Case Title: Lyons v. Ryan

Citation: 

Docket Number: 92503

State: illinois

Court: Illinois Supreme Court

Date: 2002-09-19T00:00:00Z

Document:
Docket No. 92503–Agenda 13–May 2002.
MICHAEL LYONS et al., Appellants, v. GEORGE H. RYAN 
et
al., Appellees.
Opinion filed September 19, 2002.
 
      JUSTICE KILBRIDE delivered the opinion of the court:
 
      Plaintiffs, Michael Lyons and the Better Government 
Association, “on behalf of and for the benefit of the State of 
Illinois,” filed suit against defendants, George Ryan, Citizens for 
Ryan, and other present and former officers and employees of the 
Secretary of State, seeking to impose constructive trusts on funds 
and benefits alleged to have been illegally received by defendants. 
Ryan, a former Secretary of State, is presently Governor of the 
State of Illinois. Citizens for Ryan is a state political committee 
responsible for soliciting and accepting political contributions for 
Ryan’s campaigns.
      The circuit court dismissed plaintiffs’ suit, finding that 
plaintiffs lacked standing. The appellate court affirmed. 324 Ill. 
App. 3d 1094. We allowed plaintiffs’ petition for leave to appeal. 
177 Ill. 2d R. 315. We now affirm and hold that: (1) only the 
Attorney General is empowered to represent the state in litigation 
when it is the real party in interest; and (2) section 20–104(b) 
Illinois Code of Civil Procedure (Code) (735 ILCS 5/20–104(b) 
(West 1998)) is unconstitutional to the extent that it purports to 
confer standing on private citizens to sue in cases where the state 
is the real party in interest.
 
I. BACKGROUND
      On November 18, 1999, plaintiffs filed a “taxpayers action 
brought on behalf of the State of Illinois,” against defendants in 
the circuit court of Cook County. Count I of the complaint claimed 
that certain Secretary of State officers and employees conspired 
with Citizens for Ryan in a scheme to issue commercial drivers’ 
licenses to unqualified drivers in exchange for political 
contributions. Count II claimed that an additional Secretary of 
State officer furthered and perpetuated the scheme by obstructing 
and covering up investigations. Count III claimed that Ryan was 
involved in the scheme. In each of these counts, plaintiffs sought, 
on behalf of the state, the imposition of constructive trusts on 
funds and benefits alleged to be illegally received by defendants.
      In count IV of the complaint, plaintiffs sought the recovery of 
fraudulently obtained public funds on behalf of the State, pursuant 
to section 20–101 of the Code (735 ILCS 5/20–101 (West 1998)). 
Plaintiffs claimed that, pursuant to section 20–104(b), they are 
authorized, as citizens and taxpayers of the State of Illinois, to 
commence and prosecute the action on behalf of the State, and 
thus are entitled to recover public funds under section 20–101.
      Section 20–104(b) provides in part that a private citizen may 
bring a lawsuit to recover damages from persons who have 
defrauded the state if the appropriate government official fails to 
file suit or arrange for settlement of the action, after notice. 735 
ILCS 5/20–104(b) (West 1998). For purposes of section 
20–104(b), the “appropriate government official” is the Attorney 
General when the state is the government unit allegedly damaged. 
See 735 ILCS 5/20–104(b)(1) (West 1998).
      Defendants moved to dismiss plaintiffs’ complaint pursuant 
to sections 2–615 and 2–619 of the Code (735 ILCS 5/2–615, 
2–619 (West 1998)). On July 25, 2000, the circuit court granted 
defendants’ motions to dismiss.
      The appellate court affirmed the circuit court’s dismissal of 
plaintiffs’ complaint. 324 Ill. App. 3d 1094. The appellate court 
held, with respect to counts I, II, and III of plaintiffs’ complaint, 
that taxpayers lacked constitutional standing to sue for the 
recovery of illegally obtained funds by state officials because only 
the Attorney General has the constitutional authority to bring such 
an action. 324 Ill. App. 3d at 1101-06. On count IV, the appellate 
court further held that section 20–104(b) of the Code (735 ILCS 
5/20–104(b) (West 1998)) is unconstitutional to the extent that it 
purports to confer standing on private citizens to sue in cases 
where the state is the real party in interest. 324 Ill. App. 3d at 
1107. This court allowed plaintiffs’ petition for leave to appeal. 
See 177 Ill. 2d R. 315. We granted the Business and Professional 
People for the Public Interest leave to submit an amicus curiae 
brief in support of plaintiffs, and we granted Tyrone C. Fahner, 
thirty-seventh Attorney General of Illinois, leave to submit an 
amicus curiae brief in support of defendants. See 155 Ill. 2d R. 
345. We also granted leave to Joint Council No. 25 of the 
International Brotherhood of Teamsters and Illinois Federation of 
Labor and Congress of Industrial Organizations to submit an 
amicus curiae brief in support of defendants. See 155 Ill. 2d R. 
345.
 
