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Tribune v. The College of Du Page

Court of Appeals of Illinois, Second District

May 9, 2017

THE CHICAGO TRIBUNE, Plaintiff-Appellee and Cross-Appellant,
THE COLLEGE OF DU PAGE and THE COLLEGE OF DU PAGE FOUNDATION, Defendants-Appellants and Cross-Appellees.

         Appeal from the Circuit Court of Du Page County. No. 15-MR-580, Honorable Robert G. Gibson, Judge, Presiding.

          SPENCE JUSTICE delivered the judgment of the court, with opinion. Justices McLaren and Hutchinson concurred in the judgment and opinion.



         ¶ 1 Plaintiff, the Chicago Tribune (Tribune), brought suit against defendants, the College of Du Page (College) and the College of Du Page Foundation (Foundation), pursuant to the Illinois Freedom of Information Act (FOIA) (5 ILCS 140/1 et seq. West 2014)), seeking disclosure of a federal grand jury subpoena that was served on the Foundation on or about April 13, 2015. The Tribune and defendants filed cross-motions for summary judgment. On March 17, 2016, the circuit court granted the Tribune's motion as to both defendants and denied defendants' motions, holding that the subpoena was subject to disclosure under section 7(2) of FOIA. 5 ILCS 140/7(2) (West 2014). In so ruling, the circuit court found that the College had contracted with the Foundation to perform a governmental function on its behalf and that the subpoena directly related to that governmental function. The Tribune thereafter filed a petition for attorney fees under section 11(i) of FOIA. 5 ILCS 140/11(i) (West 2014). The circuit court later allowed the Tribune to voluntarily withdraw the fee petition without prejudice on July 18, 2016, so that it could refile it at the conclusion of this appeal.

         ¶ 2 Defendants appeal the circuit court's March 17, 2016, order granting the Tribune's motion for summary judgment and the July 18, 2016, order allowing the Tribune to withdraw its fee petition without prejudice. Although summary judgment was entered in the Tribune's favor, it has filed a cross-appeal, contending that the circuit court erred in ruling that the Foundation is not a subsidiary public body under FOIA. For the following reasons, we affirm the circuit court's judgment, dismiss the Tribune's cross-appeal, and remand for further proceedings.

         ¶ 3 I. BACKGROUND

         ¶ 4 A. College of Du Page

         ¶ 5 The College is a community college in Glen Ellyn, Illinois. It was organized under the Public Community College Act (Act) (110 ILCS 805/1-1 et seq. (West 2014)) and is a "public body" as that term is defined in section 2(a) of FOIA. 5 ILCS 140/2(a) (West 2014). In its 2015 fiscal year, the College's enrollment exceeded 28, 000 students and it was the second largest provider of undergraduate education in the state. That year, the College's annual budget exceeded $300 million. Its principal sources of revenue were student tuition and property taxes levied in Community College District 502, which encompasses most of Du Page County and portions of Cook and Will Counties.

         ¶ 6 The College is governed by an eight-member board of trustees (College Board), which is composed of one nonvoting student and seven individuals elected by the voters of District 502. The College Board is responsible for overseeing the mission, leadership, and operations of the College and has the powers that are authorized to it by section 3-7 of the Act (110 ILCS 805/3-7 (West 2014)). The College president and all other administrators report to the College Board.

         ¶ 7 B. College of Du Page Foundation

         ¶ 8 The Foundation was incorporated in Illinois as a not-for-profit corporation in 1967-the same year that the College first opened its doors to the public. As expressed in its bylaws, the Foundation exists to support the educational mission of the College by raising money to fund the College's academic programs, capital programs, and student scholarships. It does not support any other institutions or individuals. The Foundation assists the College in soliciting private financial donations, and it manages, invests, and administers all private gifts and resources, including endowments and real property. The Foundation is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue Code (26 U.S.C. § 501(c)(3) (2006)).

         ¶ 9 As provided in its bylaws, the Foundation is managed by a board of directors (Foundation Board), which is tasked with determining how to hold, manage, and administer all private donations, subject to the terms and conditions prescribed by the donor. In its sole discretion, the Foundation Board may accept or reject any contribution or gift. The Foundation Board and its officers owe fiduciary duties to the Foundation, including the duty of loyalty. The Foundation can indemnify its directors, officers, employees, or agents against expenses, judgments, and fines, and it can purchase and maintain insurance on behalf of those individuals.

         ¶ 10 The Foundation Board is organized into three groups. "Group 1" consists of between 32 and 37 members whom other members of the Foundation Board select to serve specified terms. "Group 2" consists of the College's president, the Foundation's executive director, and one member of the College Board, as ex officio members. "Group 3" consists of honorary members, emeritus directors, recognized community leaders, and the like. Only Group 1 is entitled to vote, and any action by a majority of Group 1 directors constituting a quorum is an official act of the Foundation Board. The bylaws require the Foundation Board to have a minimum of four regular meetings per year, in addition to an annual meeting held each June. All such meetings are held at the College.

