the principle of res judicata to the case at bar, we first examine the scope of this court's prior decision in Consolidated Distilled Products, Inc. v. Mahin (1973), 56 Ill.2d 110 (Consolidated I). That suit was, in pertinent part, brought as a class action by various named wine distributors on behalf of all others similarly situated importing distributors of wine made from grapes grown outside Illinois who had remitted taxes relative to that business pursuant to article VIII, section 1, of the Liquor Control Act. This class of wine distributors alleged that the differing tax rates for grapes grown in Illinois and grapes grown elsewhere violated numerous clauses of the United States and Illinois constitutions. The class sought a judgment declaring the tax invalid, the enjoining of the collection of such taxes, the deposit in a protest fund of any sums paid during the pendency of the case, an order that the class be reimbursed, either by refund or by the issuance of a credit memorandum, for any sums paid into the protest fund, and an award of the class' attorneys' fees. Certain individuals who alleged that they had purchased wine at retail were permitted to intervene on behalf of all wine purchasers in Illinois. It was their position that, if any reimbursement was due, it should accrue to the ultimate purchasers who had borne the actual burden of the tax.
In Consolidated I, the court found that the intervenor class of wine purchasers had failed to adequately show that the burden of the tax was transferred by the distributors to the retail liquor dealers and, in turn, by the liquor dealers to the class of wine purchasers. The court concluded, in this regard, that the intervenors were not entitled to receive the funds held on deposit. (56 Ill.2d 110, 117.) The court, assuming arguendo that the challenged provision of the Liquor Control Act was invalid, considered whether the class of wine distributors would be entitled to the monies held in the protest fund. It reasoned that to avoid the unjust enrichment of persons who had not actually borne the burden of the tax, it was necessary that the remitters of a tax show they had ultimately paid the tax and had not passed the tax burden on to others. The court concluded:
"There has been no showing that [the wine distributors] bore the burden of the tax. The only proof that bears upon that question is the stipulation * * * that shows, or tends to show, that they passed the tax on to ...