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New Heights Recovery and Power, LLC v. Bower

March 09, 2004

[5] NEW HEIGHTS RECOVERY AND POWER, LLC, FORMERLY KNOWN AS CGE FORD HEIGHTS LLC; AND CGE FULTON, LLC, PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS,
v.
GLEN BOWER, AS DIRECTOR OF THE DEPARTMENT OF REVENUE, AND THE DEPARTMENT OF REVENUE, DEFENDANTS-APPELLANTS AND CROSS-APPELLEES (COMMONWEALTH EDISON COMPANY, DEFENDANT; U.S. BANK TRUST NATIONAL ASSOCIATION, FORMERLY KNOWN AS FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION, AS LIQUIDATING TRUSTEE OF THE CGE FORD HEIGHTS LIQUIDATING TRUSTS, FORMERLY AS INDENTURE TRUSTEE, INTERVENING PLAINTIFF).
THE VILLAGE OF ROBBINS AND ROBBINS RESOURCE RECOVERY PARTNERS, L.P., PLAINTIFFS-APPELLEES AND CROSS-APPELLANTS,
v.
KEVIN WRIGHT, MARY FRANCES SQUIRES, RUTH KRETSCHMER, TERRY HARVILL, EDWARD HURLEY, RICHARD MATHIAS, AND RICHARD KOLHAUSER, AS COMMISSIONERS OF THE ILLINOIS COMMERCE COMMISSION; GLEN BOWER, AS DIRECTOR OF THE DEPARTMENT OF REVENUE, DEFENDANTS-APPELLANTS AND CROSS-APPELLEES (COMMONWEALTH EDISON COMPANY, DEFENDANT-APPELLANT).
NEW HEIGHTS RECOVERY AND POWER, LLC, FORMERLY KNOWN AS CGE FORD HEIGHTS LLC; CGE FULTON, LLC; THE VILLAGE OF ROBBINS; AND ROBBINS RESOURCE RECOVERY PARTNERS, L.P., PLAINTIFFS-APPELLEES,
v.
COMMONWEALTH EDISON COMPANY; RICHARD MATHIAS, RICHARD KOLHAUSER, RUTH KRETSCHMER, TERRY HARVILL, AND EDWARD HURLEY, AS COMMISSIONERS OF THE ILLINOIS COMMERCE COMMISSION, DEFENDANTS-APPELLANTS (U.S. BANK TRUST NATIONAL ASSOCIATION, FORMERLY KNOWN AS FIRST TRUST OF ILLINOIS, NATIONAL ASSOCIATION, AS LIQUIDATING TRUSTEE OF THE CGE FORD HEIGHTS LIQUIDATING TRUSTS, FORMERLY AS INDENTURE TRUSTEE, INTERVENING PLAINTIFF-APPELLEE; THE DEPARTMENT OF REVENUE, INTERVENOR).



[6] Appeal from the Circuit Court of Cook County Nos. 00 CH 3157; 96 CH 2560; 00 CH 3754 Honorable Robert Boharic Judge Presiding.

[7] The opinion of the court was delivered by: Justice Cahill

[8]  The issue in this case is whether plaintiffs have a constitutionally protected interest in the continuation of a specific rate of reimbursement for electricity generated and sold to a public utility company. The trial court concluded that such rights existed and prohibited application of a legislative enactment abolishing that rate. Because we conclude that a specific rate of reimbursement once mandated by the legislature does not create a constitutionally protected interest in the continuation of that rate, we reverse.

[9]  Plaintiffs, New Heights Recovery & Power, LLC, CGE Fulton, LLC, the Village of Robbins, and Robbins Resource Recovery Partners, L.P., filed two separate complaints against defendants. They included Commonwealth Edison (ComEd), commissioners of the Illinois Commerce Commission (ICC), the Director of the Illinois Department of Revenue (Department) and the Department. Both complaints question whether Public Act 89-448, amending section 8-403.1 of the Public Utilities Act (220 ILCS 5/8-403.1 (West 1996)) (hereinafter, Retail Rate Law), applies to disqualify plaintiffs from receiving a special rate of reimbursement for electricity sold to ComEd. Pub. Act 89-448, eff. March 14, 1996 (hereinafter 1996 amendment).

[10]   The Retail Rate Law was adopted in 1987 to "encourage the development of alternate energy production facilities for the disposal of solid waste." Pub. Act 85-882, eff. Nov. 5, 1987 (adding Ill. Rev. Stat. 1987, ch. 111 2/3, par. 8-403.1). The Act directed electric utility companies to enter into 20-year contracts to buy electricity from qualified solid waste energy facilities (labeled with the acronym QSWEF) at a "retail rate" that was higher than the market rate. Ill. Rev. Stat. 1987, ch. 111 2/3, par. 8-403.1(c). In return, the utility companies would receive tax credits from the state equal to the difference between the retail rate and the market rate. Ill. Rev. Stat. 1987, ch. 111 2/3, par. 8-403.1(d).

[11]   In reliance on the Retail Rate Law as adopted in 1987, each plaintiff developed an incinerator plant that burned used tires as a source of energy. These plants were certified by the ICC as QSWEFs eligible for the special rate of reimbursement. As QSWEFs, plaintiffs entered into 20-year contracts with ComEd for the purchase of electricity at the special rate. The contracts contained the following provision:

[12]  
"Service and billing, hereunder *** shall continue for 20 years from the date Customer's [q]ualifed [s]olid [w]aste [e]nergy [f]acility begins commercial operation, unless terminated earlier by the written agreement of [the parties], the Customer loses its status as a [QSWEF] [citation] or the Company ceases to obtain full Public Utilities Revenue Tax Credits [citation] associated with purchases under this [c]ontract for any reason."

