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People Who Care v. Tax Objectors

October 26, 2000

IN RE CONSOLIDATED OBJECTIONS TO TAX LEVIES OF SCHOOL DISTRICT NO. 205, FOR THE YEARS 1991 THROUGH 1996 (PEOPLE WHO CARE, APPELLANT, V. TAX OBJECTORS, APPELLEES).


The opinion of the court was delivered by: Justice Bilandic

Docket No. 88267-Agenda 20-May 2000.

This appeal arises from objections filed by tax objectors challenging the real estate taxes levied by the board of education of Rockford School District No. 205 (school district) to fund equitable remedies ordered in separate federal litigation involving school desegregation. The circuit court of Winnebago and Boone Counties granted summary judgment in favor of the tax objectors and held that the provisions of article IX of the Local Governmental and Governmental Employees Tort Immunity Act (Tort Immunity Act) (745 ILCS 10/9-101 et seq. (West 1998)) did not authorize funding the equitable remedies in this case. When the school district did not file an interlocutory appeal, People Who Care, the plaintiff in the federal litigation, filed a petition to intervene. The circuit court allowed the petition and certified questions for appellate review. On interlocutory appeal, the appellate court answered the certified questions and affirmed the circuit court's ruling. 306 Ill. App. 3d 1104. We granted People Who Care's petition for leave to appeal. 177 Ill. 2d R. 315.

This court granted leave to file amicus curiae briefs in support of People Who Care. The Illinois Association of School Boards, the Illinois Association of School Administrators, and the board of education of the City of Chicago filed a joint brief, as did the Chicago Lawyers' Committee for Civil Rights Under Law, Inc., the Mexican American Legal Defense and Educational Fund, and the American Civil Liberties Union of Illinois. The Large Unit District Association filed its own amicus brief.

For the reasons set forth below, we affirm the judgment of the appellate court.

BACKGROUND

In 1989, People Who Care filed a class action against the school district in federal court, alleging that the school district had engaged in a pattern of intentional segregation and discrimination on a system-wide basis. In that action, People Who Care sought equitable and declaratory relief, and specifically requested injunctive relief. Prior to full adjudication on the merits, the parties entered into two court-approved interim agreements, where liability was not admitted. The first interim order modified a reorganization plan adopted previously by the school district. The second interim order was in the form of a preliminary injunction pursuant to which the school district was directed to carry out a detailed and comprehensive plan for system-wide changes in the operation of its schools. In conjunction with the second interim order, the federal court found that the school district was authorized to use the Tort Immunity Act to fund the cost of the remedial measures. This allowed the school district to levy additional property taxes and issue bonds.

In 1993, following a hearing, the magistrate judge issued a report, recommending that the school district be held liable for violating the constitutional rights of the minority student class. The federal court in 1994 entered a declaratory judgment order holding that the school district had unlawfully segregated and discriminated against its students. The federal court also entered a permanent injunction order against the school district, directing it to eliminate all vestiges of discrimination against the African-American and Hispanic students. People Who Care v. Rockford Board of Education School District #205, 851 F. Supp. 905 (N.D. Ill. 1994).

In 1996, the federal court entered a "Comprehensive Remedial Order" (CRO), requiring the School District to implement and fund detailed system-wide desegregation remedies including a student assignment plan to desegregate schools, educational programs to address discrimination, and long-term capital improvements such as the renovation and construction of schools. The Seventh Circuit Court of Appeals modified certain portions of the remedial requirements set forth in the CRO. People Who Care v. Rockford Board of Education School District No. 205, 111 F.3d 528 (7th Cir. 1997). Throughout this time, beginning with the first interim order, funds to implement remedial programs were raised by real estate taxes levied and bonds issued under the Tort Immunity Act.

Separate from the aforementioned federal class action, tax objectors challenged the 1991 through 1996 real estate taxes levied by the school district under the Tort Immunity Act to fund the desegregation remedies in the federal class action. The school district successfully had the cases removed to federal court. The federal court ruled that the school district had the authority under the Tort Immunity Act to levy taxes to pay for the desegregation remedies. In re Application of the County Collector of the County of Winnebago, Illinois, for Judgment & Order of Sale for Taxes on Lands & Lots upon Which the General Taxes &/or Special Assessments for the Year[s] 1991, 1992 & 1993 are Delinquent, 918 F. Supp. 235 (N.D. Ill. 1996). The Seventh Circuit Court of Appeals reversed on jurisdictional grounds and remanded the matter to the circuit court of Illinois. In re Application of County Collector, 96 F.3d 890 (7th Cir. 1996).

Upon remand from the federal court, the circuit court granted summary judgment in favor of the tax objectors. The circuit court determined that the Tort Immunity Act did not authorize the school district to pay for remedial measures implemented under the second interim order. The circuit court also determined that the Tort Immunity Act did not authorize the school district to pay for desegregation remedies ordered by the federal district court subsequent to the liability determination.

