my name is jacob hubert and i represent the appellant's group of illinois taxpayers illinois courts have long held the taxpayers have standing to seek an injunction against the illegal use of public funds this case requires nothing more than a straightforward application of this well established principle the plaintiffs are challenging a regulation promulgated by the defendant the department of commerce and economic opportunity they allege that this regulation is illegal because it directly contradicts the statute and has resulted in the state issuing millions of dollars more in tax credits to certain businesses than it legally could plaintiffs have standing to challenge this regulation for two reasons first pla fs have standing as taxpayers to challenge the use of public resources to administer and unlawful regulation and second plaintiffs have standing as taxpayers to challenge the issuance of tax credits that are not authorized by law you want to of course have long recognized that taxpayers have standing to seek an injunction against the misuse of public funds because taxpayers are the equitable owners of public funds and will be liable to replenish any shortfall in public funds that results from illegal activity counsel do you have a case that stands for the proposition that taxpayers have standing to sue  or the failure to call up facts as opposed to taxpayer standing to sue based on the misuse of funds or taxes already a law there's no case in which you're a taxpayer plaintiff has had standing to make the government go collect taxes from somebody the case law does not say that are you saying that there is no case one way or the other on that or there is there are cases out there but that do have standing to sue on behalf of the state to get revenue from private parties on behalf of the state there hasn't been a case that i'm aware of where taxpayers have sought an injunction to force a public official to go collect tax dollars from somebody and that's not a theory of taxpayer standing that underlies this case taxpayer standing exists to allow taxpayers to stop a public official from affirmatively doing something illegal and that's what plaintiffs are seeking to do here the illinois supreme court has made it clear that the misuse of public funds includes the use of public resources to administer an unlawful and accurate end and the use of those said the tax credits under the edge program may be issued up to a certain amount and the plaintiffs are alleging that in fact the department is issuing tax credits that exceed that amount so that funds that should be in the treasury are not ending that would be a result of is there any other result i mean that's what this case about is a well that's right this regulation would be struck down because it contradicts state law and then the department would have to pro presumably a new regulation that would comport with the law and whether the tax credits that it issues under that on balance would be more or less would remain to be seen that certainly the kinds of tax credits they've been issuing that exceed the legal limit would no longer be permissible and the supreme court has made clear that we are even administering an unlawful and ackman in itself the use of public resources internally to administer something a statute for the licensing the professional engineers that they allege was unconstitutionally vague and there was no allegation that the state was paying out money to anybody illegally and the taxpayer wasn't personally affected by the statute but because  statute was unconstitutional the taxpayer had a right to enjoin the use of public funds to administer that statute and it's the same here the plaintiffs are challenging a regulation which they allege is illegal because it directly contradicts the statute and so taxpayers have a right not to have their tax dollars used to administer an unlawful regulation the department has argued that this case is different from other cases that have recognized taxpayer standing because it involves a challenge to regulation rather than a challenge to a statute but that difference isn't relevant the key to taxpayer standing is whether a public official or a public body is using public resources to do something illegal and that's exactly what the plaintiffs have alleged here the case was does not say or  y that taxpayers only have standing to challenge an illegal stash it so happens that taxpayer cases might commonly challenge a statute because if there's an unconstitutional statute on the books you know that when the government administers that statute it's going to be doing something illegal so there's something there to enjoy but that's also true where you have an invalid regulation and it would also be true if there was a policy in place that a government body or official were consistently followed and it would also be true if it was simply a pattern of illegal activity where say a corrupt government official was consistently paying out cash to people without authorization department has also suggested that allowed recognizing taxpayer standing in this case would lead to excessive lawsuits where taxpayers would challenge any decision by any government official that they don't like which could flood the courts and potentially grind government to a halt but there's no basis for such a concern for several reasons one reason is because the principles the taxpayers are asking the court to apply here are new they've been part of illinois law for over a century and in fact the courts haven't been flooded with taxpayer lawsuits seeking to enjoin lots of different things there is a sort of natural limit on that given that it's costly to bring lawsuits and presumably taxpayers  does not ask the government to affirmatively collect taxes it's not an injunction to tell the department of revenue or any