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CHICAGO — A federal judge said he isn’t allowed to take jurisdiction over a lawsuit in which Cook County property owners claimed their property tax bills were falsely inflated so other properties could be underassessed and pay less.
Plaintiffs, including A.F. Moore & Associates, J. Emil Anderson & Son, Prime Group Realty Trust, the American Academy of Orthopaedic Surgeons, Erling Eide, Fox Valley/River Oaks Partnership and Simon Property Group filed their complaint July 17, naming as defendants Cook Country Treasurer Maria Pappas and former Cook County Assessor Joseph Berrios.
Each detailed how the alleged scheming forced them to pay larger tax bills — collectively, by tens of millions of dollars — than should have been appropriate given the real market value of their property.
According to the complaint, the plaintiffs’ cases are part of a larger group seeking tax relief going as far back as 2000 in cases filed in Cook County Circuit Court. The actions were consolidated for purposes of discovery.
On April 30, Judge Charles Kocoras issued an opinion on the county officials’ motion to dismiss. The officials said the Tax Injunction Act bars the lawsuit, and also that there is an adequate remedy under a different federal law. Berrios also argued the claims are time barred.
According to Kocoras, the TIA keeps federal courts from interfering with taxes collected under state law whenever a state court remedy to a plaintiffs’ concern is available. He said the U.S. Seventh Circuit Court of Appeals has, for two decades, “upheld the Illinois tax objection procedures as a ‘plain, speedy and efficient’ remedy under the TIA.”
Specifically, he said taxpayers can appeal to the Property Tax Appeal Board or file an objection with the county circuit court. The plaintiffs argued those avenues “are deficient because they create uncertainty as to whether the state court will hear their constitutional objections to the taxation process,” Kocoras wrote. “However, both federal and state court precedent serve to quell those concerns.”
The plaintiffs challenged the “speedy and efficient” nature of the state and county appeals system, noting they’ve been fighting in court over the matter for more than a decade.
Kocoras, however, said “this inquiry does not turn on the length of the specific proceedings at issue, but rather the typical length of resolution. Decade-long litigation is not a feature of the tax-objection procedures, but rather an unfortunate product of the tactics employed in this case.”
A regular tax objection takes two to three years in state court, per the county’s filings, and Kocoras said the plaintiffs didn’t allege the state’s “procedures require them to engage in ‘ineffectual activity’ during the course of the litigation.”
The complaint targets the 1995 state law amending the property tax code, which plaintiffs say has never been reviewed by a federal court. But Kocoras said “the Seventh Circuit has considered individual features of the amendments and reached the conclusion that the Illinois procedures afford an adequate remedy. … the 1995 amendments do not evince the need to deviate from the decades of Supreme Court and Circuit Court precedent establishing that the Illinois procedures afford Plaintiffs an adequate tax-objection remedy.”
As such, Kocoras said, the TIA strips the federal court of jurisdiction.
Since Kocoras determined he lacked subject matter jurisdiction, he did not address the merits of either motion to dismiss, so he denied them as moot.
Plaintiffs have been represented in the action by attorneys Mark R. Davis and Kevin B. Hynes, of the firm of O’Keefe Lyons & Hynes LLC, of Chicago, and attorneys Richard L. Fenton, Cicely R. Miltich and Michael K. Sciaccotta, of the firm of Dentons US LLP, of Chicago.
The county officials have been represented by the Cook County State’s Attorney’s Office. Berrios has been individually represented by attorneys Steven M. Puiszis, Katherine G. Schnake and Jessica L. Watkins, of the firm of Hinshaw & Culbertson LLP, of Chicago.