Illinois Appellate Court: Illinois Construction Industry Groups Have Standing to File Lawsuit But Lose Their Constitutional Arguments

Saul Ewing Arnstein & Lehr LLP

Saul Ewing Arnstein & Lehr LLP

Under a recent Illinois appellate court decision, local Illinois construction industry groups were held to have standing to sue Cook County, Illinois, but those groups lost on their substantive claim that the County had violated an amendment to the Illinois Constitution. See Illinois Road and Transportation Builders Association v. County of Cook, 2021 IL App (1st) 190396, 2021 WL 824842 (Mar. 3, 2021).

In November 2016, Illinois voters approved a constitutional amendment requiring that funds collected from transportation-related taxes and fees be only spent for transportation purposes (the “Amendment”). In March 2018, construction industry groups filed suit against Cook County, Illinois, alleging that County had failed to comply with the Amendment. The groups claimed that the County had wrongfully diverted transportation-related taxes and fees to the County’s Public Safety Fund to pay for non-transportation purposes, including the County Sheriff’s office, the State’s Attorney, the department of corrections, and the Clerk of the Circuit Court.

In defense of the lawsuit, the County first argued that the industry groups did not have standing to sue because they could not state a specific harm; industry group members could not prove that they definitively would have been awarded work/jobs if tax money had been spent on transportation purposes. In response, the industry groups argued, and the Appellate Court agreed, that industry group members were denied the chance to bid on construction projects that “inevitably” would have come previously, and would come in the future, if the County followed the alleged constitutional mandate and kept transportation dollars in a pot dedicated only for transportation projects.

After ruling that the industry groups had standing to sue the County, the Appellate Court turned to the substantive issue of whether the County could divert the specific funds at issue to non-transportation County operations. The industry groups argued that the Amendment applied to all transportation-related taxes imposed by all Illinois governmental bodies. The County argued that the Amendment applies only to spending controlled by a “statute” passed by the Illinois General Assembly, and that spending of the funds in question was controlled by a local “ordinance” enacted by the County. The Appellate Court sided with the County, holding that the Amendment did not apply to spending authorized by an “ordinance,” and therefore, the County was not required to use the funds collected from transportation taxes and spent by an “ordinance” for transportation purposes.

The industry groups have asked the Illinois Supreme Court to consider the case on appeal. Regardless of any action taken by the Illinois Supreme Court, this case illustrates how difficult it can be to direct the actions of government entities by constitutional amendment. Further, it also shows how small differences in language can have a large effect, and potentially affect millions of transportation-using people and tens of millions of transportation-project dollars.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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