government official to go collect a certain amount of taxes from somebody all seeking to do is enjoying the department of and economic opportunity for issuing tax credit awards it's not seeking to have the government go collect taxes from anybody so that case isn't on point because that's not what the taxpayers here are solutes in the proposition of a pass here like plaintiffs were to prevail here and the department of revenue declined to collect taxes from a given person for whatever reason we could go to court and its end and tell and ask the court to direct the government to collect taxes from somebody plaintiffs don't have standing to do that with they have standing to do is to stop the government from administering an illegal enactment of spending resources to do that and from taking the affirmative step of issuing the tax credit award and entering into an agreement for the tax credit toward an ultimate consequence of that will be that more taxes will be correct collected but that's not what this but that's not the remedy that the taxpayers here are seeking the only underlying statute involved here the edge tax credit act says in effect that tax credits issued under the statute must be limited to a certain amount when a business gets a tax credit award the amount of that tax credit they receive must be limited to new employees that they hire after after entering into the agreement to work on a particular project the regulation the plaintiffs are challenging with that was probably gated afterword says that the tax credits can actually be limited to not only the amount of income taxes withheld from new employees hired after the company enters into the remit but also the amount withheld from retained employees people of the business already employed who who are working on the project in question and that's in direct conflict with the statute the general assembly said only up to this point and then the department turned around and said well i only have to that point but also this additional amount from people the business was already employed whether that's a good policy decision or not it contradicts the law and if if this state is going to  allow tax credits up to that amount it has to be authorized by the general assembly the department can't decide on its own that it's going to expects actually expand this program and make more available and in fact shouldn't result in the department issuing tax credits to business is that otherwise would not qualify for them at all because they hire no new employees after entering into the agreement and the in the tax credits they get are based entirely on taxes withheld from retained employees so the department here is clearly violating the law and when a public body is violating the law it's what the case law is clear that the taxpayers have a right to stop them from using their money to do that the department has also raised the prospect but i should add the department suggests that could lead to people challenging particular actions of government officials they don't like but it's important to recognize that taxpayer standing only allows taxpayers to enjoin future bad actions by government officials you can't go back and challenge discrete decisions by government officials after the fact because you think they were illegal you can only sue to stop government officials from doing something illegal in the future let me ask this i don't know you know give them an aperture maybe short of this litigation that questions of standing which have arisen which don't really address the merits but it's possible that some would say you know that's a good point to they're just talking receptive to second guessing their predecessors had someone said by way this is wrong you want to fix it before filing suit well you're out of this this lawsuit has been pending for a long time so they've been aware of it all this time and they have not taken any steps to  repeal the regulation which suggests that if they won't do it in response to a lawsuit presumably they wouldn't have done it in response to a letter there's a second basis for standing in this case and that is that the actual issu of the tax credit award is itself an expenditure of government funds because it's functionally equivalent to an expenditure of government funds it makes no difference from the pack tax payers it perspective whether the government gives any legal subsidy in the form of a check cash payout or in the form of a tax credit either way the effect on the state treasury is the same and the tax payers liability to rip replenish the treasury for any shortfall is the same and it would make no sense to say that taxpayers have would have standing if the government were to issue these businesses eight collect taxes f the excess amount of these tax credits that does constitute public funds because they have the general assembly has said that these funds belong in the treasury and the reason they're not getting there is because of the illegal activity of the department the department has also argued that in response to both cases of standing that the plaintiffs don't have standing here because only the state is the real party in interest they could pursue this kind of claim but that there's no basis for that argument no valid basis the state relies on the department relies on the lines versus ryan case and again that case isn't applicable because it was a tax payer derivative action where taxpayers were suing a private party for promoting the private parties on behalf of the state to take back money for the state to put that money in the state treasury and under the existing president at that time the taxpayer lacked standing to do that only the attorney general is allowed to sue private part of those to take back money for the  state but that is in this case this case isn't taxpayer to rivet