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Blog comments do not reflect the views or opinions of the Author or Ancel Glink. Some of the content may be considered attorney advertising material under the applicable rules of certain states. Prior results do not guarantee a similar outcome. Please read our full disclaimer

Thursday, June 28, 2018

Supreme Court Issues Ruling in "Fair Share" Union Fee Challenge

The U.S. Supreme Court issued its long anticipated ruling in the Janus v. AFSCME case involving a challenge to the "fair share" requirement that requires payment of fees by employees who are not members of the union. The Supreme Court ruled in favor of the plaintiff, finding the state of Illinois' requirement that non-consenting public-sector employees pay the fair share fee violates the employees' First Amendment rights. 

To read more about this ruling and find out how it affects local government employers in Illinois, check out our post on Ancel Glink's employment law blog The Workplace Report with Ancel Glink, which you can find here.  

You can read the Court's opinion here.

Tuesday, June 26, 2018

Take it to the Bank! New Podcast Released

In a new episode of Quorom Forum (Ancel Glink's podcast), Ancel Glink’s Brent Denzin addresses blighted, vacant and abandoned properties. Brent discusses how land banks create a solution for community blight.  You can listen to this podcast episode here

A land bank is an intergovernmental entity that’s tasked with acquiring, managing, and disposing of property. Land banks exist in different forms in every state. Illinois does not have a state statute that enables land banks; they currently exist as a home rule unit of government collaborating with non-home rule units. This is especially helpful, because home rule units can use their powers on behalf of the land bank, and thus the entity is not restrained by non-home rule powers.

Land banks utilize many areas of expertise in order to legally and efficiently acquire these properties, including economic development, real estate acquisition, and public works. These areas of expertise are consolidated into one land bank that is able to work on behalf of a wide area of municipalities or counties. The ability to pool resources among multiple local governmental entities is one of the main benefits of land banks.

Once the property is in the land bank, it shifts to asset managers. Asset managers that work for the land bank are constantly driving around, assessing the properties and looking at conditions. The asset managers try to figure out how to secure the properties, maintain the lawns, etc. At the same time, the land bank has inside real estate staff or outside realtors looking to sell the property who are going through the same process as someone would with any other property with clean title.

Even if a land bank does not include a county, the land bank will have to work cooperatively with their county because counties have a tax trustee role and can go into court and file tax petitions for tax delinquent properties. Usually the back taxes on a property is what causes it to become blighted and deteriorated, so this power to acquire title is important for a land bank. Overall, land banks are valuable tools that tackle community deterioration and blight and can be formed any time under the Illinois Intergovernmental Cooperation Act. 

Learn more about landbanks or listen to our other Podcast episodes by visiting our Quorum Forum website at http://quorumforum.ancelglink.com

Monday, June 25, 2018

South Dakota v. Wayfair: Not the Final Word on Internet Sales Tax

UPDATED 6/27/18 (see bold)

On June 21, 2018, the United States Supreme Court issued a ruling in the case South Dakota v. Wayfair that has been hailed as a landmark decision regarding the ability for states to tax interstate transactions.  While it is a very important decision that overturned decades old precedent, there are three reasons why it is not the final word on the authority for states to tax the sale of goods over the Internet.

It is an Incomplete Result

First, the case is a narrow decision that only addresses part of the analysis required to approve the taxation of interstate sales.  The basic legal question is whether a state’s assessment of taxes on out-of-state transactions substantially burdens interstate commerce.  Under the U.S. Constitution, only the federal government has the power to regulate interstate commerce.  As a result, the Constitution implicitly prohibits state laws which either discriminate against or substantially burden interstate commerce.  For state tax laws to be approved under these guidelines, the U.S. Supreme Court has said the tax must:

(1) apply to an activity with a substantial nexus with the taxing State,
(2) be fairly apportioned,
(3) not discriminate against interstate commerce, and
(4) be fairly related to the services the State provides.

The reason the Wayfair case is so important is because for 50 years no state tax that applied to out-of-state sales could get past the first test.  Previously, to meet that first test (the company has a substantial nexus to the state levying the tax), it had to have a physical presence in that state.  In Wayfair, a 5-4 majority of the Court decided that a physical presence is no longer required to satisfy the substantial nexus test.  That is the important but limited decision made by the Court.

