Full Opinion

2026 IL App (1st) 241683 No. 1-24-1683 Opinion filed November 6, 2026 SIXTH DIVISION ____________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ____________________________________________________________________________ THE CITY OF CHICAGO DEPARTMENT OF ) Appeal from the Circuit Court PUBLIC HEALTH, ) of Cook County, Illinois in an ) Administrative Review Law ) Action of a Decision by the Plaintiff-Appellee, ) Chicago Department of ) Administrative Hearings. v. ) ) No. 2023 CH 06165 THE CITY OF CHICAGO DEPARTMENT OF ) ADMINISTRATIVE HEARINGS and GENERAL ) III, LLC, ) The Honorable Allen P. ) Walker, Judge, Presiding. Defendants ) ) (General III, LLC, Defendant-Appellant). ) ____________________________________________________________________________ JUSTICE PUCINSKI delivered the judgment of the court, with opinion. Justices Hyman and Evans concurred in the judgment and opinion. OPINION ¶1 This action under the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2022)) stems from the decision of the City of Chicago Department of Public Health (CDPH) to deny a permit sought by appellant General III, LLC (General III) to operate a large recycling facility on the southeast side of Chicago. After General III sought review in the City of Chicago Department 1-24-1683 of Administrative Hearings (DOAH), an administrative law judge (ALJ) vacated the permit denial. CDPH sought administrative review, after which the circuit court reversed the ALJ’s decision and reinstated the permit denial. General III then sought relief in this court. ¶2 For the following reasons, we agree with the circuit court that the ALJ made errors of law in the course of vacating the permit denial. Thus, we affirm the circuit court, reverse the ALJ’s decision, and reinstate the CDPH’s denial of the permit. I. BACKGROUND ¶3 This matter stems from the February 2022 decision by the Commissioner of CDPH to deny a permit to operate a new large recycling facility on the southeast side of Chicago. Before we delve into the facts, we find it helpful to review the regulatory scheme that governs the powers of the CDPH and the permitting process for recycling facilities. ¶4 A. CDPH Powers Under the Code ¶5 First, we review the provisions of the Municipal Code of Chicago (Code) governing the CDPH, which are contained in Chapter 2-112 of the Code. Chicago Municipal Code § 2-112-005 et seq. (amended Feb. 24, 2021). Section 2-112-010 of the Code establishes the CDPH and specifies that it shall be administered by a Commissioner, who is either a licensed physician or a person with an advanced degree in a field related to public health. Chicago Municipal Code § 2- 112-010 (amended March 20, 2024). The Code states: “All matters pertaining to the administration of the staff of the [CDPH] and the proper protection and promotion of public health shall be in charge of the Commissioner of Public Health.” Chicago Municipal Code § 2-112-030 (amended February 24, 2021). ¶6 At the relevant time, section 2-112-110 specified the Commissioner’s authority to issue permits under Chapter 11-4 of the Code (the Chicago Environmental Protection and Control -2- 1-24-1683 Ordinance). Chicago Municipal Code § 2-112-110(b)(9) (amended Feb. 24, 2021) (since amended); Chicago Municipal Code § 11-4-010 et seq.(amended Oct. 27, 2021). Section 2-112- 110 of the Code set forth several additional powers of the Commissioner, including the power to “conduct studies, investigations and research, including joint cooperative investigation and research with public and private agencies and organizations” and the power to “advise, consult and cooperate with other agencies of the state and federal governments.” Chicago Municipal Code § 2- 112-110(b)(12), (13) (amended Feb. 24, 2021) (since amended). 1 Additionally, section 2-112- 110(c) gave the Commissioner power to do what “may be necessary” for the “proper protection and promotion of public health.” Id. § 2-112-110(c); Chicago Municipal Code § 2-112-030 (amended Feb. 24, 2021). ¶7 The Code further authorizes the Commissioner “to issue rules necessary or proper for the administration or enforcement of health ordinances.” Chicago Municipal Code § 2-112-070 (amended Feb. 24, 2021) (subsequently amended Dec. 20, 2025). ¶8 B. Code Provisions and Rules Regarding Recycling Permits ¶9 This case also requires familiarity with provisions of Chapter 11-4 of the Code, the Chicago Environmental Protection and Control Ordinance, pertaining to recycling facilities. ¶ 