IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION

TAX & MISCELLANEOUS REMEDIES SECTION

)METROPOLITAN PIER AND EXPOSITION AUTHORITY, an Illinois municipal corporation, CPIICAGO CONVENTION AND TOURISM BUREAU, a not-for-profit Illinois corporation, and the VILLAGE OF ROSEMONT, an Illinois municipal corporation

))))))

Case No. 1))Plaintiffs,))V.))

c '■ -.j)UBER TECHNOLOGIES, INC., a Delaware corporation, RASIER, LLC, a Delaware limited liability company, and LYFT, INC., a Delaware corporation

))) t;o))Defendants.

X,”

COMPLAINT I'O

’), Chicago ConventionPlaintiffs Metropolitan Pier and Exposition Authority (“MPEA

and Tourism Bureau (“Choose Chicago”), and the Village of Rosemont, Illinois (“Village of

Rosemonf’ or “Village”) (collectively, “Plaintiffs”), bring this complaint pursuant to 735 ILCS

5/2-701 for declaratory and other relief against Defendants Uber Technologies, Inc. ( Uber ),

Rasier, LLC (“Rasier”) and Lyft, Inc. (“Lyft”) (collectively, “Defendants”), and state as follows:

NATURE OF THE ACTION

This case concerns Defendants’ refusal to remit the Airport Departure Tax (the

all persons, other than governmental agencies,

1.

“Tax”), which MPEA is required to impose on

engaged in the business of providing ground transportation for hire from Chicago O’Hare

International Airport (“O’Hare”) and Chicago Midway International Airport (“Midway”) to

passengers. Defendants are in the business of providing ground transportation for hire within the

metropolitan area of Chicago. The City of Chicago, Illinois, (“City of Chicago”) recently

authorized Defendants to pick up rides and passengers from O’Hare and Midway. Despite the

fact that Defendants are statutorily obligated to remit the Tax to MPEA for the benefit of

Plaintiffs, they have refused to do so. Plaintiffs, therefore, bring this action against Defendants

required to collect and remit the Tax tofor; (1) a declaratory judgment that Defendants are

Plaintiffs; and (2) a monetary judgment in the amount of the Tax, interest and penalties that are

due and owing to Plaintiffs from Defendants.

PARTIES

MPEA is a municipal corporation and a unit of local government under the2.

Illinois Constitution of 1970.

Choose Chicago is a not-for-profit Illinois corporation, with its principal place of

business in Chicago, Illinois. Choose Chicago is in the business of promoting Chicago tourism

3.

and trade.

The Village of Rosemont is a municipal corporation and home rule unit organized

under the Illinois Constitution of 1970. The Village is located immediately adjacent to O’Hare

4.

and approximately 14 miles northwest of the Chicago “Loop.” The Village owns and operates

the Donald E. Stephens Convention Center, a 890,000 square foot convention, exposition and

conference facility that the Village promotes, leases and licenses for the purpose of presenting

and conducting trade shows, conferences, conventions and expositions.

Uber is a Delaware corporation with its principal place of business in San

Uber is authorized to conduct business and does conduct business

5.

Francisco, California.

throughout Illinois, including in Cook County.

2

Rasier, a Delaware limited liability company, is a subsidiary of Uber and is

fiber’s equivalent for purposes of this action. Rasier is authorized to conduct business and does

conduct business throughout Illinois, including in Cook County.

Lyft is a Delaware corporation with its principal place of business in San

Francisco, California. Lyft is authorized to conduct business and does conduct business

throughout Illinois, including in Cook County.

6.

7.

JURISDICTION AND VENUE

This Court has jurisdiction over Defendants pursuant to 735 ILCS 5/2-209

because Defendants have transacted business in Illinois, out of which this cause of action arises,

and Defendants regularly conduct such business within Illinois.

Venue is proper in this Court pursuant to Section 735 ILCS 5/2-I0I because

Defendants regularly conduct business within Cook County, Illinois, and such business gives rise

to this cause of action.

8.

9.

FACTS

MPEA is a “unit of local government” and a municipal corporation, organized

and existing under the “Metropolitan Pier and Exposition Authority Act ( MPEA Act ).

70 ILCS §§ 210/3, 4, 5.4(a). MPEA owns and contracts for the management of McCormick

Place and Navy Pier, and promotes and operates conventions, fairs and expositions in the

Chicago metropolitan area. Id. MPEA has “a compelling and proprietary interest in the success,

competitiveness, and continued viability of McCormick Place and Navy Pier . .

obligation to ensure that these facilities produce sufficient operating revenue.” Id. at 5.4(a).

In 1992, the MPEA Act was amended to provide for the issuance by the MPEA of

Expansion Project Bonds to finance the MPEA’s capital improvement projects. Approximately

10.

. and its

11.

