The opinion
2013 IL 115106
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 115106)
THE PEOPLE OF THE STATE OF ILLINOIS ex rel. ILLINOIS
DEPARTMENT OF LABOR, Appellant, v. E.R.H. ENTERPRISES,
INC., Appellee.
Opinion filed November 21, 2013.
JUSTICE KARMEIER delivered the judgment of the court, with
opinion.
Chief Justice Garman and Justices Freeman, Thomas, Kilbride,
Burke, and Theis concurred in the judgment and opinion.
OPINION
¶1 The principal issue before the court in this appeal is whether
E.R.H. Enterprises, Inc. (E.R.H.), is subject to the provisions of the
Prevailing Wage Act (Wage Act) (820 ILCS 130/0.01 et seq. (West
2008)) by reason of its contract with, and work performed on behalf
of, the Village of Bement (Village). The circuit court of Piatt County
answered that question in the affirmative, finding that E.R.H. did not
qualify for an exemption as a “public utility company” (see 820 ILCS
130/2 (West 2008)), and thus ruling in favor of the Illinois
Department of Labor. The appellate court reversed, holding that
E.R.H. does qualify for the exemption. 2012 IL App (4th) 110943.
We allowed the Department’s petition for leave to appeal (Ill. S. Ct.
R. 315 (eff. Feb. 26, 2010)), and now reverse the judgment of the
appellate court.
¶2 PRINCIPAL STATUTES INVOLVED
¶3 Section 1 of the Wage Act declares:
“It is the policy of the State of Illinois that a wage of no less
than the general prevailing hourly rate as paid for work of a
similar character in the locality in which the work is
performed, shall be paid to all laborers, workers and
mechanics employed by or on behalf of any and all public
bodies engaged in public works.” 820 ILCS 130/1 (West
2008).
¶4 Section 2 of the Wage Act defines “public works” as “all fixed
works constructed by any public body, other than work done directly
by any public utility company, whether or not done under public
supervision or direction, or paid for wholly or in part out of public
funds.” (Emphasis added.) 820 ILCS 130/2 (West 2008). Section 2
defines “construction” as “all work on public works involving
laborers, workers or mechanics,” including “any maintenance, repair,
assembly, or disassembly work performed on equipment whether
owned, leased, or rented.” 820 ILCS 130/2 (West 2008).
¶5 Subsection (a)(1) of section 3-105 of the Public Utilities Act
defines “public utility” as follows:
“(a) ‘Public utility’ means and includes, except where
otherwise expressly provided in this Section, every
corporation, company, limited liability company, association,
joint stock company or association, firm, partnership or
individual, their lessees, trustees, or receivers appointed by
any court whatsoever that owns, controls, operates or
manages, within this State, directly or indirectly, for public
use, any plant, equipment or property used or to be used for
or in connection with, or owns or controls any franchise,
license, permit or right to engage in:
(1) the production, storage, transmission, sale,
delivery or furnishing of heat, cold, power, electricity,
water, or light, except when used solely for
communications purposes[.]” 220 ILCS 5/3-105(a)(1)
(West 2008).
Subsection (b)(1) of the Public Utilities Act excludes from the
definition of “public utility” “utilities that are owned and operated by
any political subdivision, public institution of higher education or
municipal corporation of this State, or public utilities that are owned
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by such political subdivision, public institution of higher education,
or municipal corporation and operated by any of its lessees or
operating agents.” 220 ILCS 5/3-105(b)(1) (West 2008).
¶6 BACKGROUND
¶7 A detailed recitation of facts can be found in the appellate court’s
opinion. 2012 IL App (4th) 110943, ¶¶ 3-12. For present purposes, a
brief summary will suffice. Additional facts will be noted as
necessary in the course of our analysis.
¶8 E.R.H. contracts with the Village to assist the Village in fulfilling
its obligation to operate and maintain the Village’s potable water
facility and parts of the water delivery infrastructure. E.R.H.’s five-
year contract with the Village acknowledges that “the Village is
responsible for the maintenance and operation of the Potable Water
facility and water infrastructure which serves the Village” and that
E.R.H. “has agreed to fulfill all requirements set forth under the
applicable laws and regulations for the operation of such facility and
certain segments of the infrastructure.”
¶9 Under the contract, E.R.H. helps to maintain the storm and
sanitary sewer systems by removing blockages, jetting lines, cleaning
basins and repairing water main breaks and lines requiring less than
20 feet of replacement pipe, while the Village is responsible for
“repairs of a greater magnitude” and for restoring paving, curbs,
streets and sidewalks affected by any repairs. The Village is also
responsible for the maintenance, repair, upkeep, and expense of its
water tower, as well as the maintenance and expense of telephone
lines between the water tower and the pump station.
