Heller v. Fergus Ford, Inc.

• Decision Date: 07 November 1973
• Docket Number: No. 58373,58373
• Citation: 15 Ill.App.3d 868,305 N.E.2d 352
• Parties: Paul HELLER, Individually and in a representative capacity, Plaintiff-Appellee, v. FERGUS FORD, INC., a corporation, et al., Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 352

305 N.E.2d 352

15 Ill.App.3d 868

Paul HELLER, Individually and in a representative capacity Plaintiff-Appellee, v. FERGUS FORD, INC., a corporation, et al., Defendants-Appellants.

No. 58373.

Appellate Court of Illinois, First District, Fourth Division.

Nov. 7, 1973.

William J. Scott, Atty. Gen., Fred F. Herzog, First Asst. Atty. Gen., Calvin C. Campbell, Asst. Atty. Gen., Donald S. Carnow, Special Asst. Atty. Gen., Chicago, for defendants-appellants.

L. Louis Karton and Samuel T. Wexler, Kreger & Karton, Ltd., Chicago, of counsel, for plaintiff-appellee.

DIERINGER, Justice.

This is an interlocutory appeal from a temporary mandatory injunction order issued by the Circuit Court of Cook County on November 21, 1972. The plaintiff, Paul Heller, brought this action individually and in a representative capacity on behalf of all those customers of Fergus Ford, Inc., who had bought or will buy automobiles equipped with pollution control equipment. The defendants are Fergus Ford, Inc.; George Mahin, Director of Revenue; Alan J. Dixon, Treasurer of the State of Illinois; and William J. Scott, Attorney General of the State of Illinois.

The issues on appeal are whether the complaint constitutes a proper class action, whether the emission control systems which are a part of new automobiles are 'pollution control facilities' within the statutory purview of the exemptions to the Use Tax and the Retailers' Occupation Tax, whether the temporary mandatory injunction was appropriate under the circumstances of the case, whether the injunction violates the separation of powers clause of Article II, Section 1 of the Illinois Constitution S.H.A. of 1970, and whether the plaintiff must exhaust his statutory administrative remedies before resorting to a court of equity.

The plaintiff alleged he purchased a 1971 Ford automobile in November of 1970 from Fergus Ford, Inc., at a time when there was in existence provisions in the Illinois Use Tax Act and the Retailers' Occupation Tax Act which exempted pollution control facilities from the imposition of the taxes. Because the automobile came equipped with a pollution control emission device, the plaintiff alleges he was entitled to an exemption from the Illinois Use Tax and the Retailers' Occupation Tax to the extent the price of the automobile reflected the cost of the pollution control equipment and that he was illegally denied that exemption.

Plaintiff sought the establishment of a protest fund, an accounting, and the issuance of a bulletin by the Director of Revenue of the State of Illinois to all holders of a Certificate of Registration in the State of Illinois advising them to remit all excess taxes collected from the sale of vehicles having pollution control facilities. The court ordered the issuance of such a bulletin in its temporary injunction order and this appeal was filed by George Mahin, Director of Revenue; Alan J. Dixon, Treasurer of the State of Illinois, and William J. Scott, Attorney General of the State of Illinois. Fergus Ford, Inc., did not appeal.

The first issue we shall consider is whether the complaint constitutes a proper class action. In Illinois the matter of class or representative actions is governed entirely by case law, and the defendants rely on the cases of Peoples Store of Roseland v. McKibbin, (1942) 379 Ill. 148, 39 N.E.2d 995, and Newberry Library v. Board of Education, (1944) 387 Ill. 85, 55 N.E.2d 147 for the proposition that there is no community of interest among members of the alleged class because each purchase of a car from Fergus Ford, Inc., was a separate and distinct transaction. In McKibbin retailers, selling food to charitable institutions and schools, filed a class action in behalf of all firms in the state engaged in selling food to such institutions, claiming these sales were exempt from the Retailers' Occupation Tax. The court stated:

'In those cases where class litigation has been sustained, all members of the class are found to have a common interest in the questions involved and the results obtained. In the instant cases all retailers of the State engaged in selling food supplies to institutions of the kind and character to which plaintiffs sold have an interest in having such sales exempted from the tax but the common interest stops there. A decision sustaining their view that no tax is due on such sales does not create any fund from which reimbursement can be made, neither does it establish the existence of a right of recovery in every vendor. Each must make proof as required by section 6 as amended, and in doing so he resorts to his own sales which are wholly independent and unrelated to the sales made by others engaged in the same business and selling to similar institutions. The money wrongfully collected as a tax and held by the State officials is not to be considered as one fund for the benefit of all who had paid taxes which should not have been paid, but the interest of each taxpayer is limited to his own sales. If the plaintiffs, or any of those whom they seek to represent as a class, paid taxes which should not have been paid, then the money in the hands of the defendants was derived from distinct, separate transactions which each vendor had with the institutions to whom they had sold.'

In Newberry the plaintiff sued on behalf of all those who had purchased identical bonds and who had failed to receive payment of interest for a particular coupon. The court stated that a class action may be brought only where there is a common interest among the members of the class in the question involved, the remedy, and the subject matter of the suit, or where the relationship among the members of the class is such as to legally entitle one member to stand in judgment for...