Arangold Corp. v. Zehnder

• Decision Date: 20 March 2003
• Docket Number: No. 93836.,93836.
• Citation: 204 Ill.2d 142,787 N.E.2d 786,272 Ill.Dec. 600
• Parties: ARANGOLD CORPORATION, d/b/a Arango Cigar Company, Appellant, v. Kenneth E. ZEHNDER, Director of Revenue, et al., Appellees.
• Court: Illinois Supreme Court

787 N.E.2d 786

204 Ill.2d 142

272 Ill.Dec. 600

ARANGOLD CORPORATION, d/b/a Arango Cigar Company, Appellant, v. Kenneth E. ZEHNDER, Director of Revenue, et al., Appellees.

No. 93836.

Supreme Court of Illinois.

March 20, 2003.

Stanley R. Kaminski, of Duane Morris L.L.C., John A. Biek, Melissa A. Connell, of McDermott, Will & Emery, Chicago, for appellant.

James E. Ryan, Attorney General, Springfield (Joel B. Bertocchi, Solicitor General, A. Benjamin Goldgar, Assistant Attorney General, Chicago, of counsel), for appellees.

Justice GARMAN delivered the opinion of the court:

This case concerns the constitutionality of the Tobacco Products Tax Act of 1995(Act) (35 ILCS 143/10-10 et seq. (West 2000)). The trial and appellate courts upheld the Act against challenges based upon the Illinois due process clause (Ill. Const. 1970, art. I, § 2) and the uniformity clause (Ill. Const.1970, art. IX, § 2). We granted leave to appeal (177 Ill.2d R. 315) and we now affirm.

I. BACKGROUND

Plaintiff, Arangold Corporation, is an Illinois corporation doing business as a wholesale tobacco distributor of noncigarette tobacco products, such as cigars and chewing tobacco. Arangold is subject to the Act, which imposes a tax on such products. Proceeds from the tax are deposited into the Long-Term Care Provider Fund of the State Treasury (Fund). 35 ILCS 143/10-10 (West 2000). Disbursements from the Fund are made to skilled and intermediate nursing facilities under Title XIX of the Social Security Act, known as the Medicaid program, and pursuant to article V of the Illinois Public Aid Code (305 ILCS 5/5B-8(b)(1) (West 2000)). These programs provide medical care for people whose income and resources are inadequate to meet their medical needs.

In November 1995, Arangold brought an action in the circuit court of Cook County challenging the constitutionality of the tax imposed by the Act. It alleged that the Act contravened the federal due process and equal protection clauses (U.S. Const., amend. XIV), the Illinois due process and equal protection clauses (Ill. Const.1970, art. I, § 2), the uniformity clause of the Illinois Constitution (Ill. Const.1970, art. IX, § 2), and the Illinois Constitution's prohibition on special legislation (Ill. Const.1970, art. IV, § 13). The trial court denied Arangold's motion for summary judgment on all counts of its complaint. Arangold subsequently amended its complaint to challenge Public Act 89-21, the legislative enactment that included the Act, on the basis that it violated the single subject rule of the Illinois Constitution (Ill. Const.1970, art. IV, § 8(d)). In April 1998, the trial court granted summary judgment to Arangold on its single subject claim. A direct appeal was taken to this court due to the finding of unconstitutionality. In July 1999, this court reversed, finding no single subject violation, and remanded the cause to the trial court for further proceedings. Arangold Corp. v. Zehnder, 187 Ill.2d 341, 240 Ill.Dec. 710, 718 N.E.2d 191 (1999).

In March 2000, defendants filed a motion for summary judgment as to all of Arangold's constitutional claims. Following oral argument, the trial court granted the motion. Arangold appealed to the appellate court, which affirmed the trial court's decision. 329 Ill.App.3d 781, 263 Ill.Dec. 631, 768 N.E.2d 391.

II. ANALYSIS

A. Standard of Review

Summary judgment is proper where "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2000). A trial court's grant of summary judgment is reviewed de novo. Morris v. Margulis, 197 Ill.2d 28, 35, 257 Ill. Dec. 656, 754 N.E.2d 314 (2001).

The constitutionality of a statute is also reviewed de novo. Miller v. Rosenberg, 196 Ill.2d 50, 57, 255 Ill.Dec. 464, 749 N.E.2d 946 (2001). Statutes carry a strong presumption of constitutionality. People ex rel. Ryan v. World Church of the Creator, 198 Ill.2d 115, 120, 260 Ill.Dec. 180, 760 N.E.2d 953 (2001). The party challenging a statute carries the burden of rebutting that presumption and "clearly establishing" its unconstitutionality. Russell v. Department of Natural Resources, 183 Ill.2d 434, 441, 233 Ill.Dec. 782, 701 N.E.2d 1056 (1998). This court has a duty to uphold the constitutionality of a statute whenever reasonably possible. City of Chicago v. Morales, 177 Ill.2d 440, 448, 227 Ill.Dec. 130, 687 N.E.2d 53 (1997).

