Alberts, Trustee v. Illinois Department of Public Health

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
GREATER SOUTHEAST COMMUNITY
HOSPITAL CORPORATION I, et
al.,
Debtor.
___________________________
SAM J. ALBERTS, TRUSTEE FOR
THE DCHC LIQUIDATING TRUST,
Plaintiff,
v.
ILLINOIS DEPARTMENT OF
PUBLIC HEALTH,
Defendant.
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Case No. 02-2250
(Chapter 11)
(Jointly Administered)
Adversary Proceeding
No. 04-10443
DECISION AND ORDER RE MOTION FOR DEFAULT JUDGMENT
The plaintiff, Sam J. Alberts, Trustee for the DCHC
Liquidating Trust (the “Trust”), has filed a motion for default
judgment against the defendant, the Illinois Department of Public
Health, on his claims for avoidance of transfers of certain
payments to the Department and for recovery of the avoided
The decision below is hereby signed. Dated: October
18, 2006.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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1 In his response, Alberts contends that Illinois’
sovereign immunity may not prohibit an affirmative collection
action against the defendant because, in order to enjoy sovereign
immunity, the defendant must be the “State of Illinois,” whereas
here the named defendant is the Illinois Department of Public
Health. 	See Trustee’s Response at 2-3. 	This argument is without
merit. 	As a department of the State of Illinois, the Illinois
Department of Public Health enjoys the same protections of
sovereign immunity that are generally available to the state.
See Vill. of Riverwoods v. BG Ltd. P’ship, 658 N.E.2d 1261, 1265
(Ill. App. 1995) (“Sovereign immunity in Illinois exists pursuant
to statute and mandates that the State or a department of the
State cannot be a defendant in an action brought directly in the
circuit court.”).
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transfers under 11 U.S.C. § 550 (Docket Entry “D.E.” No. 7, filed
March 15, 2005). 	Mindful of the prohibition of entering a
default judgment in any civil action that is barred by the
Eleventh Amendment, however, the court directed Alberts to
supplement his motion for default judgment to address the
sovereign immunity issues presented by this adversary proceeding
(D.E. No. 8, entered May 31, 2005). 	The court’s order further
requested that Alberts demonstrate that service on the defendant
was proper. 	Alberts filed a response to the court’s order,
addressing both of the court’s concerns (D.E. No. 10, filed June
28, 2005). 	Although the court concludes, contrary to Alberts’s
position, that the Illinois Department of Public Health is, in
fact, an arm of the state of Illinois and therefore generally
entitled to assert the defense of sovereign immunity, 1 based upon
the plaintiff’s response to this court’s order, and in light of
the Supreme Court’s recent decision in Central Va. Cmty. College
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v. Katz, 126 S. Ct. 990 (2006), the court will grant Alberts’s
motion for default judgment.
In Katz, the Supreme Court held that when the states
ratified the Bankruptcy Clause, they relinquished their right to
assert the defense of sovereign immunity in proceedings brought
pursuant to laws promulgated by Congress under the Bankruptcy
Clause. 	Katz, 126 S. Ct. at 1004-05. 	The holding in Katz puts
to rest this court’s concern that § 106(a) is an unconstitutional
abrogation of the states’ sovereign immunity and that the instant
adversary proceeding might therefore be barred by the Eleventh
Amendment. 	Accordingly, the court shall not further delay entry
of a default judgment on that basis.
Rule 7004(b)(6), which requires that service made upon a
state or municipal corporation or other governmental organization
thereof subject to suit, be accomplished “by mailing a copy of
the summons and complaint to the person or office upon whom
process is prescribed to be served by the law of the state in
which service is made . . . 	or in the absence of the designation
of any such person or office by state law, then to the chief
executive officer thereof.” 	Unable to locate any Illinois
statute designating the person or office upon whom process is to
be served in a case brought against the Illinois Department of
Public Health, Alberts served Eric E. Whitaker, the Director of
the Illinois Department of Public Health. 	As the highest ranking
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4	O:\Laura\Alberts v Illinois DPH - default judgment.wpd
official within the Illinois Department of Public Health, the
court finds that, for purposes of Rule 7004(b)(6), Eric E.
Whitaker is the “chief executive officer” of that department.
The court, like Alberts, was unable to locate an Illinois statute
designating the person or office to be served in a proceeding
commenced against the Illinois Department of Public Health, and
the court therefore concludes that service of the summons and
complaint on Eric E. Whitaker was proper under Rule 7004(b)(6).
It is thus
ORDERED that Alberts’s motion for default judgment (D.E. No.
7) is GRANTED.
A judgment consistent with the foregoing follows.
[Signed and dated above.]
Copies to:
All counsel of record; Eric E. Whitaker, Director of the Illinois
Department of Public Health, 535 West Jefferson Street,
Springfield, Illinois 62761; Lisa Madigan, Esq., Attorney General
of Illinois, 500 South Second Street, Springfield, Illinois,
32706; Illinois Department of Public Health, P.O. Box 4263,
Springfield, Illinois, 62708.
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