of action plaintiffs are not seeking to take back money from businesses that have received illegal tax credits they're only trying to stop future that but lines has no effect on taxpayers ability to bring true taxpayer lawsuits on behalf of their own interests to stop the government from doing something illegal and that's again precisely what the plaintiffs are asking the court to do here so this case does not require the court it does not ask the court to break any new ground case simply ask the court to apply  established principle that taxpayers have a right to stop public bodies and public officials from using their taxpayer dollars to do something illegal so for that reason we respect we ask the court to reverse the district of the trial  illinois requires an injury to a legally cognize of all interest as the courts have said repeatedly that injury must be distinct and palpable fairly traceable to the defendant's actions and redress of all through the requested relie the reason for this is to ensure that the disputes before the court are truly adversarial and are not mere abstract disagreements those same principles applied to taxpayer standing it's always been a narrow doctrine and it does not allow lawsuits over generalized disagreements the basic underpinnings of and principles of traditional standing doctrine apply so traditionally the illinois courts have recognized taxpayer standing only where the taxpayer has an equitable ownership in the public funds at issue and is liable for replenishing again this is the same basic idea as traditional standing some kind of a cognizable interest the equitable ownership in the under in the public funds at issue the in addition courts have allowed challenges to the operation of an importance of retaining employees as well as creating new jobs for example at in section five desh fifteen that the statute states the department shall make credit awards under this act to foster job creation and retention in illinois that in considering an application under section five just twenty five b three the department must determine if not for the credit the project would not occur occur in illinois and that can include  hired after the taxpayers entered into the perks creditor group if you look at the definition of retained employees in the in the challenge regulation would see that it refers only to employees who are now spending at least two thirds of their time in the project the new project that has been approved for the tax credit so these are employees whose current positions are largely attributable to the capital improvements and other investments that if not for the credit will not occur in illinois so they're still former employees but what i'm not sure i understand well i suppose the question of what if they were working there for ever working and they were doing something different unrelated to the project that they are now spending i'm sorry i was well former ex felon governor let's assume that we had a regulation promulgated by his department that defined how this would work and said we're going to talk about a tax credit for compensation to employees of retained employees rising employer who is joining ryan's buddy and making big contributions to him if i understand your position the corruption shown by all of  that since the attorney general i guess is the only one who could challenge it and i'm not even sure of their but nobody not these plaintiffs no interested citizen could say wait a minute th sorry you don't have standing to do there at the end this certainly clearly corrupt circumstance has to go unabated until such time as i guess the state itself chooses to case if taxpayers challenge the regulation because he believes that it has some kind of corrupt intent behind it then there would be no reason why taxpayers wouldn't themselves and or and challenge any other government action that they believe realistic it is not possible to cabin the kind of challenges you're describing to regulations and in fact plaintiffs don't attempt they say any kind of pattern or practice of behavior or any kind of policy we should be able to challenge the law so for example on plaintiff's theory they should be able to challenge department of revenue policy that certain types of tax disputes will be settled for less than what is arguably the full  and whether based on principle of public policy points or based on corruption second there are other mechanisms in place to suit to look to come to look at problems of corruption of the story you're describing taxpayer lawsuits are not the only way the other ways well for example with respect to regulation the regulations have to be reviewed by jake and that's these regulations so there's an opportunity with members of the legislature to step in throughout that the public always has the opportunity to speak to its own active representatives and state officials and say we don't think that this regulation is legal or we don't think this ventilation is a good idea so it's not in fact part of the record but it is the department of commerce and economic opportunity has announced in november that it is no longer approving tax credits based on government the beneficence to people who again kind of like my example with george ryan seem to be well connected to the federal government who is providing given if assent to these folks and of course that's just the biggest example and perhaps what i'm suggesting and raise the question directly to you is given the corruption demonstrated over the last several years by government actions or inactions why shouldn't this whole concept of questions of taxpayer suits be revisited and cast again to the supreme court sorry you still want to hear to this policy given what we have now seen over the last fifteen years i don't think that this court can pin open taxpayer standing to