¶ 10 The contract further provides that the Village must purchase and
furnish parts and materials for taps for new customers, with E.R.H.
installing the taps. While E.R.H. must maintain fire hydrants, the
Village must provide materials to replace the hydrants when
necessary. Though E.R.H. must keep equipment in good repair, the
Village must replace equipment that does not function adequately if
it is beyond repair. The Village also assumes certain costs and
expenses, including the costs of capital improvements for additional
equipment needed to meet revised permit requirements as well as the
cost of electricity to operate any additional equipment or structures.
Upon request, E.R.H. is required to submit “paperwork” to the
Village to enable the Village to monitor E.R.H.’s correspondence and
interaction with the Illinois Environmental Protection Agency.
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¶ 11 On May 23, 2008, the Department issued a subpoena duces tecum
to E.R.H.’s attorney, requiring him to appear on June 10, 2009, with
the employment records delineated in the subpoena. The subpoena
referenced an investigation being conducted under the Wage Act
regarding E.R.H.’s repair of water main leaks for the Village. In a
June 10, 2008, letter, the Department took the position that the Wage
Act’s public-utility exemption did not apply to E.R.H. because the
Village owned the system.
¶ 12 In December of 2008, after attempts to secure compliance had
come to naught, the Department filed a verified complaint for
adjudication of civil contempt against E.R.H., seeking enforcement
of its subpoena under section 10 of the Wage Act (820 ILCS 130/10
(West 2008)). In February 2009, E.R.H. filed an answer asserting,
inter alia, that it is an exempt “public utility company.”
¶ 13 In July of 2009, the Department served its first request for
production of documents. The documents requested were outlined in
six sentences, four of which sought “communications and/or
documents” in E.R.H.’s “possession or control” that would evince
communication with the Illinois Commerce Commission or other
agencies that regulate public utilities, and thus “help prove or
disprove” E.R.H.’s “contention that it is a public utility company.”
The remaining two requests sought, respectively, documents relevant
to the matter under investigation, i.e., “work done by Respondent’s
workers *** in connection with the repair of water main leaks for the
Village of Bement,” and documents E.R.H. intended to introduce
during trial or hearing of the matter.
¶ 14 E.R.H. objected to each request “to the extent it is overbroad in
temporal scope and seeks information which is irrelevant, immaterial,
and not reasonably calculated to lead to the discovery of admissible
evidence.” Further, E.R.H. objected “to the extent [each request]
invades the attorney/client privilege and/or attorney-work product
doctrine.” E.R.H represented it would “provide non-objectionable
documents *** responsive” to each request.
¶ 15 According to the Department’s subsequently filed motion to
compel production of the documents, the Department’s “good faith
attempt” to “resolve [the] discovery dispute” “produced no
documents.”
¶ 16 Thereafter, E.R.H. filed numerous, amended objections to the
request for production of documents. Ultimately, E.R.H.
acknowledged that it had no communications and/or documents in its
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possession or control that evinced contact or interaction with the
Illinois Commerce Commission. E.R.H. represented that it had
“produced all *** documents” responsive to the Department’s
requests for evidence of communications with regulatory agencies,
and documents that would help prove or disprove E.R.H.’s claim that
it was a public utility company. With respect to the Department’s
request for documents relating specifically to work done by E.R.H.’s
workers in connection with the repair of water main leaks for the
Village of Bement, E.R.H. continued to object, claiming exemption
from the Prevailing Wage Act. Additionally, E.R.H. objected,
asserting that the discovery request was “unconstitutional because it
deprives Respondent of any meaningful ability to challenge the
Illinois Department of Labor’s administrative authority.” E.R.H.’s
response to that request does not indicate that any relevant documents
were produced. E.R.H. answered the Department’s sixth request with
the assertion that it had supplied all documents that it might produce
at trial.
¶ 17 The record on appeal contains neither the documents ultimately
produced nor an adequate summary of their content or nature.
¶ 18 On August 25, 2010, the circuit court, after considering the
evidence produced and the arguments of the parties, found that
E.R.H. was not a public utility and ruled it had to comply with the
Department’s subpoena. On January 7, 2011, the court, on its own
motion, entered another order acknowledging E.R.H.’s pending
motion to reconsider, and its request to clarify the basis in law for the
court’s prior docket entry, and indicated the court would enter an
amended order, at which time E.R.H.’s filings would be withdrawn
pursuant to agreement of the parties.
¶ 19 On February 16, 2011, the trial court entered the amended order.
The court first found that the subpoena issued by the Department was
properly served upon E.R.H. by mailing the subpoena to its attorney,
as directed. The court then clarified its bases for finding that E.R.H.
was not a public utility. In support of its determination that E.R.H
was not an exempt “public utility company,” the court cited the
following: (1) the Village owned the potable water facility and
infrastructure, and the agreement between the Village and E.R.H.
specifically acknowledged that “the Village is responsible for
maintenance and operation of the Potable Water Facility and water
infrastructure which serves the Village”; (2) the “Village of Bement
Water Department (not E.R.H.) has been recognized by the Illinois
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Environmental Protection Agency and the Illinois Department of
Public Health for achieving the highest standard of compliance with
the Illinois Fluoridation Act”; (3) the Village “has sometimes”
contracted out some, but not all, of its responsibilities to E.R.H.; (4)
the Village supplies the public with water and there “is no suggestion
that E.R.H. charges the public for the water as would a public utility”;
(5) E.R.H. was not regulated by the Illinois Commerce Commission
or any other state agency. The court stated:
“[I]t is the Village, not E.R.H., that is ‘responsible for
maintenance and operation of the facility and infrastructure.’
