No.  92963

 

                                                                                                                                                           

 

IN THE SUPREME COURT

OF THE STATE OF ILLINOIS

                                                                                                                                                           

JACK and MARGARET CAVENEY

Plaintiff-Appellees,

v.

GLEN L. BOWER, Director of the Illinois Department of Revenue; JUDY BAARTOPINKA, Treasurer of the State of Illinois; and ILLINOIS DEPARTMENT OF REVENUE,

Defendants-Appellants.

Appeal from a Decision of the Illinois

Appellate Court, Second District
No. 2-99-1427

There Heard on Appeal from the Circuit Court for the Eighteenth Judicial Circuit
Du Page County, Illinois
No. 98 TX 006

The Honorable
JOHN W. DARRAH
Judge Presiding

                                                                                                                                                           

Amicus Curiae Brief of Appellate Lawyers Association in Support of Defendants

                                                                                                                                                           

Gino L. DiVito

Michael I Rothstein

Michael Grant

TABET DiVITO & ROTHSTEIN LLC

180 North LaSalle Street, Suite 1510

Chicago, Illinois 60601

Telephone:  312-762-9450

Facsimile:   312-795-9801

 


POINTS AND AUTHORITIES

 

POINTS AND AUTHORITIES.......................................................................................................1

 

I. Introduction.....................................................................................................................................2

 

II.  Interest of Amicus Curiae...........................................................................................................2

 

III.  Procedural History of the Case.................................................................................................. 3

 

Caveney v. Bower, 319 Ill. App. 3d 13 (2d Dist. 2001)....................................................4, 5

 

Commonwealth Edison v. Will County Collector,

  196 Ill. 2d 27 (2001).......................................................................................................4, 5

 

IV.  Argument.................................................................................................................................. 6

 

A.  Rule 315’s Requirement and Defendants Compliance with Them..................................... 7

 

City of Naperville v. Watson,

  175 Ill. 2d 399, 405-06 (1997).................................................................................... 7

 

B.  The 1994 Rule 315 Amendment.................................................................................... 9

 

C.  Appellate Lawyers Association’s 1996 and Present Rule Change Recommendations.... 10

 

D.  This Court’s Rule 315 Waiver Doctrine....................................................................... 12

 

Dinnen v. City of Chicago,

  125 Ill. 2d 248, 265, 531 N.E. 2d 347, 354 (1988)................................................... 12

 

Genaust v. Illinois Power Co.,

  62 Ill. 2d 456, 462 (1976).......................................................................................... 12

 

Schatz v. Abbott Labs.,

  51 Ill. 2d 143, 144-45 (1972).................................................................................... 12

 

Conclusion..................................................................................................................................... 13

 

I.          Introduction

This case highlights a common issue concerning petitions for leave to appeal under Supreme Court Rule 315.  The issue is whether Rule 315 requires a petitioner to argue within the petition for leave to appeal every issue that this Court will be asked to determine, or only the issue or issues related to why this Court should grant review and why the appellate court’s decision should be reversed or modified. 

This amicus brief suggests that argument on every issue is not required.  It suggests that the present language and intent of Rule 315 require argument only on the issue that warrants this Court’s review and the reversal or modification of the appellate court’s decision.  This brief therefore encourages this Court to rule in favor of defendants on the waiver issue in this case; to reconsider its prior decisions concerning waiver; and to exclude from the waiver doctrine issues properly preserved in the lower courts.

The Appellate Lawyers Association takes no position on the substantive issues in the case before this Court.  Rather, this amicus brief addresses only the procedural issue raised by plaintiffs’ Motion to Strike, a motion that the Court has taken with the case.  The specific issue presented by the motion is whether defendants waived issues that were properly before, but not addressed by, the appellate court, by not arguing them in their petition for leave to appeal under Rule 315. 

II.        Interest of Amicus Curiae

            The Appellate Lawyers Association is an organization of Illinois attorneys who regularly practice in the state and federal reviewing courts.  Formed in 1968, the Appellate Lawyers Association is comprised of approximately 400 active members from across the state of Illinois whose practices focus on the courts of review.  The Appellate Lawyers Association endeavors to (1) systematically review all pertinent legislation and court rules affecting jurisdiction and procedure in the appeal of cases to achieve greater clarity, fairness and comprehensiveness; (2) facilitate closer and more effective liaisons between lawyers concentrating on the appeal of cases, the appellate bench and the legislature; (3) improve the standards of quality and competence in the preparation of cases on appeal; and (4) exchange ideas and techniques, resolve common problems, and discuss matters of mutual interest to those focused on this field.

