STATE OF ILLINOIS CIRCUIT COURT OF COOK COUNTY LAW DIVISION/TAX & MISC. Judge Kubasiak, Room 2607 Facsimile Transmittal Sheet ro: 312 544 BM FROM: Agata Levy m2 5ul i gal aa 2607 ne 321A Zot OOF Wetropditon Weer s 16L 501% DATE: Oe 2B Fax Number: Total No. of Pages Including Cover: © Sender's Fax Number: 312/603-258 Urgent afer Review oPlease Comment Please Reply «Please Recycle Notes/Comments:IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT — LAW DIVISION TAX AND MISCELLANEOUS REMEDIES SECTION METROPOLITAN PYER EXPOSITION AND AUTHORITY, CHICAGO CONVENTION AND TOURISM BUREAU, and THE VILLAGE OF ROSEMONT, No. 16 L 50196 Plaintiffs Judge Ann Collins-Dole UBER TECHNOLOGIES, INC., RAISER LLC, and LYFT, INC., Defendants. ) ) ) ) ) ) ) ) > ) ) ) ) ) OPINION and ORDER Plaintiffs Metropolitan Pier and Exposition Authority (*MPEA”), Chicago Convention and Tourism Bureau, and the Village of Rosemont, Illinois (collectively, “Plaintiffs"), filed their complaint pursuant 10 735 ILCS 5/2-701 for declaratory and other relief against Defendants Uber Technologies, Inc., Rasier, LLC and Lyf, Inc. (collectively, “Defendants”). Defendants are ‘Transportation Network Providers, (“TNP”) in the business of providing ground transportation for hire, Recently the City of Chicago (“City”) authorized Defendants to pick up tides and passengers from Chicago O*Hare International Airport and Chicago Midway Intemational Airport, Since Defendants are now authorized (o pick up passengers ftom Chicago airports, Plaintiffs allege Defendants are now statutorily obligated to collect and remit the Airport Departure Tax (“Tax"). Defendants argue that the Tax does not apply to them, On January 7, 2016, the MPEA notified Defendants that they were statutory obligation te remit the Tax und werned of potential legal ramifications if the Tax was not paid by January 18. 2016, Defendants did not pay the Tax. On Match 18, 2016, Plaintiffs sued Defendants for: (1) @ ‘declaratory judgment that Defendants are required to collect and remit the Tax to Plaintiffs; and (2) a monetary judgment in the amount of the Tax, interest and penalties that are due and owing to Plaintiffs Defendants, moved to dismiss Plaintifis* complaint alleging it violates Defendants’ due process rights and Plaintiffs did not comply with or exhaust administrative procedutes.RELEVANT FACTS Defendants are TNPs as defined by the Transportation Network Providers Act (“TNF Act”). See 623 [LCS 57/5. The ENP Act defines TNPs as: an entity opetating in this State that uses a digital network or software application service to connect passengers to transportation network ‘company services provided by transportation network company drivers. A. TNC is not deemed to own, control, operate, ot manage the vehicles used by INC drivers, and is not a taxicab association or a for-hire vehicle owner, “Transportation network company driver” ot “TNC driver” means an individual who operates a motor vehicle that is: (1) owned, leased, or otherwise authorized for use by the individual; (2) nota taxicab or for-hire public passenger vehicle; and (3) used to provide transportation network company services. TNC service is not a taxicab, for-hire vehicle, or strect hail service, 625 ILCS 57/5. The MPI'A is a municipal corporation and “unit of local government” under the Ilinois Constitution of 1970. It was created by the Illinois General Assembly in the Metropolitan Pier Exposition Authority Act (*MPEA Act”). 70 ILCS 210/3. The MPEA owns and contracts for the management of MeConmick Place and Navy Pier, and promotes and operates conventions, fairs ‘and expositions in the Chicago metropotitan area. Jd, MPEA has “a compelling and proprietary interest in the suecess, competitiveness, and continued viability of MeCormick Place and Navy Pier and its obligation to ensure that these facilities produce sufficient operating revenu.” ai 5.4(u). The MPLA is vested with the authority granted by the MPEA Act. Under the MPRA Act, the MPRA is tasked with adopting an ordinance that imposes an occupation tax on particular yusiness engaged in providing ground transportation for hire to passengers in the metropolitan area. 70 [LCS 210/13(f), In accordance with the MPEA Aci, MPEA enacted the MPEA Airport Departure Tax Ordinance (“Ordinance”), which became effective January |, 1993 and was amended September 1, 2010, and November 16, 2015. The MPEA Act and Ordinance requires the levying of an airport departure tex, otherwise known as the MPEA Airport Departure Tex, as follows: By ordinance the Authority shall, as soon as practicable after the effective date of this amendatory Act of 1991, impose an occupation tax on all persons, other than a governmental agency, engaged in the business of 2providing ground transportation for hire to passengers in the metropolitan area al arate of (i) $4 per taxi or livery vehicle departure with passengers Tor hire from commercial service airports in the metropolitan area 70 TLES 210/13(8). ‘Additionally, the Ordinance sets forth procedures for assessing