10 Chapter 11-4, Article XX (sections 11-4-2510 to 11-4-2680) is entitled “Recycling Facility and Urban Farm Accessory Composting Permits.” Chicago Municipal Code §§ 11-4-2510 to 11- 4-2680. Section 11-4-2660 of the Code states that the Commissioner “shall promulgate rules and Analogous language now appears in section 2-112-100(c) of the Code. Chicago Municipal Code § 2- 1 112-100(c) (amended Nov. 15, 2023) (“The Commissioner shall encourage and conduct such studies, investigations and research as in his judgment will promote and improve public health. Such activity may be carried out jointly with public or private entities.”). -3- 1-24-1683 regulations necessary to implement the provisions of this Article XX.” Chicago Municipal Code § 11-4-2660 (amended May 6, 2015). ¶ 11 Section 11-4-2530 specifies that an application for a recycling facility must be made “to the Commissioner in a manner specified by the Commissioner for such purpose.” Chicago Municipal Code § 11-4-2530 (amended July 29, 2015) (subsequently amended Nov. 15, 2023). That section identifies certain minimum information that must be provided but also states that the applicant must provide “[a]ny other information requested by the Commissioner.” Id. § 11-4- 2530(I). ¶ 12 Pursuant to its rulemaking authority, the Commissioner has issued two sets of rules pertinent to recycling facilities. First, the Commissioner issued “Recycling Facility Permits Rules and Regulations” in March 2014 (2014 Rules). Chi. Dep’t of Pub. Health, Recycling Facility Permits (Mar. 19, 2014), https://www.chicago.gov/content/dam/city/depts/dol/rulesandregs/RECYCLINGFACILITYPER MITSFINAL.pdf [https://perma.cc/HUT5-P5AU]. ¶ 13 Pertinent to this appeal, Rule 3.0 of the 2014 Rules sets forth “Conditions of Permit Issuance,” including that an application must pass a “compliance history evaluation” described in Rule 4.0. Id. In turn, Rule 4.0 states that, before granting a permit for a recycling facility, the Commissioner “will conduct an evaluation of the applicant’s prior experience in recycling or junk facility operations or other waste handling operations.” Id. Under Rule 4.0, the Commissioner may deny a permit based on an applicant’s violations of laws, regulations, standards, permit conditions, or ordinances in the past three years or if conditions at a previously permitted facility “pose a material threat to continued compliance” with any such laws, regulations, standards, permit conditions, or ordinances. Id. -4- 1-24-1683 ¶ 14 The Commissioner issued a second set of rules, titled “Rules for Large Recycling Facilities” (LRF Rules), in June 2020. Chi. Dep’t of Pub. Health, Rules for Large Recycling Facilities (June 5, 2020), https://www.chicago.gov/city/en/depts/dol/rules-and-regulations- portal/rules-for-large-recycling-facilities.html#docaccess [https://perma.cc/7AXU-JVKH]. The LRF Rules set forth additional requirements for the operation of a “Large Recycling Facility”, which was defined to mean a “Facility that is authorized to accept 1,000 tons or more per day of Recyclable Materials, operates a metal Shredder that Processes vehicles that has a rated capacity of greater than 25 tons per hour, or utilizes Mechanical Sorting Equipment in the Processing of ASR [Auto Shredder Residue].” Id. There is no dispute that the facility underlying the instant appeal meets the definition of a Large Recycling Facility. ¶ 15 The Code states that the Commissioner may deny an application for a permit “where such application does not meet all applicable requirements set forth in the Code.” Chicago Municipal Code § 11-4-040(a) (amended July 29, 2015) (subsequently amended Nov. 15, 2023). It also provides that “[t]he Commissioner may impose reasonable permit conditions to protect the public health, safety or welfare of the city.” Id. § 11-4-040(e). ¶ 16 Elsewhere, section 11-4-2525 of the Code states that “[n]o permit shall be renewed or issued to” an applicant “whose permit issued under this article has been revoked for cause within the past three years” or to entities with a 25% or larger ownership stake in a party whose permit was revoked for cause within that time frame. Chicago Municipal Code § 11-4-2525 (added Apr. 9, 2008). ¶ 17 The Code contemplates review of a CDPH permit denial by the DOAH. After denial of a permit application, the applicant may demand a hearing within 15 days, after which the “Commissioner shall initiate an administrative hearing at the Department of Administrative -5- 1-24-1683 