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Lawsuit filed by unpaid social service providers

Wednesday, May 4, 2016

* Press release

Pay Now Illinois, a coalition of 64 Illinois-based human and social service agencies and companies, today sued Illinois Governor Bruce Rauner and the directors of six statewide agencies seeking immediate payment in full of more than $100 million owed for work performed under contracts that date back to July 1, 2015, the beginning of the state’s current fiscal year.

In seeking a permanent injunction and declaratory judgment, the suit, filed in Cook County Circuit Court, charges that the Governor and other state officials have acted illegally by failing to make payments on contracts while continuing to enforce them. The suit also claims that the Governor’s veto of certain appropriation bills on June 25, 2015 was an unlawful impairment, or interference, with the agencies’ constitutional right to a legal remedy for the non-payment of these contracts. State agencies signed contracts with the social services providers, in some cases even after the Governor’s veto of the budget. The value of unpaid contracts for the members of the coalition exceeds $100 million.

The coalition members, who provide services including housing for the homeless, healthcare, services for senior citizens, sexual abuse counseling, and programs for at-risk youth, face “acute financial hardship.” Many have reduced staff and programs, and the viability of some of the organizations is threatened.

“This suit is about upholding a contract and paying your bills, basic good business practices,” said Andrea Durbin, of Pay Now Illinois. “We have delivered services under binding contracts, and now the state needs to pay us. We have delivered – and we continue to deliver – essential services to Illinois’ most vulnerable population of men, women and children as required under our contracts with the state. We are doing our part. We expect the state to do the same.”

In addition to Governor Rauner, other defendants in the suit include: John Baldwin, Acting Director of the Illinois Department of Corrections; Jean Bohnhoff, Director of the Illinois Department of Aging; James Dimas, Secretary of the Illinois Department of Human Services; Michael Hoffman, Acting Director of the Illinois Department of Central Management Services; Felicia Norwood, Director of the Depart- ment of Health and Family Services; and, Nirav Shah, Director of the Illinois Department of Public Health. In a detailed timeline of activities surrounding the Illinois budget approval process, the suit makes the case that funds were appropriated to pay the contracts, but the Governor’s action to veto appropriation bills blocked payment to service providers who had signed contracts.

“The Governor vetoed appropriation bills, and then his Administration entered into contracts for those same services,” said Durbin, who is also chief executive officer of Illinois Collaboration on Youth (ICOY), a statewide network of organizations providing services to at-risk youth and their families. “The state agencies have enforced these contracts, and have never suggested suspending or terminating them. They can’t simultaneously have us enter into a contract and perform services and then say there isn’t money to pay for them. The state has been having its cake and eating it too. That is just not good business.”

Click here to read the lawsuit. To see a list of coalition members, click here.

- Posted by Rich Miller        

50 Comments
  1. - Oswego Willy - Wednesday, May 4, 16 @ 11:33 am:

    That’s “Governors Own”… now defined by a lawsuit and Press Release.

    ===“The Governor vetoed appropriation bills, and then his Administration entered into contracts for those same services,” said Durbin, … “The state agencies have enforced these contracts, and have never suggested suspending or terminating them. They can’t simultaneously have us enter into a contract and perform services and then say there isn’t money to pay for them. The state has been having its cake and eating it too. That is just not good business.”===

    Vote.

    Accordingly.


  2. - Beaner - Wednesday, May 4, 16 @ 11:33 am:

    Sham Rauner: CK, call Sysco and place an order for frozen Perch. Poindexters just declared they want a(n) expletive problem!


  3. - wordslinger - Wednesday, May 4, 16 @ 11:34 am:

    Geez, what took you so long?


  4. - Adam Smith - Wednesday, May 4, 16 @ 11:35 am:

    Good idea to use the courts, stacked with hand-picked Dem party hacks, to enforce political your preferred political solutions.


