the first piece on the call this afternoon is piece number one two two eight seven eight city of chicago developers city of cancun and others agenda number five how soon are you ready you may proce and by the way you've you've agreed to split your time yes and the clerk will give you a three minute warning of thank you thank you mr chief justice other justices member of the court my name is steven blonder and i represent this is a case in which the city of chicago is asking the circuit court of cook county to audit more than twenty four companies and where their tax sales took place they're asking  court be in our with something that's exclusively left of the partner of revenue and to conduct these mini audits over these twenty four businesses or these hundreds of thousands if not millions of transactions without protections provided for in the revenue code without the procedures without the timeframes and they're asking that a court and not the agency that has exclusive jurisdiction address the issue court in ruling in how we got here gave lip service to this court's holding in j n j ventures and they otherwise treat is a knowledge they century white the holding off by saying you can have a different claim with a different label and if it's like to put that label on it you can go to a cork essentially close the old adage that looks like a duck it sounds like a duck quacks like a duck it's still a duck and whatever the claim it goes to the partner of driving exclusively there's nothing for a court to do it bears understanding as to how we got here in two thousand and five in the city of chicago filed a claim against shanahan in a couple of retail consultants that claim was brought under section eight eleven twenty one and that's important because that's a claim specifically provided for by the legislature where it says one municipality can sue another miss municipality over the sales taxes that were paid in the wrong place it's a specific claim that's carved out by the legislature essentially what they were saying was sales were being source in kank and those settle should have been sourced in chicago so chicago lost out in that revenue that was the city's theory in two thousand and eleven when they filed their first complaint two thousand and twelve when they filed their second complaint two thousand thirteen when they filed their third complaint but alas after that the city flip flopped and they no longer said these cells we shouldn't source in chicago chicago should have gotten the revenue but they complaint the fourth complaint in this matter several years into litigation they suddenly said these were out of state sales and so the city should have gotten used to it again what's different about this claim is it's not a claim anymore that says sales tax was paid to the wrong place the claim specifically carved out by statute by the legislature instead it's a new cl sick lame saying these companies were slightest claim they were doing the situs of sales and take heat but really it was somewhere out of state and they should have paid use tax so it's not one municipality vs another saying who should get the revenue it's something very different and it's something outside the statutory framework it was provided for when a claim exists and it's important to understand that distinction then we get to the fourth proposed am jurisdiction over any of this it's something that exclusively jane jade ventures hadn't been decided at that point so it wasn't that he could rely on that opinion but judge flynn looked at it and said this isn't for a court this is for the department of revenue the city now before this court relies on the chief justices opinion in zante that's really the only case that they point to that supports your position that was a case where the seven that was an easy decision for this court because it clearly wasn't something that was exclusively left to an agency this case is more like changing ventures when we look at it they're asking the court to do an audit something locked the the legislature gave to the department of revenue because what has to happen here you need to go into these companies look at their source documents but look and say ok where did the sale take place look at is look at their records it's an audit if you look at the partner revenue website that the fines and audit you take those same procedures that's what they're asking the court to do now that's a function that the tax code the legislat everyone agrees on that but where we diverge is where the appellate court went off the rails and said well yeah we get that we see jay jay that ensures we agree with that holding we lay out that hold and we lay out the rationale but then we the revenue codes provide for the department of revenue to do that and what would be the result be if we're going to say that courts can have this you can find theoretically two hundred minas a pal days in the state all bringing a use tax claim because after all used tax gets split between all the municipalities and states so what they're doing is saying let's override the circuit courts with a plethora of cases and they say in their brief well court was right to say we have a framework to look at this in and we see it goes to the problem of revenue again where they fell off the tracks was by looking at the label of the client and not sending it to the partner of revenue the city's other big argument is they're left without a remedy there's nothing they can do that's not right either all one has to do is look at city if he versus the department of revenue and that case you've got various writs of prohibition got rich mandamus you got things that can happen that happened there if public or even recognize that it was appropriate to do they also could bring a claim against department of revenue on a mandamus fight and you have the eleven twenty one claim that they started this litigation