Cook County Soda Pop Tax: Proceedings Re. Plaintiff's Emergency Motions Document

Proceedings, 1 August 2017 Illinois Retail Merchants Association, et al v. The Cook County Dept.
of Revenue
1 IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS

COUNTY DEPARTMENT - LAW DIVISION
2 TAX & MISCELLANEOUS REMEDIES SECTION
3 ILLINOIS RETAIL MERCHANTS )
ASSOCIATION; BERKOT, LTD, d/b/a)
4 BERKOT SUPER FOODS; FAIRPLAY, )
INC, d/b/a FAIRPLAY FOODS; )
5 CHIQITA FOOD MARKET, INC, d/b/a)
FOOD MARKET LA CHIQUITA & )
6 TAQUERIA; LEAMINGTON FOODS, )
INC; TONY'S FINER FOODS )
7 ENTERPRISES, INC, d/b/a TONY'S )
FRESH MARKET; VALLI PRODUCE, )
8 INC; and WALT'S LEGESTEE, INC, )
d/b/a WALT'S FOOD CENTER, )
9 )
Plaintiffs, )
10 )
vs. ) No. 17 L 050596
11 )
THE COOK COUNTY DEPARTMENT OF )
12 REVENUE; ZAHRA ALI, as Director)
of the Cook County Department )
13 of Revenue; and the COUNTY OF )
COOK, )
14 )
Defendants. )
15
16 ______________________________________
17 PROCEEDINGS BEFORE THE HONORABLE
DANIEL J. KUBASIAK
18 August 1, 2017
11:30 a.m.
19 Daley Center
Room 2607
20 Chicago, Illinois
21
22
23
24
Bridges Court Reporting Page: 1

Proceedings, 1 August 2017 Illinois Retail Merchants Association, et al v. The Cook County Dept. of Revenue
1 Report of Proceedings had at the Hearing

2 in the above-entitled cause before the HONORABLE DANIEL
3 J. KUBASIAK, a Judge of said Court, taken before Diana
4 G. Polk, a Certified Shorthand Reporter, taken at
5 Richard J. Daley Center, 50 West Washington Street,
6 Room 2607, Chicago, Illinois, on Tuesday, August 1,
7 2017, at the hour of 11:30 a.m.
8 - - -
9 APPEARANCES:
10 HORWOOD MARCUS & BERK
500 W. Madison St, Suite 3700
11 Chicago, IL 60661
PH: 312.606.3200
12 BY: MR. DAVID S. RUSKIN, and
MS. MARILYN WETHEKAM, and
13 MR. JORDAN GOODMAN,
14 On behalf of the Plaintiffs;
15 ASSISTANT STATE'S ATTORNEY'S OFFICE
50 W. Washington St, Suite 500
16 Chicago, IL 60602
PH: 312.603.5440
17 BY: MR. KENT RAY, and
MS. SISAVANH BAKER, and
18 MR. JAMES S. BELGRATIS,
19 On behalf of the Defendants.
20
21
22
23
24

1 THE COURT: Illinois Retail Merchants versus Cook

2 County.
3 MR. RAY: Good morning, your Honor.
4 THE COURT: Good morning.
5 MR. RUSKIN: Good morning, your Honor.
6 MR. RAY: Kent Ray on behalf of Defendants.
7 MS. BAKER: Sisavahn Baker on behalf of
8 Defendants.
9 MS. WETHEKAM: Marilyn Wethekam on behalf of
10 Plaintiffs.
11 MR. RUSKIN: David Ruskin on behalf of
12 Plaintiffs.
13 THE COURT: I have a couple motions that are
14 identified as being emergency motions that were filed
15 by the Merchants Association and the plaintiffs in this
16 matter.
17 MR. RAY: I believe we worked out one of them,
18 your Honor.
19 THE COURT: Okay. So you're going to grant the
20 stay?
21 MR. RAY: The other one.
22 THE COURT: Gee.
23 MR. RUSKIN: I would just jump in and say I'm not
24 sure we've worked out the details, which are important
1 because the appellate court is going to look at the

