Judge dismisses payment suit filed by social service agencies

A Cook County judge on Wednesday dismissed a lawsuit filed by 97 social service agencies — including Illinois first lady Diana Rauner’s early childhood education non-profit — that sued the state and Gov. Bruce Rauner for $161 million in missed payments and interest incurred during the budget impasse.

Andrea Durbin, chair of the Pay Now Illinois coalition, confirmed on Wednesday that the judge denied her group’s motion for a preliminary injunction and dismissed the case. Durbin said the group will likely file an appeal.

“He said in court that he was doing so because he wanted to see this resolved at the appellate court. That our issues were important, that we deserve a hearing and that this situation was urgent,” Durbin said. “He acknowledged the urgency of it and that it deserved to be heard at a higher level than at a trial court level.”

The Illinois Attorney General’s office, which represented the governor and other state officials named in the suit, also confirmed the judge’s case dismissal.

Pay Now Illinois is a coalition of 97 social service providers — including Ounce of Prevention, headed by Diana Rauner — that sued the state for breach of contract over missed payments during the state budget impasse, which led some social service agencies to shutter its doors. The group was not just seeking full payment on contracts, but also interest on late payments.

Gov. Bruce Rauner, State Comptroller Leslie Munger, Audra Hamernick, the director of the Illinois Housing Development Authority, were among state officials listed as defendants in the case.

The suit was filed on May 4, before a stopgap budget was reached. It was initially filed to require the state to start payments that were 60 days late.

The agencies originally sued for $161 million. The amount owed eventually grew to $184 million, but after payments from the stopgap budget, the debt is now less than $100 million, according to a spokesman for the plaintiffs.

In a motion to dismiss filed on Aug. 25, the state argued only Gov. Bruce Rauner and the General Assembly could take action to ensure payments to the agencies’ contracts. The stopgap budget signed on June 30 included authorization to pay for “some or all of the social services” provided by the plaintiffs, the motion said.

The attorney general’s office essentially argued the payments were barred by sovereign immunity, meaning the state is immune from civil suit or criminal prosecution. The state argued any claim against the state about contracts should have been filed exclusively with the Court of Claims.

But Durbin said the Court of Claims would be an untimely option. She said one service provider told her a claim he filed in 2012 was just finalized this year, with no payments yet made.

“People could go for years and years and years without having a resolution,” she said.

Durbin said some agencies in the suit have been paid from the stopgap, while others haven’t.

“There are organizations that have and haven’t received payments. I think the problem with the stopgap of course is it’s not a real budget. It’s temporary. It’s piecemeal. It doesn’t cover and it doesn’t provide sufficient appropriations for all the social service agencies.”