Mary K. Rochford
Ruling on a challenge to the city’s infamous parking meter deal, the 1st District Appellate Court gave the lawsuit the boot.
In a 34-page opinion written by Justice Mary K. Rochford and issued Friday, the appellate panel acknowledged that the 2008 deal handing control of the meters to a private company for 75 years in exchange for a one-time $1.15 billion payment was hastily entered.
“However, arguments about why the concession was a bad deal for the [c]ity do not provide a basis for invalidating the concession agreement and the adopting [o]rdinance,” Rochford wrote.
Under its contract with Chicago Parking Meters LLC, the city must compensate CPM for the cost of meters affected by street closures or construction, the removal of meters and losses from allowing handicap parking in meter spaces.
The plaintiffs — Chicago resident Aviva Patt and the Independent Voters of Illinois Independent Precinct Organization — filed a complaint in Cook County Circuit Court in August 2009 to enjoin the city from paying any funds to CPM.
They argued that provisions of the contract violate the Illinois Constitution and that the deal was an illegal lease of the city’s meter system and illegally deprives the city of its regulatory authority. In a July 2011 amended complaint, the plaintiffs added CPM as a necessary defendant.
The lawsuit challenged the contract’s provisions that: require the city to defend private claims against CPM, delegate ticketing powers to CPM, obligate the city to reimburse CPM for its costs to maintain the private parking meters and require the city to use public funds to enforce parking tickets issued by CPM as if the tickets were issued by the city.
The plaintiffs asked the court to declare the contract unconstitutional on grounds that public funds or property can only be used for public purposes.
In November 2011, then-Circuit Judge Richard J. Billik Jr. ruled that the plaintiffs had standing as taxpayers to sue for the injunction but then granted summary judgment in favor to the city on the merits.
In the appellate court’s ruling, Rochford wrote that the plaintiffs must prove the city acted to benefit a private interest without any corresponding public benefit in order to show the contract was unconstitutional.
But the city does receive benefits under the deal, Rochford wrote — namely, that the city collects fines from meter violations and that meter enforcement encourages turnover of parking spaces for the public benefit.
The contract also beneficially shifted the risk that parking meter revenue might decline in the future away from the city, she wrote.
“Given the public benefits provided by the concession agreement, plaintiffs’ claim that Section 7.6(a) violates the public purpose provision was rightly dismissed,” Rochford wrote.
The panel found that the plaintiffs did not show the city could not exercise police powers such as closing streets for events that prevent people from parking on a metered block for a set amount of time.
“To the contrary, the [c]ity made such Article 7 payments precisely as a result of exercising said police powers,” Rochford wrote.
The panel also disagreed with the plaintiffs’ contention that the fear of additional costs for the city to regulate its own streets has a chilling effect on the city’s sovereignty.
“The [c]ity preserved its police power, although at a cost,” she wrote. “The [c]ity also preserved its right to collect fines from the parking meter violations to be used for public purposes and which constitute millions in revenue. Despite these benefits received by the city, the concession agreement has been criticized and subjected to healthy debate.”
The appellate opinion affirms the trial court’s dismissal order. Justices Shelvin L. Hall and Bertina E. Lampkin concurred.
Patt and IVI-IPO were represented by Clinton A. Krislov and John P. Orellana of Krislov & Associates Ltd. and Thomas H. Geoghegan and Michael P. Persoon of Despres, Schwartz & Geoghegan Ltd.
Krislov said his client plans to ask the Illinois Supreme Court to take the case and that the ruling sets a dangerous precedent.
“This would justify the city selling the property tax system and the state selling the income tax system,” he said.
The city was represented by Deputy Corporation Counsel Benna Ruth Solomon, Chief Assistant Corporation Counsel Myriam Kasper and Senior Counsel Julian N. Henriques Jr.
A Law Department spokeswoman could not be reached for comment.
CPM was represented by Robert Y. Sperling, Bryna J. Dahlin, Christopher J. Letkewicz and Elizabeth P. Papez of Winston & Strawn LLP. They could not be reached for comment.
The case is Independent Voters of Illinois Independent Precinct Organization, et al., v. Amer Ahmad, et al., 2014 IL App (1st) 123629.