The Court did not reach a decision on the final three factors because the underlying South Dakota courts did not have a chance yet to evaluate those questions. So, the case goes back to the lower courts to determine if the plan satisfies the remaining tests so that South Dakota actually can levy sales tax against out-of-state sales.

Nevertheless, the Court made some important observations.  The majority decision expressed concern for how interstate taxation could burden startups and small businesses and questions whether such companies could have a substantial nexus to the state if they do not engage in a significant amount of commerce in the state.  The Court favorably commented on the South Dakota tax plan under review in this case – that plan restricts the application of sales tax to out-of-state companies that have at least $100,000 in sales per year or more than 200 separate transactions per year with state residents.  The Court also indicated that the ease with which companies could comply with a state’s taxing scheme would weigh on whether it created a substantial burden on interstate commerce.  South Dakota and more than twenty other states have adopted the Streamlined Sales and Use Tax Agreement, which is designed to make it much easier for out-of-state retailers to comply with an Internet tax program.

Illinois has no Internet Tax Law

Second, Wayfair only addresses a South Dakota state law.  Even if the case had gone further and approved the tax plan implemented by South Dakota, Illinois does not have a parallel tax law.  Before Illinois can levy taxes against Internet sales it would have to amend its current sales tax laws.  As we know, the General Assembly has a difficult time reaching an agreement on such important issues.  In addition, Illinois is not one of the states to adopt the Streamlined Sales and Use Tax Agreement.  So, before Illinois and local governments could benefit from the holding in Wayfair, the General Assembly would have to take action in a way which complies with the Commerce Clause.

The Fiscal Year 2019 Budget which was adopted as Public Act 100-0587 does make amendments to the Use Tax Act and Service Use Tax Act.  The amendments are designed to mimic the tax regulations on out-of-state purchases adopted in South Dakota.  Currently, the amendments only authorize the collection of the State Use Tax and not any local use tax.  The amendments are not designed to become effective until October 1, 2018.  Nonetheless, the Illinois sales tax paradigm remains different from South Dakota’s because Illinois is not a party to the Streamlined Sales and Use Tax Agreement.

The Federal Government Can Preempt the Field

Third, as mentioned above, the federal government has exclusive authority to regulate interstate commerce.  As the Court states, “when Congress exercises its power to regulate commerce by enacting legislation, the legislation controls.”  So, the federal government could preempt a patchwork of different state Internet tax laws by adopting comprehensive legislation to govern the field.  To-date, Congress has been unable to reach an agreement on this issue.  Various versions of the Main Street Fairness Act, designed to place local businesses on a level playing field with Internet businesses, have been debated for several years with no action – the very motivation for South Dakota to adopt its plan in the first place.  Some people have speculated that the Wayfair decision will jump start the legislative process and result in a nationwide sales tax program.  Only time will tell.

Post authored by Adam Simon, Ancel Glink

Friday, June 22, 2018

Employee's Disciplinary Records Exempt Under FOIA

In a recent appellate court decision, an Illinois court upheld a municipality's denial of a FOIA request asking for the "disciplinary history" for a city employee. Johnson v. Joliet Police Department, 2018 IL App (3d) 170726.

The requester had asked for the disciplinary history for a city employee. The city denied the request, citing section 8 of the Personnel Records Review Act that prohibits the release of disciplinary records of a government employee that are more than 4 years old, and that it had no disciplinary records for the period within the prior 4 years. The requester sued, arguing that the statute does not apply to FOIA requests. 

The circuit court ruled in the city's favor and the requester appealed. The appellate court agreed with the circuit court, finding the requested records expressly exempt from FOIA under section 7.5(q) of FOIA that states that records prohibited from release under the Personnel Records Review Act are exempt from FOIA. The court distinguished between citizen complaints (that depending on the nature of the complaint may not be exempt) and disciplinary records (which are expressly exempt from FOIA).

Monday, June 18, 2018

Federal FOIA Does Not Authorize Lawsuits Against Individual Government Employees

A federal circuit court of appeals ruled in favor of a government agency in a lawsuit challenging the agency's response to a request under FOIA for certain government records. Henson v. Department of Health and Human Services (7th Cir. June 15, 2018).

