Waukegan Potawatomi Casino v. Ill. Gaming Bd.

227 N.E.3d 127

2023 IL App(1st) 220883

WAUKEGAN POTAWATOMI CASINO, LLC, Plaintiff-Appellant,

v.The ILLINOIS GAMING BOARD; Charles Schmadeke, Board Chairman; Dionne R. Hayden, Board Member; Anthony Garcia, Board Member; Marc E. Bell, Board Member; Marcus Fruchter, Board Administrator; and The City of Waukegan, Defendants-Appellees.

No. 1-22-0883

Appellate Court of Illinois, First District, FIFTH DIVISION.

Filed July 28, 2023

Appeal from the Circuit Court of Cook County. No. 2021 CH 5784, Honorable Cecilia A. Horan, Judge presiding.

Michael J. Kelly, Jill C. Anderson, Dylan Smith, and Martin Syvertsen, of Freeborn & Peters LLP, of Chicago, for appellant.

Kwame Raoul, Attorney General, of Chicago (Jane Elinor Notz, Solicitor General, and Christina T. Hansen, Assistant Attorney General, of counsel), for appellees Illinois Gaming Board, Charles Schmadeke, Dionne R. Hayden, Anthony Garcia, Mare E. Bell, and Marcus Fruchter.

Glenn E. Davis and Charles N. Insler, of HeplerBroom LLC, of St. Louis, Missouri, for other appellee.

OPINION

JUSTICE MITCHELL delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Waukegan Potawatomi Casino, LLC (Potawatomi Casino), appeals an order dismissing its complaint for declaratory judgment and injunctive relief. The principal issue presented in this appeal is as follows: did the circuit court err in dismissing Potawatomi Casino’s complaint for lack of standing because the alleged violations of the Illinois Gambling Act denied Potawatomi Casino its right to compete in a lawful certification process? Because the trial court did err, we reverse and remand.

¶ 2 I. FACTS

¶ 3 The General Assembly amended the Illinois Gambling Act in 2019 to authorize the Illinois Gaming Board (Board) to issue 6 new casino licenses, including one in the City of Waukegan (City), in addition to the 10 existing licenses. Pub. Act 101-31 (eff. June 28, 2019) (amending 230 ILCS 10/7(e-5)). The Illinois Gambling Act provides for a licensing process specific for these new licenses, requiring the host municipality to initiate the process. Id. Notably, the Board can consider issuing a license to an applicant only after the host municipality has certified to the Board that it has negotiated with the applicant on certain specified details of the proposed casino:

"The Board shall consider issuing a license pursuant to paragraphs (1) through (6) of this subsection only after the corporate authority of the municipality or the county board of the county in which the riverboat or casino shall be located has certified to the Board the following:

(i) that the applicant has negotiated with the corporate authority or county board in good faith;

(ii) that the applicant and the corporate authority or county board have mutually agreed on the permanent location of the riverboat or casino;

(iii) that the applicant and the corporate authority or county board have mutually agreed on the temporary location of the riverboat or casino;

(iv) that the applicant and the corporate authority or the county board have mutually agreed on the percentage of revenues that will be shared with the municipality or county, if any;

(v) that the applicant and the corporate authority or county board have mutually agreed on any zoning, licensing, public health, or other issues that are within the jurisdiction of the municipality or county;

(vi) that the corporate authority or county board has passed a resolution or ordinance in support of the riverboat or casino in the municipality or county;

(vii) the applicant for a license under paragraph (1) has made a public presentation concerning its casino proposal; and

(viii) the applicant for a license under paragraph (1) has prepared a summary of its casino proposal and such summary has been posted on a public website of the municipality or the county." 230 ILCS 10/7(e-5) (West 2020).

¶ 4 The City of Waukegan issued a request for qualifications and proposals, soliciting proposals to develop and operate a casino in the City. Waukegan Potawatomi Casino, LLC, submitted a proposal in response, and the City held a public meeting during which four casino applicants presented their proposals. Subsequently, the Waukegan City Council (City Council) voted on resolutions certifying those four applicants to the Board. The council passed resolutions certifying three of the applicants but declined to pass the resolution certifying Potawatomi Casino. A few days later, the council voted to reconsider the resolution regarding Potawatomi Casino but, on reconsideration, did not pass the resolution.

¶ 5 Following the council’s adoption of the resolutions, Potawatomi Casino filed an action in the circuit court of Lake County against the City, asserting claims under the fourteenth amendment of the United States Constitution (U.S. Const., amend. XIV), the Illinois Gambling Act, and the Open Meetings Act (5 ILCS 120/1 et seq. (West 2020)). The City removed the case to the federal district court, where the case remains pending. Waukegan Potawatomi Casino, LLC v. City of Waukegan, No. 1:20-CV-750 (N.D. Ill.)