2 order and we want to make sure it doesn't give us
3 trouble.
4 THE COURT: So what is the issue to be resolved
5 on that matter?
6 MR. RUSKIN: The issue and the reason we brought
7 the motion is because the order itself has the words,
8 "without prejudice."
9 THE COURT: That's true.
10 MR. RUSKIN: And there's case law that directs
11 that that could be deemed by the appellate court to be
12 a non-final appealable order. We recognize that and
13 ask your Honor to just strike those words which would
14 make it a final order and allow us to then go directly
15 to --
16 THE COURT: I have no problem with doing that and
17 I trust you don't have an objection to me doing that,
18 do you?
19 MR. RAY: What we would add to that, your Honor,
20 is 304(A) language because we would still have our
21 petition for damages that you granted us leave to file
22 pending here. It's not a resolution of all of the
23 matters so we believe that in order to get to the
24 appellate court, the plaintiffs would need the 304
1 language.
2 MR. RUSKIN: Except you didn't grant them leave.
3 You said ask for leave for whatever you want to file.
4 THE COURT: They asked for leave, and I don't
5 know the exact wording I used, but I thought what I had
6 said was that you are entitled to do whatever you think
7 is in the best interest of your clients.
8 MR. RAY: Thank you, and we have done that today.
9 THE COURT: And you have done that.
10 MR. RUSKIN: Our position is that at this point
11 that motion would be premature in light of the fact
12 that we are going to be asking the appellate court
13 for-- the appellate court is going to be reviewing,
14 potentially remanding, in which case that motion is
15 moot.
16 MR. RAY: Well, there's case support, your Honor,
17 for the fact that this is a collateral issue.
18 THE COURT: Let's get to that motion after we've
19 resolved this. So you're objecting to the 304(A)
20 language being included in it?
21 MR. RUSKIN: No. What I'm just, I guess,
22 thinking out loud here, 304(A) doesn't provide if
23 finality to the order. If there is some part of the
24 order that is final and some part that isn't, whether
1 it's a matter or a party, then 304(A) would allow us to

2 appeal the order. But at this point, if you strike the
3 "without prejudice" it's all final. If you accept the
4 filing of and that this Court can entertain a motion
5 for damages that was just filed, then there's an
6 argument from the County side that it's no longer filed
7 in which case 304(A) would be acceptable and
8 appropriate.
9 MR. RAY: And our position is just that, that as
10 we stand here today, the order is not final. We have
11 our timely-filed petition for damages, regardless of
12 the merits, and we'll address that in due time. But
13 that as a result, the 304(A) language is required in
14 order to allow the plaintiffs to get to the appellate
15 court.
16 THE COURT: I think I tend to agree with that, so
17 we include the 304(A) language, simply amend the order
18 to reflect that to strike the words "without prejudice"
19 and include the 304(A) language and allow you to pursue
20 the matter with the appellate court. I don't want to
21 jump too far ahead on these matters but by the same
22 token I'm not inclined to grant your motion to stay
23 enforcement. You can seek leave of the stay with the
24 appellate court. I think given the rulings that I
1 entered and conclusions that I reached, it would be

2 inappropriate for me to stay the matter so your motion
3 to stay I would deny.
4 MR. RUSKIN: May I, Judge, may I respond to that?
5 THE COURT: Yes, you can. I understand your
6 situation but I tried to explain why I felt I needed to
7 do what I think I'm going to do but I'll give you a
8 chance to persuade me differently.
9 MR. RUSKIN: Thank you. And your reference to
10 the orders you entered is going to be my basis as well,
11 our basis, for the stay. You said very specifically at
12 the TRO hearing and at the entering of the order that
13 it was extremely troubling, problematic, that the
14 County couldn't present a basis for refunds. That
15 hasn't changed. We are going to be faced with that
16 from here until there's a review by the appellate court
17 one way or the other and a stay from now until then
18 makes as much sense as it did back on June 29th.
19 THE COURT: My perspective is that I believe the
20 stay was appropriate when I thought the issues
21 presented in your complaint were certainly worthy of
22 the Court's consideration and deliberation and I
23 believe I was correct and I think I may still be
24 correct if a stay is granted that the County has no
1 program or procedure in place to refund money to