When the school district did not pursue an interlocutory appeal from the circuit court's ruling, People Who Care was granted leave to intervene. The circuit court then certified the following questions of law for interlocutory appeal pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308):

"(a) Whether the Rockford School District (the `District') was authorized by the Illinois Local Government Employees Tort Immunity Act (`the Tort Immunity Act') to levy taxes to fund remedies agreed to by the District and/or ordered by the Federal Court in People Who Care v. Rockford Board of Education 89 C 20168 (`the People Who Care case'):

(i) in a 1991 consent decree;

(ii) after the District was adjudicated guilty in 1994 and enjoined generally to provide a comprehensive remedy; and/or

(iii) after a Comprehensive Remedial Order was entered in 1996 and the District was expressly ordered by the Federal Court to use the Tort Immunity Act levy to fund the remedies (including FY 97 remedial programs and Certificates of Participation)[.]

(b) Whether the District was authorized by the Tort Immunity Act to levy taxes to pay the debt service on general obligation bonds issued to fund capital improvement remedies agreed to by the District or ordered by the Federal Court in the People Who Care case[.]

(c) Whether taxpayers are precluded from challenging any of the aforesaid taxes under principles of res judicata or collateral estoppel[.]" *fn1

The appellate court initially denied People Who Care's application for leave to appeal; however, this court issued a supervisory order directing the appellate court to allow the appeal and to answer the certified questions. The appellate court answered certified questions "(a)" and "(b)" in the negative. The appellate court declined to address certified question "(c)" and found it waived because the parties did not brief that question. The appellate court therefore affirmed the circuit court's rulings that the use of the tax levies under the Tort Immunity Act to fund remedies in the People Who Care case was not authorized.

ANALYSIS

The issue before this court, as presented in the certified questions, essentially is whether the school district is authorized under the Tort Immunity Act to levy taxes to fund the cost of complying with injunctive remedies. Because this issue involves the interpretation of a statute, which is a question of law, we conduct de novo review. Department of Public Aid ex rel. Davis v. Brewer, 183 Ill. 2d 540, 554 (1998); Lucas v. Lakin, 175 Ill. 2d 166, 171 (1997).

In construing the meaning of a statute, this court's primary objective is to ascertain and give effect to the intent of the legislature. The language of the statute provides the best indication of the legislature's intent. Department of Public Aid, 183 Ill. 2d at 554. We will not depart from the plain language of the statute by reading into it exceptions, limitations or conditions conflicting with the express legislative intent. Barnett v. Zion Park District, 171 Ill. 2d 378, 389 (1996). Moreover, where the statutory language is clear and unambiguous, it will be given effect without resorting to other aids of construction. Gem Electronics of Monmouth, Inc. v. Department of Revenue, 183 Ill. 2d 470, 475 (1998). We also note that statutes imposing a tax are strictly construed against the government and in favor of the taxpayer. Gem Electronics, 183 Ill. 2d at 475. Keeping these principles of statutory construction in mind, we now examine the relevant provisions of the Tort Immunity Act.

Sections 9-107 and 9-102 (745 ILCS 10/9-107, 9-102 (West 1998)) are the two provisions of the Tort Immunity Act directly at issue in this appeal. Both provisions fall under article IX of the Tort Immunity Act, which is entitled "Payment of Claims and Judgment." 745 ILCS 10/9-101 et seq. (West 1998). Section 9-107 authorizes a local public entity to levy taxes upon all taxable property within its territory for purposes of section 9-102. 745 ILCS 10/9-107 (West 1998). Section 9-102 of the Tort Immunity Act in turn empowers a local public entity "to pay any tort judgment or settlement for compensatory damages for which it *** is liable in the manner provided in this Article." 745 ILCS 10/9-102 (West 1998). It is evident from these provisions that section 9-107 sets forth a tax-levy power and section 9-102 explains the circumstances for utilizing such a tax levy. The issue here is whether section 9-102 provides authority for the school district to levy taxes in this case under section 9-107.

In addressing this issue, we must resolve whether the injunctive remedies in this case constitute "compensatory damages" within the meaning of section 9-102. The term "compensatory damages" is not defined in section 9-102 or anywhere else in the Tort Immunity Act. Accordingly, we rely on the plain and ordinary meaning of the word. See In re Estate of Callahan, 144 Ill. 2d 32, 43 (1991). We also apply a strict construction of the term because it is included in a statute that should be considered a taxing statute given the tax-levy provision in section 9-107. See Canteen Corp. v. Department of Revenue, 123 Ill. 2d 95, 105 (1988).

Compensatory damages are "[d]amages sufficient in amount to indemnify the injured person for the loss suffered." Black's Law Dictionary 394 (7th ed. 1999). Damages in turn are "[m]oney claimed by, or ordered to be paid to, a person as compensation for loss or injury ." Black's Law Dictionary 393 (7th ed.1999). In light of these definitions, the plain meaning of the term "compensatory damages" is a monetary award paid to a person as compensation for loss or injury. We hold that the use of the term "compensatory damages" in section 9-102 limits application of that provision to the payment of monetary awards in tort judgments or settlements. People Who Care argues that the term "compensatory damages" is not limited to monetary awards but also includes the costs of complying with injunctive remedies. An injunction, however, is "[a] court order commanding or preventing an action." Black's Law Dictionary 788 (7th ed. 1999). "Compensatory damages" clearly differ from an injunction such that injunctive remedies do not constitute "compensatory damages." Accordingly, section 9-102 does not apply to the payment of costs of complying with injunctive relief.

In support of its argument, People Who Care asserts that this court's decision in Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (1992), is controlling in determining the definition of ...


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