It is the Village, not E.R.H., that has the duty to serve the
public and treat all persons alike. The Village, by contracting
out some of its responsibilities, but only some, does not
transform E.R.H. into a public utility for purposes of the
P.W.A. Rather, E.R.H. remains what it is, simply an outside
contractor.”
¶ 20 The court directed E.R.H. to provide the documents sought by the
Department within 30 days; however, “[p]ursuant to the agreement of
the parties and [the] Court’s Order of January 7, 2011,” E.R.H. was
given 30 days from the date of the amended order in which to file an
amended motion to reconsider “and/or” appeal. Pursuant to an
extension of time granted by the circuit court, E.R.H.’s motion to
reconsider the amended order was timely filed on April 1, 2011. On
September 23, 2011, the circuit court filed a lengthy memorandum
order, addressing E.R.H.’s numerous objections and arguments,
reiterating much of the reasoning set forth in its amended order of
February 16, 2011, and ultimately denying E.R.H.’s motion to
reconsider the amended order. E.R.H.’s notice of appeal was filed on
October 18, 2011.
¶ 21 The appellate court reversed, concluding that E.R.H. was a public
utility, exempt from the Wage Act. 2012 IL App (4th) 110943, ¶¶ 24,
31. In reaching that conclusion, the appellate court first found that the
definition of “public utility” in section 3-105(a) of the Utility Act
should apply to the Wage Act: “While application of the definition of
section 3-105(a) of the Utility Act is not mandatory, the Labor
Department has failed to show why it should not apply.” 2012 IL App
(4th) 110943, ¶ 20. The court acknowledged a belated Department
argument that subsection (b)(1) of section 3-105 excluded the
municipality and its “operating agent,” i.e., E.R.H., from “public
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utility” status (2012 IL App (4th) 110943, ¶ 21), but disregarded that
argument, stating, without analysis:
“Regardless of the reason for the exclusion, we find no reason
why the exclusion would exist in the context of the Wage Act.
Accordingly, section 3-105(b)(1) of the Utility Act does not
remove defendant from the definition of the ‘public utility’ in
the context of the Wage Act.” 2012 IL App (4th) 110943, ¶
21.
The appellate court went on to find, “[e]ven absent the Utility Act’s
definition, [E.R.H.] meets the definition of a public utility” under two
general dictionary entries. See 2012 IL App (4th) 110943, ¶ 25, 28
(citing Black’s Law Dictionary 1686 (9th ed. 2009), and
Merriam-Webster’s Collegiate Dictionary 942 (10th ed. 2000)).
¶ 22 In support of its conclusion that E.R.H. is an exempt “public
utility company,” the appellate court recited certain documentary
evidence presented in the circuit court. The appellate court noted that
the parties’ agreement acknowledged, at the outset, “the Village was
responsible for maintaining and operating the potable water facility
and water infrastructure that served the Village”; however, the court
observed their contract delegated partial responsibility for selected
functions to E.R.H.:
“Under the Agreement, [E.R.H.] would maintain and operate
the facility and certain segments of the infrastructure. The
Agreement contained 25 numbered paragraphs and detailed
what was the responsibility of defendant and what remained
the responsibility of the Village.” 2012 IL App (4th) 110943,
¶ 26.
¶ 23 The appellate court noted that among the duties delegated to
E.R.H. was the responsibility to comply with the guidelines
established by the Illinois Environmental Protection Agency. 2012 IL
App (4th) 110943, ¶ 26. In that regard, the appellate court pointed to
the Village water department’s exemplary record of fluoridation
compliance, and an Illinois House of Representatives resolution
recognizing E.R.H.’s owner for being named operator of the year by
the Illinois Potable Water Supply Operators Association for his work
at the Village treatment facility. See 2012 IL App (4th) 110943, ¶ 27.
According to the appellate court, “[t]he fact the Village still remained
the named entity with the agency,” and that “the Village remained the
owner of the facility,” did “not alter the fact [E.R.H.] was the party
responsible to the agency.” 2012 IL App (4th) 110943, ¶ 29.