Hearings, Environmental Safety and Consumer Affairs Hearings Division.” Chicago Municipal Code § 11-4-040(d) (amended July 29, 2015) (subsequently amended Nov. 15, 2023). Upon the conclusion of the DOAH hearing, the “administrative law officer shall have the authority to affirm or vacate the Commissioner’s denial decision.” Id. ¶ 18 C. Prior Operations at the Site of the Proposed Facility ¶ 19 For several decades, General Iron Industries Inc. (General Iron) owned and operated a metal scrap recycling business in the Lincoln Park neighborhood of Chicago. Beginning around 2015, the City advised General Iron that it desired the closing of the operations in Lincoln Park. ¶ 20 By July 2018, General Iron had agreed to sell certain of its assets to Reserve Management Group (RMG). There is no dispute that RMG is an affiliate of General III, with overlapping ownership. Specifically, General III is 80 percent owned by another LLC, General II, which, in turn, is owned by two holding companies, RMG Investment Group and RMG Development Group II. As stated by the circuit court, this relationship indicates that RMG entities own 80 percent of General III; General III does not dispute this point. ¶ 21 Notably, for many years preceding the permit application at issue, RMG and affiliated entities owned and operated four recycling facilities at a 175-acre site at 116th Street and Burley Avenue on the south side of Chicago, referred to as the “Burley site.” This appeal concerns an application to operate a large recycling facility on the Burley site. ¶ 22 In February 2019, General III applied to the Chicago Zoning Board of Appeals (Zoning Board) for a special use permit. Following a public hearing, in April 2019, the Zoning Board issued findings and authorized the permit application. ¶ 23 In September 2019, the City entered into an agreement with General Iron, General Metals, LLC, and RMG, titled “TERM SHEET REGARDING GENERAL IRON/RMG INTERIM -6- 1-24-1683 OPERATING PLAN, CESSATION OF NORTHSIDE OPERATIONS, AND SOUTHSIDE TRANSITION.” It recited that RMG and General Iron agreed to cease the Lincoln Park metal recycling operations, and “RMG intends to transition to a new metal recycling operation to be developed” at the Burley site. The City agreed to “reasonably cooperate * * * in achieving the efficient, expeditious transition” of operations to the Burley site, “including reasonable assistance with processing and review of license and permit applications, and scheduling of public hearings.” However, the City specified that it would “enforce its ordinances, rules, regulations, licenses, permits, and policies as necessary to protect the public health and safety and welfare, applying such enforcement neutrally and consistently to General Iron, RMG, and other metal recycling facilities in the City.” The agreement called for General Iron to close most of its operations at the Lincoln Park facility by December 31, 2020. ¶ 24 D. Illinois EPA Permit Granted in 2020 ¶ 25 On September 25, 2019, General III applied to the Illinois Environmental Protection Agency (IEPA) for a permit to operate a new scrap metal recycling facility at the Burley site. The IEPA issued a notice of public comment period and conducted two public hearing sessions in May 2020. On June 25, 2020, the IEPA issued a construction permit to General III. ¶ 26 In July 2020, General III applied to CDPH for an air pollution control (APC) permit pursuant to section 11-4-620 of the Code. Chicago Municipal Code § 11-4-620 (amended Nov. 16, 2011) (subsequently amended Nov. 7, 2022). On September 15, 2020, CDPH issued the permit. ¶ 27 E. Construction of Facility from 2020-21 ¶ 28 The record reflects that General III began construction of a new facility at the Burley site in September 2020, before it had formally submitted an LRF permit application to CPDH. Construction continued until March 2021, before CPDH had rendered a decision on a permit -7- 1-24-1683 application for a large recycling facility. According to General III, the cost of constructing the facility was approximately $80 million. ¶ 29 F. General III Applies for a Large Recycling Facility Permit ¶ 30 In November 2020, General III filed its LRF permit application for the Burley site. On December 23, 2020, CDPH informed General III that its application was incomplete, setting forth 34 categories of additional information to be provided in an updated application. On January 13, 2021, General III filed a revised application containing