  5. - Ghost - Wednesday, May 4, 16 @ 11:37 am:

    wow these attorneys must not be very good.

    unfortunetly there is a statute that says laws suits against the state over contracts must be filed in the court of claims and the state as a soveriegn is otherwise immune from contract claims filed in state court. but the statute of limitations i the court of claims is very short, so if they dink around in state court, where a local judge may lead them on without dismissing it, they could blow the statute


  6. - Oswego Willy - Wednesday, May 4, 16 @ 11:38 am:

    ===…stacked with hand-picked Dem party hacks, to enforce political your preferred political solutions.===

    So… signed contracts and then refusing paymebt is a Raunerite way, not a Democratic way of being “honest and above board”

    Maybe you need to take a walk, fresh air does wonders.


  7. - wordslinger - Wednesday, May 4, 16 @ 11:39 am:

    –Good idea to use the courts, stacked with hand-picked Dem party hacks, to enforce political your preferred political solutions.–

    I think the real “Adam Smith” understood the definition of “binding contract.”

    You might want to look it up.


  8. - olddog - Wednesday, May 4, 16 @ 11:39 am:

    “Good idea to use the courts, stacked with people who understand the law, to uphold basic contractual obligations.”

    There. Fixed it for you.


  9. - northernwatersports - Wednesday, May 4, 16 @ 11:39 am:

    Not gonna go anywhere except into news reports that are meaningless to the average Illinois citizen. Now….when vendors just stop providing services and the slow train wreck starts to unfold in photos, viral videos, no food at prisons, no electric, gas or water at state facilities, etc……
    That will get the attention of BVR and the GA members to act.
    Not until then….
    Everyone has a lawyer and yet no one listens….
    This doesn’t change anything.


  10. - Dome Gnome - Wednesday, May 4, 16 @ 11:39 am:

    Glad to see this. The list could/should be longer. Where is Catholic Charities in this?


  11. - Pawn - Wednesday, May 4, 16 @ 11:41 am:

    Ghost, read the actual complaint before you display your ignorance


  12. - Oswego Willy - Wednesday, May 4, 16 @ 11:41 am:

    - Ghost -

    While it IS about “the money”…

    … it’s also about getting out, front and center, that Rauner, Governor Bruce Rauner, is being held accountable for the decimation of people, groups, organizations, and businesses.

    The politics here is as important as the lawsuit, no matter, after this release, it plays “out”

    Rauner has been “sued”, it’s something to rally against Rauner.


  13. - Qui Tam - Wednesday, May 4, 16 @ 11:44 am:

    Much will depend the contract language. Para. 63 in the suit indicates that the state screwed-up by not giving notice of cancellation when the appropriation wasn’t available, at least on some contracts.

    I would have to disagree with OW at this point. Now Lisa Madigan Owns it as she will likely be defending non-payment. She may be able to string it out arguing “deferred payment” rather than non-payment.

    The next move may be lawful cancellation of a number contracts as opposed to continuing to let the contract run while blowing-off required payment.

    Of course the right thing to do would have been to either cancel the contract or honor it. - but we’re dealing with the State.


  14. - Honeybear - Wednesday, May 4, 16 @ 11:46 am:

    Is this just Kabuki which will be dismissed or is this a broadside which could actually rake the ship of state?


  15. - Beaner - Wednesday, May 4, 16 @ 11:47 am:

    The Court of Claims is for goods for which there is an appropriation, but in which the invoice did not get into the accounting system in a timely fashion (before the cut-off of tape submission to the Comptroller for lapse spending). Since there is not appropriation, it would not be the proper venue for these types of claims. I wondered about this too. FYI.


  16. - Earnest - Wednesday, May 4, 16 @ 11:49 am:

    Sadly, whichever party has been in office the past few decades, social service providers get a lot more support by suing the state than advocating to it.


  17. - Bigtwich - Wednesday, May 4, 16 @ 11:50 am:

    745 ILCS 5/1 Except as provided in the Illinois Public Labor Relations Act, the Court of Claims Act, the State Officials and Employees Ethics Act, and Section 1.5 of this Act, the State of Illinois shall not be made a defendant or party in any court.