B. Due Process

In this court, Arangold has abandoned its federal constitutional claims, as well as its Illinois equal protection and special legislation claims, choosing to pursue only its Illinois due process and uniformity claims. We first address Arangold's due process arguments.

The Act neither involves a suspect classification nor impinges on a fundamental right. Accordingly, to comport with due process, it must bear a rational relationship to the public interest sought to be served and the means adopted to accomplish this goal must be reasonable. Messenger v. Edgar, 157 Ill.2d 162, 176, 191 Ill.Dec. 65, 623 N.E.2d 310 (1993); Russell, 183 Ill.2d at 447, 233 Ill.Dec. 782, 701 N.E.2d 1056. In applying the rational basis test, a court must identify the public interest that the statute is intended to protect, examine whether the statute bears a reasonable relationship to that interest, and determine whether the method used to protect or further that interest is reasonable. People v. Lindner, 127 Ill.2d 174, 180, 129 Ill.Dec. 64, 535 N.E.2d 829 (1989). Rational basis review is limited (Miller, 196 Ill.2d at 59, 255 Ill.Dec. 464, 749 N.E.2d 946) and "highly deferential" (Committee for Educational Rights v. Edgar, 174 Ill.2d 1, 33, 220 Ill.Dec. 166, 672 N.E.2d 1178 (1996)). As long as there is any reasonably conceivable state of facts showing that the legislation is rational, it must be upheld. People v. Hamm, 149 Ill.2d 201, 216, 172 Ill.Dec. 179, 595 N.E.2d 540 (1992). Whether a statute is wise or whether it is the best means to achieve the desired result are matters left to the legislature, not the courts. People v. Shephard, 152 Ill.2d 489, 503, 178 Ill.Dec. 724, 605 N.E.2d 518 (1992). The judgments made by the legislature in crafting a statute are not subject to courtroom fact finding and may be based on rational speculation unsupported by evidence or empirical data. Cutinello v. Whitley, 161 Ill.2d 409, 421-22, 204 Ill.Dec. 136, 641 N.E.2d 360 (1994).

Defendants argue that the government interest at stake—funding medical care for the poor in long-term care facilities—is legitimate and that the General Assembly could reasonably have found that tobacco products cause diseases requiring such care.

Revenues collected pursuant to the Act are used to pay the cost of long-term medical care for those persons unable to bear the cost of such care themselves. The State has a legitimate interest in preserving the health of its citizens (New Energy Co. of Indiana v. Limbach, 486 U.S. 269, 279, 108 S.Ct. 1803, 1810, 100 L.Ed.2d 302, 312 (1988)) and in assisting the poor to meet their needs (Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 515, 57 S.Ct. 868, 875, 81 L.Ed. 1245, 1256 (1937)). The General Assembly may have believed that the use of tobacco products causes a variety of health problems and that such problems require long-term medical care. With respect to those persons who lack the resources to afford such care, the General Assembly may have believed that responsibility to pay rests with the state and that those, such as Arangold, whose products impose such costs on the state, should bear some measure of those costs through the taxing of their products.

Recognizing that litigants may not challenge the factual underpinnings of the General Assembly's legislative judgments under due process analysis (People ex rel. Lumpkin v. Cassidy, 184 Ill.2d 117, 124, 234 Ill.Dec. 389, 703 N.E.2d 1 (1998)), Arangold challenges the method chosen in the Act to fund long-term care for the poor. It argues that the tax imposed by the Act is arbitrary and unreasonable because it selectively targets for taxation distributors of cigars and chewing tobacco to fund a general welfare program of the state, designed to benefit a broad range of taxpayers. It principally relies on two cases decided by this court, Crocker v. Finley, 99 Ill.2d 444, 77 Ill.Dec. 97, 459 N.E.2d 1346 (1984), and Boynton v. Kusper, 112 Ill.2d 356, 98 Ill.Dec. 208, 494 N.E.2d 135 (1986).

In Crocker, the plaintiff challenged the constitutionality of a $5 fee charged to all petitioners for dissolution of marriage. The fee was assessed in addition to the usual filing fees and, pursuant to statute, was collected to fund shelters and other services for victims of domestic violence. This court invalidated the fee, which, in reality, was a tax, on the basis that it conflicted with the Illinois constitutional right to obtain justice by law freely (Ill. Const.1970, art. I, § 12). Recognizing that statutes imposing litigation taxes are not necessarily unconstitutional, we determined that court filing fees and taxes may be imposed only for purposes relating to the operation and maintenance of the courts. We found such a requirement to be inherent in the constitutional right to obtain justice freely. "If the right to obtain justice freely is to be a meaningful guarantee, it must preclude the legislature from raising general revenue through charges assessed to those who would utilize our courts." Crocker, 99 Ill.2d at 455, 77 Ill.Dec. 97, 459 N.E.2d 1346. We also held the fee violative of due process. Focusing on the means chosen by the legislature to fund domestic violence shelters and programs, we noted that these services were available to all adults and their dependents who are the subjects of domestic violence. There was no requirement that recipients of the services be married or divorced, yet ...