SUPREME COURT OF ILLINOIS
537 N.E.2d 323, 127 Ill. 2d 316, 130 Ill. Dec. 256 1989.IL.373
Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Albert Green, Judge, presiding.
JUSTICE WARD delivered the opinion of the court. JUSTICE CALVO took no part in the consideration or decision of this case.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WARD
Plaintiff City of Chicago brought an action in the circuit court of Cook County to recover fees under the Sewer Revenue Fund Ordinance (Chicago Municipal Code § 185.1 (1984)) from classes, inter alia, of educational and charitable institutions that allegedly had failed to pay properly assessed fees for use of the City's sewer system. Defendants Northwestern University and the Young Men's Christian Association of Metropolitan Chicago (hereafter, the defendants) were named both individually and as representative parties for the proposed educational and charitable institutional classes. Before a ruling had been made on the City's motion to certify the classes, the trial court granted the defendants' motion to "opt out" of the action, that is, to be excluded from the class under section 2-804(b) of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 2-804(b)). The plaintiff moved for and was granted certification for an interlocutory appeal of the trial court's order pursuant to our Rule 308 (107 Ill. 2d R. 308), and the appellate court, with one Justice Dissenting, reversed (173 Ill. App. 3d 1016) the trial court's order permitting the defendants to opt out. This court granted the defendants' petition for leave to appeal under Rule 315(a)(107 Ill. 2d R. 315(a)).
On August 11, 1983, Gregory and Edward Baksinski, as taxpayers, filed a class action complaint in the circuit court of Cook County against several of the officials of the City of Chicago alleging that numerous educational, charitable and religious institutions which utilized the City's sewer system were being improperly exempted under the Sewer Revenue Fund Ordinance (see Chicago Municipal Code § 185.1 (1984)) from payment of sewer-usage charges. The plaintiffs requested an accounting and a mandatory injunction requiring officials of the City to collect the fees. The complaint named Northwestern University as a defendant in its individual capacity and as the representative of a class of defendants to consist of all educational institutions:
"who own, operate and maintain buildings in the City of Chicago, who are users and consumers of water supplied by the City of Chicago and utilize the sewer system of said City, who have been exempted from the payment of City water charges, but expressly not exempt from the payment of the City's sewer usage fees, and have not paid any sewer usage fees from the time of the enactment of the aforesaid ordinance . . .."
Defendant YMCA and the Fourth Presbyterian Church were named the representatives of proposed classes of charitable and religious institutions which were also being allegedly improperly exempted by the City from the payment of sewer-usage charges. The complaint also named the Edgewater Hospital as the representative of similarly situated nonprofit hospitals. We, however, are concerned only with the question of opting out at this stage, which the defendants have raised; there is no question before us as to the Fourth Presbyterian Church or Edgewater Hospital.
The City was later granted leave to intervene and align itself as a plaintiff. It then filed a class action complaint designating as defendants the same classes named in the Baksinskis complaint and similarly designating the defendants as the representatives of those classes.
The defendants filed an answer to the plaintiffs' complaints asserting, as an affirmative defense, that a class action was an "improper means for the City to collect allegedly delinquent sewer charges from individual members of the defendant class[es]" and that the defendants were not the "proper part[ies] to be appointed as representative[s] of the purported defendant class[es] because [they are not] similarly situated to the other class members." Specifically, the defendants argued that unlike other members of the putative classes, they had been billed for and paid both water and sewer charges on certain of their properties and further that their respective legislative charters exempt them from taxation. Related to the contention regarding charters, the defendants filed a counterclaim against the City seeking a declaration that they are exempt from all past and present sewer charges on the ground that their legislative charters provide exemption.
On August 15, 1986, the City filed a motion to certify the defendant classes. While that motion was pending, the defendants filed a motion to opt out of the action under section 2 -- 804(b) of the Code of Civil Procedure, which provides:
"Any class member seeking to be excluded from a class action may request such exclusion and any judgment entered in the action shall not apply to persons who properly request to be excluded." Ill. Rev. Stat. 1985, ch. 110, par. 2-804(b).
The defendants argued that they were not the proper parties to represent their respective classes due to a conflict of interest between their interests and the interests of the proposed classes. The defendants asserted that they intended to argue that the ordinance imposes a tax for the use of the City's sewer services and that their respective legislative charters exempted them from the imposition of all municipal taxation. This defense, they said, would be antithetical to the interests of those ...