and collecting owed taxes. § [+17 of the Ordinance provides “ [t}he Collector, through its Department of Revenue may determine and asscss the amount of any tox due. . . . “The Department of Revenue shall serve written notice of any tax determination and assessment (“Deficiency Notice”) on the person to whom itis issues, demanding payment of sums due and owing,” Hearing procedutes in response to Deficiency Notice are provided for in § 1-20 of the Ordinance. § 1-20 allows a taxpayer 20 days to tespoud to « Deficiency Notice priot to @ hearing with the Department of Revemuc. On November 16, 2015, the MPEA. amended the Ordinance in MPEA Ordinance No. 15- 03 @Ordinance Amendment”). One of the purposes of the MPEA Ordinance Amendment was te extend the Airport Departure Tax to TNPs, like Defendants. The Ordinance Amendment redefined the term “livery” to include TNPs and transportation network vehicles. The Ordinance ‘Amendment additionally provided that the Tax is imposed on a new category: “Category 4. For ‘each transportation network vehicle departure from a commercial service airport with passengers for hixe: $4 per departure.” Plaintiffs alleged the MPEA Act and Ordinance Amendment both authorizes and requires the MPEA to impose and collect the Airport Departure Tax on Defendants. See 70 ILCS § 210/13(9. APPLICABLE LAW Motions to dismiss are granted pursuant to Section 2-615 of the Illinois Code of Civil Procedure. 735 ILCS-5/2-615. A motion to dismiss attacks the legal sufficiency of a complaint alleging defects on the face of the complaint. Vitro v. Mikelcic, 209 Ill. 2d 76, 81 (2004). In ruling on a motion to dismiss, the relevant inquiry is whether. taking all well-pleaded facts as tue, the allegations of the complaint, construed in the light most favorable to the plaintiff is sufficient to state a cause of action upon which relief can be granted. Canel v, Topinka, 212 I 2d 311, 317 (2004). A motion to dismiss should be granted if “it is clearly apparent that no set of facts can be proved that would entitle plaintiff to relief.” Tedrick v. Community Resource Center, Inc,, 235 I. 24 155, 161 (2009). ‘Declaratory judgments ere granted in cases where there is an actual controversy and a binding declaration of tights is needed to resolve legal uncertainty faced by the litigants. 735 ILCS 5/2-701. A court must avoid issuing a declaratory judgment where there is not actual controversy ripe for decision but where the outcome of other cases may be influenced by the judgment. Palm ¥. 2800 Lake Shore Drive Condo. Ass'n, 2014 IL App (1st) 111290, | 45.ANALYSIS Defendants assert Plaintifis' complaint should be dismissed because Plaintiffs have failed to comply with the required administrative procedures, including exhaustion of remedies, before bringing their sit in the Cireuit Court, Defendants allege Plaintiffs are exceeding their authority ‘because they have not complied with MPEA Act procedures before assessing the tax. Defendants argue that when Plaintiffs summarily assessed the tax and subsequently brought this complaint, Plaintiffs denied Defendants their due process rights. Plaintiffs claim they are not required to exhaust administrative remedies before bringing suit, because the MPEA has not adopted the exhaustion of remedies doctrine, See Tri-State Coach Lines, Inc. v. Metropolitan Pier and Exposition Authority, 313 Til. App. 34 179, 186 (Ist Dist, 2000). Plaintiffs contend they are entitled to a declaratory judgment because they present a “pure” igsue of law, thus the Court has jurisdiction over the matter. Furthermore, Plaintiffs contend, since this mattor is besed on interpretation of statute and case law, itis “within a court's expertise and not an administrative agency's.” See Office of the Cook Cty. State’s Attorney v. Itt Local Labor Relations Bd., 166 Il]. 24 296, 306-07 (1995); see also Cty. of Knox ex rel. Masterson v, Highlands, LLC, 188 Ill, 2d $46, 551-52 (1999). Plaintiffs further contend that since the legislature has not given exclusive jurisdiction to ‘an administrative review, the Courts retain jurisdiction over the matter. See State ex. re. Beeler ‘Shad & Diamond P.C. v. Ritz Camera Centers, 377 Il, App. 36 990, 1006-08 (Ist Dist. 2007) ‘Additionally, Plaintiffs argue that declaratory relief is appropriate because the administrative process under the MPEA Act is not comprehensive. Plaintiffs contend that administrative review does not provide a complete remedy for MPEA because only taxpayers, not taxing authorities such as the MPEA can appeal adverse rulings in the Circuit Court, Defendants argue Plaintiffs do not raise purely questions of law in their request for declaratory relief and monetary judgament. Plaintiffs’ complaint raised fetal issues, including whether Defendants are subject to the tax and whether only the City of Chicago, the Collector “shall” impose the Airport Departure Tax. Defendants argue that while the exhaustion of remedies doctrine may not be diectly on point, the administrative procedure permitting the MPEA to assens tax ageinst a tax payer is not optional. See Bio-Medical Laboratories, Inc v Tratnore, 68 Ill. 2d 540, 551 (1977). Those procedures are the only manner in which the MPEA may assess a tax. See id, Defendants assert MPEA has summarily concluded Uber is subject to the tax, without giving proper “notice,” as required by the Ordinance, The MPEA’s January 7. 