right of action is part of Article XX, denominated "Recovery of Fraudulently Obtained Funds," and has an effective date of July 1, 1987.
The procedure for bringing a citizen suit under § 20-104 includes demand on the appropriate government official, but does not indicate what a proceeding undertaken by a citizen on the State's behalf does to the State's right to collect damages for itself. This statutory scheme is relatively new, and this Court has found no cases interpreting its provisions. Therefore, the Court is in the position of interpreting the intent of the Illinois General Assembly.
Considering the citizen action provision, § 20-104(b), in light of Feen and the statutory scheme as a whole, it seems clear that the General Assembly intended that a citizen proceeding on the State's behalf succeed to all of the rights originally granted the State. In other words, once a citizen has made demand on the State and the State has indicated its refusal to proceed, by action or inaction, the citizen steps into the shoes of the State and assumes all of the State's rights to recover the funds at issue to the exclusion of subsequent State action.
To interpret § 20-104 otherwise would be to render the rights of the citizen a nullity, in spite of a clear statutory framework to the contrary. If the citizen did not stand in the shoes of the State in bringing the action, the citizen and the courts would be faced with the problem of duplicative and possibly conflicting litigation, with the State bringing a claim identical to the present action on its own behalf--in either state or federal court. This, then, would lead to the ensuing problem of inconsistent judgments. The legislature could not have intended to leave to the State the right to wreak havoc in litigation filed under § 20-104. It defies logic to assume that the legislature intended that, after failing to act, the State could bring a subsequent action effectively sabotaging any litigation filed pursuant to § 20-104(b).
This returns the Court to the question of whether this citizen suit is analogous to a shareholder derivative action brought on behalf of an unwilling corporation. In a shareholder derivative action, a corporation that is unwilling to bring suit on its own behalf is an indispensable party under Rule 19(a) and must be aligned as a defendant. Bagdon v. Bridgestone/Firestone, Inc., 916 F.2d 379, 382 (1990), citing Smith v. Sperling, 354 U.S. 91, 1 L. Ed. 2d 1205 , 77 S. Ct. 1112 (1957). Therefore, the State of Illinois should be brought in as a defendant in this action.
The State argues, however, in opposition to the plaintiffs' motion, that bringing the State into the action as a defendant would violate the Eleventh Amendment, because it would constitute an action "against one of the United States." Under Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 79 L. Ed. 2d 67 , 104 S. Ct. 900 (1984), a suit is against the sovereign for purposes of the Eleventh Amendment, if "'the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration or if the effect of the judgment would be to restrain the Government from acting, or to compel it to act.'" Id. at 100 n. 11, citing Dugan v. Rank, 372 U.S. 609, 620, 10 L. Ed. 2d 15 , 83 S. Ct. 999 (1963).
On the facts of this case, Pennhurst is not implicated. Under § 201-04, the State's rights acceded to the citizen. Therefore, it is not this Court's proceedings that restrain the State from acting, bat rather the statutory scheme of Article XX, which allows the State to waive its rights in favor of a citizen litigant. The only "right" which may be affected by the proceedings before this Court is the right to disrupt pending litigation.
If there are no Eleventh Amendment problems, the plaintiffs argue for joinder of the State as a nominal defendant. This Court hesitates to rely solely on the analogy of this derivative action to that of a shareholder derivative action against a corporation, and, so to declare on the strength of that analogy alone that the State should be brought in as a necessary party. It seems clear, however, that without the State "complete relief cannot be accorded among those already parties," as stated in Rule 19(a). For example, if the State is not brought in as a nominal party, the lack of access to State documents for discovery purposes may greatly impede the plaintiffs' ability to act successfully on behalf of the State.
In sum, because the Eleventh Amendment is not at issue, the plaintiffs, may bring in the State as a nominal party. Joinder of the State, rather than forcing the State to act, will afford the State the opportunity to monitor the litigation and participate to the extent it wishes in the proceedings, because it will allow the State to have counsel appear and to receive notice of all proceedings.
Accordingly, the plaintiffs' motion to join the State of Illinois as an additional party defendant, pursuant to Rule 19(a) of the Federal Rules of Civil Procedure, is granted. Plaintiff is granted leave to file an amended complaint, to that end, within twenty-one days.
JOHN A. NORDBERG, United States District Judge
DATED: June 5, 1992