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03/16/88 Alfons W. Bobrowicz, Indiv v. the City of Chicago

March 16, 1988

ALFONS W. BOBROWICZ, INDI

v.

AND ON BEHALF OF ALL RESIDENTS OF UNINCORPORATED AREAS OF THE METROPOLITAN SANITARY

DISTRICT OF GREATER CHICAGO SIMILARLY SITUATED, PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS

v.

THE CITY OF CHICAGO, DEFENDANT-APPELLANT AND CROSS-APPELLEE



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, THIRD DIVISION

522 N.E.2d 663, 168 Ill. App. 3d 227, 119 Ill. Dec. 1 1988.IL.361

Appeal from the Circuit Court of Cook County; the Hon. Anthony J. Scotillo, Judge, presiding.

APPELLATE Judges:

JUSTICE McNAMARA delivered the opinion of the court. RIZZI and FREEMAN, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MCNAMARA

Defendant, the City of Chicago, appeals from an order of the trial court granting summary judgment in favor of plaintiff Alfons Bobrowicz and all members of the class represented by plaintiff, in their action challenging the surcharge imposed by defendant on the sale of water to private entities and individuals residing in unincorporated areas of the Metropolitan Sanitary District. In a cross-appeal, plaintiffs appeal from the granting of summary judgment in favor of defendant on an equal protection claim and the dismissal of the last count of their complaint charging that the practices of defendant violate the Illinois Antitrust Act (Ill. Rev. Stat. 1985, ch. 38, par. 60-1 et seq.).

Defendant owns and operates a waterworks system known as the Metropolitan Sanitary District of Greater Chicago . The MSD was created by the Chicago Sanitary District Act of 1889 (Ill. Rev. Stat. 1889, ch. 42, par. 320 et seq.), and since that time has been the main waterworks system for the greater metropolitan area of Chicago. The MSD procures its supply of water from Lake Michigan and protects the lake from sewage pollution with its sewage facilities. Defendant sells water to approximately 45 suburban municipalities within the MSD. Defendant also sells water to four railroads, a private utility company and approximately 300 private customers. The municipalities which purchase water from defendant supply water to their own residents, and often sell water to other municipalities or individual consumers outside their corporate limits.

Section 26 of the Sanitary District Act imposes a price restriction on sales of water to cities, villages, townships, incorporated towns or other municipal corporations. (Ill. Rev. Stat. 1985, ch. 42, par. 348.) Before defendant will sell water to a municipality, the purchaser is required to sign a water service contract which, until 1985, required the municipality to report the amount of water it delivered to consumers in unincorporated areas and to pay defendant a 50% surcharge above the city meter rate for such water. Defendant also required that the purchasing municipality impose these same conditions on any other municipality to which it sold water. Defendant eliminated the surcharge provision from contracts with municipal customers entered into or renewed after June 1982. Defendant also unilaterally cancelled the surcharge provision in all existing contracts as of May 1, 1985.

The representative plaintiff resides in an unincorporated area of Worth Township, in Cook County. This property is located within the boundaries of the MSD. Plaintiff purchases water from the City of Palos Heights, which receives its water from Alsip. Alsip purchases its water from defendant. During the period of time relevant to this suit, plaintiff paid the 50% surcharge to Palos Heights and that surcharge was eventually remitted to defendant.

Plaintiff filed this action in 1984 alleging that defendant's imposition of a 50% surcharge violated section 26 of the Sanitary District Act, and the common law duty of a utility to charge reasonable rates. Count II of the complaint alleged that defendant's 50% surcharge on water furnished for consumption by the plaintiff class violated their constitutional rights to equal protection of the law. Count III alleged that the surcharge constituted illegal monopolization and price discrimination and thus violated the Illinois Antitrust Act. Ill. Rev. Stat. 1985, ch. 38, par. 60-1 et seq.

The trial court certified a plaintiff class consisting of all water consumers located outside Chicago, but within the MSD, who consumed water supplied either directly or indirectly by Chicago for which Chicago was paid a surcharge. As a result of this class definition, those represented include all private entities or individuals who purchase water from defendant, and all individuals who purchase water from a suburban municipality which either purchases from defendant or from another municipality which purchases from defendant, who pay a surcharge.

The trial court granted plaintiffs' motion for summary judgment on count I of their complaint. The court granted summary judgment for defendant on count II and granted defendant's motion to dismiss with prejudice count III. In its holding on count I, the trial court held that section 26 of the Sanitary District Act required defendant to furnish water to consumers within unincorporated areas of the MSD and private entities at a rate no greater than the rate defendant charges its own residents.

Pursuant to Supreme Court Rule 308 (107 Ill. 2d R. 308), the trial court certified two questions for immediate appeal: (1) Does section 26 of the Sanitary District Act, or the common law, prohibit the City of Chicago from imposing a surcharge on water furnished within the MSD to a person or entity which is not a "city, village, township, incorporated town or other municipal corporation?" and (2) Did or does section 26 of the Act, or the common law, prohibit the City of Chicago from imposing a surcharge on water furnished within the MSD ...


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