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¶ 24 Moreover, the appellate court considered it inconsequential that
no evidence of record indicated E.R.H. was regulated by the Illinois
Commerce Commission as a “public utility.” The court
acknowledged E.R.H.’s admission, in its amended objections to the
Department’s request for production of documents, that no documents
exist evincing communication between E.R.H. and the Commerce
Commission; however, the appellate court observed that E.R.H., on
appeal, claimed it did submit a document from the Commerce
Commission in response to the request to produce, “but that
document is not included in the record on appeal” (2012 IL App (4th)
110943, ¶ 27)—for which the appellant is responsible. Regardless,
the court noted it had previously recognized that “a company need not
be presently regulated by the Illinois Commerce Commission to be a
utility in fact” (2012 IL App (4th) 110943, ¶ 23 (citing Danville
Redipage, Inc. v. Illinois Commerce Comm’n, 87 Ill. App. 3d 787,
788 (1980)) and the court stated, E.R.H. “should be regulated by the
Illinois Commerce Commission, if it is not already” (2012 IL App
(4th) 110943, ¶ 29).
¶ 25 The appellate court further found it significant that “the contract
[with the Village] does not indicate [E.R.H.] could treat water
customers differently or refuse to serve certain ones,” and that E.R.H.
was contractually “required to deal with the public in certain
circumstances,” as refutation of the Department’s argument that
E.R.H. “only provided services to the Village.” 2012 IL App (4th)
110943, ¶ 30.
¶ 26 ANALYSIS
¶ 27 The parties agree, and we find, that de novo review applies to the
questions before us, as they involve issues of statutory construction.
See Wisnasky-Bettorf v. Pierce, 2012 IL 111253, ¶ 15.
¶ 28 The first and foremost question for our consideration is whether
E.R.H. qualifies as a “public utility company” for purposes of the
exemption set forth in section 2 of the Wage Act. Although a working
definition of that term in the Wage Act would have been helpful, as
would some clear indication as to the reason for the exemption—to
the extent it would inform our interpretation—the legislature has
provided neither. The parties do not posit a reason for the exemption.
Our own research, though limited, has uncovered nothing that would
definitively inform our interpretation of the term. We have found no
correlative provision in the prevailing wage statutes of other
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jurisdictions. Confronted with this quandary, the appellate court
turned to the Utilities Act and dictionaries for guidance.
¶ 29 In the former respect, we note that appellate panels have
recognized limitations in importing definitions from other statutes,
since the context in which a term is used obviously bears upon its
intended meaning. See Christ Hospital & Medical Center v. Illinois
Comprehensive Health Insurance Plan, 295 Ill. App. 3d 956, 961
(1998); Navlyt v. Kalinich, 125 Ill. App. 2d 290, 295 (1970). Even
when two statutes share nearly identical definitions, there can be
critical differences in context, or limiting language elsewhere in one
statute, that qualifies the term in question. Andrews v. Kowa Printing
Corp., 217 Ill. 2d 101, 111 (2005).
¶ 30 In this case, the appellate court imported the definition of a
“public utility”—which is not literally consonant with the term
“public utility company,” as employed in the Wage Act—from the
Utilities Act. The broad definition of “public utility” in the Utilities
Act appears to have been intended to be generously inclusive so as to
designate a wide range of persons and entities that would be subject
to the regulatory jurisdiction and supervision of the Illinois
Commerce Commission. See 220 ILCS 5/3-105(a) (West 2008). As
broad as that definition of “public utility” is, the legislature has
specified it does not include: “public utilities that are owned and
operated by any political subdivision *** or municipal corporation of
this State, or *** are owned by such political subdivision *** or
municipal corporation and operated by any of its lessees or operating
agents.” 220 ILCS 5/3-105(b)(1) (West 2008).
¶ 31 The appellate court in this case adopted the definition of “public
utility” in subsection (a) of section 3-105 of the Utilities Act without
any significant analysis as to its applicability to the Wage Act, and
without any meaningful discussion of the exclusion set forth in
subsection (b), which would clearly apply to the Village’s water
department and E.R.H., the Village’s “operating agent.” See 2012 IL
App (4th) 110943, ¶ 21 (“Regardless of the reason for the exclusion,
we find no reason why the exclusion would exist in the context of the
Wage Act.”).
¶ 32 The definitional distinction is important, in the context of the
Utilities Act, because it serves to identify those who will be subject
to the Utilities Act, and comprehensive regulation by the Illinois
Commerce Commission, and those who will not, i.e., “public utilities
that are owned and operated by any political subdivision *** or
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municipal corporation of this State, or *** are owned by such
political subdivision *** or municipal corporation and operated by
any of its lessees or operating agents.” 220 ILCS 5/3-105(b)(1) (West
2008). The exclusion of municipalities from general regulation under
the Utilities Act was acknowledged by this court long ago in
Springfield Gas & Electric Co. v. City of Springfield, 292 Ill. 236,
240 (1920): “Municipal corporations *** are expressly excepted from
the terms of and provisions of the Public Utilities act *** and in a
very emphatic manner ***.” Thus, if we apply the definition of
“public utility” from the Utility Act, without derogation, neither the
municipality nor its “operating agent,” E.R.H., comes within its
purview. We see no reason why transposition of the definition from
the Utilities Act into the Wage Act, for use there, should remove the
definitional exclusion.
