Rehg v. Illinois Dept. of Revenue

Citation152 Ill.2d 504,178 Ill.Dec. 731,605 N.E.2d 525
Decision Date22 October 1992
Docket NumberNo. 72374,72374
Parties, 178 Ill.Dec. 731 Timothy K. REHG, Appellee, v. The ILLINOIS DEPARTMENT OF REVENUE et al., Appellants.
CourtIllinois Supreme Court

Roland W. Burris, Atty. Gen., Springfield (Rosalyn B. Kaplan, Sol. Gen., and Susan Frederick Rhodes, Asst. Atty. Gen., Chicago, of counsel), for appellants.

Mark D. Lipton and James M. Mullady, Meyer, Capel, Hirschfeld, Muncy, Jahn & Aldeen, P.C., Champaign, for appellee.

Justice BILANDIC delivered the opinion of the court:

The plaintiff, Timothy K. Rehg, brought an action in the circuit court of Champaign County seeking a declaration that the Cannabis and Controlled Substances Tax Act (the Act) (Ill.Rev.Stat.1989, ch. 120, par. 2151 et seq.) was unconstitutional on its face and as applied to him. That statute imposes a tax on the transfer of marijuana and controlled substances. Following a hearing, the circuit court entered an order holding that the Act, as applied to the plaintiff, violated the double jeopardy provisions of the fifth amendment of the United States Constitution and article I, section 10, of the Illinois Constitution of 1970 (U.S. Const., amend. V; Ill. Const.1970, art. I § 10). The Illinois Department of Revenue appealed directly to this court, pursuant to Supreme Court Rule 302(a)(1) (134 Ill.2d R. 302(a)(1)).

I. JURISDICTIONAL QUESTION

Before addressing the merits of the trial court's order, we must first consider whether we have jurisdiction over this appeal. As stated, the Department of Revenue appealed to this court pursuant to Supreme Court Rule 302(a)(1). That rule permits appeals directly to this court when a statute of the United States or of this State has been held invalid. 134 Ill.2d R. 302(a)(1).

The trial court's order declared that "the Tax Act as applied to the plaintiff Timothy Rehg violates the 5th Amendment of the United States Constitution and Article 1 Section 10 of the Illinois Constitution." If this order is construed as resting exclusively upon the double jeopardy clause of the fifth amendment of the United States Constitution and its counterpart in the Illinois Constitution (Ill. Const.1970, art. I, § 10), the trial court's judgment is not appealable directly to this court pursuant to Rule 302(a)(1). An order that application of the Act to the plaintiff would violate the prohibition against double jeopardy does not invalidate the Act, any more than an order declaring that a particular defendant may not be tried for homicide invalidates the homicide statute. Such an order does not declare a statute unconstitutional; it simply declares that application of that statute would violate a particular defendant's constitutional rights. An appeal from such an order is properly brought in the appellate court pursuant to Rule 301 (134 Ill.2d R. 301).

The quoted portion of the trial court's order suggests that the court simply held that the Act could not be applied constitutionally to the plaintiff, because it placed him twice in jeopardy for the same offense. A close reading of the "Memorandum Opinion and Order" reveals, however, that the court also declared the Act unconstitutional on its face. The trial court determined that the Act violated the due process clauses of the Federal and State Constitutions, because it imposed a criminal penalty without affording an accused the proper constitutional safeguards. Accordingly, we find that we have jurisdiction of this appeal pursuant to Supreme Court Rule 302(a)(1).

II. THE FACTS

The facts are undisputed. In May 1990, the plaintiff was arrested by the InterAgency Task Force pursuant to an on-going investigation. The plaintiff's automobile was seized at the time of his arrest and was subsequently forfeited to the State. The plaintiff was later charged by information with burglary and two counts of manufacture or delivery of a controlled substance. These charges stemmed from Rehg's theft of approximately $300 worth of prescription drugs from his father's pharmacy. In October 1990, the plaintiff pleaded guilty to one count of manufacture or delivery of a controlled substance. (Ill.Rev.Stat.1989, ch. 56 1/2, par. 1401(c).) The other charges were dismissed. On November 16, 1990, the trial court sentenced Rehg to four years' probation, and ordered him to perform 300 hours of public service work and to pay court costs.

Immediately after the sentencing hearing, the Department of Revenue (Department) served Rehg with a "Notice of Tax Liability for Cannabis and Controlled Substances Tax Jeopardy Assessment." The notice, which was issued on November 8, 1990, advised the plaintiff that a tax was due on 1,006 dosage units of a controlled substance. The notice advised the plaintiff that he owed a tax in the amount of $42,000, plus a penalty of $168,000 and interest of $3,675, for a total liability of $213,675. This assessment was made pursuant to the Cannabis and Controlled Substances Tax Act (Ill.Rev.Stat.1989, ch. 120, par. 2151 et seq.).