            The Appellate Lawyers Association has long favored an amendment to Rule 315 that would expressly provide for the need to file petitions for leave to appeal under Rule 315 that are brief and concisely focused on issues that warrant this Court’s review, without the possibility of waiving other issues.  The rule change espoused by the Appellate Lawyers Association which soon will be presented to this Court’s Rules Committee jointly with the Illinois State Bar Association is not meant to alter the intent of Rule 315.  Rather, it is intended only to ensure that issues not argued in a petition for leave to appeal because they do not reflect reasons why this Court should accept a case for review are not waived.  Because this case presents a quintessential example of such a case, the Appellate Lawyers Association files this amicus brief in support of defendants’ position on this issue, while encouraging this Court to take a fresh look at its prior decisions related to the waiver of issues under Rule 315 and urging a holding that would expressly avoid the possibility of waiver in the future, except where an issue has not been preserved in the lower courts.

III.       Procedural History of This Case

            This case arises from the personal income tax filings of plaintiffs, a corporation’s majority shareholders.  (R. C123).  For federal tax purposes, the corporation chose to function as a “subchapter S” corporation.  (R. C123).  During the years 1993-95, plaintiffs claimed tax credits under section 201(k) of the Illinois Tax Act for research and development expenses incurred by the corporation.  (R. C123, 125).  The Illinois Department of Revenue, however, denied the tax credit because it concluded that the corporation, not plaintiffs as taxpayers, made the expenditures for research and development.  (R. C7-8, 57).  Plaintiffs then paid the amount due but filed a complaint in the circuit court, challenging the Department’s determination.  (R. C1-2, 57).  The circuit court granted plaintiffs summary judgment, holding that section 201(k) allowed the credits or, in the alternative, that section 201(k) violated the uniformity clause of the Illinois Constitution.  (R. C565).

Defendants appealed the circuit court’s decision, asserting that section 201(k) did not allow plaintiffs to take the research and development credit and that section 201(k) was constitutional.  On appeal, plaintiffs, for the first time, argued that a 1999 amendment to section 201(k) applied retroactively and allowed them to take the research and development credit.  Without commenting on the circuit court’s bases for its ruling, the appellate court held that the retroactive application of the 1999 amendment to section 201(k) allowed plaintiffs to claim the research and development credit.  Caveney v. Bower, 319 Ill. App. 3d 13 (2d Dist. 2001). 

Defendants then filed a petition for leave to appeal to this Court, contending that the appellate court had erred in its retroactive application of the 1999 amendment.  This Court denied defendants’ petition but, based on its decision in Commonwealth Edison v. Will County Collector, 196 Ill. 2d 27 (2001), vacated the appellate court’s decision and remanded the case for additional consideration.  Caveney v. Bower, 195 Ill. 2d 549 (2001).  After the parties filed supplemental briefs on remand, the appellate court acknowledged the Commonwealth Edison decision, but it again affirmed the judgment of the circuit court based on its retroactive application of the 1999 amendment to section 201(k).  Caveney v. Bower, 326 Ill. App. 3d 1 (2001).  Again, the appellate court did not address the pre-amendment interpretation of section 201(k) or the arguments related to the constitutionality of that statute.

Defendants then filed the present petition for leave to appeal, once again contending that the retroactive application of the 1999 amendment to section 201(k) was erroneous in light of the Commonwealth Edison decision.  (Defendants’ Petition at 9-18.)  In a footnote within the petition, defendants stated:

The [plaintiffs], of course, have maintained they were entitled to the tax credits even under the pre-amendment version of section 201(k).  The petitioners have taken the opposite position.  The appellate court has never reached the issue, twice deciding the case on the ground that the 1999 amendment was retroactive.  If this court grants leave to appeal, the petitioners would naturally raise the tax issue in addition to the issue of retroactivity.  The petitioners do not raise the tax issue as a ground for leave to appeal because the appellate court never decided the issue.

 

(Defendants’ Petition at 10 n.2.) 