  18. - burbanite - Wednesday, May 4, 16 @ 11:51 am:

    How is this different than the state workers suing in court to get paid?


  19. - Pawn - Wednesday, May 4, 16 @ 11:51 am:

    Bigtwich, read the complaint first


  20. - RNUG - Wednesday, May 4, 16 @ 11:56 am:

    As others have noted, the proper venue is the Court of Claims. The problem is any award there is dependent on an appropriation.

    The lawsuit is a novel approach but I suspect, in the end, it’s going to be dismissed for multiple reasons.


  21. - Anonymous - Wednesday, May 4, 16 @ 11:58 am:

    Odds that their contracts read with a clause “subject to appropriation”…99.9%


  22. - Demoralized - Wednesday, May 4, 16 @ 11:59 am:

    Before I say what I’m about to say I want to be clear that I think these people need to be paid.

    That being said, they seem to be essentially arguing that a Governor should be forced to sign an appropriation bill. Also, every contract has a provision that says they are subject to appropriation. If you are providing services under a contract then you are doing so at your own risk absent an appropriation.


  23. - A guy - Wednesday, May 4, 16 @ 12:00 pm:

    ===Where is Catholic Charities in this?===

    A million miles away. They know better.


  24. - Oswego Willy - Wednesday, May 4, 16 @ 12:02 pm:

    ===I would have to disagree with OW at this point. Now Lisa Madigan Owns it as she will likely be defending non-payment.===

    Nope.

    Those filing suit, no matter the outcome, we’re making a statement “Governors Own”. That’s the whole point. That’s why the Release makes the political statement that Rauner owns this decimation.

    Please, keep up.


  25. - crazybleedingheart - Wednesday, May 4, 16 @ 12:03 pm:

    ==Geez, what took you so long?==

    Founded fears of retaliation?


  26. - Qui Tam - Wednesday, May 4, 16 @ 12:03 pm:

    =745 ILCS 5/1 Except as provided in the Illinois Public Labor Relations Act, the Court of Claims Act, the State Officials and Employees Ethics Act, and Section 1.5 of this Act, the State of Illinois shall not be made a defendant or party in any court.=

    It may get punted to the Court of Claims, the civil rights claim may be a stretch for a contractual violation. If it were refiled, the issue of non-cancellation / breach will still be the issue Lisa owns.


  27. - Skeptic - Wednesday, May 4, 16 @ 12:04 pm:

    “..arguing that a Governor should be forced to sign an appropriation bill.” I read that as that they’re arguing that you can’t enforce a contract without paying for it. And “Subject to appropriations…” And they’re arguing that there *were* appropriations, but they were blocked illegally by Rauner.


  28. - Oswego Willy - Wednesday, May 4, 16 @ 12:07 pm:

    ===It may get punted to the Court of Claims, the civil rights claim may be a stretch for a contractual violation. If it were refiled, the issue of non-cancellation / breach will still be the issue Lisa owns.===

    Nope.

    Are you not paying attention or is this too difficult for you to comprehend…

    Those filing this… have already framed… who they blame.

    The politics at play isn’t the lawsuit, it’s highligting WHY they are filing suit… against Bruce Rauner.

    Seriously, keep up.


  29. - Qui Tam - Wednesday, May 4, 16 @ 12:09 pm:

    Also keep in mind that the Court of Claims is quite cozy with the AG, so it if goes there, it would have to be prevail on appeal.
    The Court of Claims will likely politely ignore evidence and legal arguments provided by the claimants and rule in favor of the state.


  30. - What the What - Wednesday, May 4, 16 @ 12:10 pm:

    The closing line from the Facts section of the complaint:

    “The Governor had the option under the Illinois Constitution to exercise a line-item veto to block only expenditures unrelated to the services that are unrelated to the services that are the subject of the contracts entered with plaintiffs.”

    This is making clear that paying these social service providers is a “cut” that the Governor made (or owns).


  31. - Dome Gnome - Wednesday, May 4, 16 @ 12:11 pm:

    - A guy - Wednesday, May 4, 16 @ 12:00 pm:

    ===Where is Catholic Charities in this?===

    A million miles away. They know better.

