by James G. Wargo (Spring 2016)
The Illinois Supreme Court recently ruled that the Chicago Zoological Society, which is the not-for-profit corporation that operates the Brookfield Zoo, is not a local public entity under the Local Governmental and Governmental Employees Tort Immunity Act in O’Toole v. Chicago Zoological Society, 2015 IL 118254.
The court reasoned that because there was no evidence of local governmental control over the Society, its operation and maintenance of the Brookfield Zoo did not constitute public business to qualify the not-for-profit corporation as a local public entity. A “local public entity” is defined under Section 1-206 of the Tort Immunity Act (745 ILCS 10/1-206) which provides an extensive list of traditional governmental entities as well as certain not-for-profit corporations that are organized for the purpose of conducting public business.
In O’Toole, the plaintiff was injured after she tripped and fell on a pathway at the Brookfield Zoo and filed a complaint against the Society more than a year after the accident. The Society filed a motion to dismiss the complaint and argued that the claim was time-barred under the one-year statute of limitations period applicable to local public entities under Section 8-101(a) of the Tort Immunity Act (745 ILCS 10/8-101(a)). The Society argued that it was a local public entity under the Act based on the fact that it operated and maintained the Brookfield Zoo on land owned by the Forest Preserve District of Cook County. The plaintiff argued that the Society was not a local public entity because it did not conduct public business. In support of her argument, the plaintiff noted that the Society was not a department or agency of any governmental entity, less than half of its operating budget was from tax proceeds, and its employees were not appointed or paid for by the Forest Preserve, and were not part of any public pension fund.
The trial court concluded that the Society was a local public entity and dismissed the complaint as untimely. On appeal, the appellate court reversed the trial court, and upon appeal to the Illinois Supreme Court, the court affirmed the appellate court’s decision finding that the Society was not a local public entity and could not avail itself of the one-year statute of limitations period under the Act.
With respect to the management of the Zoo, the Forest Preserve contracted with the Society in 1986 to maintain and operate the Zoo under the authority granted under Section 40 of the Forest Preserve District Act (70 ILCS 810/40). In addition, the Forest Preserve agreed to provide the property for the Zoo and to levy an annual property tax to support its operations as authorized under Section 41 of the Act (70 ILCS 810/41). Pursuant to the terms of the agreement between the parties, the Society agreed to operate and maintain the Zoo and was to have “entire control and management” of the operations. The Society agreed to submit an annual audit and itemized budget to the Forest Preserve, which budget was required to be approved by the Forest Preserve’s governing body. The parties also agreed that the president of the Forest Preserve’s board of commissioners would be an ex officio member of the board of trustees of the Society and additional commissioners would be selected to serve as ex officio governing members of the Society. Either party could also terminate the agreement after every twenty-year term.
In affirming the appellate court’s decision, the court was guided by its previous decisions that interpreted and applied the meaning of the term “public business” under Section 1-206 of the Tort Immunity Act in Carroll v. Paddock, 199 Ill.2d 16 (2002) and Brugger v. Joseph Academy, Inc., 202 Ill.2d 435 (2002). In Carroll, the court first interpreted the term “public business” to mean the “business of government.” In applying this definition, the court concluded that a not-for-profit charitable hospital and a not-for-profit mental-health care organization were not local public entities within the meaning of the Tort Immunity Act. The court noted that while the hospital and mental health facility were organized for charitable purposes, without more, the defendant not-for-profit corporations would not qualify as local public entities under the Tort Immunity Act.
Of significance, the court noted that the defendants were not subject to the control of the county board or any other unit or agency of local government. The court further noted that “[w]ithout evidence of local governmental control, it cannot be said that a not-for-profit corporation conducts ‘public business’ for purposes of the Act. Thus, in order to receive the benefits of the Act, the not-for-profit corporation must also be subject to the kinds of organizational regulations and control that are typical of other governmental units.” The court concluded that a not-for-profit corporation will be found to be involved in the “operation of the government’s public business if and only if the not-for-profit is tightly enmeshed with government either through direct governmental ownership or operational control by a unit of local government.”
In analyzing the relationship between the Forest Preserve and the Society, the court concluded that the Society had broad operational control over the daily operations of the Zoo. While the court did acknowledge some oversight of the Zoo by the Forest Preserve, it concluded that this oversight did not constitute operational control. With respect to the Forest Preserve’s financial oversight of the Zoo, the court noted that the Forest Preserve did not approve the Society’s submitted budgets.
While the court acknowledged that the president of the Forest Preserve’s board of commissioners served on the Society’s board of trustees and Forest Preserve’s board members also served as governing members of the Society, the court minimized this involvement by stating that the positions were ex officio and that 90% of the governing members of the Society were not associated with the Forest Preserve. Taking this all into account, the court held that the Forest Preserve did not exercise operational control over the Society and the Society was not a local public entity under the Act. Thus, the one-year statute of limitations period under the Tort Immunity Act did not apply to time-bar plaintiff’s complaint.