 

On April 3, 2002, this Court allowed defendants’ petition.  Defendants then filed their brief arguing that the retroactive application of the 1999 amendment was erroneous under the Landgraf standard adopted by this Court in Commonwealth Edison.  (Defendants’ Brief at 32-43.)  In their brief, defendants also addressed the pre-amended version of section 201(k) (id. at 43-55), as well as the constitutionality of that section (id. at 55-62).  Both issues were properly before the appellate court because they were the bases of the circuit court’s judgment and were fully briefed before the appellate court.  Both issues have relevance only if this Court agrees that the 1999 amendment does not apply retroactively.  In response, plaintiffs filed a motion to strike the portions of defendants’ brief that relate to the pre-amendment application of section 201(k) and the constitutionality of that statute, on the grounds that those issues were not addressed by the appellate court in its decision and they were not raised in defendants’ petition for leave to appeal.  (Plaintiffs’ Motion to Strike at ¶¶ 1-2).  On August 15, 2002, this Court took plaintiffs’ motion to strike with the case.

IV.       Argument

The language and intent of Rule 315 encourage brevity and focus on a single issue: “why review by the Supreme Court is warranted and why the decision of the Appellate Court should be reversed or modified.” Rule 315(b)(5).  Despite this clear injunction for a narrow focus, decisions of this Court have — inconsistently — deemed issues not argued in petitions for leave to appeal subject to the waiver doctrine.  The Appellate Lawyers Association encourages this Court not to apply waiver in this case.  It also urges the Court to revisit its prior decisions concerning the waiver doctrine as applied to Rule 315.  Finally, it encourages this Court to hold that it will not apply the waiver doctrine in similar cases in the future.   

Two of the issues presently before the Court are (1) whether the 1999 amendment of section 201(k) applies retroactively as defined under Commonwealth Edison and (2) whether defendants waived the issues that formed the bases of the circuit court’s decision by not arguing them in their petition for leave to appeal.  Prejudice would occur if this Court reverses the appellate court’s retroactive application of the 1999 amendment but simultaneously finds that defendants waived their arguments concerning the propriety of the circuit court’s decision. If that were to occur, defendants would be deprived of the very arguments upon which they premised their appeals to the appellate court.  Such a result is contrary to the language and intent of Rule 315.

 

A.                 Rule 315’s Requirements and Defendants’ Compliance With Them

 

            The solitary goal of a petition for leave to appeal is to convince this Court that one’s case presents some issue worthy of the Court’s consideration.  Rule 315, which this Court adopted in 1967 as a revision of former Rule 32, directs petitioners to focus on issues meriting this Court’s consideration rather than include every issue involved or potentially involved in the ultimate disposition of the case. Compare 28 Ill. 2d R. 32 with 36 Ill. 2d R. 315; see Committee Comments to Rule 315, 36 Ill. 2d 123-24.  Rule 315(a) provides a guideline for petitioners to follow in seeking this Court’s permission to appeal, listing “the character of reasons” the Court may take into account when deciding whether or not to grant leave to appeal.  Rule 315(b) sets out the required contents for a petition for leave to appeal, including “a statement of the points relied upon for reversal of the judgment of the Appellate Court” and “a short argument . . . stating why review by the Supreme Court is warranted and why the decision of the Appellate Court should be reversed or modified . . .” 

            Before February 1, 1994, Rule 315(c) provided that petitions for leave to appeal “shall otherwise be prepared, duplicated, served, and filed in accordance with the requirements for briefs as set forth in Rules 341 through 344” (145 Ill. 2d R. 315) — meaning that a petition for leave to appeal could be as many as 75 typed pages.  But since that date, Rule 315(c) has included a 20-page limitation on petitions for leave to appeal.  And the petition must still contain argument on every issue the petitioner hopes to put before the Court, or risk waiver. See City of Naperville v. Watson, 175 Ill. 2d 399, 405–06 (1997).

            While the 20-page limitation has no doubt assisted this Court in assessing which petitions to grant and which to deny, not all issues important to the resolution of a case fit neatly into the list of reasons this Court weighs in making that assessment.  This case presents a prime example: the appellate court decided the case — twice — on an issue not presented in the circuit court (the retroactivity of a 1999 amendment to the Illinois Income Tax Act that came into existence during the pendency of the appeal) and did not address the two issues presented to and decided by the circuit court and fully briefed before the appellate court (whether section 201(k) of the Act allowed the tax credits claimed by plaintiffs and, if not, whether that section violated the uniformity clause of the Illinois Constitution). 

            That the defendant-petitioners did not argue in their petition for leave to appeal the two issues the appellate court refused to address is hardly surprising: neither issue is a “point[ ] relied on for reversal of the judgment of the Appellate Court” (Rule 315(b)(3)) and neither issue shows “why review by the Supreme Court is warranted and why the decision of the appellate court should be reversed or modified . . .”  Rule 315(b)(5). 