II. DISCUSSION
      The issue before this court is whether plaintiffs have standing 
to maintain each of the counts in their complaint on behalf of the 
State of Illinois. This appeal arises from the circuit court’s 
dismissal of plaintiffs’ complaint for lack of standing. A complaint 
may be involuntarily dismissed for lack of standing pursuant to 
section 2–619(a)(9) of the Code. Glisson v. City of Marion, 188 Ill. 2d 211, 220 (1999). An order granting a motion to dismiss 
based upon lack of standing is reviewed de novo. Glisson, 188 Ill. 2d  at 220. Accordingly, we conduct a de novo review of the circuit 
court’s dismissal of plaintiffs’ complaint for lack of standing and 
consider whether dismissal was proper as a matter of law.
      Plaintiffs argue that the appellate court erred in holding that 
they lacked constitutional standing to bring a taxpayer action for 
an accounting, restitution, and the imposition of constructive trusts 
under counts I, II, and III of their complaint. Plaintiffs further 
argue that the appellate court erroneously held that section 
20–104(b) of the Code (735 ILCS 5/20–104(b) (West 1998)) is 
unconstitutional. Finally, plaintiffs claim that the appellate court 
erred in holding that they lacked standing to move to disqualify 
counsel for Citizens for Ryan.
 
A. Constitutional Standing
      Initially, plaintiffs argue that they have standing to bring a 
taxpayer action against defendants on behalf of the State of 
Illinois. In their briefs, plaintiffs alternate between alleging that 
this action is brought “on behalf of the State of Illinois,” or as 
“taxpayers for themselves and all other taxpayers similarly 
situated.” Initially, we must determine the real party in interest in 
this litigation. The “real party in interest” is defined as the person 
or entity entitled to the benefits if the action is successful. Black’s 
Law Dictionary 1264 (6th ed. 1990). In other words, the “real 
party in interest” has an actual and substantial interest in the 
subject matter of the action, as distinguished from one who has 
only a nominal, formal, or technical interest in, or connection with, 
the case. See Vukusich v. Comprehensive Accounting Corp., 150 
Ill. App. 3d 634, 640 (1986); see also Black’s Law Dictionary 
1264 (6th ed. 1990). In the instant case, it is the state that is 
actually and substantially interested in this action, and only the 
state would be entitled to the benefits of a successful action, not 
individual taxpayers. Accordingly, the state is the “real party in 
interest.”
      Plaintiffs are bringing this case as a taxpayer derivative 
action, seeking to enforce, on behalf of the state, a cause of action 
that belongs to the state. See Feen v. Ray, 109 Ill. 2d 339, 345 
(1985). The claimed injury is not personal to the taxpayers, but 
rather impacts the governmental entity on whose behalf the action 
is brought. Taxpayer standing to bring a derivative action turns 
largely on the identity of the governmental entity that is the real 
party in interest. Where, as here, the state is the real party in 
interest, individual taxpayers have no standing to bring the cause 
of action.
      Plaintiffs claim that this is an issue of first impression despite 
our consideration of the same issue in Fuchs v. Bidwill, 65 Ill. 2d 503 (1976). A review of taxpayer standing and the line of cases 
leading up to Fuchs is instructive. In Fergus v. Russel, 270 Ill. 304 
(1915), taxpayers challenged certain legislative appropriations of 
public funds. One legislative enactment purported to transfer the 
Attorney General’s powers and duties relating to insurance to the 
Insurance Superintendent. The court declared the appropriations 
to the Insurance Superintendent “for legal services and for 
traveling expenses of attorneys and court costs” invalid. Fergus, 
270 Ill.  at 342-43. The court reasoned that under the 1870 Illinois 
Constitution, the Attorney General was the only officer 
empowered to represent the state in any suit or proceeding when 
the state was the real party in interest. Fergus, 270 Ill.  at 342. 
Fergus relied on the constitutional provision granting the Attorney 
General all common law powers associated with that office. 
Fergus, 270 Ill.  at 342. The court reasoned that, although the 
legislature could add to these powers, it could not reduce the 
Attorney General’s common law authority. Fergus, 270 Ill.  at 342. 
Fergus has never been overruled and remained valid law upon the 