with but abandoned that says you can sue municipality for misallocation of sales times so there's neatly carved out ways that the city can prosecute its client one before this court is not the way to do it i see mr joseph the rest of the  court should be reversed for two reasons that are related to what mr blonder said in the context of exclusive jurisdiction but conceptually distinct first there is no private right of action and certainly no cause of action in equity to enforce what is manifestly a set of statutory rights obligations that provide for their own remedies second the plaintiffs are home rule units and in seeking to  constitution that's the first point there's no such thing as a common law a right to use tax revenue as this court said in people x well for universes eighteen t taxation is a legislative not a judicial function and the quote reiterated that just as recently as a few weeks ago in the oswald vs hammer case where it said that the power of taxation in the general assembly is plenary there's a very clear cascade of authority as to how these claims arise the seeder of the wellspring of authority for taxation is set forth in article nine section one of the constitution which says that the general assembly has quote unquote exclusive power over taxation the general assembly has an active of statutes that affect the matters in this case and it is authorized the department of revenue in the exercise of its discretion to enforce those laws in particular under section twenty five zero five dash three hundred of the revenue  the general assembly has enacted if not hundreds if not thousands perhaps hundreds of tax acts scores or dozens of which are applicable in this case and six that i would like to focus the court's attention on they include the department of revenue law the state finance act the state revenue sharing act the use tax act the retailers occupation tax act and the illinois i mean a simple code and in particular article eight divisional levon which concerns revenue that is the entire universe of tax laws rights and obligations and they didn't exist at common law and as this court said in the city vs as a case it is years ago where a statute creates a new right or imposes a new duty reliability unknown to the common law and at the same time gives a remedy for its enforcement the remedies so prescribed is exclusive that's what the general assembly did in this case the plaintiffs styled a claim as one from just enrichment but in fact it seeks to correct tax reporting allegations that the department of revenue had within its purview to correct there are several saturates that authorized the department to do that i'd like to draw the court's attention to a couple of them in particular one of them is section twenty five of five dash four seventy five of the depriving of running law which states as an example of the kind of correction the department of revenue can make recording or use tax payment as retailers occupation tax or a retailers occupation tax payment as used tax that is exactly the situation that we have here that is exactly the claim the cities are bringing here there are similar statutes and in some of these other acts for instance the state finance act section six z e dash eighteen and section and dash eleven dash sixteen of the municipal code provides for the same sort of allocation power to the department of revenue now as mr bond or indicated that doesn't mean there's no remedy for the city if it has a complaint about what the department of of that particular action is number one that it involves statutory rights an obligation and number two that it's an action against and if in the first instance if they hadn't contact concocted these latter day claims with this new theory in their fourth or fifth complaint they brought their action originally that's what they could have done the interest in this case is bad policy because it has no limiting principle really any putative tax beneficiary consume any tax revenue beneficiary because of the actions of a third party in reporting their taxes one can imagine all kinds of mischief that can result from that sort of unlimited theory here as mr blogger indicated the general assembly creates a remedy and knows how to do it in the appropriate situations so in the perform any function pertaining to its government and affairs and this court has consistently ruled that that allows a a municipality exactly what the plaintiffs in this case proposed to do they proposed to exercise their authority in such a way that will affect two hundred plus other municipalities and units of local government on what even they acknowledge is by definition a state wide system of taxation  the city of kankakee case i'm sorry in the city of champagne case the court said some case concerns statutory law although it comes cloaked in an equitable garment it's an ancient maxim of this court that we look to the substance rather than the form of the complaint and the substance of the of the complaint in this case is one to enforce state tax liabilities i reserve the rest of my time thank you thank you it please the court i'm julian henriques and i am arguing today on behalf of the city of chicago and the village of skokie we have alleged that several brokers and internet retailers engaged in stream that enabled kankakee to receive substantial tax revenue to which it was not entitled to the significant the true financial detriment of chicago in scope the retailers made sales outside illinois of merchandise to be used with illinois but fessler reported that they made the sales in kankakee and wrongfully paid sales tax rather than use tax dollars in use tax revenue and out of the sales tax revenue kankakee wrongfully of trained it paid substantial rebates to the brokers and the brokers in turn paid significant portions of the rebates to the retailers the appellate court held that we stated