2 taxpayers in the event this case is stricken. Having
3 said that, I have already ruled that I do not believe
4 it violates the Constitution and I dismissed your
5 complaint. So I have no basis, even though I may be
6 overruled and it may be determined by the appellate
7 court that I was wrong and that this does violate
8 either the Uniformity Clause or that it's
9 unconstitutionally vague, one or the other or both, and
10 the parties may be in that awkward position of having
11 to determine how to disgorge whatever tax revenues have
12 been collected and return it to the taxpayers, but
13 those are issues that are hypothetical, and I think if
14 I were to essentially stay this then I would be
15 questioning my own determinations that the matter does
16 not violate the Constitution, and, as such, I don't
17 think I can do that.
18 Now, I believe, and you certainly have
19 the right to request that the appellate court stay it
20 pending their determination and they may see it
21 differently because they have not ruled on the matter
22 yet and they may believe it's appropriate to stay it
23 pending their ruling but I don't think I can do that.
24 MR. RUSKIN: Respectfully, Judge, I think that
1 the point you made that you could be --

2 THE COURT: I think it was a valid point, and I'm
3 glad you agree with my logic, but once I've reached a
4 decision on this I think I have resolved the issue of
5 legality. And once that's resolved even if this --
6 this may turn out to be a God awful tax which is
7 extremely difficult to collect and causes all sorts of
8 problems for merchants, but those are issues that don't
9 go to the legal merits of the complaint, and I can see
10 in my own mind that a mom-and-pop shop somewhere on the
11 south or west side that sells a few cans of pop every
12 day to people who come and buy a sandwich may have
13 trouble keeping track of that but that doesn't make it
14 unconstitutional and those were your arguments.
15 MR. RUSKIN: In the complaint.
16 THE COURT: In the complaint.
17 MR. RUSKIN: But what I was going to say is I
18 think 305(B) goes directly to that point. 305(B)
19 doesn't address whether we're right or wrong, it's the
20 damage, the harm, that will be caused if it is
21 reversed. And you can have a very strong feeling, and
22 I'm sure you do, that your decision was correct and it
23 may be ultimately, but the 305(B) goes to the point
24 that what's going to happen if it's not.
1 THE COURT: I think you need to make that

2 argument to the appellate court, Counsel. I can be
3 sympathetic with the position, I can see difficulties,
4 but by the same token every tax has some degree of
5 difficulty, I presume, with the collection process. I
6 have become more familiar with the number of taxes that
7 many of these merchants are forced to collect and I can
8 appreciate the difficulty that it causes them, but it's
9 been upheld, the taxing power has been upheld, and this
10 Court was bound to follow all of the cases that were
11 previously decided regarding uniformity or vagueness
12 and that's what I did, at least that's what I hope I
13 did. And that was my only intent. When I said at the
14 beginning that as in surgery the intention is to do no
15 harm, that was what I was attempting to follow as we
16 were proceeding here. And I think that harm issue was
17 the basis for the TRO.
18 MR. RAY: Thank you, your Honor.
19 THE COURT: Just a moment. Do you have anything
20 else, Counsel?
21 MR. RUSKIN: No. Thank you.
22 THE COURT: Okay.
23 MR. RAY: Since we were going to be here today,
24 your Honor, we filed our motion for a petition for
1 damages. All we ask for today is a briefing schedule.

2 THE COURT: I'm willing to do that only because
3 everyone is entitled to that. But let me just make
4 sure that everybody understands my perspective, and I
5 have not reached a final determination on anything.
6 But I said when on June 30th when the matter was first
7 before me and in the questioning I think I questioned
8 several things about the County's preparedness to
9 refund money and I think, as Mr. Ruskin has pointed
10 out, I think I had pointed out at some point in time
11 that I think the County had not presented a reasonable
12 plan for refund and was not prepared to do so. The
13 mere fact that the County is prepared to put this into
14 a protest fund was nice but it was woefully
15 insufficient to address how the monies might have been
16 refunded. I think the TRO was not only appropriate but
17 was necessary. The appellate court seemed to agree
18 with that and they sent it back and the appellate court
19 in their order directed me to conduct a hearing on a
20 preliminary injunction and the County had not filed a
21 verified answer. So it was my understanding of the
22 law, I was mandated then to enter a preliminary
23 injunction because you had not filed a verified answer
24 to the complaint. So there was an agreement, I
1 believe, at that time, that rather than me entering the

