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American Civil Liberties Union of Illinois v. White

February 12, 2010


The opinion of the court was delivered by: Judge Joan B. Gottschall


The American Civil Liberties Union of Illinois and Mary Dixon (collectively the "ACLU") filed a class action complaint under 42 U.S.C. § 1983 alleging that the Illinois Lobbyist Registration Act, 25 Ill. Comp. Stat. 170, Public Act 96-555 at § 65 (the "Amended Act") violates the First and Fourteenth Amendments to the United States Constitution by imposing, inter alia, a $1,000 levy (the "Levy") on protected speech in excess of the costs to administer the lobbying regulations in the Amended Act, and by exempting religious organizations and the news media from payment of the Levy under certain conditions. After granting the ACLU a temporary restraining order on December 29, 2009 (Doc. No. 35), the court held a preliminary injunction hearing on January 14, 2010. Prior to the hearing, the ACLU moved for consolidation of the preliminary injunction hearing with trial on the merits under Rule 65(a)(2), and for class certification. Finally, in its post-hearing reply brief, the ACLU asks the court to defer resolution of its claim that the Amended Act's exemptions for media and religious organizations are unconstitutional.

1. Facts

The parties have stipulated that the Secretary estimates that he will spend $1,224,739 to administer the Amended Act in fiscal year ("FY") 2010 and $1,362,359 to do so in FY 2011. See Stipulations of Fact ¶¶ 17, 19 ("Stip. Fact"), Pls.' Ex. 24. There are 3,947 registered lobbyists or lobbying entities in Illinois as of December 15, 2009. Stip. Fact ¶ 23. The court adopts these stipulations as its findings of fact.

Multiplying the number of registered lobbyists or lobbying entities by $1,000, the ACLU estimates that the Levy will generate $3,947,000 in FY 2010 and 2011, and generate revenue surpluses of $2,722,261 and $2,584,641, respectively. See Pls.' Post-Hearing Br. 7. The Secretary stated that he is unable to estimate projected receipts from the Levy in FY 2010 or 2011 because "he does not know how many individuals or organizations will register as lobbyists in the future or how much revenue will be collected." Stip. Fact ¶ 14. The court need not definitively resolve the accuracy of the ACLU's estimates to find that the Levy is unreasonably excessive.

2. The Tax Injunction Act Does Not Divest This Court Of Jurisdiction Over This Case

The Secretary renews his argument, initially made in opposition to the TRO, that the Tax Injunction Act (the "TIA"), 28 U.S.C. § 1341, divests the court of subject matter jurisdiction over this action. Most of the Secretary's TIA contentions retread case law the court already considered in its memorandum opinion granting the ACLU's request for a temporary restraining order (the "TRO Order") and the court declines to reconsider those cases and arguments here. See Dec. 23, 2010 Mem. Op. & Order 1-6 (Doc. No. 30).

The court turns, then, to the Secretary's new theory: that the legislature's practice of "sweeping" excess monies from the Lobbyist Registration Fund ("LRF") to other state accounts, combined with the mismatch between the revenues the Secretary expects the Levy to generate and the costs the Secretary expects to incur to enforce the provisions in the Amended Act, means that the Amended Act established a tax subject to the TIA. See Def.'s Mem. 2-7.

As the court stated in the TRO Order:

Whether the TIA divests this court of jurisdiction turns on whether the levy is a "tax" or a "fee," a distinction based on federal law which the court draws by looking past labels and considering where the levied money goes (i.e., to what state account) and why the money is taken. Where a levy confers a general benefit to the public it is considered a tax; a fee, by contrast, provides more narrow benefits to regulated companies or defrays an agency's cost of regulation. The classic "regulatory fee" is imposed by an agency upon those subject to its regulation.

TRO Order 2 (internal citations and quotation marks omitted).

In support of the Secretary's argument that the Levy is a tax he asks the court to look backwards to the legislative history of Illinois Public Act 93-32, passed in 2003. In that act the Illinois legislature raised three-hundred user fees associated with various state accounts, including the LRF, to ensure that: each fund is paying its 'fair share' for administrative services and oversight provided with general funds . . .

Many funds require a full array of state services, including accounting, investing, auditing, leasing and legal representation. Many of these services are supported through the General Revenue Fund . . . To partially pay for prior administrative cost subsidies, $144 million in fund balances will be transferred from select funds to the General Revenue Fund in fiscal year 2003.

Ill. State Chamber of Commerce v. Filan, 837 N.E.2d 922, 925 (Ill. 2005) (quoting Illinois State Budget FY 2004, 1-10). From this legislative intent (relating to a bill that is here unchallenged), and the evidence in the record that the Illinois legislature authorized sweeps of excess LRF funds (see Def.'s Ex. 3) in previous fiscal years (and altered the State Finance Act to facilitate those sweeps), the Secretary reasons that the increase in ...

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