Cook County Record

Wednesday, November 20, 2019

Cigarettes distributor McLane says Cook Co. blocking attempts to protest county's 'unprecedented' $171M tax demand

State Court

By Jonathan Bilyk | Oct 18, 2019

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A tobacco wholesaler has sued Cook County, claiming county officials have slow-walked their request for public records, intentionally frustrating the company’s attempt to protest a $171 million tax assessment the county slapped on the wholesaler earlier this year.

On Oct. 15, McLane Midwest Inc. and their attorneys filed suit in Cook County Circuit Court, asking the court to order the county to turn over documents McLane believes is needed to mount a defense to the “incredible and unprecedented” tax assessment the county is demanding McLane pay.

“Defendants’ (Cook County’s) ever-changing and conflicting positions reinforce the fact that Defendants never conducted a proper search of the documents … in the first place,” McLane’s lawyers wrote in the complaint.

The lawsuit specifically accuses Cook County’s government of violating the Illinois Freedom of Information Act.

The action arises about six months since the Cook County Department of Revenue completed an audit of McLane’s tax filings, and ordered the Texas-based company to pay more than $171.3 million in back taxes under the county’s Tobacco Ordinance – a payment demand the complaint calls “unfounded and egregious.”

The complaint said the county revenue department gave McLane until May 20 to exercise its right to protest the assessment.

The complaint said McLane, through its attorneys with the firm of Simpson Dattilo LLC, of Chicago, then submitted a request for documents under the Freedom of Information Act. The complaint said McLane needs the documents to support its protest of the tax demand.

The FOIA requests asked the county to furnish records, including “emails, notes, memoranda, photographs and reports” from 2009-2012 “related to in-store cigarette inspections” conducted by the county at 11 suburban Sam’s Clubs stores, as well as other documents and correspondence related to the passage of the county Tobacco Ordinance and of any notice provided to the public and retailers concerning changes to the ordinance in 2012.

Under the FOIA law, governments have five days from the submission of a records request to either approve the request and supply the documents; deny the request, subject to exclusions provided in the law; or request an extension.

In response, the complaint alleges, county FOIA officials claimed the request was “unduly burdensome” and the county “did not have the capacity to search for and review these communications and potential attachments for possible redactions without disrupting daily operations and  delaying other important work.”

According to the complaint, McLane agreed to several time extensions to allow the county to supply the requested documents, but were forced to file the protest without the documents, merely to preserve their rights under the law to mount a defense later.

Ultimately, in July and again in mid-August, the county provided a selection of documents, but many of them did not meet the requested criteria and many others were heavily redacted, the complaint said, blocking out key information from McLane’s view.

McLane said the county’s response has “willfully, intentionally, and in bad faith frustrated” McLane’s attempt to protest the $171 million tax assessment.

“… Defendants’ initial assertion that any response … would be ‘unduly burdensome’ was merely pre-textual and part of Defendants’ willful, intentional, and bad faith efforts to delay, obstruct, and deny Plaintiffs’ access to records that could support McLane’s Protest of the Assessment,” the complaint said.

McLane has asked the court to declare the county is in violation of FOIA and to issue an injunction requiring the county to produce documents responsive to McLane’s requests. Further, the complaint asks the court to order the county to produce complete copies of all redacted documents for inspection by a judge, to determine what redactions actually may be needed.

Further, McLane has asked the court to order the county pay penalties for violating FOIA, and to pay their attorney fees related to the FOIA matter.

McLane and the Simpson Dattillo firm are represented in the action by attorney Richard Yu and others with the firm of Taft Stettinius & Hollister LLP, of Chicago.

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Organizations in this Story

Cook County Department of RevenueCircuit Court of Cook CountyMCLANE COMPANY

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