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The People of the State of Illinois Ex Rel. the v. E.R.H. Enterprises

September 7, 2012

THE PEOPLE OF THE STATE OF ILLINOIS EX REL. THE DEPARTMENT OF LABOR,
PLAINTIFF-APPELLEE,
v.
E.R.H. ENTERPRISES, INC., DEFENDANT-APPELLANT.



Appeal from Circuit Court of Piatt County No. 08MR14 Honorable John P. Shonkwiler, Judge Presiding.

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

PRESIDING JUSTICE TURNER delivered the judgment of the court, with opinion.

Justices Steigmann and McCullough concurred in the judgment and opinion.

OPINION

¶ 1 In December 2008, plaintiff, the Department of Labor (Labor Department), filed a complaint for adjudication of civil contempt against defendant, E.R.H. Enterprises, Inc., for its failure to comply with the Labor Department's May 2008 subpoena duces tecum brought under section 10 of the Prevailing Wage Act (Wage Act) (820 ILCS 130/10 (West 2008)). The subpoena related to the repair of water main leaks that defendant had done on the water infrastructure owned by the Village of Bement (Village). Defendant objected claiming (1) it was exempt from the Wage Act because it was a public utility, (2) the subpoena was not properly served, and (3) the subpoena was too broad as it was not limited to a specific project or temporal scope. In August 2010, the Piatt County circuit court found the subpoena was properly served and defendant was not a public utility. The court ordered defendant to provide the Labor Department with the documents sought by the subpoena for the period of May 23, 2003, to May 23, 2008, within 30 days of the order. In September 2010, defendant filed a motion to reconsider and later a request to clarify the basis in law for the grant of the Labor Department's complaint. In January 2011, the court entered an order declaring it would file an amended order that would supercede its August 2010 order. The next day, the court filed an amended order, which "affirmed" its prior order and provided additional detail for its ruling. Defendant filed a motion to reconsider the amended order. In September 2011, the court entered an "amended memorandum order," denying defendant's motion to reconsider.

¶ 2 Defendant appeals, asserting (1) it is exempt from the Wage Act because (a) it is a public utility, (b) it did not perform public works, and (c) it is not paid from public funds; (2) the amended order and memorandum order were not properly entered; and (3) the Labor Depart-ment's subpoena was improperly served and procedurally deficient. We reverse.

¶ 3 I. BACKGROUND

¶ 4 On May 23, 2008, the Labor Department issued a subpoena duces tecum to defendant's attorney, Charles Morgan, requiring him to appear before the Labor Department on June 10, 2008, with the employment records delineated in the subpoena. The subpoena noted an investigation was being done under the Wage Act regarding defendant's repair of water main leaks for the Village. In a June 10, 2008, letter, the Labor Department extended the date for production of the documents to July 2, 2008, because Morgan had not received the subpoena until June 9, 2010. The letter also noted the Wage Act's public-utility exemption did not apply to defendant because the Village owned the system. In September 2008, the Attorney General's office sent defendant a letter, requesting the documents be submitted within 14 days or it would file a lawsuit.

¶ 5 On December 17, 2008, the Labor Department filed a verified complaint for adjudication of civil contempt against defendant, seeking enforcement of its subpoena under section 10 of the Wage Act (820 ILCS 130/10 (West 2008)). In February 2009, defendant filed an answer to the complaint and raised several defenses. Defendant asserted it was a public utility and thus exempt from the Wage Act. It also alleged the subpoena was procedurally deficient because (1) it was not served on defendant or its custodian of records, (2) it was not served in a timely manner, and (3) the records requested were not limited to a specific project or temporal scope. Defendant also noted it had served the Labor Department with a motion to quash the subpoena, which had not been addressed. In May 2009, the Labor Department filed a response to defendant's defenses, denying the allegations, except for the assertion the subpoena was not limited to a specific project or temporal scope and the allegation it had not addressed defendant's motion to quash the subpoena.

¶ 6 In November 2009, the trial court ordered the parties to file briefs. Defendant's brief in opposition to the complaint asserted (1) it was exempt from the Wage Act as a public utility, (2) it was exempt from the Wage Act because it was not in the construction business, and (3) the subpoena is unenforceable because it was not served (a) on the proper person and (b) in a timely manner. Attached to defendant's brief was (1) the subpoena, (2) a document showing when the subpoena was delivered, (3) defendant's motion to quash the subpoena that was filed with the Labor Department, and (4) the agreement between defendant and the Village (Agreement). The Agreement was dated May 11, 2004, and was in effect for five years. It had 25 paragraphs delineating the responsibilities of defendant and the Village as to the Village's potable water facility and water infrastructure that served the Village. Under the Agreement, defendant was paid $129,792 per year in monthly installments from the water operation and maintenance fund account.

¶ 7 The Labor Department's brief in support of the subpoena alleged (1) defendant was not a public utility, (2) defendant did perform public works, and (3) the subpoena did comply with procedural rules. Attached to its brief was (1) the Agreement; (2) an Illinois Department of Public Health certificate awarded to the Village's water department; (3) defendant's amended objections to the Labor Department's first request for the production of documents; (4) the subpoena; (5) a May 21, 2008, letter from Morgan to the Labor Department; (6) the September 29, 2008, letter from the Attorney General's office to defendant; and (7) the Labor Department's June 10, 2008, extension letter. Defendant filed a reply brief, to which it attached the following: (1) House Resolution No. 692 of the 94th General Assembly; (2) an undated letter written by Charles Donahue, Solicitor of Labor, United States Department of Labor, to C. Franklin Daniels, assistant commissioner of multifamily housing operations of the Federal Housing Administration; and (3) the May 21, 2008, letter from Morgan to the Labor Department.

¶ 8 On August 11, 2010, the trial court held a hearing on the complaint, at which the parties only argued the issues. The court did not hear any testimony. After hearing the parties' arguments, the court found defendant was not a public utility and had to comply with the subpoena. The court asked the assistant Attorney General to prepare a written order, which was filed on August 25, 2010.

¶ 9 On September 23, 2010, defendant filed a motion to reconsider, to which it attached (1) the affidavit of Mike Hite, the Village's treasurer, and (2) the Agreement. The Labor Department filed a brief in opposition to the motion that also attached (1) Hite's affidavit, (2) the Agreement, and (3) Morgan's May 2008 letter. In October 2010, a new attorney entered his appearance on defendant's behalf and later filed a request to clarify the basis in law for the docket order that granted the Labor Department's complaint. The Labor Department again opposed the request. In January 2011, the trial court entered a written order, indicating it would file an amended order that would supercede its August 25, 2010, order. The January 2011 order noted that, when the amended order was filed, defendant's motion to reconsider and request for clarification would be considered withdrawn and defendant could file an amended motion to reconsider or an appeal. Additionally, enforcement of the amended order would be stayed pending ruling on any such amended motion to reconsider or appeal.

ΒΆ 10 On February 11, 2011, the trial court entered its amended order. In support of its finding defendant was not a public utility, the court noted the following: (1) the Village owned the potable water facility and water infrastructure that serves the Village and was responsible for its maintenance and operation; (2) the Village, not defendant, was recognized for the fluoridation of the Village's water; (3) the Village contracted out some but not all of its responsibilities to defendant; (4) the Village, not defendant, had the duty to serve the public and treat all persons alike; (5) defendant was simply an outside contractor that assisted the Village with supplying water to the public; (6) defendant did not charge the public for its services; and (7) defendant was not regulated by the Illinois Commerce Commission or any other State agency. The amended order "affirmed" the original order and required defendant to provide the documents sought by the Labor Department within 30 days of the ...


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