            Even so, the defendant-petitioners expressly mentioned both issues in their petition for leave to appeal, explained why those issues were not argued in the petition, and informed this Court of their intent to argue those issues if the petition were granted. (Defendants’ Petition, at 10 n.2.)  As a practical matter, petitioners often are hard-pressed to include, in a 20-page petition for leave to appeal, argument on every issue this Court should consider if it accepts the case for review.  Thus, many petitioners include in their petitions only those issues that, in their view, qualify as reasons for review under Rule 315(a) — general importance, conflicts with other Supreme and Appellate Court decisions, etc. 

            As the Committee Comments note in relevant part:

In prescribing the contents of the petition, [the Rule] makes clear that the purpose is to state why the Supreme Court should take the case, and not merely to argue the case on the merits, though a statement as to why the decision below should be reversed is usually pertinent to the former question as well as the latter, as with the petition for certiorari in the United States Supreme Court.  The court desires such petitions to be short documents that will enable it to decide whether to entertain the appeal.  If such petitions were as long as full briefs on the merits, the purpose of the preliminary sifting procedure would be in substantial part defeated.  It is expected that usually 10 to 15 pages will suffice and that more than 20 or 25 pages will seldom be necessary. . . .

 

36 Ill. 2d at 124.

 

            Petitioners for leave to appeal should not face a possible waiver of issues that, while important to the ultimate resolution of a case, may not fit the criteria the Court analyzes in deciding whether to grant the petition.  That is so especially here, since the defendant-petitioners fully briefed those issues in the appellate court, described those issues in their petition, explained why they did not argue those issues in their petition, and informed this Court — and their opponents — of their intention to argue those issues if their petition were granted.

B.        The 1994 Rule 315 Amendment

In 1993, this Court’s Rules Committee, in seeking to amend a number of Supreme Court Rules, prepared a “Report and Proposal for Changes to the Rules Covering Civil Appellate Procedure.”  See Ex. A.  In that report, the Rules Committee proposed an amendment to Rule 315(c) limiting the length of the petition to 25 pages.  Ex. A at 5.  It also proposed, as a companion to that proposed amendment, a parallel amendment to Rule 315(g), allowing a party to “seek and obtain any relief warranted by the record on appeal if the grounds for relief have been properly preserved in the courts below.”  Ex. A at 5.  The rationale behind the Rules Committee’s proposals, as stated in its Report and Proposal, was to “permit a party to focus only on those issues important to why the court should allow the appeal and yet preserve its right to raise other issues in a more complete brief if the appeal is granted.”  Exhibit A at 3.  The Committee stated that shorter petitions “should provide more focused petitions and decrease the workload of the court in reviewing the petitions.”  Id. 

In response to the Rules Committee’s recommendation, however, this Court amended only Rule 315(c).  The amendment, which became effective on February 1, 1994, limited the petition for leave to appeal not to 25 pages but to 20 pages.  Thus, while reducing the page limitation to less than that recommended by the Rules Committee, the Court ignored the Committee’s parallel recommendation that Rule 315(g) be amended to explicitly allow a petition to argue only why the appeal should be granted, without waiving any other grounds for relief properly preserved in the lower courts.

The page and issue limitations changes recommended by the Rules Committee in 1993 were part of a comprehensive amendment to Rule 315.  The intent of the combined proposals was to facilitate this Court’s decision concerning the allowance of an appeal by limiting the petition, in length and in focus, only to the issue most important for review.  The corresponding intent was to ensure that other issues that had been properly before the lower courts, but were not argued in seeking review, were not waived.  Thus, the 1993 recommended amendments would have expressly allowed a petitioner to focus exclusively on a specific issue for review while preserving other issues for discussion in a subsequent brief.

C.                 Appellate Lawyers Association’s 1996 and Present Rule Change             Recommendations

 

            In 1996, the Appellate Lawyers Association considered the amendment of Rule 315 to achieve the goal pursued by the Rules Committee in 1993.  Attached at Ex. B is the memorandum of Susan Condon discussing the proposed amendment to Rule 315(g) (Ex B at 3), and at Ex. C the memorandum of Russell P. Veldenz, which demonstrates the Appellate Lawyers Association’s high priority for the amendment of Rule 315(g), which would:

add language affirming the right of petitioners, if the PLA is granted, to seek and obtain any relief warranted by and preserved in the record.  As noted in the prior memo, this allows parties to focus on the reasons why the PLA should be granted without requiring the parties to raise all asserted errors. 

 

Ex. C at 2.