adoption of the 1970 Illinois Constitution. People ex rel. Scott v. 
Briceland, 65 Ill. 2d 485, 495 (1976).
      In Briceland, an action was brought seeking a declaratory 
judgment that only the Attorney General was empowered to 
institute and prosecute cases before the Pollution Control Board. 
The Briceland plaintiffs also sought an injunction barring the 
Environmental Protection Agency from pursuing actions before 
the Pollution Control Board. This court reexamined our holding in 
Fergus to determine its continued vitality under the 1970 
Constitution. We recognized that article V, section 15, of the 1970 
Constitution (Ill. Const. 1970, art. V, §15) provides that “[t]he 
Attorney General shall be the legal officer of the State.” Briceland, 
65 Ill. 2d  at 492.
      In particular, we stated:
“The constitutional proceedings, the official
explanation submitted to the voters, and the fact that the
delegates chose to reenact the language of the 1870
Constitution in regard to the Attorney General, all lead to
the conclusion that the principle of Fergus v. Russel was
incorporated into article V, section 15, of the present
constitution. We hold, therefore, that the Attorney
General is the sole officer authorized to represent the
People of this State in any litigation in which the People
of the State are the real party in interest, absent a contrary
constitutional directive.” Briceland, 65 Ill. 2d  at 500.
Accordingly, we held that a provision of the Environmental 
Protection Act (Ill. Rev. Stat. 1975, ch. 111½, par. 1051, now 
codified at 415 ILCS 5/51 (West 1998)) authorizing the 
Environmental Protection Agency to prosecute cases before the 
Pollution Control Board was unconstitutional because the 
Attorney General is the sole officer entitled to represent the 
interests of the state in litigation conducted before administrative 
tribunals. Briceland, 65 Ill. 2d  at 500.
      On the same day Briceland was decided, this court also held 
in Fuchs that the Attorney General “is the only officer empowered 
to represent the State in litigation in which it is the real party in 
interest.” Fuchs, 65 Ill. 2d  at 510. In Fuchs, the plaintiffs, “ 'as 
representatives of and on behalf of all citizens, residents and 
taxpayers of the State of Illinois’ ” (Fuchs, 65 Ill. 2d at 505), 
brought an action to recover bribe money paid to state legislators. 
In accordance with article V, section 15, of the Illinois 
Constitution (Ill. Const. 1970, art. V, §15) and the decisions in 
Fergus and Briceland, this court affirmed the dismissal of 
plaintiffs’ action. Fuchs, 65 Ill. 2d  at 510. In so doing, we noted 
that there was no authority conferring taxpayer standing on the 
basis that the funds at issue would become “public” only upon the 
imposition of a constructive trust. Fuchs, 65 Ill. 2d  at 509.
      Plaintiffs attempt to distinguish this case from Fuchs, arguing 
that Fuchs bars only taxpayer actions seeking to impose a 
constructive trust on monies that are not “public funds.” Plaintiffs 
claim that Fuchs is inapplicable because their action does involve 
“public funds.” They argue that the salaries of state employees 
involved in the alleged scheme, as well as the cost of equipment 
used in the scheme, are “public funds” and that these expenditures 
depleted the state treasury. Plaintiffs misconstrue this court’s 
holding in Fuchs.
      Contrary to plaintiffs’ assertion, Fuchs did not solely rely on 
the status of the funds sought to be recovered, but more precisely 
relied on the identity of the state as the real party in interest. See 
Fuchs, 65 Ill. 2d  at 510. Nevertheless, the funds at issue in this 
case cannot be distinguished from the funds at issue in Fuchs. 
Here, plaintiffs seek to impose a constructive trust on allegedly 
illegal campaign contributions, salaries of officers and employees 
involved in the alleged scheme, and the cost of equipment used in 
the alleged scheme. Like the bribes in Fuchs, the campaign 
contributions had no impact on the treasury. Plaintiffs offer no 
basis for this court to conclude that the salaries of state employees 
involved in the alleged scheme would not have been paid in the 
absence of the alleged scheme, or that the equipment used in the 
alleged scheme was not used for any other legitimate purpose.
      Standing to bring an action cannot be based on the creation of 
“public” funds through the imposition of a constructive trust. See 
Fuchs, 65 Ill. 2d  at 509. No distinction may be drawn between the 
