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Emerald Casino, Inc. v. Illinois Gaming Board

December 30, 2003


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

The opinion of the court was delivered by: Presiding Justice Wolfson


The law is clear: "shall" means shall, except when it doesn't.

In this case we must decide what the legislature meant when it used "shall" in a 1999 amendment to the Riverboat Gambling Act (Act) (230 ILCS 10/1 et seq. (West 2000)). The answer to that question determines whether the amendment tells the Illinois Gaming Board (Board) it must grant Emerald Casino, Incorporated's (Emerald) application to renew its license and relocate its gambling business to Rosemont. *fn1


Illinois' Riverboat Gambling Act authorizes the Board to issue ten licenses for riverboat gambling, the first four of them for gambling on the Mississippi River. 230 ILCS 10/7(e) (West 2002). In 1992, the Board issued one of the Mississippi River licenses to HP, Incorporated, now known as Emerald Casino. The license was renewed for one year in 1995 and again in 1996.

In April 1997, Emerald applied for a license renewal; however, instead of remaining on the Mississippi, Emerald wanted to relocate to Rosemont. The Board refused Emerald's application two months later. Emerald pursued an administrative appeal. While the administrative appeal was pending in July 1997, Emerald stopped operating its casino.

The administrative law judge (ALJ) issued an order agreeing with the Board's denial. The ALJ denied both of Emerald's motions for reconsideration. Before Emerald's administrative appeal went back to the Board, the legislature added section 11.2 to the Act, effective June 25, 1999. 230 ILCS 10/11.2(a) (West 2002). In part, the section reads as follows:

"(a) A licensee that was not conducting riverboat gambling on January 1, 1998, may apply to the Board for renewal and approval of relocation to a new home dock location authorized under section 3(c) and the Board shall grant the application and approval upon receipt by the licensee of approval from the new municipality or county, as the case may be, in which the licensee wishes to relocate pursuant to section 7(j)." 230 ILCS 10/11.2(a) (West 2002).

Only Emerald fit that description, then and now.

Once section 11.2(a) passed, the Board declared the ALJ's previous order moot and allowed Emerald to file a new application for renewal and relocation under the new section. On July 7, 1999, the Board of Trustees of Rosemont approved Emerald's request to dock in Rosemont. Emerald submitted its revised application to the Board on September 24, 1999.

On January 30, 2001, the Board announced its intent to deny Emerald's request for renewal and relocation. On March 6, 2001, the Board issued its written notice of denial in addition to a five-count disciplinary complaint seeking to revoke Emerald's existing license. Emerald requested a hearing on the denial of its application and answered the Board's disciplinary complaint. The record provides no specific reason why the revocation proceedings linger without resolution.

On May 21, 2001, Emerald filed a complaint in the Circuit Court of Cook County seeking declaratory relief and a writ of mandamus ordering the Board to approve Emerald's application for renewal and relocation. Subsequently, the parties filed cross-motions for summary judgment, disputing whether the Board had the authority to deny Emerald's application even though Emerald met the two criteria set forth in section 11.2(a) of the Act.

Before the trial court ruled on the summary judgment motions, the Village of Rosemont (Rosemont) filed an emergency motion to intervene and join Emerald's motion for summary judgment. The trial court granted summary judgment in favor of the Board and denied Emerald's motion for summary judgment. The court did not address Rosemont's motion to intervene.

Rosemont filed a renewed motion to intervene. Rosemont also filed a motion requesting the court to vacate the previous summary judgment order and grant summary judgment in favor of Emerald based on the legislative history of section 11.2(a). The trial court granted Rosemont's request to intervene, but denied the motion to vacate its previous order.

Emerald and Rosemont now appeal the orders granting the Board summary judgment. We reverse and remand.


I. Standard of review

Generally, a trial court's decision to deny declaratory relief or a writ of mandamus will not be disturbed on appeal unless it is against the manifest weight of evidence. Villareal v. Village of Schaumburg, 325 Ill. App. 3d 1157, 1160, 759 N.E.2d 76 (2001); State Farm Fire & Casualty Co. v. Leverton, 314 Ill. App. 3d 1080, 1083, 732 N.E.2d 1094 (2000). However, this appeal arises from a grant of summary judgment. "In all cases involving summary judgment, we review the evidence in the record de novo." West American Insurance Co. v. J.R. Construction Co., 334 Ill. App. 3d 75, 80, 777 N.E.2d 610 (2002) (applying de novo standard when reviewing summary judgment that denied declaratory relief); see also Villareal, 325 Ill. App. 3d at 1160 (conducting de novo review of summary judgment denying writ of mandamus).