¶ 6 Subsequently, Potawatomi Casino filed a separate action in the circuit court of Cook County against the City and the Board. In its complaint, Potawatomi Casino sought a declaratory judgment that the City had failed to comply with the statutory requirements in the Illinois Gambling Act to certify applicants to the Board. It also sought to enjoin the Board from issuing a casino license until the City had satisfied those requirements. The circuit court denied Potawatomi Casino’s emergency motion for a temporary restraining order, and this court affirmed. Waukegan Potawatomi Casino, LLC v. Illinois Gaming Board, No. 1-21-1561 (filed Dec. 16, 2021) (order denying plaintiff’s interlocutory appeal). The Board, soon after, issued a finding of preliminary suitability in favor of one of the certified applicants, Full House Resorts. The City and the Board moved to dismiss Potawatomi Casino’s complaint (735 ILCS 5/2-615, 2-619.1 (West 2020)), and the circuit court dismissed the complaint with prejudice for lack of standing. Potawatomi Casino timely appealed. Ill. S. Ct. R. 303(a) (eff. July 1, 2017).

¶ 7 II. ANALYSIS

¶ 8 A. Standing

[1–4] ¶ 9 Potawatomi Casino argues that the circuit court erred in dismissing its complaint for lack of standing because it did suffer an injury to its right to compete in a lawful certification process. Under Illinois law, standing "tends to vary" from federal law "in the direction of greater liberality." Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 491, 120 Ill.Dec. 531, 524 N.E.2d 561 (1988). Illinois courts are generally more willing than federal courts to recognize standing on the part of any person "who shows that he is in fact aggrieved." Id. Lack of standing under Illinois law is an affirmative defense; it is not jurisdictional. Glisson v. City of Marion, 188 Ill. 2d 211, 224, 242 Ill.Dec. 79, 720 N.E.2d 1034 (1999); see also Soto v. Great America LLC, 2020 IL App (2d) 180911, ¶ 20, 445 Ill.Dec. 83, 165 N.E.3d 935. As a consequence, a defendant bears the burden to raise and establish lack of standing, and if not timely raised, it is forfeited. Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217, 252-53, 341 Ill.Dec. 381, 930 N.E.2d 895 (2010). A defendant may properly raise lack of standing in a motion to dismiss brought under section 2-619 of the Code of Civil Procedure. 735 ILCS 5/2-619(a)(9) (West 2020); Glisson, 188 Ill. 2d at 220, 242 Ill.Dec. 79, 720 N.E.2d 1034. When considering such a motion, a court must accept as true all well-pleaded facts in the complaint as well as any inferences that may reasonably be drawn in the plaintiff’s favor. Sandholm v. Kuecker, 2012 IL 111443, ¶ 55, 356 Ill.Dec. 733, 962 N.E.2d 418. We review a dismissal under section 2-619 de novo.¹ Glisson, 188 Ill. 2d at 220-21, 242 Ill.Dec. 79, 720 N.E.2d 1034.

[5, 6] ¶ 10 The doctrine of standing is designed to preclude parties who have no interest in a controversy from bringing suit and assures that suit is brought "only by those parties with a real interest in the outcome of the controversy." Id. at 221, 242 Ill.Dec. 79, 720 N.E.2d 1034. In general, standing requires "some injury in fact to a legally cognizable interest." Id. (citing Greer, 122 Ill. 2d at 492, 120 Ill.Dec. 531, 524 N.E.2d 561). The claimed injury must be (1) distinct and palpable, (2) fairly traceable to the defendant’s actions, and (3) substantially likely to be redressed by the grant of the requested relief. Greer, 122 Ill. 2d at 492-93, 120 Ill.Dec. 531, 524 N.E.2d 561.

[7] ¶ 11 Potawatomi Casino claims a legally cognizable interest in its right to compete in a casino certification process that is fairly and lawfully conducted. The Illinois Gambling Act prescribes a process with which the City is unambiguously required to comply before the Board can consider issuing a license. 230 ILCS 10/7(e-5) (West 2020). An applicant participating in such statutorily mandated selection process would thus have a right to have a fair and compliant process. See Keefe-Shea Joint Venture v. City of Evanston, 332 Ill. App. 3d 163, 171-72, 266 Ill.Dec. 85, 773 N.E.2d 1155 (2002) (a duty is owed to a bidder to award the contract to the lowest, responsive, responsible bidder as statutorily required, and, "as a necessary corollary, a bidder has the right to participate in a fair bidding process"). Although this interest is often implicated in cases involving a competitive bidding process, it is not strictly limited to such context. See, e.g., Illinois Road & Transportation Builders Ass’n v. County of Cook, 2022 IL 127126, ¶ 18, 461 Ill.Dec. 431, 204 N.E.3d 189 (the plaintiffs had standing where the county’s unconstitutional diversion of transportation funds decreased the number of projects they could bid on); Aramark Correctional Services, LLC v. Comity of Cook, No. 12 C 6148, 2012 WL 3961341, at *1, 5 (N.D. Ill. Sept. 10, 2012) (request for...