The Act provides that any "dealer" who possesses cannabis or controlled substance must pay a tax and affix a stamp or other official indicia on the substance as evidence of payment of the tax. (Ill.Rev.Stat.1989, ch. 120, par. 2155.) The Act defines a "dealer" as a person who "in violation of the Illinois Controlled Substances Act or the Cannabis Control Act, manufactures, produces, ships, transports, imports, sells or transfers, or possesses with intent to deliver to another person more than 30 grams of cannabis or more than 5 grams of any controlled substance or 5 or more dosage units of a controlled substance." (Ill.Rev.Stat.1989, ch. 120, par. 2152.) The Act provides a varying rate of tax, depending on the type of drug involved. The Act also makes a dealer who fails to pay the tax subject to an additional penalty equal to four times the unpaid tax. (Ill.Rev.Stat.1989, ch. 120, pars. 2159, 2160.) Finally, the Act specifies that a dealer who distributes or possesses cannabis or controlled substances without affixing the required stamps is guilty of a Class 4 felony. Ill.Rev.Stat.1989, ch. 120, par. 2160.

As stated, the plaintiff, in response to the "Notice of Tax Liability" served upon him, filed a complaint for declaratory judgment, challenging the constitutionality of the Act. He argued that double jeopardy principles barred the Department from enforcing the Act against him, because he previously had been criminally convicted and punished for the same offense. The trial court entered a preliminary injunction enjoining the Department from taking any further action under the Act. Following a hearing, the trial court declared the statute unconstitutional and quashed the jeopardy assessment.

Although the scope of the trial court's order is somewhat unclear, we find that it can fairly be said to rest upon two separate grounds. First, the court found the Act unconstitutional on its face because the Act, while labeled a tax, actually imposed a form of criminal punishment. Second, the court found that the Act was unconstitutional as applied to the plaintiff because the tax assessment punished the defendant a second time for the same offense. The court determined that the tax assessment was punishment within the meaning of the double jeopardy clause because it bore no rational relationship to the government's loss. We consider each of these findings separately.

III. ANALYSIS

A. Unconstitutional on Its Face?

As stated, the trial court declared the Act unconstitutional on its face on the ground that it imposed a form of criminal punishment. Because the validity of a legislative act is involved, we begin our analysis with the presumption that all statutes are constitutional. (Continental Illinois National Bank & Trust Co. v. Illinois State Toll Highway Comm'n (1969), 42 Ill.2d 385, 389, 251 N.E.2d 253.) The party challenging the statute in question bears the burden of clearly establishing that the statute is unconstitutional. (Bernier v. Burris (1986), 113 Ill.2d 219, 227, 100 Ill.Dec. 585, 497 N.E.2d 763.) Any doubts will be resolved in favor of the validity of the law challenged. Continental Illinois National Bank & Trust Co. v. Illinois State Toll Highway Comm'n (1969), 42 Ill.2d 385, 389, 251 N.E.2d 253.

With these principles in mind, we first consider the trial court's conclusion that the Act is facially invalid because it imposes a criminal penalty rather than a tax. Specifically, we must determine whether the Act, though civil in form, is actually a form of criminal punishment. A statute which imposes criminal punishment without affording an accused the procedural safeguards which accompany a criminal trial or the rights guaranteed by the fifth and sixth amendments of the Federal Constitution violates due process. See Kennedy v. Mendoza-Martinez (1963), 372 U.S. 144, 164, 83 S.Ct. 554, 565, 9 L.Ed.2d 644, 658.

Whether the Act imposes a criminal sanction is a matter of statutory construction. Helvering v. Mitchell (1938), 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917; see also United States v. Halper (1989), 490 U.S. 435, 447, 109 S.Ct. 1892, 1901, 104 L.Ed.2d 487, 501 ("recourse to statutory language, structure, and intent is appropriate in identifying the inherent nature of a proceeding, or in determining the constitutional safeguards that must accompany those proceedings").

The United States Supreme Court has established a two-part test for determining when a statute, though nominally civil, actually imposes a criminal sanction. (United States v. Ward (1980), 448 U.S. 242, 248-49, 100 S.Ct. 2636, 2641, 65 L.Ed.2d 742, 749; see United States v. One Assortment of 89 Firearms (1984), 465 U.S. 354, 104 S.Ct. 1099, 79 L.Ed.2d 361; Rex Trailer Co. v. United States (1956), 350 U.S. 148, 76 S.Ct. 219, 100 L.Ed. 149; Helvering v. Mitchell (1938), 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917.) First, the court must determine whether the legislature expressly or impliedly indicated a preference for a...

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