facts at hand and Fuchs on that basis. Accordingly, we reject 
plaintiffs’ argument that the status of the funds sought to be 
recovered distinguishes this case from Fuchs.
      Plaintiffs next ask this court to reconsider and overrule Fuchs. 
Plaintiffs argue that our holding in Fuchs is inconsistent with our 
decision in City of Chicago ex rel. Cohen v. Keane, 64 Ill. 2d 559 
(1976). In Keane, the plaintiff brought an action “on behalf of the 
City of Chicago” seeking an accounting for profits made by 
defendants through an alleged scheme to defraud the City and its 
citizens. The taxpayer action in Keane was specifically authorized 
by the Illinois Municipal Code (Municipal Code) (Ill. Rev. Stat. 
1975, ch. 24, par. 1–5–1, now codified at 65 ILCS 5/1–5–1 (West 
1998)). In Keane, the real party in interest was a municipality, and 
the authority to bring the action was derived from the Municipal 
Code. Conversely, in Fuchs and the instant case, the state was the 
real party in interest, and the authority to bring an action on behalf 
of the state was derived from the Illinois Constitution. Under our 
constitution, the authority to initiate litigation has been vested 
exclusively in the Attorney General. Thus, the rationale in Keane 
is inapposite to Fuchs.
      Plaintiffs also urge this court to overrule Fuchs because it is 
not consistent with public policy. Plaintiffs claim that by denying 
taxpayers access to the courts, they have been “effectively 
deprived of redress for wrongs committed by corrupt state 
officials.” As this court stated in Fuchs, “[i]t is presumed that a 
public official 'performs the functions of his office according to 
law and that he does his duty.’ ” Fuchs, 65 Ill. 2d  at 510, quoting 
People ex rel. Hoyne v. Newcomer, 284 Ill. 315, 324 (1918). 
Disagreement with the Attorney General’s decision in any given 
case does not justify granting standing to anyone who desires to 
bring an action on behalf of the state. See Fuchs, 65 Ill. 2d  at 510. 
Consequently, there is no public policy sufficient to override the 
constitutional limitation on the authority to initiate litigation on 
behalf of the state.
      The Attorney General, as the chief law enforcement officer of 
the state, is afforded a broad range of discretion in the performance 
of public duties and the exercise of this discretion is a necessary 
and proper function of that office. See People ex rel. Barrett v. 
Finnegan, 378 Ill. 387, 393 (1941) (the Attorney General has 
arbitrary discretion to institute proceedings in any case of purely 
public interest). The Attorney General, as an elected representative 
of the citizens of this state, is responsible for evaluating the 
evidence and other pertinent factors to determine what action, if 
any, can and should properly be taken and what penalties should 
be sought. See People v. Mack, 105 Ill. 2d 103, 115 (1984) 
(prosecution is vested with broad discretion in determining 
whether or not to charge an individual with a criminal offense and 
the nature of the offense to be charged); see also People v. Rhodes, 
38 Ill. 2d 389, 396 (1967) (prosecutor is the representative of the 
people and “has the responsibility of evaluating the evidence and 
other pertinent factors and determining what offense can properly 
and should properly be charged”).
      It is presumed that the Attorney General will act to enforce the 
laws of this state and, when appropriate, seek an accounting or the 
imposition of a constructive trust. Fuchs, 65 Ill. 2d  at 510. The 
Attorney General may have legitimate reasons for not taking 
action at a particular time. For example, the Attorney General may 
not want to interfere with a pending investigation. While we are 
cognizant of the allegations of deplorable conduct in this case, we 
may not overlook standing requirements solely on the basis of the 
conduct alleged in the complaint. The “public interest will not be 
served in permitting persons, without limitation, to institute 
actions of this nature against public officials when the Attorney 
General has declined to act.” Fuchs, 65 Ill. 2d  at 510.
      We reaffirm this court’s holding in Fuchs: the Attorney 
General possesses the exclusive constitutional power and 
prerogative to conduct the state’s legal affairs. Therefore, we hold 
that plaintiffs lack constitutional standing to bring a taxpayer 
action for an accounting, restitution, and the imposition of 
constructive trusts under counts I, II, and III of their complaint.
 