2 preliminary injunction we were simply going to continue
3 the TRO so that agreed order continued it entered on
4 July 11th. It was continued to July 21st when oral
5 argument was heard and then it was continued to July
6 28th when the order was entered.
7 Now, I've reviewed as best as I can in
8 the short amount of time that this matter was presented
9 to me, the cases that are on point somewhere here, the
10 cases that I could find. I could find no such case of
11 a governmental body suing a taxpayer who had challenged
12 a tax. I can tell you that I am troubled by this, the
13 chilling effect of the government saying that you best
14 not challenge us because if you are proven wrong we
15 will come and get damages from you. I know what the
16 statute says but I have found no cases, and if can you
17 find a case where a governmental body sought damages
18 from someone who challenged the tax and a TRO having
19 been entered, I will consider those cases. I'll
20 consider any case that you want to make. I don't think
21 that the motion that you filed even references a
22 particular case. It simply recites the statute, and I
23 can read the statute. (Reading):
24 "In all cases where a temporary
1 restraining order preliminary

2 injunction is dissolved by the circuit
3 court or by the reviewing court, the
4 circuit court after the dissolution of
5 the temporary restraining order
6 preliminary injunction and before
7 finally disposing of the action shall
8 upon the party claiming damages by
9 reason of such temporary restraining
10 order or preliminary injunction filing
11 a petition under oath setting forth the
12 nature and the amount of damages
13 suffered determine and enter a judgment
14 in favor of the party who is injured by
15 such temporary restraining order."
16 Now, all of these cases go to finding
17 out if temporary restraining orders were wrongfully
18 entered. If there are damages, if there are damages, I
19 think they would be limited to a very small window.
20 The appellate court upheld the TRO that was entered
21 without any discussion as to it but dismissed your
22 challenge and you failed to file a verified complaint
23 so the preliminary injunction was going to be mandated.
24 The order says it was agreed. Now, somebody else had
1 penciled in something else but it was an agreed order

2 that we were not going to enter a preliminary
3 injunction and we were going to continue the TRO. So
4 the mere fact that the County agreed to the continuance
5 of the TRO, I think, undercuts your motion for damages.
6 And, more to the point, I would like to find any
7 argument that you can make that will support the notion
8 that a taxing body can sue for damages if, in fact, a
9 party asserts their rights under the Constitution to
10 challenge that tax and then is ultimately dismissed.
11 Now, the other fact of the matter, the
12 other question of the matter is if, in fact, you were
13 granted damages, would all of the employees who were
14 let go be made whole? Would they be rehired? Would
15 they be given their money back for any paychecks they
16 might have missed? Would anybody who has been hired
17 since then to take their place be dismissed?
18 MR. RAY: Those are inquiries that did go beyond
19 the parties' rights to --
20 THE COURT: They may or may not go beyond this.
21 MR. RAY: I hear you loud and clear, your Honor.
22 What I would ask is for 14 days to supplement our
23 motion with the cases you are seeking and we'll provide
24 a memorandum in support.
1 THE COURT: All right. You want some time?

2 MR. RUSKIN: Sure, but I think we would like to
3 see what they supplement first.
4 THE COURT: I understand.
5 MR. RUSKIN: And, of course, maybe they won't
6 supplement so I think maybe we come back before your
7 Honor after we receive, if they filed something.
8 THE COURT: I think this would set a precedent in
9 the state. I found no cases on this. And if this is,
10 in fact, going to be the new policy, the new
11 interpretation of this as it relates to this matter,
12 this Court wants to make damn sure that it's correct in
13 its ruling. And, honestly, my first reaction is this
14 has a significant chilling effect upon any taxpayer who
15 wishes to challenge government on any action as it
16 relates to anything, I suppose. It doesn't have to
17 just be taxes.
18 MR. RAY: I understand what you're saying, your
19 Honor, but in this case there was significant delay in
20 filing the complaint.
21 THE COURT: That is irrelevant. There's nothing
22 in the Code of Civil Procedure that says that a party
23 needs to file at any particular time. They have a
24 right to file any time.
1 MR. RAY: That's correct. However, we also