First, the court held that the federal FOIA does not provide a cause of action against individual employees of the agency. The court noted that the federal FOIA gives jurisdiction to the courts to order the agency to produce agency records, and an individual employee is not an "agency" defined by the statute. Second, the court found that the agency had conducted an adequate and reasonable search of its records, and established that it made a good faith effort to conduct a search for the requested records. Finally, the court determined that the agency properly withheld or redacted documents under the statute's exemptions. 

Thursday, June 14, 2018

TRO Issued Against Village's Assault Weapon Ban

The issue of gun control has been a topic of extensive conversation across the country, and recently in Illinois when the Village of Deerfield enacted an assault weapons ban by local ordinance. That ban is currently the subject of a legal challenge in multiple lawsuits, including one brought by the Illinois State Rifle Association and the Second Amendment Foundation, and another lawsuit filed by Guns Save Life, Inc. Both cases claim the Village had no authority to adopt its assault weapons ban because it was preempted by state law. Other arguments include "takings" and eminent domain claims and both complaints ask the court to issue a temporary restraining order (TRO) to prohibit the Village from enforcing the ban while the case moves forward.

On June 12th, a Lake County Circuit Court judge issued a preliminary ruling in both cases granting a TRO to plaintiffs and barring the Village from enforcing its assault weapons ban. The court determined that the Village ordinance was not enforceable because it is preempted by state law, specifically provisions of the Firearm Owner's Identification Card Act and Firearm Concealed Carry Act that were enacted in 2013. The court also found that the Village's 2018 ordinance that amended a 2013 ordinance adopted by the Village within the limited preemption exclusion time-frame was a "new" ordinance and not an amendment of the 2013 ordinance. The court rejected plaintiffs' takings and eminent domain claims. 

This ruling is not the final decision in this case, but grants temporary relief to plaintiffs while the case proceeds.

You can read the court's ruling here.

Monday, June 11, 2018

Quorum Forum Podcast Discusses Employment Law Issues

Ancel Glink just released Episode 3 of its podcast, Quorum Forum. In this episode, Ancel Glink's labor and employment attorneys provide updates on new employment laws that affect government employers and engage in a discussion about sexual harassment in the workplace. 

You can find this Episode 3 here and our previous podcast episodes on Quorum Forum's website here

Don't forget to send us your questions and show ideas to podcast@ancelglink.com!

Thursday, June 7, 2018

Zoning Lawsuit Bill Passes Both Illinois Houses

Illinois House Bill 4711, if passed, proposes to amend the Zoning Enabling Acts for municipalities, counties, and townships to address lawsuits against these government entities. That bill recently passed both houses and has been sent to the Governor.

If passed, the zoning statutes will be amended to provide that the statute commonly referred to as the Adjoining Landowner Act does not authorize a lawsuit against the municipality, county, or township in which the property in question is located unless the government entity is the owner of that property. The Adjoining Landowner Act authorizes a municipality or property owners within 1200 feet of a property allegedly in violation of buildings or zoning codes to sue the property owner to enforce the building or zoning code. 

The specific language that would be added to the municipal Adjoining Landowner Act is as follows:
Except in relation to municipality-owned property, this Section does not authorize any suit against a municipality or its officials for any act relating to the administration, enforcement, or implementation of this Division or any ordinance, resolution, or other regulation adopted pursuant to this Division.  
Similar language would be added to the township and county statutes. 

The bill is consistent with numerous Illinois cases that have dismissed lawsuits filed against government entities under the Adjoining Landowner Act. Those cases clearly state that the Adjoining Landowner Act does not provide a cause of action against the government entity unless the entity is the owner of the property that is allegedly in violation of building or zoning codes.

Post Authored by Julie Tappendorf

Wednesday, June 6, 2018

Illinois Supreme Court Takes Appeal in Food Truck Case

The Illinois Supreme Court granted an appeal in a case challenging the City of Chicago's food truck ordinance.  We wrote about the appellate court ruling here and the trial court ruling here.  Both courts ruled in favor of the City of Chicago, rejecting the plaintiffs' claim that the ordinance violated the food truck operators' equal protection rights because it treated food trucks differently than restaurants. It also rejected their argument that the 200 foot distance requirement from brick and mortar restaurants violated the food truck operators' due process rights, finding no protected property right to operate a food truck.  We will update you once the Illinois Supreme Court issues its ruling in this appeal.

