Evanston, Ill.-based NorthShore University HealthSystem has requested a Cook County judge to dismiss a class-action suit that demands repayment from hospitals for alleged erroneous tax exemptions, according to the Cook County Record.
Thornmeadow Partners filed the class-action suit in May 2016 against NorthShore, as representative for other tax-exempt hospitals in Illinois. The plaintiffs claim the hospitals wrongly benefited from tax exemptions and asked the court to force the hospitals to reimburse taxpayers for the extra amount they paid in property taxes since the hospitals were exempt.
Under a 2012 law, a nonprofit hospital in Illinois doesn't have to pay property taxes if it can show its charitable services are equal to or exceed its property tax liability. Plaintiffs cited, as the basis of the class-action suit, an Illinois Fourth District Appellate Court decision issued in January 2016 deeming the 2012 state law unconstitutional. However, the Illinois Supreme Court vacated the appellate court decision in March and remanded the case to a lower court for reconsideration.
NorthShore filed a motion to dismiss the class-action suit, arguing the Illinois Supreme Court decision vacating the Fourth District Appellate Court ruling causes Thornmeadow Partners' case to collapse. NorthShore further argues that the Illinois First District Appellate Court held the 2012 law was constitutional in a ruling issued in a separate case in December 2016.
The next hearing in the NorthShore case is Aug. 14 and Judge Celia Gamrath is overseeing the case.
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