unjust enrichment claims and that the circuit court has subject matter jurisdiction in their p l a and their briefs challenged only the jurisdictional ruling they did not challenge the ruling on the merits and thereby forfeited any challenge to that ruling and while the amakosa brief filed in support of defendants addressed the merits that did not put the issue before this court because this court's review was limited to the issues presented in the p l a now i noticed that the small and i was surprised by this that  court correctly ruled that the circuit court has subject matter jurisdiction over there are claims with two exceptions not relevant here the illinois constitution grants circuit courts of original tax purposes in both cases this was because the relevant statutes contained no explicit language divesting the courts of jurisdiction and not worth in the j j ending analysis in terms of it certainly does and with good reason that was a very unusual case because the statute in that case the illinois gaming act was very unusual  valid and then but not be able to enforce it would have the party would have to go to the to the court to go after to the court of the probably would have to go to the department of labor this court recognized that anomaly and so tweaked the law concerning jurisdiction to accommodate that circumstance we have no similar circumstance in this case there is no such a minimally in this yes this case fits perfectly within the  zon three two months after j and j if the legislature intends for exclusive original jurisdiction for why with the agency rather than with the circuit courts when it has an act of a comprehensive statutory scheme it must make that intention explicit here no statute contains exclusionary language the vesting the courts have jurisdiction over tax disputes zohn also noted that support exists for the argument the court should consider the constitution expressly confers jurisdiction on the circuit courts over all jurisdictional matters and that's important that to rise in skilling the court said look if and if if the if the for the legislature to nevertheless confer jurisdiction on an agency in the face of the constitutional provision saying that jurisdiction has altered jurisdiction over all just of all matters it's conferred on the circuit cour sales tax was a uniform grant by the legislature the legislatures said nothing to indicate that such that the that there was that such an action that i'm act in the j and j case they are the kind of tweak that was necessary in the j and j cases not presented in this case there are no anomaly like the unusual anomaly that was presented to the  and then have to recalculate the amounts and then read distribute and audit certainly that would sound as if those are functions that the legislature has given to the department of robert so are you asking for something else or is are you asking for an audit as it's been described here no i mean there could be the interesting thing here is that that by the way  the department of revenue shortly after this court decided it's hurting the case and changed the rules regarding how to determine the size situs of serious for tax purposes th department of revenue said look we're going to discontinue all audits regarding pretty hard leigh sales obviously that was had had something to do with lack of resources in the agency and they needed to shift  to sales tax cases but this this is not i'm not in the circuit court to conduct discovery and during the discovery already undertaken in this case and that's how simply a matter for cost of finding all of those giving those to the other side arguing about the ones concerning which there may be a dispute and then have the circuit court enter some summary judgment in the they're there i don't know how many transactions there are but it's a stitch it is it's a simple matter for us to sit down and put them in a couple of different piles and my understanding is that it's very clear that rich transactions were sent through the brokers kankakee and all of those transactions sent through the brokers none of those were what was that none of the brokers didn't perform the function of the the least the word audit but audit has a as substantial overlap with the notion of discovery in circuit court cases the court doesn't have to do the audit the parties will and action well it shouldn't be a trial i think all of those are clear i think there's no room genuine issue of material fact with respect to most all of those transactions almost all of those transactions that form the millions of dollars and use tax revenue that the city of chicago was doing but pride of and that and that killed god in the form of of sales tax revenue almost all of those are there's no genuine issue of material fact in those cases so  far as i know no they have not as far as i know they'd have no idea what happened they didn't do the audit had they done the audit then we probably wouldn't be here today but they chose not to do the audit and and we had the right to bring a cause of action for unjust enrichment for example their argument is look all these transactions are so meshed in the in the tax laws  discretionary matters the so we had to the only way that we could have have done this is to is to sue for unjust enrichment so but the fact that th rules the the tax laws does not change the fundamental character of this case so for example if if i'm entitle to a refund of enrichment even vote all of the income tax laws which is the basis for that refund check it is subject to comprehensive regulation as well the roof fact that  in the thirteen years since the village bypass the case there's only been four cases of which we are aware in which any party has sued even under the the solos tax and use tax statutes and the rule of a single case in which anybody has raised a similar theory with respect to the income tax law so