Judge 'Robin Hood' asked to redistribute $90 million in old Illinois Bell case

Steve Korris Mar. 6, 2008, 5:30am

Two local businesses want Madison County Circuit Judge Daniel Stack to redistribute $90 million that Illinois Bell Telephone refunded to business customers in 2001, but so far Stack has not relished the Robin Hood role they offer.

A year ago he told attorneys for Big Sky Excavating and Theis Law Firm they might have a right with no remedy in their claim that Illinois Bell failed to comply with a law the Illinois Legislature passed in 2001.

In December he invited the phone company, now SBC, to move for summary judgment.

John Muench of Chicago submitted SBC's motion Jan. 3, but plaintiff attorney Terrence O'Leary of Granite City had beaten him to the punch.

O'Leary moved Dec. 21 for "partial summary judgment on the issue of liability."

In response, Muench associate Hans Germann derided the motion as "a misdirected attempt to spin straw into gold."

Whether Stack lets the suit keep running or not, he has displayed less enthusiasm for it than former Circuit Judge Philip Kardis.

In 2004 Kardis declared the law unconstitutional, finding it "so narrowly defined and so openly beneficial" to Illinois Bell that it couldn't stand a constitutional test.

The Fifth District appellate court in Mount Vernon affirmed Kardis.

In 2005, the Illinois Supreme Court unanimously reversed him.

The dispute started in 1995, when businesses complained to the Illinois Commerce Commission that Illinois Bell deceptively classified their rates.

The Legislature and Illinois Bell reached a $90 million compromise in 2001.

Illinois Bell provided refunds of $60.47 per line to businesses up to 11 lines.

Businesses with 12 or more lines received $30.49 per line.

Big Sky Excavating sued in Madison County for redistribution, claiming Illinois Bell favored the larger customers.

Big Sky Excavating moved for class action certification, and Kardis granted it when he declared the law unconstitutional.

By the time the case returned to Madison County, Kardis had retired.

O'Leary added Theis Law Firm as plaintiff.

Muench asked Stack to dismiss the suit, arguing that the court had no authority to disturb rates of the Illinois Commerce Commission.

At a hearing last April, Muench said plaintiffs would strip businesses of rights.

"You will never be asked to strip anyone of rights," plaintiff attorney Glenn Bradford of Edwardsville answered.

"You don't have authority to do that," Bradford said.

Stack said, "They will get it from their customers?"

Bradford said, "Right."

Stack said, "If there is no remedy I can impose, I'm not sure how much farther I can go. I'm not completely sure there is a remedy."

He denied the motion to dismiss but he said plaintiffs had to tell him what remedy they expected.

They amended the complaint, reviving the constitutional challenge and alternatively alleging diversion of millions from small customers to large ones.

For SBC, John Papa of Granite City responded in July that he saw nothing new.

"This Court has no authority to provide a remedy for any of the claims," he wrote.

After SBC moved for summary judgment this year, O'Leary responded in a Feb. 21 brief that, "any amounts misapplied must be re-allocated and paid as damages."

"Plaintiffs do not contest the amount of the legislative refund; they claim the refund statute was violated and as a result they sustained damage," O'Leary wrote.

"Damages are owed to the class of customers this legislatively mandated refund was intended to benefit," he wrote.

On Feb. 25, Germann attacked O'Leary's motion for judgment on liability and repeated SBC's argument that Stack lacks the authority to grant relief.

Germann wrote, "…their request for a larger refund is a ratemaking matter and improperly injects the court into the heart of the ratemaking process."

The 2001 law, he wrote, required Illinois Bell to distribute $90 million among the class or classes of customers that alleged in any action that they paid excess rates.

The law, he wrote, "ended contentious regulatory proceedings precisely to avoid a determination of whether particular customers had overpaid and, if so, how much they should receive in a refund."

He wrote that Illinois Bell complied with the statute's plain language in cooperation with the Illinois Commerce Commission.

He wrote, "…the statute mandated that Illinois Bell pay $90 million to customer 'classes,' and Illinois Bell did precisely that, by dividing the universe of business customers into two groups, at the ICC staff's suggestion. No more was required."

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