approximately 1165 pages. ¶ 31 G. Federal HUD Investigation and the City’s Response ¶ 32 Certain community members raised complaints with the United States Department of Housing and Urban Development (HUD) about the potential detrimental environmental and discriminatory impacts of the new facility at the Burley site. In October 2020, HUD began an investigation in response to a complaint that the City engaged in racial discrimination by facilitating the relocation of General Iron’s metal recycling operations from Lincoln Park, a majority white neighborhood, to a majority Black and Hispanic neighborhood. ¶ 33 In November 2020, HUD contacted the City and expressed concerns about the expansion of operations at the Burley site. HUD asked the City to “refrain from issuing the final permit” while HUD conducted conciliation discussions with the complaining parties and the City. ¶ 34 In a letter dated November 20, 2020, the City of Chicago Law Department responded to HUD, stating that the “claims of discrimination advanced in the complaint lack any merit.” The City also stated that “RMG has been conducting metal recycling operations” at the Burley site “in a lawful and environmentally safe manner for decades.” The City denied that the new facility would “perpetuate racial segregation by ‘facilitating the relocation’ of General Iron’s Lincoln Park facility to the Southeast side of Chicago.” The City stated: “[T]he planned RMG expansion is not -8- 1-24-1683 a relocation of General Iron’s Lincoln Park operation, but an entirely distinct effort undertaken by a different legal entity.” ¶ 35 We again note that, although General III was the specific entity that applied for the LRF permit at issue, there is no dispute that General III’s ownership overlaps with the ownership of RMG and its related entities that previously operated at the Burley site. ¶ 36 H. The Federal EPA and Chicago Mayor Request a Health Impact Assessment ¶ 37 On May 7, 2021, the administrator of the United States EPA, Michael S. Regan, sent a letter to Chicago’s then mayor, Lori Lightfoot, expressing concern about the proposed facility and suggesting that the City delay a decision on the permit application. The letter stated: “Substantial data indicate the current conditions facing Chicago’s southeast side epitomize the problem of environmental injustice, resulting from more than a half century of prior actions. This neighborhood currently ranks at the highest level for many pollution indicators * * * including fine particulate matter, air toxics cancer risk, respiratory hazard, traffic proximity, lead paint, Superfund site proximity, hazardous waste proximity, and wastewater discharges.” ¶ 38 The EPA also stated that the proposed site on Chicago’s southeast side “raised significant civil rights concerns,” referencing HUD’s investigation. The EPA advised: “Prior to reaching a decision on the permit, U.S. EPA suggests that the City complete an environmental justice analysis, such as a Health Impact Assessment, to meaningfully consider the aggregate potential health effects of the proposed RMG facility on the southeast side of Chicago. * * * We believe it is prudent for the City -9- 1-24-1683 to delay a decision on the pending permit until such an analysis can be conducted.” ¶ 39 Three days later (May 10, 2021), the CDPH commissioner advised General III that the City was following the U.S. EPA’s recommendation and had suspended its review of the permit application. Mayor Lightfoot also publicly stated that she had directed CDPH to initiate an environmental study, as recommended by the U.S. EPA. ¶ 40 I. The HIA Recommends Denial of the Permit ¶ 41 With the assistance of the U.S. EPA, CDPH began work on the “Health Impact Assessment” (HIA) in May 2021. In February 2022, CDPH issued the HIA regarding the permit application. The HIA acknowledged that it was “conducted in close coordination with and reliance on” the U.S. EPA and an environmental consultant. ¶ 42 The HIA noted that compared to Chicagoans overall, residents of the southeast side are “more vulnerable to the health effects of pollution based on their health and social status.” Acknowledging the existing facilities at the Burley site, the HIA noted that “highly sensitive groups may be harmed by the particulate matter pollution currently caused by RMG and other local industries.” It found that “[e]ven incremental additional emissions would exacerbate this harm.” The HIA found that “when the proposed Southside Recycling