Metropolitan Sanitary Dist. of Greater Chicago v. On-Cor Frozen Foods, Inc.

• Decision Date: 13 February 1976
• Docket Number: ON-COR,No. 62212,62212
• Parties: The METROPOLITAN SANITARY DISTRICT OF GREATER CHICAGO, a Municipal Corporation, Plaintiff-Appellee, v.FROZEN FOODS, INC., an Illinois Corporation, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 577

343 N.E.2d 577

36 Ill.App.3d 239

The METROPOLITAN SANITARY DISTRICT OF GREATER CHICAGO, a Municipal Corporation, Plaintiff-Appellee, v. ON-COR FROZEN FOODS, INC., an Illinois Corporation Defendant-Appellant.

No. 62212.

Appellate Court of Illinois, First District, Fifth Division.

Feb. 13, 1976.

Marshall & Marshall, Chicago (Maurice G. Shanberg, Chicago, of counsel), for defendant-appellant.

Allen S. Lavin, Chicago (Frederick M. Feldman and Ina S. Winston, Chicago, of counsel), for plaintiff-appellee.

DRUCKER, Justice:

Plaintiff brought this action to recover penalties and interest in the amount of.$9,294 from defendant for violation of its Industrial Waste Surcharge Ordinance. Defendant is in the business of operating a food processing plant in Chicago. The complaint alleged that defendant was liable for such penalties and interest because it had failed to remit payment for treatment of its industrial wastes within the time limits prescribed by the ordinance. In a verified answer defendant denied any liability and alleged that (1) plaintiff did not have the power to enact the penalty provisions of the ordinance, (2) the penalty provisions did not apply because defendant had filed the statements and remitted payment, albeit in an untimely manner and (3) the penalty and interest provisions of the ordinance are so excessive as to be unreasonable. Plaintiff moved for summary judgment which was granted by the court in the amount of $9,200.94. ¹ The grounds which are the basis of defendant's appeal are those which it raised in its verified answer.

The statutes of this state allow industrial concerns to discharge refuse in excess of 3,650,000 gallons a year into plaintiff's sewers and works only upon compliance with such reasonable terms and conditions as plaintiff is empowered to make. These terms and conditions may include 'a requirement for the payment of compensation to (plaintiff) for the conveying, pumping, treatment and disposal of such excess.' See Ill.Rev.Stat.1973, ch. 42, par. 326a(a) and (b). ²

On December 10, 1970, pursuant to this statutory grant of authority, plaintiff adopted the Industrial Waste Surcharge Ordinance for the purpose of making 'reasonable charge for the cost of handling and treating industrial wastes in excess of 3,650,000 gallons in any 12 month period from an industrial plant. . . .' (Metropolitan Sanitary District of Greater Chicago, Industrial Waste Surcharge Ordinance, Section 1, December 10, 1970.) The ordinance imposes a duty on industrial plants subject to the surcharge to install sampling chambers equipped with standardized monitoring equipment. The owners of such plants are required to submit monthly to plaintiff certified statements detailing the quantities of industrial wastes it discharges into plaintiff's sewers and works 'not later than the last day of the following month.' (Industrial Waste Surcharge Ordinance, Section 5.) Together with this certified statement, owners of industrial plants are required to remit the amount of surcharge due. Section 7 of the ordinance provides procedures to be utilized in the event irregularities are found in an owner's statement:

'(b) Payments:

The owner of each industrial plant subject to surcharge shall remit monthly to the Sanitary District, the amount of the surcharge due together with its certified statement.

Should inspection by the Sanitary District reveal that any statement filed by an owner does not accurately represent actual conditions, the Sanitary District shall redetermine the surcharge due and bill the owner for any deficiency together with interest as herein provided. Said bill shall be paid within ten (10) days after receipt thereof by the owner.

(c) Interest:

Interest, at the rate of one percent per month or any fraction thereof, shall be added to any overdue surcharge payments. Such interest shall accrue and continue to accrue from the date the owner's remittance was due until all overdue surcharges and interest are paid.'

Section 8 of the ordinance specifies penalties to be imposed in the event there is a failure by an owner subject to the surcharge to file its monthly statement:

'Section 8. Penalties

Should the owner of any industrial plant subject to surcharge fail to file its monthly certified statement as herein required, the Sanitary District will estimate the amount of the surcharge due and bill the owner for such overdue surcharge together with interest and penalties as provided herein. Said bill shall be paid within ten (10) days after receipt thereof by the owner.

