Windy City Promotions, LLC v. Illinois Gaming Board
2017 IL App (3d) 150434
Ill. App. Ct.2017Background
- Windy City Promotions operated Electronic Product Promotion Kiosks (kiosks) that accepted cash, issued coupons, entered purchasers into sweepstakes, and displayed casino-style game animations; winners could redeem tickets for cash.
- The Illinois Gaming Board (IGB) posted a Website Document stating the kiosks violated section 35 of the Video Gaming Act and warned licensed locations such devices would jeopardize licensure.
- IGB agents (later clarified as Illinois State Police officers assigned to the IGB) seized two kiosks from a Morris health club; Windy City sued for replevin and declaratory relief claiming the IGB lacked authority to post the Website Document and to seize the kiosks.
- Pier2 (software provider) intervened and challenged the Website Document as unauthorized rulemaking and unlawful advisory opinion; the IGB argued the document was not a rule and later removed it from its website.
- The circuit court ruled the IGB lacked authority to seize the kiosks but upheld the IGB on the Website Document issue; both sides appealed.
- The appellate court reversed the seizure ruling (holding seizure lawful based on State Police involvement) but held the Website Document constituted an interpretive rule not properly promulgated and therefore invalid.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IGB exceeded authority by posting the Website Document (rulemaking/advisory opinion) | Pier2: Document was unauthorized rulemaking/advisory opinion beyond IGB authority and violated APA rulemaking procedures | IGB: Document was merely an opinion (not a rule); moot because document was removed from website | Court: Document functioned as an interpretive rule/policy statement; IGB has authority to issue interpretive rules but failed to follow rulemaking procedures — attempted rule invalid |
| Whether IGB lawfully seized the kiosks | Windy City/Pier2: IGB lacked statutory seizure authority; seizure power resides solely with Dept. of State Police or local authorities under Criminal Code section 28-5 | IGB: Seizure was performed by Illinois State Police officers assigned to IGB pursuant to statutory contract authority, so seizure was valid | Court: Seizure lawful — pleadings showed seizure by State Police officers assigned to IGB; circuit court erred in holding seizure unauthorized |
Key Cases Cited
- Pekin Insurance Co. v. Wilson, 237 Ill. 2d 446 (discusses standard for judgment on the pleadings)
- United Consumers Club, Inc. v. Attorney General, 119 Ill. App. 3d 701 (interpretive rules described as agency reading of statutes, not binding law)
- Illinois Bell Telephone Co. v. Illinois Commerce Comm’n, 362 Ill. App. 3d 652 (agency may adopt rules only as statutes empower)
- Senn Park Nursing Center v. Miller, 104 Ill. 2d 169 (rule improperly promulgated is invalid)
- Walk v. Department of Children & Family Services, 399 Ill. App. 3d 1174 (rules not properly promulgated are invalid and unenforceable)
- Riverboat Development Corp. v. Illinois Gaming Board, 268 Ill. App. 3d 257 (agency must follow proper procedure to adopt rules)
- Metropolitan School District v. Davila, 969 F.2d 485 (agencies have inherent authority to issue interpretive rules)
- Guerra v. Shinseki, 642 F.3d 1046 (interpretive rule defined; distinguishes rulemaking from interpretation)