operation is considered as contributing to the cumulative burden experienced by the surrounding neighborhoods, it has the potential to exacerbate pre-existing environmental, health, and quality of life impacts associated with industrial development on the Southeast side.” ¶ 43 The HIA separately discussed RMG’s “compliance history,” stating there were “several instances of RMG’s failure to comply with City regulations and existing permit requirements to the detriment of the surrounding community.” It commented that, given the environmental burdens -10- 1-24-1683 that the facility could bring to the southeast side, “CDPH should only grant a permit if it is confident that RMG would operate Southside Recycling in accordance with strict permit conditions.” The HIA stated: “[t]he history of non-compliance exhibited here * * * indicates that the company is not currently acting in the best interest of the community and CDPH is not confident that it will do so with respect to Southside Recycling.” ¶ 44 The HIA concluded that CDPH should deny the permit application “based on a combination of factors, including: concerns for health, environment, and quality of life in an already over-burdened community; the inherent risks of recycling operations; as well as concerns about the company’s operating history, including apparent violations of existing permit requirements.” ¶ 45 J. CDPH Denies the Permit ¶ 46 On February 18, 2022, CDPH issued a 12-page letter in which it denied the permit application. The denial was largely based on the HIA, but it also relied on the compliance history of pre-existing facilities at the Burley site, which were operated by entities affiliated with General III. ¶ 47 CDPH’s denial letter noted its authority under the Code to adopt rules “necessary or proper” to administer environmental ordinances, including with respect to recycling facilities. CDPH recited that Rule 4.0 calls for an “evaluation of the applicant’s prior experience in recycling or junk facility operations” and allows denial of an application based on violations within the prior three years of regulations, standards, permit conditions, or ordinances. Chi. Dep’t of Pub. Health, Recycling Facility Permits (Mar. 19, 2014), https://www.chicago.gov/content/dam/city/depts/dol/rulesandregs/RECYCLINGFACILITYPER MITSFINAL.pdf [https://perma.cc/HUT5-P5AU]. CDPH also noted that the Code authorized the -11- 1-24-1683 Commissioner to cooperate with state and federal government agencies and to “do any and all other acts which may be necessary for the implementation of other powers” conferred by the Code. Chicago Municipal Code § 2-112-110 (amended Feb. 24, 2021) (since amended). ¶ 48 CDPH’s denial letter cited “an unacceptable risk that the proposed facility would produce an increase in particulate matter, noise, and diesel emissions, the negative effect of which are magnified in a population with the health vulnerabilities identified and documented in the HIA.” CDPH found “potential adverse changes in air quality and quality of life” plus the “health vulnerabilities in the surrounding communities described in the HIA—together with the Applicant’s track record in operating similar facilities within this campus—presents an unacceptable risk.” ¶ 49 CDPH’s denial letter cited a number of “Past and Present Environmental Compliance Issues” involving pre-existing recycling operations at the site. CDPH recognized the majority of the site was occupied by Reserve Marine Terminal (RMT), and there were “smaller operations conducted by three other recycling businesses.” CPDH’s review of information submitted with General III’s application found a number of issues with operations of the existing facilities, namely: (1) the volume of material processed exceeded the permitted tonnage under RMT’s permit; (2) RMT failed to obtain proper permits for its foundry sand operation; (3) RMG failed to notify CDPH of a December 2019 violation it received from the Illinois Environmental Protection Agency; and (4) CDPH issued a notice of violation to RMT in June 2019 for failure to control dust at the site. The CDPH also noted that December 2021 soil samples showed high levels of lead on site; CDPH observed certain unpermitted recycling activity at the site in December 2021; and CDPH had learned that RMG failed to report a July 2021 warehouse collapse. -12- 1-24-1683 ¶ 50 In denying General III’s permit application, CDPH stated that “the Applicant’s track record in operating similar facilities” gave