2 raised the issue of a bond, which could have addressed
3 this issue.
4 THE COURT: Once again, the issue of a bond goes
5 to whether or not a taxpayer who challenges the
6 government on an action is required to compensate that
7 government for taxes not collected. This is a big
8 country with lots of governmental agencies and a US
9 government and you find some cases that allow that and
10 I'll consider all of them.
11 MR. RAY: Certainly, your Honor.
12 THE COURT: All right. So the County wishes 14
13 days to supplement their petition for damages.
14 MR. RAY: August 15th?
15 THE COURT: That's fine. And then you wish --
16 MS. WETHEKAM: At least 14 days, your Honor, to
17 review it and come back.
18 THE COURT: That's fine with me. So then we set
19 this for clerk status sometime after that. I am very
20 knowledgeable of the issues that governments face in
21 regard to budgeting, and I appreciate the fact, but
22 damages may be mitigated. Parties were released.
23 Governmental bodies -- their budgets were cut back.
24 I've seen the memos going back and forth. Damages may
1 or may not be $17 million even if you're granted

2 damages. Damages are real damages not speculative
3 damages and the mere fact that you had a budget that
4 estimated it was going to be $17 million a month is
5 irrelevant. It's how much is it actually going to be
6 if, in fact, we get to this point. But the Court will
7 conduct a hearing as to all of the mitigation that has
8 taken place on this matter if we go to that point.
9 This is not simply we guess we are going to get $17
10 million, that's our damages, hand it over. Okay?
11 MR. RAY: Understood.
12 THE COURT: And I only raise my voice because I
13 think this is a significant issue that needs to be
14 addressed and I am somewhat surprised that the County
15 is taking this action. Despite everything I said,
16 though, I will rule according to the law. I will not
17 rule according to my personal feelings. Okay?
18 MR. RAY: Thank you.
19 THE COURT: Thank you. Somebody prepare that
20 order.
21 MS. WETHEKAM: Yes, your Honor.
22 MR. RAY: One question with respect to our first
23 point with the amendment of the order from last Friday,
24 is that something we should just put into this order
1 today?
2 THE COURT: I think I would like to have a
3 separate order simply amending that so that it's clear
4 what we've done on that and then as far as the
5 continuation on this that would be a separate order.
6 Okay?
7 MR. RAY: Thank you.
8 MR. RUSKIN: And it's nunc pro tunc back to July
9 28th?
10 MR. RAY: That impacts the filing of our motion.
11 It would be effective today.
12 THE COURT: I don't see how that affects you.
13 MR. RUSKIN: It doesn't really other than if we
14 run up against a deadline, it's important to know what
15 date the clock starts to run.
16 THE COURT: I think it would start today.
17 MR. RUSKIN: Fair enough.
18 THE COURT: Thank you. Anything else?
19 MS. WETHEKAM: No, your Honor. Thank you, very
20 much.
21 (Hearing adjourned at 11:49 a.m.)
22
23
24

1 STATE OF ILLINOIS)
)SS.
2 COUNTY OF C O O K)
3
4 I, Diana G. Polk, Certified Shorthand

5 Reporter No. 084-002945, in and for the State of
6 Illinois, do hereby certify that I reported in
7 shorthand the proceedings had in the above-entitled
8 matter and that the foregoing is a true, correct and
9 complete transcript of my shorthand notes so taken as
10 aforesaid.
11
12 _________________________________
13 Diana G. Polk, CSR
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Cook County Soda Pop Tax: Proceedings Re. Plaintiff's Emergency Motions Document

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Proceedings, 1 August 2017 Illinois Retail Merchants Association, et al v. The Cook County Dept.

1 IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS

Bridges Court Reporting Page: 1

1 Report of Proceedings had at the Hearing

Bridges Court Reporting Page: 2

1 THE COURT: Illinois Retail Merchants versus Cook

1 because the appellate court is going to look at the

1 it's a matter or a party, then 304(A) would allow us to

1 entered and conclusions that I reached, it would be

1 program or procedure in place to refund money to

1 the point you made that you could be --

1 THE COURT: I think you need to make that

1 damages. All we ask for today is a briefing schedule.

1 believe, at that time, that rather than me entering the

1 restraining order preliminary

1 penciled in something else but it was an agreed order

1 THE COURT: All right. You want some time?

1 MR. RAY: That's correct. However, we also

1 or may not be $17 million even if you're granted

Bridges Court Reporting Page: 18

4 I, Diana G. Polk, Certified Shorthand

Bridges Court Reporting Page: 19

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