¶ 33 The appellate court also employed the following definition of
“public utility” from Black’s Law Dictionary:
“ ‘A company that provides necessary services to the public,
such as telephone lines and service, electricity, and water. •
Most utilities operate as monopolies but are subject to
governmental regulation. *** 2. A person, corporation, or
other association that carries on an enterprise for the
accommodation of the public, the members of which are
entitled as a matter of right to use the enterprises’s
facilities.’ ” 2012 IL App (4th) 110943, ¶ 25 (quoting Black’s
Law Dictionary 1686 (9th ed. 2009)).
¶ 34 Two distinguishing characteristics are immediately apparent:
E.R.H. has not been the entity subject to governmental regulation, and
the “facilities” involved here are not those of the corporate
“enterprise,” i.e., E.R.H. We find the former distinction much more
significant than the latter. In our view, governmental regulation of
utilities—or lack thereof—is a key component of the appropriate
analysis.
¶ 35 The exception in the Wage Act, for work “done directly by any
public utility company,” has been in the Wage Act from the
beginning. 1941 Ill. Laws 703, 704 (eff. July 1, 1941). However, in
the original version of the Act, the legislature apparently felt
compelled to employ language tying the exception unmistakably to
work “done directly by any public utility company pursuant to order
of the commerce commission or other public authority, whether or not
done under public supervision or direction.” (Emphasis added.) 1941
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Ill. Laws 703, 704 (effective July 1, 1941). In 1961, when the Act was
revised, the emphasized language was deleted, leaving the pertinent
exemptive text, referencing work “done directly by any public utility
company, whether or not done under public supervision or direction,”
i.e., the Act’s present form. 820 ILCS 130/2 (West 2008). We do not
know why the change was made, but one might well speculate that
the deleted language was considered redundant in light of subsequent
text referencing instances of work “done under public supervision or
direction,” and the reality, with the rise of utility regulation, that work
“not done under public supervision or direction” would nonetheless
at some point be subject to the scrutiny of the Commerce
Commission, which, in addition to regulating public utilities subject
to its jurisdiction, has authority over utility rates. At this juncture, we
state the obvious: lower labor costs for public utilities in the
construction of public works would, theoretically, allow for lower
utility rates.
¶ 36 Municipal utilities have always been subject to different rules. As
this court stated in Springfield Gas & Electric Co.: “[T]he Municipal
Ownership Act is a complete act within itself, authorizing cities to
acquire, own and operate public utilities within their borders and to
regulate the same and fix rates and charges ***.” Springfield Gas &
Electric Co., 292 Ill. at 242. The authority to do so survives to this
day. See 65 ILCS 5/11-117-1(1), (4), (5) (West 2008) (providing that
a municipality may “(1) acquire, construct, own and operate within
the corporate limits of the municipality any public utility ***[,] (4)
fix the rates and charges for the product sold and the services
rendered by any such public utility[,] and (5) make all needful rules
and regulations in relation thereto”). In short, municipal utilities have
a degree of independence and flexibility insofar as they can, within
rather broad statutory guidelines, set their own rates and charges to
reflect their costs.
¶ 37 At one point in the history of the Wage Act, the legislature did
attempt to apply the Wage Act’s provisions to the construction of
public works by employees of municipalities—in addition to the
municipalities’ contractors—whether the work performed was
governmental or proprietary. This court, in City of Monmouth v.
Lorenz, 30 Ill. 2d 60, 66-67 (1963), struck down that part of the
legislation that imposed upon the municipalities an obligation to pay
prevailing wages to the municipalities’ own employees, finding that
part of the act “violate[d] the equal protection clause of both the
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fourteenth amendment to the Federal constitution and section 22 of
article IV of the Illinois constitution.” This court then concluded:
“Deletion of the amendments will leave [the Wage Act] substantially
as originally enacted by which it was made applicable to public
bodies when engaged in construction of public works by contract.”
(Emphasis added.) City of Monmouth, 30 Ill. 2d at 67.
¶ 38 Monmouth still stands as the applicable law. The result, as the
Department points out, is “the Wage Act treats public works done
directly by public utility companies the same as public works done
directly by public bodies.” The same can be said of those with whom
they contract. Contractors who perform construction work for public
utility companies, and those who perform similar work for municipal
utilities, are both subject to the provisions of the Wage Act.