The penalty for failing to file a monthly certified statement shall be five percent per month or any fraction thereof, of such unpaid surcharge. Such penalty shall accrue for each month from the date any remittance was due, until paid. In addition to such penalty, interest shall also be assessed as provided under Section 7(c), except that no interest shall accrue on any unpaid penalty.'

In the instant case defendant filed its monthly certified statements for the period from March 1, 1971, through December 31, 1973, on January 17, 1974, and remitted the sum of $8,088 as the amount of surcharge it owed. Plaintiff brought this action alleging that due to its late filing defendant owed in addition $9,200.94 in penalties and interest.

Opinion

It is defendant's initial contention that plaintiff was not granted the power by the enabling legislation, Ill.Rev.Stat.1973, ch. 42, par. 326a, to provide for the imposition of penalties and therefore the penalty provisions of the Industrial Waste Surcharge Ordinance are invalid. Defendant's contention is grounded on the well established principle that plaintiff has only those powers granted it by enabling legislation. '(Plaintiff) drives its powers from the legislature and can exercise only those that have been expressly delegated to it and such as are necessarily implied.' (Judge v. Bergman, 258 Ill. 246, 251, 101 N.E. 574, 576.) This principle, defendant argues, is clearly embodied in Section 8 of Article VII of the Constitution of 1970 which provides in pertinent part:

'Townships, school districts, special districts and units, designated by law as units of local government, which exercise limited governmental powers or powers in respect to limited governmental subjects shall have only powers granted by law.' See City of Des Plaines v. Metropolitan Sanitary District, 16 Ill.App.3d 23, 305 N.E.2d 639; reversed on other grounds 59 Ill.2d 29, 319 N.E.2d 9.

It is asserted that since Section 326a does not explicitly confer on plaintiff the power to impose a penalty on one who fails to file or makes a late filing of the monthly certified statement, the penalty provisions of the ordinance are unenforceable.

We agree that the focus of our analysis of this issue must be Article VII, Section 8, of the Constitution. The Constitutional Commentary to this section states that it 'preserves the concept of Dillon's Rule' with respect to the enumerated governmental bodies. (Constitutional Commentary, Smith-Hurd Annot. Const., Art. VII, sec. 8, 1971, p. 85.) Dillon's Rule provides:

'It is a general and undisputed proposition of law that A municipal corporation possesses and can exercise the following powers, and no others: First, those granted in Express words; second, those Necessarily or fairly implied in or Incident to the powers expressly granted; third, those Essential to the accomplishment of the declared objects and purposes of the corporation,--not simply convenient, but indispensable.' (I Dillon, Municipal Corporations sec. 237, pp. 448--449, 5th ed.)

This position has traditionally been the rule in Illinois. Courts of this state have recognized for over 125 years that the express statutory power to adopt an ordinance carries with it the implicit authority to adopt penalties for the violation of such ordinance. (See e.g. City of Pekin v. Smelzel, 21 Ill. 464; Toledo, Peoria and Warsaw Railway Co. v. Town of Chenoa, 43 Ill. 209.) Furthermore, we note that the principle of Dillon's Rule has often been invoked in upholding the validity of ordinances adopted by plaintiff. See e.g. Judge v. Bergman; Zenith Radio v. Metropolitan Sanitary District, 2 Ill.App.3d 35, 275 N.E.2d 756. ³

In the instant case plaintiff has claimed that without the penalty provisions its surcharge ordinance would be rendered meaningless. This argument is predicated on the clear intent of the ordinance and Section 326a to provide a regular and orderly method for plaintiff to recover the costs of processing excess effluent discharged by large industrial users (i.e., those who discharge wastes in excess of 3,650,000 gallons a year) at as little expense as possible to plaintiff compatible with fair and effective monitoring of such users.

Thus the ordinance is designed to be self-assessing, that is, it imposes a duty on industrial plants to monitor the discharge of their own refuse and compute the size of the surcharge which they must remit. If the plants do not monitor themselves, the expense of metering and analyzing their effluent must be borne by plaintiff. The penalty provisions of the ordinance supply a strong incentive for voluntary compliance thus eliminating the necessity of plaintiff monitoring the effluent discharged by each plant.

In addition, and more importantly, the ordinance prescribes a strict timetable for that the payments for the cost of handling that the payments for the costs of handling wastes in excess of 3,650,000 gallons a year accrue to plaintiff in an orderly fashion. Failure to remit surcharge payments or the remitting of these payments in an untimely fashion in violation of the ordinance would undermine any possibility of plaintiff matching revenues to its ongoing operational costs. Such uncertainty in its collections, caused by the failure of large users to comport with the terms of the ordinance, would undoubtedly work to the detriment of homeowners and small industrial users. The penalty...