Appellate court raises its eyebrow at Chicago’s ordinance enforcement machine

In the recent First District Appellate Court case of Stone Street Partners, LLC, v. The City of Chicago Department of Administrative Hearings, 2014 IL App (1st) 123654, Justice Delort explores the “deficiencies in the manner in which the City of Chicago handles in-house adjudication of ordinance violations.” ¶ 1. The opinion is important for several reasons.

First, the opinion sheds light on the recent growth of Chicago’s Department of Administrative Hearings (DOAH) into a powerful operation with a massive caseload. A series of legislative enactments over the past 20 years raised the enforceability of DOAH’s administrative judgments to a level equal to that of judicial judgments. Public Act 90-516, effective January 1, 1998, sponsored by then-State Senator Barack Obama, gave the administrative adjudication process some “teeth”—as Obama put it during General Assembly proceedings—by giving administrative decisions the same enforceability as a judgment entered by a court of competent jurisdiction. See 65 ILCS 5/1-2.1-8(b). This allowed DOAH to issue garnishment process and attached a debtor’s assets to collect its administrative judgments. However, the enhanced enforceability of administrative judgments was not accompanied by enhanced due process procedures, such as strict adherence to the rules of evidence. The city quickly realized that this created the best of both worlds, and today DOAH’s large central hearing facility at 400 West Superior Street “rivals Illinois county courthouses in its size and case volume.” ¶ 10.

Second, in a point of law that state and municipal attorneys should bear in mind, the First District’s opinion held that non-attorneys are not entitled to represent corporations at administrative hearings. ¶ 16. Citing a May 2010 ISBA Board of Governor’s advisory opinion, the court held that “representation of corporations at administrative hearings—particularly those which involve testimony of sworn witnesses, interpretation of laws and ordinances, and can result in the imposition of punitive fines—must be made by a licensed attorney at law.” ¶ 16. Given this holding, attorneys representing State or municipal entities at administrative hearings should, as a matter of course, make a record of whether the party representing a corporation is or is not a licensed attorney. If it is revealed that the representative is not a licensed attorney, that representative’s appearance is a nullity. Accordingly, the State or municipal party should move for a finding that the corporate party failed to appear and, if appropriate under the circumstances, seek a default judgment.

Finally, the First District’s opinion reminds State and municipal attorneys that strict adherence to the local rules and procedures may nonetheless result in reversal. The city argued before the First District that its rules and regulations specifically allow non-attorneys to represent corporations in administrative hearings. However, the court rejected that argument because although “this grant of authority may be efficacious,” it “clearly usurps the authority of our supreme court to administer the practice of law.” ¶ 18. As Stone Street Partners illustrates, State and municipal attorneys should protect judgments awarded in their favor by ensuring that those judgments are obtained in accordance with all applicable rules. This means routinely questioning the validity of local procedural rules in light of constitutional requirements, state statutes, and the Supreme Court rules. When in doubt, State or municipal attorneys should err on the side of caution and voluntarily provide whatever additional procedures might be necessary to allow a reviewing court to confidently determine that the opposing party’s interests were adequately protected.

The Stone Street Partners case pulls back the curtain and strongly questions the due-process adequacy of Chicago’s ordinance enforcement machine. Whether the city responds in any way is yet to be determined. Regardless, the opinion provides a useful read for any attorney involved in administrative litigation, especially attorneys who find themselves in an administrative hearing at 400 West Superior Street. ■