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11/16/94 RIVERBOAT DEVELOPMENT CORPORATION v.

November 16, 1994

RIVERBOAT DEVELOPMENT CORPORATION, AN ILLINOIS CORPORATION, AND JOE A. TERRELL, PLAINTIFFS-APPELLANTS,
v.
ILLINOIS GAMING BOARD, WILLIAM KUNKLE, JR., W. JACK CHAMBLIN, ROBERT G. GIBSON, RAYMOND C. NIEPERT, AND J. THOMAS JOHNSON, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE ILLINOIS GAMING BOARD, AND MORTON E. FRIEDMAN, IN HIS OFFICIAL CAPACITY AS ADMINISTRATOR OF THE ILLINOIS GAMING BOARD, DEFENDANTS-APPELLEES, AND ALTON RIVERBOAT GAMBLING PARTNERSHIP, ARCHVIEW CASINO CRUISES, INC., GREATER PEORIA RIVERBOAT CASINO CRUISES, INC., JO DAVIESS RIVERBOAT CORPORATION, ROCK ISLAND BOATWORKS, INC., AND SOUTHERN ILLINOIS RIVERBOAT CASINO CRUISES, INC., INTERVENOR-DEFENDANT-APPELLEES.



Appeal from the Circuit Court of Cook County. Honorable Sophia H. Hall, Judge Presiding.

As Corrected December 9, 1994.

Tully, Rizzi, Cerda

The opinion of the court was delivered by: Tully

PRESIDING JUSTICE TULLY delivered the opinion of the court:

Plaintiffs, Riverboat Development Corporation (hereinafter referred to as "Riverboat") and Joe A. Terrell (hereinafter referred to as "Terrell"), filed a single count complaint in chancery against defendants, Illinois Gaming Board (hereinafter referred to as "Board"), William Kunkle, Jr., W. Jack Chamblin, Robert G. Gibson, Raymond C. Niepert, and J. Thomas Johnson, in their official capacities as members of the Illinois Gaming Board, and Morton E. Friedman, in his official capacity as Administrator of the Illinois Gaming Board. Plaintiffs sought a declaration that: the proposed rules pursuant to which the Board was purporting to act were void as they were not properly promulgated in accordance with the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1991, ch. 127, par. 1001 et seq. (now 5 ILCS 100/1 et seq. (West 1992))) (hereinafter referred to as "Administrative Procedure Act"); the Board was without jurisdiction to act until rules were properly promulgated in accordance with the Administrative Procedure Act; that its actions pursuant to the proposed rules be null and void. Plaintiffs also sought to enjoin the Board from acting pursuant to the Riverboat Gambling Act (Ill. Rev. Stat. 1991, ch. 120, par. 2401 et seq. (now 230 ILCS 10/1 et seq. (West 1992))) (hereinafter referred to as the "Riverboat Gambling Act") until such rules were properly promulgated.

Intervenor-defendants-appellees were all of the successful applicants whose licenses were placed at risk by the broad relief sought by the plaintiffs.

Following the presentation of oral arguments on cross-motions for partial summary judgment, the circuit court ruled in favor of the defendants and entered an order finding no just reason for delay or appeal. The plaintiff now appeals from this order pursuant to Supreme Court Rule 304 (134 Ill. 2d R. 304).

As all of the riverboat gambling licenses authorized by the Illinois State legislature have been issued, most of the relief originally sought by the plaintiffs is now moot. The only relief plaintiffs seek at the appellate level is a declaration that the Gaming Board's finding that plaintiffs are "not suitable for licensing" is null and void because it was made pursuant to invalid and ineffective administrative rules.

STATEMENT OF FACTS

The material facts are not in dispute. Plaintiff Riverboat is an Illinois corporation and Terrell is its sole shareholder. On June 30, 1990, Terrell, on behalf of Riverboat Development, submitted an application to the Board for a license to conduct riverboat gambling from a home dock in East St. Louis, Illinois. Thereafter, the Board conducted a background investigation of plaintiffs.

On November 26, 1990, the Board voted to adopt administrative rules (hereinafter referred to as "proposed rules") dealing with licenses and hearings. Immediately after the Board voted to adopt said rules, the chairman said "the fact that the Board's rules had not gone through the formal rulemaking process does not preclude the Board from operating under them."

On November 27, 1990, after a formal presentation by plaintiffs, the Board found the plaintiffs "not preliminarily suitable for licensing." The "not preliminarily suitable for licensing" standard is set forth in the proposed rules and is not contained anywhere in the Riverboat Gambling Act. On December 22, 1991, the Gaming Board sent a letter to Terrell confirming in writing its November 27, 1990 finding. This letter stated that the Board found the plaintiffs "were not a suitable candidate to receive a Riverboat Gambling License" and informed Terrell that he was entitled to "request a hearing in accordance with Rule 410" of the proposed rules. The letter also contained detailed findings of the Board which supported their denial. Terrell filed a timely request for a hearing.

On January 18, 1991, the proposed rules were published for the first time in the Illinois Register. In the administrative hearing, Plaintiffs challenged the proposed rules on the grounds that they had not been properly promulgated in accordance with the requirements of the Administrative Procedure Act and therefore they had been improperly denied a license. The proposed rules were revoked and ...


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