it reason to weigh the “unpredictable risks and hazards associated with large metal recycling more heavily in assessing the likelihood of adverse outcomes for an already-burdened community.” The denial letter advised that, pursuant to section 11-4- 040(b) of the Code, General III could request a hearing within 15 days. ¶ 51 K. Proceedings in the DOAH ¶ 52 General III sought review in the Department of Administrative Hearings (DOAH). An ALJ, Mitchell C. Ex, conducted a hearing in January 2023. The ALJ heard testimony from several witnesses, including CDPH officers and representatives of General III. ¶ 53 L. The ALJ’s Decision Vacates CDPH’s Denial of the Permit ¶ 54 On June 1, 2023, the ALJ issued a 50-page “Findings, Decision and Order” that vacated the CDPH’s denial of the permit application. ¶ 55 In its findings, the ALJ emphasized that before May 2021, there was no indication that an HIA would be conducted or have any role in the CDPH’s permit decision. The ALJ found that hearing testimony from CDPH witnesses indicated that “By May 10, 2021, [General III] had submitted all required documentation” under CPDH rules. ¶ 56 The ALJ pointed out that CDPH witnesses acknowledged that an HIA does not appear in the Code and that Mayor Lightfoot directed the agency to initiate the HIA. Although the ALJ recognized that the Code authorized the Commissioner to issue rules necessary or proper for the implementation of environmental ordinances, the ALJ emphasized that a “Health Impact Assessment” does not appear in any City ordinance, rule, or regulation. ¶ 57 The ALJ rejected the notion that the Commissioner had authority to conduct the HIA, as there was no “specific ordinance” governing use of an HIA, and an HIA was “never formally -13- 1-24-1683 disclosed by publication in any way.” Accordingly, the ALJ found the HIA findings were “improperly applied” and must be “disregarded as beyond the authority of the Commissioner to implement.” ¶ 58 Separate from the HIA, the ALJ decision also found the CDPH erred insofar as the permit denial was premised on alleged instances of noncompliance, pursuant to the compliance review contemplated by Rule 4.0. In doing so, the ALJ found that Rule 4.0 conflicted with a Code provision. ¶ 59 Specifically, the ALJ reasoned that Rule 4.0 was legally inconsistent with section 11-4- 2525 of the Code, which requires denial of a permit where the applicant has had a permit “revoked for cause within the past three years.” Chicago Municipal Code § 11-4-2525 (added Apr. 9, 2008). According to the ALJ, Rule 4.0 impermissibly “lowers that bar by allowing permit denial for any violation *** of federal, state, or local laws, regulations, standards, permit conditions, or ordinances” in the operation of a facility. The ALJ determined that, in light of section 11-4-2525, the Commissioner could not “enact[ ] a rule that allows a permit to be denied for minor violations of law,” as the ordinance “imposed a much higher standard.” Thus, insofar as CDPH denied the permit based on “lesser violations” pursuant to Rule 4.0, the ALJ concluded this was beyond the Commissioner’s authority and should be “disregarded.” ¶ 60 Elsewhere, the ALJ remarked that the City made contradictory statements regarding the environmental safety of the facilities at the Burley site. It noted that in 2020 (before the HIA), the City made statements indicating that the new facility would be “clean, efficient and environmentally sensitive.” The ALJ also noted that despite numerous inspections at the Burley site, CDPH had “never raised any concerns with RMG” or affiliates before the February 2022 denial letter, other than a minor ticket for dust. -14- 1-24-1683 ¶ 61 The ALJ acknowledged but declined to address General III’s independent claim that it had “vested rights” to approval of its permit, given its acts in reliance on prior dealings with City agencies. The ALJ found this argument was more appropriate for the circuit court. ¶ 62 The ALJ concluded that General III “had met the LRF rules and requirements for an operating permit” but that: “Instead, at the direction of Mayor Lightfoot, the Chicago Department of Public Health, acting without City Council legislative authority, paused the permit application process and initiated a health impact assessment, which itself lacked authorization from the Council. As a result of the HIA, additional concerns were raised and included in the Denial Letter. For the most part, these additional concerns had never been