3

$2,669 billion of Expansion Project Bonds are currently outstanding and over $11 billion of debt

service payments will be required to pay the outstanding Expansion Project Bonds.

The MPEA Act provides for the repayment of the Expansion Project Bonds from

three sources: (a) taxes imposed in the Chicago area (the “Authority Taxes”); (b) Annual State

Sales Tax Deposits; and (c) a share of any surplus revenues from the Illinois Sports Facilities

Authority, if there is any. The Authority Taxes include; (1) a Car Rental Tax; (2) a Restaurant

Tax; (3) a Hotel Tax; and (4) an Airport Departure Tax.

Under the MPEA Act, the Authority Taxes are the first source for repayment of

the Expansion Project Bonds and the Annual State Sales Tax Deposits are the second source that

is available to meet the debt service requirements for the Expansion Project Bonds when the

Authority Taxes are insufficient. In other words, every dollar of Authority Tax receipts reduces

the State’s exposure to the use of Annual State Sales Taxes to pay MPEA Expansion Project

Bonds.

12.

13.

all secured under an Indenture of Trust thatThe Expansion Project Bonds are

pledges and assigns all of the Authority Taxes as security for the repayment of the Expansion

Project Bonds. Additionally, the State has pledged to the holders of the Expansion Project

Bonds that the State will not limit or alter the rights and powers vested in the MPEA or the basis

14.

on which State funds are to be paid to the MPEA.

In addition to providing for the repayment of the Expansion Project Bonds, the

MPEA Act also provides for the funding of Choose Chicago and the maintenance and

improvement of the Donald E. Stephens Convention Center from the Airport Departure Tax.

Prior to September 1, 2010, revenue generated from the Airport Departure Tax

allocated solely towards repayment of the Expansion Project Bonds (these pre-September 1,

15.

16.

was

4

2010 rates are collectively referred to as the “Original Tax Amount”). Once the Airport

Departure Tax rates were doubled on September 1, 2010, the proceeds from the increase in the

tax rate (generally referred to as the “Increased Tax Amount”) were, and still are, allocated

towards Choose Chicago and the Donald E. Stephens Convention Center; these additional

proceeds are not for the benefit of the MPEA or its bondholders and are not pledged as security

for or available for repayment of the MPEA.

Specifically, after the City of Chicago collects the proceeds of the Airport

Departure Tax pursuant to the intergovernmental agreement with MPEA {see Ex, 1) and then

deducts the greater of 7.5% of the Tax collected, or $835,000, of costs associated with the

collection, enforcement and administration of the Tax, the remainder of the Tax is allocated,

pursuant to the MPEA Act, as follows:

17.

100% of the Original Tax Amount is paid to the State Treasurer, as trustee

for the MPEA, for deposit into a trust fund that is used to repay the MPEA Expansion Project

a.

Bonds;

75% of the Increased Tax Amount is paid to the MPEA and used to fund

grants to Choose Chicago. These grants support the convention purposes of the MPEA; and

25% of the Increased Tax Amount is paid to the State Treasurer and

deposited in the Convention Center Support Fund, which is used for grants to the Donald E.

Stephens Convention Center.

b.

c.

Historically, annual collections of the Airport Departure Tax have been

approximately $10 million of Original Tax Amount, which is allocated to the MPEA’s Project

Expansion Bonds, and approximately $10 million of Increased Tax Amount, which is allocated

between Choose Chicago and the Donald E. Stephens Convention Center. The Airport

18.

5

Departure Tax receipts allocated to Choose Chicago has become so significant, it makes up

almost 27% of Choose Chicago’s 2016 operating budget.

The MPEA Act both authorizes and requires the Authority to impose and collect19.

the Authority Taxes, including the Airport Departure Tax. With respect to the Airport Departure

Tax the mandate is set forth in Section 13(f) of the MPEA Act:

By ordinance the Authority shall. . . impose an occupation tax on all persons, other than a governmental agency, engaged in the business of ground transportation for hire to passengers in the metropolitan area at a rate of $4 per taxi or livery vehicle departure with passengers for hire from commercial service airports in the metropolitan area.

70 ILCS § 210/13(f) (emphasis added).

The MPEA must impose the entire amount of the Airport Departure Tax every

year with no abatement of the rate and the Authority may not exempt from the Airport Departure

Tax persons who are subject to the Tax. This maximum imposition of the Airport Departure Tax

is a statutory mandate even if the amount collected exceeds the debt service requirements for the

Expansion Project Bonds.

20.

In order to facilitate the imposition of this required occupation tax, the Illinois

General Assembly provided MPEA with the “power to pass all ordinances and make all rules

and regulations proper or necessary to carry into effect the powers granted to [it].

21.

70 ILCS

§ 210/23.

Thus, MPEA enacted the MPEA Airport Departure Tax Ordinance (“MPEA22.

