The U.S. Supreme Court has turned back an attempt by Cook County officials and other taxing bodies to undo a decision that opened federal courts to property tax disputes, because the appeals judges determined certain Cook County taxpayers couldn't get a fair shot to appeal their tax assessments.
The action will let stand the ruling from the U.S. Seventh Circuit Court of Appeals, in which a panel of judges, including new U.S. Supreme Court Justice Amy Coney Barrett, ruled that a group of Cook County property owners should be allowed to sue the county in federal court over their property tax bills.
On Nov. 16, the U.S. Supreme Court denied an attempt the Cook County Treasurer’s office, Assessor’s office, and others, to appeal the Seventh Circuit’s decision.
The constitutional challenge was filed in 2018 by a group of property owners who said Illinois’ property tax appeal rules, and a state law governing them, improperly shield certain county officials and deny taxpayers their day in court, as otherwise guaranteed by the U.S. Constitution.
The federal lawsuit had come after nearly two decades of litigation over what the plaintiffs alleged were improper and unequal property tax assessments in Cook County.
Named plaintiffs in the action included A.F. Moore & Associatates; J. Emil Anderson & Son; Prime Realty Group Trust; the American Academy of Orthopaedic Surgeons; Erling Eide; Fox Valley/River Oaks Partnership; and Simon Property Group.
The plaintiffs had been among a collection of taxpayers who had each been fighting with the county for property tax relief and refunds, in separate cases dating as far back as 2000.
Frustrated at every turn, the plaintiffs turned to the federal courts in Chicago, saying state law and the procedural rules for tax appeals, established by the state and county, have made it all but impossible to appeal their property tax assessments.
Cook County’s opaque and byzantine tax assessment and appeal system has gained notoriety in recent years, as reports have noted the process favors property taxpayers who can use politically connected lawyers and firms, such as that headed by Illinois House Speaker and Democratic Party Chairman Michael Madigan, to guide their tax appeals.
The new federal lawsuit accused the county officials of assessing the plaintiffs’ properties unequally compared to similar properties, forcing them to pay tax bills wrongly inflated by tens of millions of dollars, and then using state law and procedural rules to stymy their lawsuits, including blocking them from obtaining the evidence they need to support their claims.
The plaintiffs particularly took aim at a 1995 state law which they said the county has used to prevent them from litigating their claims in court, violating their rights to due process.
At the Seventh Circuit, the plaintiffs’ arguments found a better reception.
In the January decision authored by now-Justice Barrett, the Seventh Circuit panel concluded the state’s refusal to allow the plaintiffs to raise their constitutional claims in state court made plain that the state courts fall short of protecting the rights of taxpayers.
“We are left to conclude that this is the rare case in which taxpayers lack an adequate state-court remedy,” Barrett wrote in January.
The county officials then sought to appeal to the U.S. Supreme Court.
In a brief filed Oct. 30, they argued the problem in this case was not “Illinois’ system of taxation.” Rather, they said, the fault lay with the plaintiffs’ insistence on demanding access to information explaining the assessor’s “intent” in allegedly unfairly inflating their property assessments. They said this was precluded by Illinois state law, which should control in this case.
The county officials noted other federal appeals courts had decided such questions differently.
While Barrett and the Seventh Circuit had stated their decision applied to the “rare case” presented by the complexities of Illinois’ and Cook County’s tax systems, the county officials claimed it has “opened the federal courts – and taxing bodies across the state and the nation – to a flood of constitutional challenges to property tax assessments…”
Those contentions were largely echoed in a supporting brief filed by the Illinois Association of School Boards and a collection of school districts from Chicago’s suburbs. These districts included: Consolidated High School District 230 in Orland Park, Tinley Park and Palos Hills; North Palos School District 117; Leyden Community High School District 212; Township High School District 214 in Arlington Heights, Elk Grove, Palatine, Mt. Prospect, Rolling Meadows and Wheeling; Community Consolidated School District 59 in Elk Grove; Hoover-Schrum Memorial School District 157 in Calumet City; Niles Elementary School District 71; Nile Township High School District 219; and Thornton Fractional High School District 215.
The city of Calumet City also signed on to the effort to oppose the taxpayers’ lawsuit.
In that brief, the school districts, who rely on property taxes, argued that allowing such a legal action to continue would result in a “crippling effect” on public school districts, cities and other units of local government.
They warned the Seventh Circuit’s ruling could potentially result in court orders for potentially massive tax refunds for overtaxed property owners, as well as the potential for exposure to class action lawsuits and possible disruption of the ability of school districts, cities and others, to collect property taxes.
School districts typically account for about two-thirds of an Illinois property tax bill.
They and the county argued these kinds of disputes should be heard in Cook County Circuit Court and other Illinois state courts. The school districts asserted the key legal question, concerning the ability of the taxpayers to press constitutional claims, should be decided by the Illinois state Supreme Court, not federal courts.
The plaintiffs have been represented in the action by attorneys from the firms of O’Keefe Lyons & Hynes LLC, and Dentons US LLP, both of Chicago.
The school districts, IASB and Calumet City were represented by attorney William R. Pokorny and others with the firm of Franczek P.C., of Chicago, as well as attorneys with the firms of Himes, Petrarca & Fester Chtd., of Chicago; Hauser Izzo Petrarca Gleason & Stillman LLC, of Flossmoor; and Odelson Sterk Murphey Frazier & McGrath Ltd., of Evergreen Park.
The county officials are represented by the Cook County State’s Attorney’s Office.
The Supreme Court said Justice Barrett did not take any part in the decision to nix the county's appeal.