2017 letter to Defendants did not comply with the “notice” requirements set forth in § 1-17 of the ‘Airport Departure Tex and did not allow Defendants to avail themselves of their hearing rights found in § 1-20 of the Ordinanee. The MPRA admits it did not follow the procedures of §§ 1-17 and 1-20 of the Ordinance. Additionally, Plaintiffs rely heavily on 7ri-State, in arguing they do not have to exhaust their adeninistrative remedies. In Tri-State Plaintiffs brought a class action secking 2 declaratory judgment that a tax violated federal law. Zri-Sfate, 315 Ul, App. 34 at 182-83, Plaintifts and ‘defendant filed etoss-motions for summary judgment, and the Court granted partial summary judgment for Plaintiffs and Defendants. Jd. at 184-85. The Appellate Court found the MPEA 4Act does expressly adopt the Administrative Review law. /d. at 186, Additionally, it determined Plaintiffs were not requited to exhaust their administrative remedies, as they raised « legal question, “in essence, challenging the tax ordinance as being facially invalid rather than invalid ‘as applied to them.” fel at 187. Thus, the Appellate Court concluded it was appropriately the subject to a declaratory action. /d at 185. Furthermore, the Appellate Court explained the exhaustion doctrine’s underlying rational is that, “it allows full development of facts before the agency.” Id. (citing Mlinois Bell Tel. Co. v, Aliphin, 60 Ml. 2d 350, 358 (1979). Finally, Plainti(ts argue if forced to follow administrative pr ocedures, Plaintiffs will be irreparably harmed by. depriving them of tax proceeds. The MPEA provides the manor and process by which Plait ‘must be complied with for the tax to be valid, Per the MPLA Act, fs can assess the Tax and ‘The tax imposed uader this subseetion and all civil penalties that may be assessed as at incident to that tax shall be collected and enforced by the Iilinois Department of Revenue. The Department shall have full power to administer and enforce this subsection, to collect all taxes and penalties so collected in the manner provided in this subsection, and to determine all rights to credit memoranda arising on account of the erroneous payment of tax or penalty under this subsection . . . . a certified copy of any ordinance imposing or discontinuing any tax under this subsection or effecting a change in the rate of that tax shall be filed with the Department, whereupon the Department sball proceed to administer and enforce this subsection on behalf of the Authority as of the first day of the third calendar month following the date of filing. TONS 210/130). ‘The MPEA Act works in conjunetion with the Illinois Municipal Code which states, “any fine, other sanction, or cost imposed. or part of any fine, other sanction, or costs jmposed, remaining unpaid after the exhaustion of, or the failure to exhaust, judicial review procedures under the Administrative Revicw Law shall be a debt due and owing the municipality and as such, may be collected in accordance with applicable law.” 65 TLCS 5/1-2.2-55(2. The Court finds Plaintiffs have not mect their burden showing they are required to follow: their own administrative processes. The MPLA does not have the authority to direetly bring suit in the Circuit Court and the Ordinance reaffirms that any sanetion remaining unpaid after the exhaustion of judicial review procedures may be collected in accordance with applicable law. The Airport Depacture Tax Ordinance is the applicable law which sets forth the manner in which the MPEA must assess a tex against a potential tax payer and that the Ordinance sets forth the Department of Revenue as the Collector of taxes. See $ 1-17. The Court finds Plaintiffs have not proved thet implementing administrative review would be uscless and cause them ham. Instead the Court finds that Une administrative review process in this case is necessary to allord Defendants due process in the fair and transparent adoption and administration of taxes. Based on ali of the relevant facts, Plaintiffs failed to adhere: 5to the administrative procedures under the MEPA Act and Ordinance. Thus, Plaintiffs have failed to afford Defendants the due process those reinedies are designed to ensure. Plaintiffs have exceeded their authority by bringing this action without complying with §§1-17 and 1-20. ‘Therefore, the Court grants Defendants’ motioa to dismi 1. ORDER ‘This matter having been fully briefed, and argued, the Court being fully apprised of the facts, law and premises contained herein, it is ordered as follows: Wri A. The Defendants’ motion to dismiss is Granted. “nie Arm Colting-Dole PR 28 2017 ‘Cireult Court-2000 ENTERED: Judge Ann Collins-Dole 2000