Ordinance”), which became effective January 1, 1993. (Ex. 1, at Ex. A.)

The MPEA Ordinance imposes an occupation tax for departures from commercial

service airports in the Chicago metropolitan area “on all persons, other than a governmental

23.

6

agency, engaged in the business of providing ground transportation to passengers for hire” at

specific rates. (Ex. 1, at Ex. A, §§ 1-3.)

The MPEA Ordinance defines “commercial service airport” to mean “any airport24.

located in Cook County, Illinois, receiving scheduled passenger service and enplaning more than

100,000 passengers per year.” {Id. at §§ 1-2.) O’Hare and Midway meet this definition.

The MPEA Ordinance defines the phrase, “engaged in the business of providing25.

ground transportation to passengers for hire,” as;

operating, or causing or permitting to be operated, any motor vehicle for transporting persons for consideration. The phrase includes, but is not limited to operating, or causing or permitting to be operated, taxis; liveries; buses; vans; charter or sightseeing vehicles; and non-emergency medical carriers.

{Id. (emphasis added.))

The MPEA Ordinance, as amended, defines a “livery” as “a motor vehicle . . .26.

(i) licensed as a livery vehicle . . . and (ii) for hire to passengers at a charge or fare per trip or per

passenger fixed by agreement in advance.” MPEA Ordinance No. 15-03, at §§ 1-2 (attached as

Ex. 2.). It also expressly provides that “[t]he term ‘livery’ shall also include all transportation

network vehicles.” {Id.)

A “transportation network vehicle” is defined by the MPEA Ordinance as “any

{Id.) “Transportation network

27.

vehicle used to provide a transportation network service.

a prearranged transportation service offered or provided for compensation usingservice means

an Internet-enabled application or digital platform to connect potential passengers with

{Id.) “Transportation network drivers” are affiliated with atransportation network drivers.

transportation network provider and transport passengers for compensation using this

'Transportation network providers” in turn “offer ortransportation network vehicle. {Id.)

provide . . . transportation network services.” {Id.)

7

The MPEA Ordinance provides specific occupation tax rates for departures from

commercial service airports for liveries ($4 per departure), transportation network vehicles ($4

per departure), taxis ($4 per departure), and buses and vans ($18-54 per departure or $2 per

28.

passenger). (Jd. at §§ 1-3.)

The MPEA Act provides that MPEA may provide for the “administration and

enforcement of the [T]ax and the collection of the [T]ax from persons subject to the tax as the

[MPEA] determines to be necessary or practicable for the effective administration of the [T]ax.”

210/13(f). The MPEA Act further provides that the MPEA “may designate the

method or methods for persons subject to the [T]ax to reimburse themselves for the [T]ax

29.

70 ILCS

liability arising under the ordinance.”

With respect to the collection of the Tax from liveries, the MPEA Ordinance

provides that “the ultimate incidence and liability for paying the [T]ax shall be borne by the

operator.” (Ex. 2, at §§ 1-3.)

30.

An “operator” is defined as “a person who is actually engaged in the b>isiness of

providing ground transportation to passengers for hire as owner, long-term lessee or

independent-contractor driver of a motor vehicle used to transport passengers for hire” (Ex. 1, at

Ex. A, §§ 1-2.) Also included in the definition of an “operator” in the MPEA Ordinance is

“[t]he transportation network provider that offers or provides the transportation network service

used to connect the driver of a transportation network vehicle with a passenger at a commercial

31.

service airport.” {Id.)

The MPEA Ordinance also requires transportation network providers to collect

the Tax from each transportation network vehicle owner and then to remit the Tax to the City of

32.

8

Chicago, which administers, collects and enforces the Tax on behalf of MPEA. (See Ex. 2 at

§§ 1-3.)

In or around November 2015, the City of Chicago began authorizing Uber and

Lyft to allow their transportation network vehicles to pick up passengers from O’Elare and

33.

Midway.

Uber operates the Uber mobile app, which allows potential passengers to submit a

trip request through their smartphones, which is then routed to Uber’s transportation network

drivers, who provide prearranged ground transportation to these passengers for compensation.

Uber offers potential passengers different types of services, including “UberX”

and “UberBlack” (or “UberSUV”). Through UberX a passenger uses the app to ask Uber to send

ordinary, unmarked private vehicle to a designated location. Uber sends the request to private

transportation network drivers who have contracted with Uber to accept its dispatches. If the

driver chooses to accept the dispatch, Uber notifies the passenger of the driver’s name, the type

of vehicle and expected time of arrival. The fare is computed by Uber using information from

the smartphone’s GPS system, based on distance and time rates set by Uber. The fare is paid to

Uber via the passenger’s credit card, which must be previously registered with Uber. Through

“UberBlack” and “UberSUV,” a passenger uses the app to ask Uber to send either a “black car”

or an SUV to a designated location. Uber sends the request to private transportation network

drivers operating large cars or SUVs. If the driver chooses to accept the dispatch, Uber notifies

the passenger of the driver’s name, the type of vehicle and expected time of arrival. The fare is

calculated by Uber, using the smartphone’s GPS system, based on distance and time rates set by

Uber. The fare is paid to Uber via the passenger’s credit card registered with Uber.