II. Procedural issues

There are three procedural issues that must be addressed. They are directed to whether this court should entertain this appeal.

The first issue was raised by this court during oral argument. We asked whether there has been a sufficient determination by the Board to warrant judicial consideration. That is, since there was no final Board action, is there a controversy "ripe for adjudication"? See Bio-Medical Laboratories, Inc. v. Trainor, 68 Ill. 2d 540, 545-46, 370 N.E.2d 223 (1977).

The Board contends we have no jurisdiction to proceed, relying entirely on National Marine, Inc. v. Illinois Environmental Protection Agency, 159 Ill. 2d 381, 639 N.E.2d 571 (1994). The issue in National Marine was whether the circuit court properly dismissed National Marine's complaint challenging the Illinois Environmental Protection Agency's (EPA) issuance of a section 4(q) (Ill. Rev. Stat. 1991, ch. 111 ½, par. 1004(q)) notice which informed the plaintiff it may be potentially liable for a release of a hazardous substance. The court, observing that the 4(q) notice was only the first step in a long enforcement proceeding which might never take place, held the plaintiff's complaint was premature and was correctly dismissed. That is, "plaintiff's complaint request[ed] [the] court to render an advisory opinion concerning future events." National Marine, 159 Ill. 2d at 390. In addition, the preenforcement judicial review of the 4(q) notice issuance "would completely undermine the statutory scheme established by the General Assembly as well as the legislative purpose of the Act." National Marine, 159 Ill. 2d at 391. The court did not use the word "jurisdiction" anywhere in its opinion.

We do not see how National Marine has much to do with this case, where we are called on to determine whether the legislature imposed a mandatory duty on the Board when it enacted section 11.2(a). No further investigation need take place. The Board, when it issued a Notice of Denial on March 6, 2001, more than 17 months after Emerald's application was filed, made clear its belief 11.2(a) grants it discretion to refuse Emerald's application or to delay it to death. All we have to do in this appeal is read the statute for legislative intent. We know how to do that.

There is a basic rationale for the ripeness doctrine as it relates to judicial intervention in administrative actions:

"to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." Bio-Medical Laboratories, 68 Ill. 2d at 546.

In Bio-Medical Laboratories, the Director of the Illinois Department of Public Aid (Department) had informed the plaintiff he intended to forthwith suspend it from the Public Aid Program. The Department's auditors agreed, but the Department had not acted. The court found "a sufficient final determination to warrant judicial consideration." Bio-Medical Laboratories, 68 Ill. 2d at 546.

Relying on Bio-Medical Laboratories, the court in Alternative Fuels, Inc. v. Director of Illinois Environmental Protection Agency, 337 Ill. App. 3d 857, 864, 786 N.E.2d 1063 (2003), pet. for leave to appeal granted No. 96071, held an agency's threat of action that could prove detrimental to a party may warrant judicial consideration. There, the EPA issued a violation notice to Alternative Fuels, Incorporated, threatening prosecution if the company did not comply with permit procedures. Ripe enough for judicial consideration of a declaratory judgment, held the court.

We were faced with a ripeness challenge in Peoples Energy Corp. v. Illinois Commerce Comm'n, 142 Ill. App. 3d 917, 492 N.E.2d 551 (1986). There, the circuit court granted injunctive relief and a declaratory judgment that stopped the Illinois Commerce Commission (Commission) from asserting its authority to halt a planned corporate reorganization of Peoples Energy. The Commission had begun a hearing, but gave no indication of how long the proceedings would take. We held the issues were clearly defined, not abstract or hypothetical, sufficiently ripe for judicial action. Peoples Energy, 142 Ill. App. 3d at 934.

We find the straightforward issue of legislative intent now placed before us is clearly defined and ripe for decision. If section 11.2(a) imposes a mandatory duty on the Board, a legislative directive is being ignored. Emerald does not seek a review of any discretionary decisions or Board findings. Deciding this case would not undermine the General Assembly's statutory scheme -- it would explicate it. This is fertile ground for mandamus and declaratory judgment action.