 

The Appellate Lawyers Association’s present recommendation concerning Rule 315 continues this tradition of support for the amendment.  See Ex. D.  As it relates to this issue, the Appellate Lawyers Association jointly with the Illinois State Bar Association will soon recommend to the Rules Committee the addition of language to what would be designated paragraph (c)(3) (presently, (b)(3)): 

a statement of the points relied upon for reversal of in asking the Supreme Court to review the judgment of the Appellate Court

 

Ex. D at 2; deleted language indicated by strikethrough; added language indicated by underline.  It will also recommend that language be added to what would be designated paragraph (c)(5) (presently, (b)(5)):

a short argument (including appropriate authorities) stating why review by the Supreme Court is warranted and why the decision of the Appellate Court should be reversed or modified.  The failure to include an issue in the petition shall not constitute a waiver of the issue if the petition is allowed  

 

Ex. D at 3; added language indicated by underline.

 

            The specific intent of the Appellate Lawyers Association’s present recommendation is merely to clarify what it believes Rule 315 currently requires.  It is further intended to achieve the effort begun in 1967 and pursued by the Rules Committee in 1993.  It is designed to make the page limitation imposed by the current version of Rule 315 correspond to the expectation that what the petition for leave to appeal requires is, as the Rule itself states, “a short argument (including appropriate authorities) stating why review by the Supreme Court is warranted and why the decision of the Appellate Court should be reversed or modified.”  Present Rule 315(b)(5).  To achieve that goal, it is designed to ensure that petitions for leave to appeal are not burdened by arguments not related to why this Court should accept review, and that the failure to include such arguments does not constitute waiver except, of course, where the issue was not preserved in the lower courts.

D.        This Court’s Rule 315 Waiver Doctrine

            From its cases, it is clear that this Court considers issues not argued in a petition for leave to appeal subject to the waiver doctrine.  The cases reveal, however, that “the waiver rule is not a jurisdictional requirement, but a principle of administrative convenience.”  Dineen v. City of Chicago, 125 Ill. 2d 248, 265, 531 N.E.2d 347, 354 (1988).  When this Court chooses not to apply the waiver doctrine it does so based on Rule 366(a)(5), which allows a reviewing court to “enter any judgment and make any order that ought to have been given or made, and make any other and further orders and grant any relief *** that the case may require.”  Id.

            The cases also reveal that this Court chooses not to apply the waiver doctrine where issues are not argued in the petition for leave to appeal but were presented by the appellants to the lower courts.  See e.g., Genaust v. Illinois Power Co., 62 Ill. 2d 456, 462 (1976); Schatz v. Abbott Labs., Inc., 51 Ill. 2d 143, 144-45 (1972).  Where a new argument, however, “poses an alternative theory of the case, one that was not discernible from an examination of the proceedings in the courts below,” the waiver doctrine is applied.  See e.g., Dineen, 125 Ill. 2d at 266, 531 N.E.2d at 354.

            In this case, the Appellate Lawyers Association requests that the waiver doctrine not be applied for two reasons:  (1) it is clear the issues that defendants wish to address were adequately argued to the appellate court, and (2) it is clear the footnote contained in defendants’ petition for leave to appeal adequately informed this Court and plaintiffs of their intent to raise the additional issues if leave to appeal were granted.

            Moreover, the Appellate Lawyers Association requests this Court to hold that in future cases the waiver doctrine, insofar as Rule 315 petitions are concerned, will be applied only where an appellant argues a new theory on appeal, one not presented to the lower courts.

V.        Conclusion

            For the reasons provided herein, the Appellate Lawyers Association encourages this Court, based upon the facts in this case, the plain language of Rule 315, and the intent and history of the amendments to Rule 315, to deny the Motion to Strike that this Court has taken with this case, to reconsider its holdings regarding Rule 315 waiver, and to hold that Rule 315’s 20-page limitation on the petition for leave to appeal should correspond to the petitioner’s need to focus concisely and solely on the issue deemed most important for this Court’s review, without risking waiver of issues preserved in the lower courts but not argued in the petition for leave to appeal.

Respectfully submitted,

APPELLATE LAWYERS ASSOCIATION

 

 

                                                                                    By:                                                                  

                                                                                                One of Its Attorneys

 

 

Gino L. DiVito

Michael I Rothstein                                                      

Michael Grant

TABET DiVITO & ROTHSTEIN LLC

180 North LaSalle Street, Suite 1510

Chicago, Illinois  60601

Telephone:  312-762-9450

Facsimile:   312-795-9801