this is a specter of horribles that simply does not thank you thank you  i'd like to start with counsel's example of the refund shock that was delivered to the wrong person that's a case where the department of revenue had already made the determination who should get the shock and it was sent to the wrong place here there's been no determination made as to who's entitle to what in terms of taxes the partner of revenue signs off on the returns so it's theoretically the three rightly practically speaking it goes back to kankakee goes back to the retailers so there's no one item and that example that council used in terms of the city being entitled to anything they're playing judge and jury and jumping through the un saying well we've already looked at all the records decided we're right so therefore it doesn't involve taxes because we know we're right so the court can just plus that and give a summary judgment but that's not what the inquiry is the inquiry is where did the sales take place and who isn't through to that revenue and then you've got to sit sort recalculating if it's used tax the share of all two hundred municipalities in the state in terms of who gets what everything that's stunned by the department of revenue exclusively in department of revenue that's the exact scenario that they're trying to bring here that's number one number two justice thomas you asked a question about the legislature have changed the statute those itasca comes down two thousand and four the legislature seen that case in the same timeframe they created one specifically they didn't create a claim for use tax they certainly could have but they chose not to that's evidence of legislative intent council made the statement in response i think it was just as per your question about audits what's the department of revenue done my clients i'm just insulting pretty hearty they were audited multiple times so there were rockets of the partner revenue dead some of them revenue that was then shifted from one place to another saying this shell this sale should have been cited somewhere else that happened the system was working well hardly did was change the standard and said hey it's a multi faceted test instead of just where's the last kind of act in the sales acceptance process and that went to the department of rubbish determination again it's an audit that was most telling to me and from just take your question to the city about well aren't you really asking them to do an audit was a lack of an answer because again the things that would have to happen here in terms of going through the documents the information the facts it's a kin to an audit and the way the city gets around is by saying well we're entitled to the money anyways it's a farce so all the court needs to do is simply rule that it comes to us what they're doing is they're circumventing the whole process of figuring out where the is such that whether it's a sales tax issue a use tax issue or who gets it and by going to the end and saying well we presuppose we get it so therefore just give it to us is it is there any  not conduct further audits or complete certain audits or open again there were many audits that they did that had been completed prior to that time frame but either way that's a decision for the parliament of revenue and council made the answer i don't  to whose question it was where he said we have no romney because they're not completing the office sure they do all they had to do was raise with the department of revenue the issue that certain revenues were passed back to them at which point they have the writ of mandamus at that point because at that point the department has acted and even if it's with this discretion or failure to exercise that discretion they have a remedy and that's what we learn from city of kankakee versus court decision again as we read the appellate court decision they adopted the jane jane ventures approach and then said give it lip service by saying well this is unjust enrichment so we don't have to fall and that by the way in justice tyson response  your initial question this must falling point here is changing factors is not an anomaly all it says as we look at both the language press language and the entire statute to understand what was happening  i just like to make two quick points first of all with respect to counsel's representation that we hadn't raised the issue of the unjust in richmond claim that's simply not correct in that it was point number two of our petition for leave to appeal which were addressed on pages fourteen through seventeen of that document it was pages twenty three thirty two on our main brief and not pitches eleven through fourteen of our reply brief we certainly did raise the question of whether a cause of action exists outside of statutory scheme what counsel may be referring to is what the exact elements of the cause of action maybe and that may not be before the court however to a certain extent that's irrelevant because the question is was there wrongdoing here and if the premise of the plaintiff's theory is that there were some false reporting out there so if so that's the wrong that they're alleging and if they're claiming that everybody reported their taxes appropriately then there can't be any i'm not unjust enrichment if the claim is that they didn't report their taxes appropriately then there's a statutory claim as to justice thomas  and that would be absurd but they misunderstood the issue with respect they understood the issue to be whether eight dash eleven dash twenty one itself precludes a use tax claim and that's not what we were arguing what we were arguing is that the existence of eight eleven twenty one shows that when the general assembly wants to create a remedy for texas overseeing it knows how to do so with that we would request that the court reverse the judgment of the appellate court and affirm the judgment