    Relieved that Lutheran Child and Family Services didn’t also keep their distance.


  32. - Oswego Willy - Wednesday, May 4, 16 @ 12:14 pm:

    ===Also keep in mind that the Court of Claims is quite cozy with the AG, so it if goes there, it would have to be prevail on appeal.===

    At least pretend you don’t have a tin foil hat in when commenting. The rule of law will decide, not a brief beginning “We’re cozy with the AG, so… ”

    Ugh.

    Do better.


  33. - wordslinger - Wednesday, May 4, 16 @ 12:14 pm:

    ===Where is Catholic Charities in this?===

    A million miles away. They know better.–

    What do “they know better?”


  34. - Wensicia - Wednesday, May 4, 16 @ 12:29 pm:

    It’s about time.


  35. - Wishful Thinking - Wednesday, May 4, 16 @ 12:30 pm:

    For all those questioning the venue, go read the IL constitution - or even better - the USC. For those saying that this won’t work, please share your thoughts on what will work. The Court is the only branch of government that seems capable of accomplishing anything. It’s easy for all of us to identify a problem. Not so easy to identify a solution. So share your wisdom. And, don’t just say stop providing services to create a crisis. Seems this coalition recognizes that stopping services to the vulnerable is irresponsible. Also seems they’ve learned that the media “highlights” about the devastation the vulnerable in our state are being dealt hasn’t moved the needle a bit. Doesn’t seem they’re asking for much. Do the work and get paid. Look. That’s business. Happens everyday. Wish them luck.


  36. - olddog - Wednesday, May 4, 16 @ 12:34 pm:

    === Now Lisa Madigan Owns it as she will likely be defending non-payment. She may be able to string it out arguing “deferred payment” rather than non-payment. ===

    Can she plead the M’Naghten rule? /s

    http://criminal.findlaw.com/criminal-procedure/the-m-naghten-rule.html


  37. - Federalist - Wednesday, May 4, 16 @ 1:19 pm:

    EVERBODY should sue the state for any unpaid bills for which the state is/was obligated.

    That simple!


  38. - cdog - Wednesday, May 4, 16 @ 1:28 pm:

    Good for them. I would suggest Higher Ed throw down a similar complaint.

    As a nation of laws that has operated sufficiently for centuries, these kind of games are destructive to the fabric of the country.

    Thanks Bruce. Your big game of “grass bowl” is great for Illinois. I would say your plan to not pay for services rendered because of a “gotcha clause” is appearing to be very dark.

    But seriously, the judgement of the ILGOP and their claims of knowing what is best for Illinois as seen on several of today’s posts, needs to be seriously called into question.


  39. - Another Anon - Wednesday, May 4, 16 @ 1:33 pm:

    Same attorney that is representing Friends of the Parks. How is he doing there? Winning.


  40. - Qui Tam - Wednesday, May 4, 16 @ 1:36 pm:

    =Can she plead the M’Naghten rule? /s=

    Fun link! Unfortunately in Illinois it’s the norm…..
    The real defense may be even more outrageous than that, but it surely be disingenuous.


  41. - Mister Whipple - Wednesday, May 4, 16 @ 1:58 pm:

    Full disclosure: I have a dog in this hunt although my NFP is not part of the lawsuit.

    Each of our state contracts has a clause that payments are “subject to appropriation.” There has been no appropriation. Nonetheless, this suit may have legs because the state has been paying providers for services if federal money, such as block grant funds, were available. As a result, human service providers’ contracts have been operationalized even without a legislatively-approved appropriation.

    The key element here is that the state has continued to require providers to abide by the tenets of these contracts. That contention has not been raised before. The lawyers can tell us whether that significantly strengthens the providers’ suit.


  42. - Norseman - Wednesday, May 4, 16 @ 1:58 pm:

    Good luck! I don’t see it working, but it’s worth a try.