raised before although the Chicago Department of Public Health was aware of, or should have been aware of, the items prior to February 2022.” The ALJ thus determined that the CDPH denial of the permit should be vacated. The ALJ noted that its order was appealable under the Administrative Review Law. ¶ 63 M. The Circuit Court Reverses the ALJ and Affirms Denial of the Permit ¶ 64 CDPH filed a timely complaint for administrative review. In August 2024, the circuit court issued a 21-page decision, in which it disagreed with the ALJ’s legal conclusions and affirmed the CDPH’s denial of the permit. In doing so, it agreed with the CDPH that (1) Rule 4.0 permitted CDPH to consider the compliance history of related entities and (2) CDPH was authorized to employ and rely on the HIA. Because we find the circuit court’s reasoning particularly thorough and persuasive, we review it in detail. -15- 1-24-1683 ¶ 65 The circuit court first addressed whether there was a conflict between Rule 4.0 and section 11-4-2525 of the Code and “whether the Commissioner’s reliance on Rule 4.0 [to deny the permit] was a proper exercise of her authority.” It answered these questions in favor of the CDPH. That is, the circuit court agreed that a compliance history review pursuant to Rule 4.0 could support a permit denial. ¶ 66 In doing so, the circuit court rejected General III’s claim that section 11-4-2525 enumerated the only three specific circumstances in which the Commissioner can deny a permit. The circuit court recognized that “CDPH, as the agency responsible for administering and enforcing the relevant provisions of the [Code], should be given deference in its interpretation of the municipal code.” The circuit court also noted that agencies have “discretion to act beyond explicitly listed statutory powers when such actions are in line with their regulatory responsibilities.” Citing the “deference owed to CDPH’s expertise in administering its regulatory framework,” it found Rule 4.0 was a proper exercise of the Commissioner’s broad discretionary authority. ¶ 67 After concluding that Rule 4.0 was valid, the circuit court proceeded to find that the CDPH did not err, to the extent it denied the permit application based on “affiliated entities’ history of noncompliance.” The circuit court emphasized that CDPH’s denial of the permit was not based “solely on the alleged instances of misconduct” but was “primarily grounded in the health risks posed” by the facility, as described in the HIA. The circuit court reasoned that “while unadjudicated allegations of noncompliance alone cannot be used as the sole basis for permit denial, an agency may consider these allegations if they are combined with a sufficient and non- prejudicial basis for denial, such as HIA risks.” (Emphasis added.) ¶ 68 The circuit court next determined that the Code authorized the Commissioner to conduct the HIA and rely on it to deny the permit. The circuit court emphasized that the Code authorized -16- 1-24-1683 the Commissioner to “encourage and conduct studies, investigations and research” and to take actions necessary for the “proper protection and promotion of public health.” Chicago Municipal Code § 2-112-110(b) (amended Feb. 24, 2021) (subsequently amended Dec. 20, 2025); Chicago Municipal Code § 2-112-030 (amended Feb. 24, 2021). The court also cited Code provisions giving the Commissioner power to “enforce all the laws of the state and provisions of this Code in relation to matters pertaining to the public health and sanitary conditions of the City.” See Chicago Municipal Code § 2-112-110(a) (amended Feb. 24, 2021) (subsequently amended Dec. 20, 2025). The circuit court also noted that the Code granted the Commissioner the power to issue rules necessary and proper for the administration of health ordinances (Chicago Municipal Code § 2- 112-070(a) (amended Feb. 24, 2021) (subsequently amended Dec. 20, 2025)) and to “supervise the execution of and implement all laws, ordinances, and rules pertaining to environmental protection and control.” Chicago Municipal Code § 2-112-110(b) (amended Feb. 24, 2021) (subsequently amended Dec. 20, 2025). The court reasoned such provisions were “consistent with a legislative framework intended to empower the Commissioner to effectively manage public health risks associated with large-scale industrial operations.” ¶ 69 The circuit court also determined that such legislative delegation of authority to CDPH was constitutionally permissible, pursuant to