Windy City Promotions, LLC v. Illinois Gaming Board
2017 IL App (3d) 150434
Ill. App. Ct.2017Background
- Windy City Promotions owned two ‘‘Electronic Product Promotion Sweepstakes Kiosks’’ (Kiosks) that dispensed coupons, entered purchasers into sweepstakes, and displayed casino-style animations; winners could redeem tickets for cash at the hosting location.
- The Illinois Gaming Board (IGB) posted a website document opining the Kiosks violated section 35 of the Video Gaming Act and warned licensees possession could be a felony; IGB later seized two Kiosks from a Morris health club (using State Police officers assigned to IGB).
- Windy City sued for replevin and declaratory relief, alleging IGB lacked authority to issue the Website Document and to seize the Kiosks; Pier2 (software vendor) intervened and both plaintiffs moved for judgment on the pleadings.
- The trial court held IGB lacked authority to seize the Kiosks but declined to enjoin IGB from posting the Website Document; parties sought reconsideration and appealed; IGB returned the Kiosks during litigation.
- The appellate court limited review to whether IGB had authority to (1) post the Website Document (interpretive rule/policy) and (2) lawfully seize the Kiosks under the statutory scheme.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IGB exceeded authority by posting the Website Document (interpretive rule/policy) | Pier2: IGB lacked statutory authority to issue advisory legal opinions or engage in unauthorized rulemaking | IGB: Document was merely an opinion, not a rule; now moot because removed from website | Court: IGB may issue interpretive rules and policy statements, so it had authority to post, but the attempted rulemaking did not follow required procedures and is therefore invalid |
| Whether trial court could enjoin IGB from posting document | Pier2: Injunction appropriate for unauthorized rulemaking | IGB: Removal of the document moots relief; refusal to treat as rule | Court: Remedy is to invalidate the improperly promulgated rule rather than injunction; trial court erred if it found otherwise |
| Whether IGB had authority to seize the Kiosks | Windy City: IGB lacked independent seizure power; seizure authority belongs to Dept. of State Police or local authorities under Criminal Code §28-5 | IGB: IGB contracts with State Police and employs State Police officers authorized to seize under Riverboat Acts; seizure was lawful | Court: Seizure was lawful where pleadings showed seizure was performed by State Police officers assigned to IGB under statutory contract authority; trial court erred in finding seizure unauthorized |
| Mootness and justiciability of the Website Document appeal | Pier2: Issue remains because IGB could repost; short-lived action fits exception | IGB: Removal renders appeal moot | Court: "Capable of repetition yet evading review" exception applies; appeal not moot |
Key Cases Cited
- Pekin Ins. Co. v. Wilson, 237 Ill. 2d 446 (explaining standard and de novo review for judgment on the pleadings)
- United Consumers Club, Inc. v. Attorney General, 119 Ill. App. 3d 701 (agencies may issue interpretive rules that are not binding law)
- Guerra v. Shinseki, 642 F.3d 1046 (Fed. Cir. 2011) (definition and role of interpretive rules vs. legislative rules)
- Senn Park Nursing Ctr. v. Miller, 104 Ill. 2d 169 (agency rules not properly promulgated are invalid)
- Walk v. Dep’t of Children & Family Svcs., 399 Ill. App. 3d 1174 (rules not properly promulgated are invalid and unenforceable)
- Riverboat Dev. Corp. v. Ill. Gaming Bd., 268 Ill. App. 3d 257 (discussing agency rulemaking procedure and validity)