The second procedural issue is the Board's contention on appeal that Emerald is barred from seeking relief from the courts because it failed to exhaust its administrative remedies.

Emerald claims the Board waived the exhaustion issue when it failed to raise it in the trial court. It did not. An appellee, the Board in this case, may urge the exhaustion issue on appeal, even though not directly ruled on by the trial court, "so long as the factual basis for such point was before the trial court." Beahringer v. Page, 204 Ill. 2d 363, 370, 789 N.E.2d 1216 (2003). We will consider the exhaustion issue.

There are three basic reasons for requiring a litigant to exhaust administrative remedies before seeking judicial review: (1) exhaustion allows full development of the facts before the agency; (2) it allows the agency an opportunity to use its expertise; and (3) the aggrieved party may succeed before the agency, rendering judicial review unnecessary. Illinois Bell Telephone Co. v. Allphin, 60 Ill. 2d 350, 358, 326 N.E.2d 737 (1975).

There are established exceptions to the exhaustion doctrine. The doctrine is not a bar to judicial determination when the issue "is one of a statutory and case law interpretation, and therefore it falls within the scope of our particular expertise and not the State Board's." Office of Cook County State's Attorney v. Illinois Local Labor Relations Board, 166 Ill. 2d 296, 306, 652 N.E.2d 301 (1995); see also Getto v. City of Chicago, 77 Ill. 2d 346, 356-57, 396 N.E.2d 544 (1979) (circuit court properly exercises jurisdiction when "the sole issue presented here is one of statutory interpretation, and there is no question which required the [agency's] expertise").

Determining the scope of an agency's power and authority is a judicial function, not a question for the agency itself to answer. Knox County ex. rel. Masterson v. Highlands, L.L.C., 188 Ill. 2d 546, 554, 723 N.E.2d 256 (1999). In addition, exhaustion is not required where the administrative remedy is inadequate or futile, or where the litigant will be subjected to irreparable injury due to lengthy administrative procedures which fail to provide interim relief. Peoples Energy, 142 Ill. App. 3d at 932; see also General American Realty Co. v. Greene, 107 Ill. App. 3d 1011, 1014-15, 438 N.E.2d 540 (1982).

In fact, if the Board has no authority to do anything other than fulfill a legislative directive, its refusal to do so does not constitute a decision subject to administrative review. See McCoy v. Stackler, 38 Ill. App. 3d 1012, 1015, 350 N.E.2d 197 (1976); see also People ex. rel. Simpkins v. Village of Kincaid, 26 Ill. App. 2d 68, 167 N.E.2d 698 (1960)(mandamus is proper remedy where village's board did not have discretion to refuse to issue permits).

The exceptions are a firm fit in this case -- no facts to develop before the agency, not a matter for use of agency expertise, an issue of statutory and case law interpretation, lengthy procedures that cause substantial harm to the applicant, and a clear signal from the agency that exhausting administrative remedies would be patently useless. See Beahringer, 204 Ill. 2d at 378; Village of Maywood Bd. of Fire & Police Commissioners v. Department of Human Rights, 296 Ill. App. 3d 570, 577, 695 N.E.2d 873 (1998) (exhaustion not required where issue of statutory interpretation, not fact, was presented, no agency expertise was involved, and irreparable harm would result from further pursuit of administrative remedies). Exhaustion was not necessary in this case.

Finally, the Board contends summary judgment was proper because Emerald's action in the trial court was untimely. The Board says Emerald should have sought declaratory relief immediately after the legislature enacted section 11.2(a) in June 1999, instead of waiting until the Board denied the renewal and relocation application in 2001. The Board fails to support its position with pertinent legal authority or persuasive reasons. Nor can we find any of either. We reject the Board's contention that Emerald's complaint was untimely.

We conclude Emerald has chosen the correct remedies in pursuit of its claim of entitlement. Declaratory judgment is an appropriate method for determining controversies relating to construction or interpretation of a statute. Lake County State's Attorney v. Illinois Human Rights Comm'n, 200 Ill. App. 3d 151, 155, 558 N.E.2d 668 (1990). As for mandamus, if Emerald is right about the meaning of "shall," it has a "clear right to the relief requested," there is a "clear duty of the respondent to act," and there is "clear authority in the ...

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