¶ 39 That E.R.H. is a contractor, rather than a “public utility
company,” is apparent when one applies the thoughtful, multifactor
analysis of the circuit court. Based on the evidence before it, the
circuit court found the following: (1) the Village owned the potable
water facility and infrastructure, and the agreement between the
Village and E.R.H. specifically acknowledged that “the Village is
responsible for maintenance and operation of the Potable Water
Facility and water infrastructure which serves the Village”; (2) the
“Village of Bement Water Department (not E.R.H.) has been
recognized by the Illinois Environmental Protection Agency and the
Illinois Department of Public Health for achieving the highest
standard of compliance with the Illinois Fluoridation Act”; (3) the
Village “has sometimes” contracted out some, but not all, of its
responsibilities to E.R.H.; (4) the Village supplies the public with
water and there “is no suggestion that E.R.H. charges the public for
the water as would a public utility”; (5) E.R.H. was not regulated by
the Illinois Commerce Commission or any other state agency. The
court concluded:
“The Village, by contracting out some of its responsibilities,
but only some, does not transform E.R.H. into a public utility
for purposes of the P.W.A. Rather, E.R.H. remains what it is,
simply an outside contractor.”
¶ 40 We agree with the circuit court, based on the totality of the factors
cited in its amended order. The preamble of the parties’ agreement
unequivocally states that “the Village is responsible for the
maintenance and operation of the Potable Water Facility and water
infrastructure which serves the Village.” Though
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E.R.H.—specifically ident i fied throughout as the
“contractor”—“agreed to fulfill all requirements set forth under the
applicable laws and regulations for the operation of such facility,” the
Village clearly retained some responsibilities with respect to
operation and maintenance of the facility, and it was the party
ultimately responsible to the public and to any pertinent regulatory
agencies. Customers paid the Village, which maintained those
payments in a special fund. The contract did not give E.R.H. the
authority to deal with customers in the manner required, pursuant to
statute (see 220 ILCS 5/8-306 (West 2008) (special provisions
relating to water and sewer utilities)), of “water utilities” providing
service to the public. E.R.H. did not assume all-inclusive
responsibility for maintenance of the Village’s facilities, and it
assumed even less with respect to the utility’s business operations. To
the extent that it performed some, the parties included a provision by
which the Village could monitor E.R.H.’s correspondence with the
Illinois Environmental Protection Agency, if any, a provision
obviously inserted in the agreement to ensure compliance.
¶ 41 We find irrelevant certain minor items of “evidence” the appellate
court mentioned in paragraph 27 of its opinion. We would emphasize,
first, that the entity that actually received the “certificate of
commendation” issued by the Illinois Department of Public Health
and the Illinois Environmental Protection Agency was the “Bement
Water Department,” not E.R.H. The appellate court also referenced
as “other evidence” the fact that E.R.H.’s owner and vice president
received recognition, via resolution in the Illinois House of
Representatives, for being named operator of the year by an industry
association. See 2012 IL App (4th) 110943, ¶ 27. We fail to see the
relevance of the resolution to the question of whether E.R.H. is or is
not a “public utility company” within the context of the Wage Act.
¶ 42 Finally, in the same paragraph, dealing with “other evidence,” the
appellate court acknowledged that E.R.H., in its “amended objections
to the Labor Department’s first request for the production of
documents, *** admitted no documents of communication between
it and the Illinois Commerce Commission exist.” Notwithstanding
that admission, the appellate court appeared to give some credence to
E.R.H.’s bare assertion on appeal, unsupported by the record, that it
“did submit a document from the Illinois Commerce Commission in
response to the request to produce,” when the appellate court
observed: “[I]t appears defendant [E.R.H.] should be regulated by the
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Illinois Commerce Commission, if it is not already (defendant argues
it is, but the documentation is not included in the appellate record).”
2012 IL App (4th) 110943, ¶ 29.
¶ 43 To the extent that the appellate court considered the possibility
that E.R.H. was a regulated entity, without supporting evidence, in
arriving at its conclusion that E.R.H. was entitled to an exemption as
a “public utility company,” the court erred. Despite conflicting
authority as to whether governmental regulation of an entity bears
upon a determination of its status as a public utility company
(compare Mississippi River Fuel Corp. v. Illinois Commerce
Comm’n, 1 Ill. 2d 509, 514 (1953) (lack of regulation by the
Commerce Commission “persuasive” as to whether the entity falls
within the purview of the Public Utilities Act), with Eagle Bus Lines,
Inc. v. Illinois Commerce Comm’n, 3 Ill. 2d 66, 71 (1954) (business
need not be presently regulated by the Commerce Commission to be
in fact a public utility)) we believe, in this context, where E.R.H. is
attempting to claim an exemption under the Wage Act as a “public
utility company,” lack of evidence that it was considered the
regulated entity by any governmental agency—be it the Commerce
Commission, the Illinois Environmental Protection Agency, the
Illinois Pollution Control Board, or any other agency—is relevant and
properly considered in conjunction with other pertinent evidence.
¶ 44 The Department sought the production of documents evincing
regulation of this nature early on, suggesting that they would “help
prove or disprove Respondent’s contention that it is a public utility
company.” E.R.H., at least initially, objected to their production. We
do not know what was ultimately produced because it was not made
a part of the record on appeal. We do know that the circuit court
made the specific finding that E.R.H. was not regulated by the Illinois
Commerce Commission or any other state agency. Nothing of record
contradicts that finding. It was the duty of E.R.H., as the appellant, to
present the reviewing court with a sufficiently complete record to
support its claim of error. See Midstate Siding & Window Co. v.
