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West Side Org. Health Serv. v. Thompson

OPINION FILED MAY 31, 1979.

WEST SIDE ORGANIZATION HEALTH SERVICES CORPORATION ET AL., PLAINTIFFS-APPELLANTS,

v.

JAMES THOMPSON, GOVERNOR, ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. JOSEPH M. WOSIK, Judge, presiding.

MR. JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

Plaintiffs, West Side Organization Health Services Corporation (WSO), John Doe, Joseph Doe and the Honorable John D'Arco, brought this action in the circuit court of Cook County on behalf of operators of drug abuse treatment programs, certain drug addicts and resident-taxpayers, to prevent officials of the executive branch of the state government from withholding funds appropriated by the General Assembly for the use of the Dangerous Drugs Commission. The circuit court granted the State defendants' motion to dismiss the action and the plaintiffs appeal.

The issues presented on appeal are: (1) whether the lapse of the funds in question into the General Revenue Fund renders the appeal moot; (2) whether the named plaintiffs have standing to maintain this action; (3) whether the principle of separation of powers bars judicial review of the executive branch's conduct; (4) whether the action is barred by the doctrine of sovereign immunity; and (5) whether plaintiffs' amended complaint states a cause of action.

We reverse and remand.

The Dangerous Drugs Commission (DDC), created by the Dangerous Drug Abuse Act (Ill. Rev. Stat. 1977, ch. 91 1/2, par. 120.1 et seq.), is charged with the responsibility of administering drug abuse treatment programs in Illinois. Under the Act, the DDC is empowered "[t]o make such agreements, grants-in-aid and purchase-care arrangements with * * * any public or private agency * * * as are appropriate to effectuate the purposes of this Act." Ill. Rev. Stat. 1977, ch. 91 1/2, par. 120.5-6.

Plaintiff WSO is an Illinois not-for-profit corporation which operates a drug rehabilitation program in Chicago and provides drug abuse treatment services. The State of Illinois, through the DDC, contracts to purchase drug rehabilitation services from WSO. Plaintiff John Doe is the fictitious name of a real person who is addicted to drugs and who has participated in the WSO drug rehabilitation program. Plaintiff Joseph Doe is the fictitious name of a real person who was allegedly denied participation in the WSO's drug rehabilitation program because of reduced state funding. Plaintiff John D'Arco is an Illinois citizen and taxpayer and member of the Illinois State Senate who claims an interest in maintaining State funding for drug rehabilitation programs.

All defendants are sued in their official capacities as State officials including Governor James Thompson, the director of the Illinois Bureau of the Budget, and the director and members of the DDC. In addition, the acting director of the Illinois Department of Finance (currently the Department of Administrative Services), the Illinois State Comptroller and the Illinois State Treasurer are named as defendants for their responsibility in the handling and distribution of public funds to drug treatment programs.

Appropriations of State monies for the purchase of drug treatment services are made by the General Assembly. The State Treasurer holds public funds for disbursement upon warrants issued by the State Comptroller. (Ill. Const. 1970, art. V, §§ 17 and 18.) The Comptroller issues warrants for payment of DDC expenses on the basis of vouchers certified by the director of the DDC and approved by the Department of Administrative Services. (Ill. Rev. Stat. 1977, ch. 127, par. 146.) The Department of Administrative Services does not approve vouchers unless they conform with allotment request forms approved by the Bureau of the Budget, a branch of the Governor's office statutorily empowered to assist the Governor in planning the State budget. Ill. Rev. Stat. 1977, ch. 127, par. 412.

Plaintiffs' five-count amended complaint alleged that in 1976, the Illinois General Assembly passed an appropriations bill that included a line item in the amount of $3,545,000 to be used by the DDC in fiscal year 1977 for the purchase of drug abuse treatment services. Governor Daniel Walker exercised his veto powers to reduce that line item by $100,000 to a total of $3,445,000. In December of 1976, the General Assembly overrode the Governor's veto reduction and the original appropriation of $3,545,000 became law. (1976 Ill. Laws 337-43.) Thereafter, Governor Thompson, through his agent, the Bureau of the Budget, informed the DDC that no allotment for the purchase of drug abuse treatment services in excess of $3,445,000 would be approved. The $100,000 amount restored to the appropriation by the General Assembly was reserved by the Governor for State budgetary reasons.

The amended complaint further alleged that while the appropriations bill was still pending in the legislature, DDC informed WSO that it planned to allocate $430,948 of the $3,545,000 appropriation for the purchase of drug treatment services from WSO. The DDC then reduced the allocation for WSO services to $330,948 after being informed by the Bureau of the Budget that no allocation in excess of a total of $3,445,000 would be approved for disbursement. WSO entered into a service contract with DDC, effective July 13, 1976, for the reduced amount. The amended complaint alleged that but for the reservation of the $100,000 for budgetary reasons, the additional funds would have been spent by DDC to obtain drug treatment services from WSO and similar organizations.

Plaintiffs sought writs of mandamus and prohibition and declaratory and injunctive relief to prevent the Governor and his agents from interfering with the DDC's allotment and expenditure of funds appropriated by the General Assembly for DDC use, and to compel the DDC to expend the funds on the purchase of drug treatment services. The trial court denied a motion by plaintiffs for temporary relief to segregate the $100,000 in question and prevent the expiration of the appropriation on June 30, 1977. A similar motion was denied by this court on October 4, 1977.

Defendants moved to dismiss the complaint, asserting, inter alia, that the claim was barred by the doctrines of separation of powers and sovereign immunity, that the named plaintiffs lacked standing to maintain the action and that the amended complaint failed to state a cause of action. On September 13, 1977, the trial court granted defendants' motion to dismiss and adopted the defendants' memorandum in support of their motion to dismiss as the basis for its decision. It is from this order that plaintiffs appeal.

In this court, defendants filed a motion to dismiss the appeal on the grounds that the lapse of the funds in question rendered the instant appeal moot. We took this motion for consideration with the case.

OPINION

I

The jurisdictional argument raised by the State defendants' motion to dismiss is whether the operation of (Ill. Rev. Stat. 1977, ch. 127, par. 161), providing for the lapse of appropriations after the passage of a specific period of time, renders the instant appeal moot.

This lawsuit challenges the right of State officials to reserve or withhold appropriated funds from the purpose intended by the General Assembly. The appropriations act in question (1976 Ill. Laws 339) became effective on July 1, 1976, and expired at the close of fiscal year 1977, on June 30, 1977. Under the 1870 Illinois Constitution, the lapse of appropriations was constitutionally mandated. (Ill. Const. 1870, art. IV, § 18.) Although no lapse provision is contained in the 1970 Illinois Constitution, the lapse of appropriations is governed by statute. The lapse provision provides in pertinent part:

"All appropriations shall be available for expenditure for the fiscal year or for a lesser period if the Act making that appropriation so specifies. A deficiency or emergency appropriation shall be available for expenditure only through July 30 of the year when the Act making that appropriation is enacted unless that Act otherwise provides.

Outstanding liabilities as of June 30, payable from appropriations which have otherwise expired, may be paid out of the expiring appropriations during the three-month period ending at the close of business on ...


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