  43. - CCP Hostage - Wednesday, May 4, 16 @ 2:12 pm:

    The state has been telling human services providers that they must fulfill the obligations of their signed contracts and that they would be paid when there was a signed budget. The various departments have been threatening and condescending when we’ve complained about the financial implications of the lack of payment, including telling us that we are poor business persons because we are having difficulty surviving with their lack of payment. For the most part, we have shielded our clientele from suffering caused by this impasse because that is why we are in business in the first place–to shield our clients from harm. So we quietly took the abuse, mortgaged our homes, and put our shoulders to the wheel. It has become apparent that there is NO plan or will to pay us. In no business model at all, ever, is this ok. We must stand up and tell the state that this is not ok. No government entity can be allowed to contract for services and then not pay. If they get away with it with us, they will try it with others. This is not what a democracy is about. If anyone can think of another way to handle a deadbeat government, state it. Otherwise, support us. If you don’t, you are as culpable as the state of Illinois. Further, if allowed to continue, lack of payment will become an acceptable political practice and will eventually be used on everyone, and not just in Illinois. This cannot stand.


  44. - Bigtwich - Wednesday, May 4, 16 @ 2:27 pm:

    “Bigtwich, read the complaint first”

    I did it talks about “Official Capacity” and injunctions to pay. In other words they want to state to pay. I do too but this will not get there except perhaps politically.


  45. - Political Animal - Wednesday, May 4, 16 @ 2:31 pm:

    I’m confused why anyone would support this.

    States are sovereign. The elected representatives decided, on behalf of we the people, where our collective pool of tax dollars goes.

    No court, Federal or State, should be able to intervene in the budget process which is entirely political.

    This lawsuit should fail for the same reason state workers shouldn’t be being paid right now for the same reason all the consent decrees should be invalid.

    If the GA and Governor are not responsible for the budget, why do we even have them? Why do unelected judges and bureaucrats get to decide where the money goes?

    If there were actual consequences for a budget impasse, an actual shutdown, this thing would never have gone on so long.


  46. - Oswego Willy - Wednesday, May 4, 16 @ 2:50 pm:

    - Political Animal -

    You should ask Rauner that.

    Road Rauner tries to keep everything at the brink of collapsing, then… when it might be “Road Rauner’s” fault… Road Rauner saves it.

    Meep-Meep.

    It’s purposeful by Rauner, ask Ron Sandack.

    Representative?

    @RonSandack: I’m frustrated 2, but taking steps towards reforming IL more important than short term budget stalemate. - Ron Sandack, 9/28/15

    So, call the Rauner Press or Legislative Shop, ask them why state employees make too much… but they want state employees paid for all their hard work…

    Crazy, right?

    Exactly right.


  47. - CCP Hostage - Wednesday, May 4, 16 @ 2:51 pm:

    The state entered into contracts. They had the option of terminating the contracts when there was no appropriation. They didn’t. They told us to keep serving and they’d pay later. Later is not coming. This is not a budget issue. It is a contract issue. If there is not enough money, period, they shouldn’t enter into contracts. But they did. They cannot have their cake and eat it too. And they’ll come for you eventually, Political Animal. If the state doesn’t have to abide by their contracts and legal obligations, there really is no limit to their power. And that’s why this is important outside of the budget impasse.


  48. - Norseman - Wednesday, May 4, 16 @ 3:03 pm:

    Willy @ 2:50 +1


  49. - Pawn - Wednesday, May 4, 16 @ 3:17 pm:

    CCP Hostage, you got it exactly right. Did you see the quote in yesterday’s Cap Fax, from the guy at Zeigler?https://capitolfax.com/2016/05/03/once-it-goes-it’s-virtually-impossible-to-rebuild/

    Other businesses are paying attention to how we are treated. Comes down to a basic question: are these contracts enforceable? If not, then they are not contracts at all. Who wants one of those?


  50. - Honeybear - Wednesday, May 4, 16 @ 4:57 pm:

    CCP Hostage- Direct Action Gets Satisfaction!


Sorry, comments for this post are now closed.


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