34.

35.

an

9

Passengers with iPhones or Androids (and a Facebook account) can similarly use

the Lyft app to request a ride. Lyfl asks the passengers for their pick-up location and sends the

request to available transportation network drivers. If a driver accepts the request, the Lyft app

provides the passenger with a picture of the driver and a description of the car to expect. The

fare is calculated by Lyft, based on a time and distance calculation. The fare is paid to Lyft via

the passenger’s credit card registered with Lyft.

In violation of the MPEA Ordinance, Defendants have failed and refuse to remit

the Tax on each of their transportation network vehicle’s departures from Midway and O’Hare to

36.

37.

MPEA.

On January 7, 2016, MPEA notified Defendants of their statutory obligation to

remit the Tax for each of Defendants’ transportation network vehicle’s departures from Midway

and O’Hare, and warned of potential legal ramifications if Defendants failed to remit the Tax by

38.

January 18, 2016. (S'ee Exs. 3, 4.)

To date, none of the Defendants have paid the Tax that is due and owing to39.

Plaintiffs.

COUNT I - ACTION FOR A DECLARATORY JUDGMENT

Plaintiffs adopt and reallege paragraphs 1-39 above as and for this paragraph 40.

Plaintiffs, the Expansion Project Bond bondholders and the State have a clear

legal interest in collecting the Tax from Defendants on each departure from O’Hare and Midway.

Plaintiffs have communicated to Defendants their position that Defendants are

required to remit the Tax on each of their transportation network vehicle’s departures from

O’Hare and Midway, pursuant to 70 ILCS § 210/13(1) and the MPEA Ordinance, and

Defendants have taken the position that they are not required to do so.

40.

41.

42.

10

A real and existing controversy exists as to the issue of whether Defendants are

required to collect and remit the Tax on each of their transportation network vehicle’s departures

43.

from O’Hare and Midway.

A declaration by the Court, as requested below, will terminate the controversy

over whether Defendants are required to collect and remit the Tax on each of their transportation

network vehicle’s departures from O’Hare and Midway.

Resolving this controversy will avoid further litigation and other potential harm to

44.

45.

Plaintiffs and Defendants.

WHEREFORE Plaintiffs respectfully request that this Court find in their favor

and against Defendants and grant the following relief:

declaration that Defendants are required to collect and remit the Tax ona. a

each of their transportation network vehicle’s departures from O’Hare and Midway; and

such other relief as this Court deems warranted.b.

COUNT II - ACTION FOR TAX, INTEREST AND PENALTIES

Plaintiffs adopt and reallege paragraphs 1^5 above as and for this paragraph 46.

Defendants have failed to collect and remit the Tax due and owing as required by

46.

47.

Sections 1-3 of the Ordinance and Section 3-46-035 of the Municipal Code of Chicago.

Pursuant to Code Section 3-4-280, the Tax is a debt due and owing by Defendants48.

to MPEA.

Pursuant to Code Section 3-46-035, Defendants are also liable for interest and

penalties for Taxes withheld on each of Defendants’ transportation network vehicle’s departures

from O’Hare and Midway since Defendants were authorized to pick up rides and passengers

49.

from these airports in November 2015.

11

WHEREFORE Plaintiffs respectfully request that this Court find in their favor

and against Defendants and grant the following relief:

a monetary judgment for Tax, interest and penalties, in an amount to bea.

determined in these proceedings; and

such other relief as this Court deems warranted.b.

METROPOLITAN PIER AND EXPOSITION AUTHORITY, AND CHICAGO CONVENTION AND TOURISM BUREAU, AND THE VILLAGE OF ROSEMONT, ILLINOIS

Dated: March 18, 2016

By:'ne of Their Attorfeys

Aharon S. Kaye Natalie F. WayneKATTEN MUCHIN ROSENMAN LLP 525 West Monroe Street Chicago, IL 60661 Telephone: (312) 902-5200 Facsimile: (312) 577-8971 Attorney I.D. 41832

Attorneys for Metropolitan Pier and Exposition Authority and Chicago Convention and Tourism Bureau

Peter D. Coblentz ROSENTHAL MURPHEY COBLENTZ & DONAHUE 30 N. LaSalle St, Suite 1624 Chicago, IL 60602 Telephone: (312) 541-1070 Facsimile: (312)541-9191

Attorney for the Village of Rosemont, Illinois

12

Exhibit 1

Exhibit 2

Exhibit 3

Exhibit 4