Rogers, 204 Ill. 2d 314, 319 (2003). E.R.H. has not done so.
¶ 45 In sum, in view of the totality of the circumstances, E.R.H. does
not qualify as a “public utility company” entitled to the exemption
under the Wage Act.
¶ 46 In a seemingly related, ill-defined argument, E.R.H. cursorily
claims it is not subject to the requirements of the Wage Act because:
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“E.R.H. is not in the construction business, it is operating and
maintaining the potable water and sewerage systems and
infrastructure for the Village of Bement. Repair and maintenance
work are necessary to maintain the operation of the systems and
infrastructure but this work cannot be considered ‘public works’
because E.R.H. is doing so in conjunction with its operational
requirements.”
This seems to us merely a repackaged argument that E.R.H. is exempt
because it is a “public utility company,” within the purview of the
Wage Act, operating the municipal utility’s facilities—a contention
we have already rejected. No one is suggesting that E.R.H.’s other
contractual activities are subject to the provisions of the Wage Act,
but E.R.H. cannot, reasonably, argue that other work performed under
its contract with the Village renders it immune for work that clearly
falls within the description of work subject to the Wage Act. The Act
defines “public works” broadly as “all fixed works constructed by any
public body,” and specifies that “construction” includes “any
maintenance, repair, assembly, or disassembly work performed.” 820
ILCS 130/2 (West 2008). We believe the “repair” of lines buried in
the ground qualifies as construction of “fixed works” under the Act.
¶ 47 E.R.H. next contends that it “does not have to pay prevailing
wage on projects supported by special funding since special funds are
not public funds as defined by the Prevailing Wage Act.” We note, in
passing, in its answer to the Department’s complaint for adjudication
of civil contempt, that E.R.H. raised as a defense that it “is a public
utility company performing work at the supervision of a public entity
and paid in part by public funds. Therefore, [the Department] has no
jurisdiction over this matter.” (Emphasis added.) E.R.H. now argues
that the “emergency repairs and maintenance of water and sewerage
systems that E.R.H. has worked on relevant to this case have been
completely paid for out of special funding,” i.e., “the Village’s Water
Operation and Maintenance Fund Account,” which, E.R.H. asserts,
“is not public funding.” E.R.H.’s new position is untenable.
¶ 48 The legislature has provided that revenue derived from the
operation of a municipal water-supply system “shall be set aside as
collected and deposited in a special fund designated as a municipal
water fund for the particular locality. The fund shall be used only for
the purpose of paying the cost of operating and maintaining the water-
supply system, improvement or extension, providing an adequate
depreciation fund, and paying the principal and interest on the bonds
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issued by the municipality under Section 11-129-9 for the purpose of
constructing or acquiring the system, improvement or extension.” 65
ILCS 5/11-129-11 (West 2008).
¶ 49 Although the Prevailing Wage Act does not define the phrase
“public funds,” a suitable definition can be found in the Public Funds
Investment Act, which defines “public funds” as “current operating
funds, special funds, interest and sinking funds, and funds of any kind
or character belonging to or in the custody of any public agency.” 30
ILCS 235/1 (West 2008). The legislature adopted a very broad
definition of “public agency,” which includes, inter alia, “cities,
towns, villages,” and “public water supply districts.” 30 ILCS 235/1
(West 2008). Obviously, the payments of water customers that are
“in the custody of” the Village, and maintained in its “special fund,”
meet the definition of “public funds,” in this case the “operating
funds” from which the contractor, E.R.H., is paid. Hence, E.R.H.’s
construction work on the Village’s infrastructure was paid for out of
“public funds.”
¶ 50 Finally, in an “argument” that occupies approximately one page
of its brief, and is devoid of citations to the record, E.R.H. contends
that the subpoena in this case “was *** not lawfully issued for a
number of reasons.” It cites one case (Martin v. Garde, 195 Ill. App.
3d 25 (1990)), which cites two others (People ex rel. Bernardi v.
Lawrence & Ahlman, Inc., 105 Ill. App. 3d 470 (1982); United States
v. Powell, 379 U.S. 48 (1964)), without discussion of the facts or the
legal principles involved in any of those cases, stating only “there are
procedures that Petitioner must follow before this Court can enforce
an administrative subpoena.” Then, after a brief recitation of this
Court’s Rule 204(a)(2) (Ill. S. Ct. R. 204(a)(2) (eff. Dec. 16, 2010)),
and citation to section 2-204(1) of the Code of Civil Procedure (735
ILCS 5/2-204(1) (West 2008)), E.R.H. concludes:
“Here, Petitioner completely failed to comply with these rules.
First, the subpoena was not properly noticed or served upon
E.R.H. The subpoena was served upon Charles Morgan, outside
legal counsel for E.R.H. Mr. Morgan is neither the registered
agent, nor is he a corporate officer, director or employee of
E.R.H. Therefore, service of the subpoena on him was
ineffective.”
