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Waukegan School Dist. v. City of Waukegan

OPINION FILED FEBRUARY 8, 1983.

WAUKEGAN COMMUNITY UNIT SCHOOL DISTRICT NO. 60 ET AL., APPELLEES AND CROSS-APPELLANTS,

v.

THE CITY OF WAUKEGAN ET AL., APPELLANTS AND CROSS-APPELLEES. — ILLINOIS BELL TELEPHONE COMPANY, APPELLANT,

v.

THE VILLAGE OF OAK PARK ET AL., APPELLEES.



No. 56393. — Appeal from the Circuit Court of Lake County, the Hon. William D. Block, Judge, presiding.

No. 56394. — Appeal from the Circuit Court of Cook County, the Hon. James C. Murray, Judge, presiding.

JUSTICE CLARK DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 8, 1983.

James R. Bryant, Jr., Michael J. Karson, and John T. Lenahan, of Chicago, and Ellis E. Fuqua, of Fuqua, Winter, Wysoki & Stiles, Ltd., of Waukegan, for appellant Illinois Bell Telephone Company.

Arthur C. Thorpe and Sara A. Hanson, of Klein, Thorpe & Jenkins, Ltd., of Chicago, for appellee Village of Oak Park.

Jack M. Siegel, of Chicago, for appellee City of Evanston.

Ronald M. Glink and Peter M. Rosenthal, of Ancel, Glink, Diamond, Murphy & Cope, P.C., of Chicago, for appellee Village of Rosemont.

Michael S. Basofin, of Basofin & Webne, of Evanston, and John G. Radosevich, of Lonchar, Nordigian & Radosevich, of Waukegan, for intervenors Bryant H. Prentice III, Leo Gideon, and Donna Keeler.

Lawrence D. Lasky, Richard M. Lipton, and Donald C. Clark, Jr., of Chicago (Isham, Lincoln & Beale, of counsel), for amicus curiae Commonwealth Edison Company.

This case involves the consolidation of two appeals: one arising out of three cases consolidated before the circuit court of Lake County (hereafter the Waukegan cases: Waukegan Community Unit School District No. 60 et al. v. City of Waukegan, 81 MR 266; David N. Barkhausen et al. v. City of Waukegan et al., 81 CH 725; County of Lake v. City of Waukegan, 81 CH 729, consolidated before the circuit court of Lake County) and a similar case brought before the circuit court of Cook County (hereafter the Oak Park case: Illinois Bell Telephone Company v. Village of Oak Park, City of Evanston and Village of Rosemont, 82 L 3405, circuit court of Cook County).

Shortly after this court rendered its decision in Commercial National Bank v. City of Chicago (1982), 89 Ill.2d 45, certain appellants filed suit against the city of Waukegan to have its 5% municipal utility tax on utility companies and its 3% consumer utility tax declared unconstitutional. After a hearing, the circuit court of Lake County held that the 5% utility tax suffered no unconstitutional infirmity, but did hold that the 3% consumer utility tax was unconstitutional based upon this court's decision in Commercial National Bank. Both holdings are before this court.

A similar suit was filed by Illinois Bell Telephone against the villages of Oak Park and Rosemont, and the city of Evanston, alleging similar constitutional infirmities with the consumer utility tax ordinances adopted by those communities. The circuit court of Cook County, however, held for the communities and found the ordinances to be constitutional. Both cases are now before this court under Rule 302(b) (73 Ill.2d R. 302(b)) and were consolidated on March 27, 1982.

In the Oak Park case plaintiff-appellant Illinois Bell Telephone Company (hereafter Illinois Bell) brought a declaratory judgment action challenging the constitutionality of the various tax ordinances enacted by the municipalities of Oak Park, Evanston and Rosemont. Each municipality filed a motion to dismiss for failure to state a cause of action.

On March 19, 1982, the circuit court of Cook County granted the defendants' motion to dismiss. Illinois Bell elected to stand on its complaint and appeals from the order of dismissal. Illinois Bell contends that the home rule taxes at issue are prohibited by article VII, section 6(e), of the 1970 Constitution and that the defendants should be permanently enjoined from imposing or enforcing these taxes.

Pursuant to Supreme Court Rule 302(b) we ordered a direct appeal, and we consolidated this case with the cases arising out of Lake County.

On March 31, 1982, by an order of this court Bryant H. Prentice and Leo Gideon of Evanston, and Donna Keeler of Oak Park were permitted to intervene. Each of the forementioned parties are persons who have used and continue to use public utilities in these respective municipalities. Prentice, Gideon and Keeler had challenged the validity of the Evanston and Oak Park taxes in a separate class action suit. Their petition to intervene had previously been denied by the circuit court.

The other actions consolidated in this appeal challenge the constitutionality of Waukegan's "consumer utility tax," which is substantially identical to utility taxes enacted by Oak Park, Evanston and Rosemont.

In addition to challenging Waukegan's consumer utility tax, plaintiffs North Shore Sanitary District, Waukegan Community Unit School District No. 60 (hereafter School District No. 60) and the County of Lake (collectively "plaintiff local government units") separately challenged the Waukegan municipal utility tax imposed by Waukegan upon the utilities pursuant to section 8-11-2 of the Illinois Municipal Code (Ill. Rev. Stat. 1981, ch. 24, par. 8-11-2). The plaintiff ...


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