In a significant legal twist, the Appellate Court of Illinois has reversed a lower court's dismissal of a class action lawsuit against a major city, potentially opening the door for thousands of payees to reclaim over $11 million in uncashed checks. The complaint was filed by John Thulis and James Webb in Cook County on June 28, 2024, against the City of Chicago.
The case stems from allegations that between 1988 and 2018, the City of Chicago issued more than 22,000 checks totaling over $11 million that were never cashed. Thulis and Webb initially filed a qui tam complaint on behalf of the State of Illinois under the False Claims Act, accusing the city of failing to turn these uncashed checks over to the state as required by the Revised Uniform Unclaimed Property Act (RUUPA). This initial lawsuit was dismissed at the request of the State Attorney General, who exercised prosecutorial discretion under the False Claims Act.
Despite this setback, Thulis and Webb persisted. They filed a new class action lawsuit on behalf of themselves and other payees alleging violations not only under RUUPA but also under the Interest Act and Consumer Fraud Act. Additionally, they brought common law claims including unjust enrichment and conversion while seeking mandamus relief to compel compliance with RUUPA.
The City moved to dismiss this new complaint based on principles of collateral estoppel and res judicata, arguing that these doctrines barred any further litigation due to the previous dismissal. The trial court agreed with the City’s argument regarding collateral estoppel and dismissed the case with prejudice. However, upon appeal, Justices Hyman, Walker, and Tailor found that neither collateral estoppel nor res judicata applied in this context. They ruled that since the initial qui tam case was voluntarily dismissed by the State and did not constitute a final judgment on its merits, it did not preclude Thulis and Webb from pursuing their class action claims.
Thulis and Webb argue that their new lawsuit is fundamentally different because it seeks redress for individual payees rather than for injuries suffered by the state. The appellate court concurred with this distinction, emphasizing that in qui tam actions under Illinois law, relators act as partial assignees for state claims without suffering direct personal injury.
As a result of this ruling, Thulis and Webb’s class action suit will return to trial court where unresolved issues will be addressed. These include whether there is an implied right of action under RUUPA for private individuals like Thulis and Webb; whether they have stated valid claims under both Interest Act and Consumer Fraud Act; as well as whether their common law claims for unjust enrichment or conversion hold merit.
This reversal underscores critical distinctions in how legal doctrines such as res judicata are applied when different parties or interests are involved across separate lawsuits. It also highlights procedural nuances in handling voluntary dismissals within qui tam actions versus broader class actions involving private litigants.
Representing Thulis and Webb are attorneys whose names remain undisclosed in available documents while Judge Thaddeus L. Wilson presided over initial proceedings before being overturned by appellate judges Hyman along with concurring justices C.A Walker & Tailor under Case ID No: 1-23-0360.