No other case authority is cited in support of that assertion. Despite
E.R.H.’s suggestion that there are “a number of reasons” why the
subpoena was “not lawfully issued,” there are no other reasons given.
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¶ 51 The Department provides some factual background which,
obviously, is not disputed by E.R.H. in its brief. The Department
supplies citations to the record to support its version of events.
According to the Department, Charles Morgan, who was then
E.R.H.’s attorney, wrote a letter to the Department, dated May 21,
2008, stating that E.R.H. would not provide payroll documents
requested by the Department because the Wage Act was inapplicable
to the repair work for the Village. Morgan’s letter concluded: “If you
have any questions or need documentation to support our position,
please do not hesitate to contact me.”
¶ 52 Two days later, the Department issued the subpoena for E.R.H.’s
production of documents and served it on Morgan as “Attorney for
E.R.H. Enterprises, Inc.,” by sending it to him via certified mail,
return receipt requested, addressed to his office in St. Louis, Missouri.
On June 9, 2008, Morgan confirmed to the Department that he had
received the subpoena. E.R.H. then refused to comply with the
subpoena and vigorously opposed its enforcement during the circuit
court proceedings.
¶ 53 In its amended order of February 16, 2011, the circuit court found
that “the Department was specifically directed to communicate with
Mr. Morgan,” and the court concluded that the subpoena was thus
properly served upon E.R.H. by mailing it to Morgan. The court
observed that Morgan’s receipt of the subpoena was confirmed by a
signed return receipt, USPS track and confirm search results, and a
conversation between Morgan and Dale Conway, conciliator with the
Department.
¶ 54 Because the appellate court found E.R.H. exempt from the Wage
Act, it did not address this issue. 2012 IL App (4th) 110943, ¶ 31.
¶ 55 The Department cites the requirement of Rule 204(a)(2) that “[a]
deponent shall respond to any lawful subpoena of which the deponent
has actual knowledge” (Ill. S. Ct. R. 204(a)(2) (eff. Dec. 16, 2010))
in support of its argument that E.R.H.—which does not dispute that
it had actual knowledge of the subpoena—was required to respond.
The Department submits that requirement is consistent with federal
authorities holding that allegedly improper service will not preclude
enforcement of a subpoena where the party to which it was directed
had actual notice and an opportunity to challenge it in court. The
Department distinguishes cases cited by E.R.H.—but which E.R.H.
does not discuss—insofar as elements of improper purpose or
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harassment were suggested in the issuance of those subpoenas, and
E.R.H. has made no such claim here.
¶ 56 As our appellate court has aptly observed, a reviewing court is not
simply a depository into which a party may dump the burden of
argument and research. Vilardo v. Barrington Community School
District 220, 406 Ill. App. 3d 713, 720 (2010); U.S. Bank v. Lindsey,
397 Ill. App. 3d 437, 459 (2009); Engle v. Foley & Lardner, LLP,
393 Ill. App. 3d 838, 854 (2009). E.R.H., the party challenging this
aspect of the circuit court’s judgment—which ruled the subpoena
enforceable—cites, without meaningful reasoning or argument,
inapplicable cases that speak only to allegations of improper purpose
or harassment in the issuance of the subpoenas there at issue. A court
of review is entitled to have the issues clearly defined and to be cited
pertinent authority. A point not argued or supported by citation to
relevant authority fails to satisfy the requirements of Supreme Court
Rule 341(h)(7), (i) (see Ill. S. Ct. R. 341(h)(7), (i) (eff. Feb. 6, 2013);
Vancura v. Katris, 238 Ill. 2d 352, 370 (2010) (“Both argument and
citation to relevant authority are required. An issue that is merely
listed or included in a vague allegation of error is not ‘argued’ and
will not satisfy the requirements of the rule.”)). Failure to comply
with the rule’s requirements results in forfeiture. Vancura, 238 Ill. 2d
at 369-70.
¶ 57 We could excuse E.R.H.’s forfeiture, were we so inclined (see
generally People v. Thompson, 238 Ill. 2d 598, 612 (2010)), but we
find no compelling reason to do so here. Judicial review of an
administrative subpoena is generally limited to a consideration of the
constitutionality of the statute, whether the contemplated agency
proceedings are included within the statutory authority, the
reasonableness of the demand, and the relevance of the information
sought. Scott v. Association for Childbirth At Home, International, 88
Ill. 2d 279, 296 (1981); Illinois Crime Investigating Comm’n v.
Buccieri, 36 Ill. 2d 556 (1967). None of those considerations suggests
that further review of this claim is indicated.
¶ 58 For the foregoing reasons, we reverse the judgment of the
appellate court, and affirm the judgment of the circuit court.
¶ 59 Appellate court judgment reversed.
¶ 60 Circuit court judgment affirmed.
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