[13]   The 1996 amendment to the Retail Rate Law, entitled "An Act to abolish incinerator subsidies under the retail rate law," redefined a QSWEF as one that uses methane gas generated from landfills as its primary fuel. Pub. Act 89-448, eff. March 14, 1996. Because plaintiffs' plants do not fall within the new definition, ComEd ceased paying plaintiffs the retail rate after the effective date of the 1996 amendment. The Department affirmed ComEd's decision in a letter dated April 3, 1996. The Department advised ComEd that it was no longer required to buy energy from incinerator plants at the retail rate or eligible for the tax credit previously available.

[14]   The plaintiffs' lawsuits alleged the 1996 amendment could not apply to disqualify them as QSWEFs eligible to receive the special rate of reimbursement under the Retail Rate Law. The complaints also contained breach of contract claims against ComEd. The trial court dismissed the state defendants on sovereign immunity grounds. In an earlier appeal, we reviewed the dismissal under Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)). We affirmed in part, dismissed in part and remanded the cause with directions that the trial court consider the remaining claims. CGE Ford Heights, L.L.C. v. Miller, 306 Ill. App. 3d 431, 714 N.E.2d 35 (1999).

[15]   On remand, the parties filed cross-motions for summary judgment, seeking a declaration on the application of the 1996 amendment. The state defendants also moved to dismiss certain claims under section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2000)). The trial court dismissed plaintiffs' claims alleging breach of contract by the state and those challenging the constitutionality of the amendment. The trial court then granted plaintiffs' motions for summary judgment on some remaining claims and denied defendants' cross-motions. The court ruled that the 1996 amendment did not apply to plaintiffs and enjoined ComEd and the state defendants from denying plaintiffs benefits under the Retail Rate Law. Plaintiffs' counts against ComEd for breach of contract were transferred to the law division.

[16]   Defendants now appeal under Rule 304(a) (155 Ill. 2d R. 304(a)), arguing plaintiffs are no longer eligible for benefits under the Retail Rate Law. Plaintiffs cross-appeal, arguing the trial court erred in dismissing claims challenging the constitutionality of the 1996 amendment and alleging breach of contract by the state. Defendants' motion to stay the trial court order pending appeal has been granted.

[17]   We review de novo a trial court order granting summary judgment (City of Chicago v. Holland, 206 Ill. 2d 480, 487, 795 N.E.2d 240 (2003)), as well as an order dismissing claims under section 2-615 of the Code (Brandt v. Boston Scientific Corp., 204 Ill. 2d 640, 644-45, 792 N.E.2d 296 (2003)).

[18]   We first address defendants' contention that the trial court lacked jurisdiction to consider plaintiffs' claims against the state defendants on sovereign immunity grounds. Defendants cite our earlier decision in this matter where we affirmed the trial court order dismissing plaintiffs' claims against the state on grounds other than sovereign immunity. CGE, 306 Ill. App. 3d 431. Defendants maintain that since CGE, "two events have undermined the basis of [our] decision[]" that sovereign immunity concerns are not implicated by plaintiffs' complaints: (1) the state was added as a party; and (2) our supreme court issued an opinion that analyzed retroactivity under statutory construction principals. These two events do not alter the conclusion reached in CGE.

[19]   The basis for our decision to affirm the trial court's dismissal of plaintiff's claims against the state was plaintiffs' failure to state a cause of action. CGE, 306 Ill. App. 3d at 439. Without a valid claim against the state, there was no need to reach the sovereign immunity issue. CGE, 306 Ill. App. 3d at 439. We again find that sovereign immunity concerns are not implicated by plaintiffs' complaints. As discussed below, plaintiffs do not have a valid claim for breach of contract against the state. We also conclude, as we did in CGE, that absent a valid breach of contract claim, plaintiffs' claims for injunctive and declaratory relief against the state have no place in the Court of Claims because they require consideration of the constitutionality of the 1996 amendment. See CGE, 306 Ill. App. 3d at 439-40. "Since the Court of Claims has no power to construe the constitutionality of a statute, its injunctive powers lack a predicate in this case." CGE, 306 Ill. App. 439-40.

[20]   We turn to the merits of this appeal. We must decide whether the 1996 amendment abolishes plaintiffs' right to the special rate of reimbursement under the Retail Rate Law. Because the parties focus on the retroactivity of the amendment, we look first to the principles governing retroactive application of amendatory acts. In Commonwealth Edison Co. v. Will County Collector, 196 Ill. 2d 27, 33, 749 N.E.2d 964 (2001), our supreme court adopted the approach to retroactivity outlined by the United States Supreme Court in Landgraf v. USI Film Products, 511 U.S. 244, 128 L. Ed. 2d 229, 114 S. Ct. 1483 (1994). Commonwealth Edison, 196 Ill. 2d at 36-39. Under Landgraf, if the legislature has expressed the temporal reach of a statutory amendment, then, absent a constitutional prohibition, the legislative intent will be given effect. Commonwealth Edison, 196 Ill. 2d at 38. If the legislature has not expressed the temporal reach, then the court must decide whether applying the statute would have a retroactive impact by impairing rights a party possessed ...


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