         ¶ 11 The bylaws provide that the Foundation's daily business is overseen by the executive director of the Foundation, who "shall be employed by the College." In practice, the executive director is the College's vice president for development. The position, formally titled "Executive Director of the College of DuPage Foundation/Vice President for Development, " has a single job description that outlines responsibilities to both the Foundation and the College. The executive director is "responsible for the leadership, oversight, development, implementation[, ] and evaluation of institutional fundraising" and "serves as a key leadership team member and an active participant in making strategic decisions affecting the College of DuPage and its Foundation." At all times pertinent to this appeal, this position was held by Catherine Brod. The executive director is supported by the "Assistant Vice President for Development/Associate Executive Director of the Foundation, " which is another dual-role position at the College and the Foundation. At all times pertinent to this appeal, this position was filled by Karen Kuhn.

         ¶ 12 The day-to-day business of the Foundation is carried out by its approximately 11-member staff, which consists entirely of paid civil-servant employees of the College. They each have one telephone extension and one College-provided email address for use on both College and Foundation business. These employees work interchangeably on College and Foundation business throughout their workday and do not maintain separate timesheets to account for their work. Rather, they annually estimate the percentages of time spent working on College business and Foundation business. For example, in each of the 3½ years that Brod served as executive director, she reported that she spent 50% of her time working on Foundation business and 50% of her time working on College business. For the percentage of time that a College employee estimates he or she worked on Foundation business, the same percentage of his or her salary is deemed an "in-kind" donation from the College to the Foundation. In its 2015 fiscal year, the Foundation received $785, 000 in "in-kind" staff support from the College. These staff members receive the same health benefits that are available to all full-time College employees and participate in the State Universities Retirement System (SURS).

         ¶ 13 In its 2014 fiscal year, the Foundation earned or raised $11.2 million, including approximately $5 million in private fundraising, and awarded roughly $1.5 million to the College, its students, and its faculty. At the conclusion of its 2014 fiscal year, the Foundation had approximately $14.5 million in assets. The Foundation's bylaws provide that, in the event of its dissolution, all Foundation assets, less any liabilities, are to be distributed to the College.

         ¶ 14 C. Memorandum of Understanding

         ¶ 15 On June 22, 2009, the College and the Foundation entered into a "Memorandum of Understanding" (MOU) detailing their respective contractual obligations. Pursuant to the MOU, the Foundation agreed, inter alia, (1) to act as "the primary depository of private donations on behalf of the College"; (2) "[t]o hold, manage and distribute such assets in [the Foundation's] possession for the dedicated purpose of supporting the mission of the College"; (3) "[t]o maintain and manage an endowment" for the College; (4) "[t]o identify, cultivate, evaluate and solicit" active and prospective donors; (5) "[t]o plan, direct and implement all phases of private sector fundraising efforts"; and (6) "[t]o pay or reimburse the College president for expenses related to fundraising activities or otherwise advancing the College/Foundation."

         ¶ 16 In return, the College agreed, inter alia, to provide the Foundation with College personnel to staff the Foundation, as well as to provide fully furnished and equipped office space on the College's campus, rent-free. The College also agreed to have the College president assume a "prominent role in the Foundation's fundraising activities." Under the MOU, after consultation with the Foundation Board, the College president is entitled to recommend an individual to serve as the executive director. The College also agreed to consider the executive director's recommendations regarding the Foundation's staffing needs and to allow the Foundation to use the College's name, logo, and marketing brand.

         ¶ 17 In the event that the Foundation ceases to exist, the MOU provides that the Foundation will transfer all of its assets and property to the College or to any foundation affiliated with the College that is organized and operated exclusively for charitable and educational purposes. The MOU's initial term was five years, but it explicitly provides that it remains in effect from year to year unless either party terminates it-either without cause upon 90 days' prior written notice, or with cause after a party's default and failure to timely cure it.

         ¶ 18 D. The Tribune's FOIA Requests and Subsequent Litigation

         ¶ 19 The instant matter stems from a series of FOIA requests sent by the Tribune in April 2015. In its first FOIA request, on April 1, 2015, the Tribune sought from the College "[a]ny copies of grand jury subpoenas for the College of DuPage Foundation which are in possession, physically or in electronic form, of the college, any of its administrators, senior managers, president, board members, paid consultants, lobbyists or representatives" (Du Page grand jury subpoena). One week later, the College's FOIA officer replied that it did not have any documents responsive to the request. On April 14, 2015, the Tribune sent FOIA requests to both the College and the Foundation, seeking various documents regarding College administrators' expenses that were reimbursed by the Foundation ...

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