June 2013Volume 101Number 6Page 278

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Home rule rules, says the Illinois Supreme Court

Ordinances enacted by home rule municipalities trump state statutes unless the state expressly exercises exclusive control, the supreme court rules in a condo case.

An Illinois Supreme Court majority has ruled that a home rule municipality may enact local ordinances with different requirements than state statutes, as long as the General Assembly has not expressly exercised exclusive control over the particular subject matter of the laws.

In Palm v. 2800 Lake Shore Drive Condo Ass'n, 2013 IL 110505, a 5-2 divided court upheld a Chicago ordinance concerning requests for production of financial records from condominium associations, even though the Chicago law differs substantially from two state statutes governing the same subject.

'[T]he power to enact more restrictive regulations'

The condo association challenged Chicago's ordinance. The group claimed the law was in conflict with, and inferior to, the state statutes, which contained more stringent requirements for production requests and less restrictive rules for an association's response. The City of Chicago intervened in trial court proceedings to argue in support of its ordinance.

Despite the disparities between the state and local laws, the trial court eventually upheld Chicago's ordinance, and the appellate and supreme courts affirmed.

"The Palm case is a strong reiteration of the independent powers that apply to home rule municipalities," said Springfield-based attorney Jeffrey R. Jurgens, who is a member of the ISBA Local Government Law Section Council. "The importance of being able to enact more restrictive regulations, as was done in Palm, provides home rule municipalities the power to address issues at a local level."

Chicago condo owner Gary Palm had a dispute with his condo association and, in 1999, sought access to some of the association's financial records. Palm asserted his rights under the Chicago law, which requires a condo association to produce all responsive financial records, regardless of their age, within three business days. The ordinance did not oblige the unit owner to state any purpose for the request.

The association resisted production on the theory that the ordinance exceeded the city's constitutional home rule authority because state statutes on the same subject had different - and more relaxed - provisions. The Illinois Condominium Property Act and the General Not For Profit Corporation Act of 1986 both require condo owners to state a proper purpose for obtaining association financial books and records, require production only of records dating back 10 years, and allow 30 days for the association to respond.

Local solutions for local problems

Home rule powers are granted pursuant to Article VII, Section 6, of the Illinois Constitution. All counties with a chief executive officer elected by the people and any municipality with a population of more than 25,000 residents are automatically home rule units of government. Other municipalities may elect by referendum to become home rule units.

Among the various home rule powers enumerated in the constitution is one that states: "Home rule units may exercise and perform concurrently with the State any power or function of a home rule unit to the extent that the General Assembly by law does not specifically limit the concurrent exercise or specifically declare the State's exercise to be exclusive."

The supreme court's majority, with an opinion drafted by Justice Kilbride and a concurrence by Justice Thomas, found that courts have interfered with local ordinances only in rare instances involving environmental regulations based on specific language in the constitution establishing the state's sole authority to regulate in that field.

Although the statutes cited by the condo association contain different regulations for these kinds of production requests than Chicago's ordinance, the court found that, in enacting those state laws, the legislature did not expressly limit a home rule municipality's power to enact its own laws on the same subject.

"The legislature has not specifically limited the authority of home rule units to regulate condominiums or reserved that power for itself, and the state does not have a vital interest in regulating condominiums necessary to justify preemption of the City's ordinance," Kilbride wrote. "Home rule is based on the assumption that municipalities should be allowed to address problems with solutions tailored to their local needs."

The court also determined that pursuant to the Illinois Home Rule Note Act, every legislative bill that denies or limits any home rule powers must contain "a brief explanatory note that includes a reliable estimate of the probable impact of the bill on the powers and functions of home rule units." 25 ILCS 75/5. The court found no such explanatory note accompanying either of the relevant statutes cited by the condo association in Palm.

"Thus, the Illinois Constitution provides home rule units with the same powers as the sovereign, except when those powers are limited by the General Assembly," Kilbride wrote. "We have consistently recognized that the home rule provisions of the Illinois Constitution are intended to 'eliminate or at least reduce to a bare minimum the circumstances under which local home rule powers are preempted by judicial interpretation of unexpressed legislative intention.'"

First line of defense

Jurgens, the local-government attorney who is a shareholder with the firm Sorling Northrup, said the Palm case will quickly become a valuable tool for all attorneys representing home rule units when the local laws are challenged. He said the decision does not necessarily make new law, but it is a powerful and clear explanation of a local government's autonomy in crafting laws tailored precisely for issues at a local level.

"Any time a municipality's home rule powers are challenged, this decision is likely to be the attorney's first line of defense," Jurgens said. "It provides a clear outline on how the enactment of a municipal ordinance in a home rule community can be inconsistent with a state statute, or how it can be in direct conflict, and it spells out the specific requirements for state preemption."

Adam W. Lasker <alasker@ancelglink.com> is a lawyer in the Chicago office of Ancel, Glink, Diamond, Bush, DiCanni & Krafthefer.

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