the test set forth by our supreme court in Stofer v. Motor Vehicle Casualty Co., 68 Ill. 2d 361, 372 (1977). The court concluded: “[T]he Commissioner had the discretion to incorporate an HIA in the LRF permit evaluation process, even if such an assessment is not explicitly mandated by the municipal code. The HIA does not impose new criteria or standards for the permit process. Rather, it provides a comprehensive assessment of relevant environmental and -17- 1-24-1683 health issues in the impacted area. In this Court’s view, it falls within the Commissioner’s broad duty to safeguard public health under the environmental ordinances of the City.” ¶ 70 The circuit court thus determined that the ALJ “erred as a matter of law” when it concluded that the Commissioner lacked authority to rely on the HIA. Rather, it found that use of the HIA was a permissible tool “within the existing regulatory framework.” ¶ 71 The circuit court then discussed the particular findings in the HIA. It noted that the HIA “highlighted significant health risks associated with the proposed facility” and that the surrounding community was “particularly susceptible to the potential health impacts” posed by a such a new facility. The court then concluded that the Commissioner’s decision to deny the permit “was not arbitrary but grounded in the substantive data and analysis presented in the HIA.” ¶ 72 The circuit court determined that the decision to deny the permit, “grounded in the findings of the HIA and supported by legal authority under the [Code], is upheld as a valid exercise of administrative discretion aimed at safeguarding public health.” Thus, it reversed “the ALJ’s decision to disregard HIA as part of the permit review process.” ¶ 73 The circuit court concluded that the CDPH “possessed the discretion and authority under both the applicable municipal ordinance and Rule 4.0 to deny the permit based on the findings of the HIA.” On that basis, the circuit court (1) affirmed the CDPH’s denial of the permit and (2) reversed the ALJ’s decision vacating the denial. The circuit court specified that this was a final and appealable order. ¶ 74 General III filed a notice of appeal, in which it requested that this court reverse the circuit court order, affirm the ALJ’s decision, and remand this matter “with instructions to order that the Large Recycling Facility permit be issued.” -18- 1-24-1683 ¶ 75 This matter has been fully briefed and orally argued. In addition to the parties’ briefs, this court has considered the amici curiae brief submitted in support of CDPH by certain community groups (Southeast Environmental Task Force, People for Community Recovery, and Southeast Side Coalition to Ban Petcoke), as well as the amici curiae brief in support of General III filed by the Illinois Chamber of Commerce, Illinois Manufacturers’ Association, Illinois Environmental Regulatory Group, and Calumet Area Industrial Commission. ¶ 76 II. ANALYSIS ¶ 77 On appeal, General III argues that our review is directed to the propriety of the ALJ’s decision (which vacated the permit denial) and that we should affirm that decision. General III primarily attacks the validity of the CDPH’s use of the HIA as a basis for the permit denial. General III maintains that the ALJ properly determined as a matter of law that CDPH was not authorized to use the HIA as a basis to deny the permit. ¶ 78 Separate from the HIA, General III asserts that denial of the permit was improperly based on the compliance history of related entities. In this respect, it claims that (1) Rule 4.0 is invalid because it conflicts with section 11-4-2525 of the Code, (2) mere “allegations” of noncompliance cannot be used to deny a permit, and (3) even if Rule 4.0 was valid, the alleged compliance issues did not justify denial of the permit. ¶ 79 General III alternatively claims it has a “vested right” to operate the facility, given its prior dealings with the City and its acts in reliance thereon. Finally, General III asserts that the ALJ should have gone farther by directing the Commissioner to issue the permit, rather than merely vacating the permit denial. ¶ 80 In its appellee brief, CDPH frames the appeal as whether its February 2022 denial (rather than the ALJ’s order) was arbitrary or capricious. CDPH maintains that the Commissioner was -19- 1-24-1683 authorized by the Code to conduct and rely on the HIA and that it was authorized by Rule 4.0 to consider the compliance history of related entities in denying Gener