Tuesday, June 5, 2018

County Did Not Violate Due Process in Ordinance Prohibiting Alcohol in Adult Businesses

In an unpublished appellate court ruling, a court ruled in favor of the county in a lawsuit filed by an adult entertainment establishment challenging a county ordinance prohibiting alcohol in adult entertainment establishments. County v. Wilhoit.

Wilhoit operated an adult entertainment establishment in Douglas County which allowed patrons to bring in and consume their own alcoholic beverages. In 2015, the County adopted an ordinance prohibiting the consumption of alcoholic beverages in adult entertainment establishments. After the county filed an ordinance violation action against Wilhoit's business to enforce the ordinance, Wilhoit filed a lawsuit against the county alleging that the ordinance was unconstitutional because the county failed to provide Wilhoit with notice of the meeting at which the ordinance was adopted.

The appellate court first noted that plaintiff did not argue that the County failed to follow the required notice procedures. Instead, plaintiff was arguing that she deserved additional notice because she had a "property interest" in operating her business. The court disagreed, finding that the County did not violate Wilhoit's procedural due process rights because (1) Wilhoit had no protected property interest  in having patrons consume alcoholic beverages at her adult entertainment establishment; and (2) Wilhoit was not entitled to any special notice beyond what was provided to the general public.

Post Authored by Julie Tappendorf

Monday, June 4, 2018

U.S. Supreme Court Expands 4th Amendment Protection to Vehicles in Driveways

In Collins v. Virginia, the U.S. Supreme Court addressed a challenge to a police search of a motorcycle located in a partially enclosed carport on a driveway adjacent to the defendant’s home. 

In the course of investigating the ownership and location of a motorcycle seen excessively speeding, Officer Rhodes went to the address where a similar motorcycle was known to be present. At the house, Rhodes observed a white tarp covering a motorcycle.  Without a warrant, the officer  walked up the driveway to where the motorcycle was parked and uncovered the tarp.  The officer discovered the same motorcycle involved in the speeding incident.  After running a search of the license plate and vehicle identification number, he confirmed that the motorcycle was stolen and photographed the motorcycle before replacing the tarp. Collins was later charged and convicted of stealing a motorcycle. 

The Virginia state courts rejected Collins’ claim that the officer’s search violated his 4th Amendment rights,finding that the search fell under the automobile exception of the 4th Amendment.  That exception recognizes that a vehicle has the opportunity to leave during the time period that an officer would have to obtain a search warrant.  In addition, vehicles that travel on public highways are generally subject to regulation while being operated.  When an officer has probable cause to find a motor vehicle was used to commit a violation on a public way, a search of an automobile is justified without a warrant.

On appeal, the U.S. Supreme Court found, in an 8-1 ruling, that Collins had greater constitutional protections because of where the motorcycle was parked.  The area outside of a home where an owner still has a right to privacy is described as the “curtilage” of a person's property.  Courts have held that because the curtilage is intimately linked to the home, physically and psychologically, it is entitled to greater privacy expectations. The Supreme Court found that the driveway where Collins’ motorcycle was parked qualified as curtilage. As a result, Collins’ had a greater 4th Amendment right when his motorcycle was parked there than if it had been parked on the street. 

The Court then looked to see if the automobile exception applied to the officer’s warrantless search.  However, the Court found that there is nothing about the automobile exception that gives an officer the right to enter a home or its curtilage to access a vehicle without a warrant. 

Local attorneys and code enforcement officers should closely examine the case to determine how to investigate and issue citations against motor vehicles located on private driveways.

Post Authored by Megan Mack & Adam Simon, Ancel Glink

Friday, June 1, 2018

Mayor Sued for Blocking Critic From Facebook Page

We reported last week about the federal district court decision that held that President Trump's blocking of critical speakers on his @realDonaldTrump Twitter account violated the speakers' First Amendment rights. A new case was recently filed in California by an individual making similar claims against a National City Mayor.

According to news sources, the mayor blocked a union organizer who was a vocal critic of the mayor from his Facebook account. The plaintiff claims that because the mayor uses his Facebook account for city business, he cannot block critics from posting on his page. The case was just filed, so there have been no rulings yet, but it's likely the parties' arguments and the court's analysis will be similar to that found in the Trump Twitter case.  We will keep you posted.

You can read the complaint here.

Post Authored by Julie Tappendorf