the extent that the plaintiffs are asking for i suppose the supreme court itself could revisit it but this court is of course bound by the presidents that are there and they were the precedents that are there are how do i put this you've argued that well but less then the wreck leon pointer of four square with exactly what we have here for less that they departed originally said you owe that would be trouble but it's here we're not talking about a settlement of a lawsuit the routine business of course but we're talking about this question of stand how many of those cases deal with the fundamental claim here which is this regulation is illegal it's turn for it to the statute and therefore special business district and it did so by making project findings it's empowering to do make to create this business district by state statute and in order to do so it has to make certain findings of fact and those findings were fraudulent and so we would like to challenge the creation of this business district and this court said no you can't the taxpayer can't do that the analysis included a discussion of an unwillingness by this court to really speculate about what the to see the collection of taxes there would be some preliminary steps necessary to achieve that result and that could be the aim of a lawsuit in mor any amount less than the amount that was due that the sheriff and the ex official collector was without authority to accept the loss of some but in essence this was a super collect tax it's at least that sound thing to the supreme it made the superficially a suit to do something different yeah i think that goes to the question of whether or not that the taxpayer plays it has an academic interest in the money at issue and what and this is now ok yes it invites taxpayers to root for the illinois administrative code and look for things that they think are inconsistent with the statutes and these are these allegations of illegality are often questions of interpretation they're not real public benefit if it's not interpretation is here frankly it looks like we just rock that this is exceeds their scope and we're and three it's it's quick and easy if the only not sure it's always going to be too quick and easy because some regulations are premised on certain types of determinations made by an agency for example so it still when it is this may not be so straightforward some may be straightforward that many may not be  in addition the what we are often getting down to are our disagreements really the kind of generalized disagreement that standing doesn't provide for disagreements about policy about how are we going to implement this particular statute some people might say you can't do it this way it's the statute doesn't allow for it but that is the kind of policy determination as long as that is that that should be that doesn't belong in the court thank you i would first like to address the prospect that's been raised of taxpayers combing through the administrative code to find illegal chad things to challenge and it's important to consider what the alternative to that is which is that there are a lot of illegal provisions and regulations that simply aren't challenged it's and perhaps that's the worst outcome if there's a loss of illegal regulations on the books that few if any people could do anything about and of course the attorney general could always perhaps go in and challenge illegal regulations but the attorney general of resources are limited and the whole point of taxpayer standing is so that things can get a challenge that otherwise wouldn't and that also gets to the argument the department raises about a lternative means that taxpayers could pursue such as lobbying their legislators but of course organizing taxpayers to effectively large lobby their legislators is very costly and very difficult well surely impact of any given illegal thing on any given taxpayer is very small so do organize them to actually challenge any given thing is difficult and that's precisely why we need taxpayer standing in general because because you can't expect the legislature even with the even of full of the legislators with the best of intentions to address every problem that's in every statute and regulation simply because of the nature of lobbying and the nature of the legislat combing through the administrative code looking for other things to challenge of the grounds that it's legal if there are things that are illegal perhaps but you know our resources are pretty limited we can only bring so many lawsuits in a time and i don't think there's too many other people like us so the prospect of a flood of litigation just simply isn't realistic even if they even if they are full of illegal regulations and again and if they are full of illegal regulations what's so wrong with challenging them what about her litigation challenging something as a legal one it really is a question of construction perhaps well again there's an unnatural constraint on all of this because people's resources to bring lawsuits are limited but besides that you also have that issue of course with respect to the constitutionality of just statutes people can dream up all kinds of ambiguity isn't statutes and and in constitutional law could lead to think of ways that a statute might be invalid but we don't find say i don't know the log on this point precisely but i would imagine that the government actually has the legal authority to settle tax debts and so if even if your did have taxpayer standing to challenge that which presumably would because it was something that already occurred but even if you did the first time it came up the court would say well know that the department or whatever officials involved here actually have some discretion in this area and so that's not illegal and that puts an end to the matter the first time