 
B. Constitutionality of Section 20–104(b) of the Code
      In the remaining count IV, plaintiffs claim that they have 
standing to sue on behalf of the state under section 20–104(b) of 
the Code (735 ILCS 5/20–104(b) (West 1998)). The circuit court 
held that plaintiffs’ claims were not recoverable under the Code. 
The appellate court affirmed, holding that section 20–104(b) was 
an unconstitutional usurpation of the exclusive power of the 
Attorney General. We agree.
      Section 20–104(b) provides in part that a private citizen may 
bring a lawsuit to recover damages from persons who have 
defrauded the state if the Attorney General, after notice, fails to 
take file suit or take other action within 60 days. 735 ILCS 
5/20–104(b) (West 1998). Although section 20–104(b) clearly 
intends to give private citizens standing to sue on behalf of the 
state, we must consider the constitutionality of this statutory 
directive.
      As the chief legal officer of the state, the Attorney General’s 
authority is derived from the Illinois Constitution (Ill. Const. 1970, 
art. V, §15). Briceland, 65 Ill. 2d  at 492. The duties of the 
Attorney General are prescribed by law and include those powers 
traditionally held at common law. Gust K. Newberg, Inc. v. Illinois 
State Toll Highway Authority, 98 Ill. 2d 58, 67 (1983). Only the 
Attorney General is empowered to represent the state in litigation 
where the state is the real party in interest. Fuchs, 65 Ill. 2d  at 510. 
The legislature may add to the powers of the Attorney General, but 
it cannot reduce the Attorney General’s common law authority in 
directing the legal affairs of the state. Newberg, 98 Ill. 2d  at 67. 
Thus, legislation that improperly usurps the common law powers 
of the Attorney General is invalid. See Briceland, 65 Ill. 2d at 501-02; Environmental Protection Agency v. Pollution Control Board, 
69 Ill. 2d 394 (1977).
      Here, although well-intentioned, the legislature has 
improperly reduced the Attorney General’s common law authority 
by enacting section 20–104(b) to confer standing upon private 
citizens to commence and prosecute actions on behalf of the state. 
Section 20–104(b) improperly usurps the powers of the Attorney 
General and is invalid. Accordingly, we determine that section 
20–104(b) of the Code is unconstitutional to the extent that it 
purports to confer standing on private citizens to sue in cases 
where the state is the real party in interest. Consequently, plaintiffs 
lack standing to proceed on count IV of their complaint.
 
III. CONCLUSION
      Given plaintiffs’ lack of standing, we need not and do not 
consider the other issues raised by the parties. We hold that 
plaintiffs lack constitutional standing to bring a taxpayer action for 
an accounting, restitution and the imposition of constructive trusts. 
We also hold that section 20–104(b) of the Illinois Code of Civil 
Procedure (735 ILCS 5/20–104(b) (West 1998)) is 
unconstitutional to the extent that it purports to confer standing on 
private citizens to sue in cases where the state is the real party in 
interest.
      The judgment of the appellate court, affirming the judgment 
of the circuit court, is affirmed.
 
Affirmed.
      JUSTICE RARICK took no part in the consideration or 
decision of this case.