Can a Motion Be Dismissed Based on Failure to Exhaust Administrative Remedies Under Castaneda ?

In Ambrose v. Thornton Township School Trustees, 274 Ill. App. 3d 676, 654 N.E.2d 545, 211 Ill. Dec. 83 (1995), the plaintiffs sought judicial review of a decision of the joint board of trustees of schools (Joint Board) that denied a territorial annexation petition. Ambrose, 274 Ill. App. 3d at 678-79. The trial court reversed the Joint Board's decision and sua sponte sanctioned the defendants for filing a motion to dismiss the complaint based on failure to exhaust administrative remedies. Ambrose, 274 Ill. App. 3d at 677-78, 684. The reviewing court affirmed the circuit court's decision to reverse the Joint Board, but reversed the sua sponte sanction order because the defendants had an objectively reasonable basis to move for dismissal based on the exhaustion doctrine under Castaneda. Ambrose, 274 Ill. App. 3d at 685. In support of its reversal, the reviewing court reasoned: "It is true that Castaneda may be distinguished from the present case. However, it does not necessarily follow that the defendants' arguments for extending Castaneda were in bad faith. There is an equally reasonable argument that Castaneda should be applied to the present case given the similarity of the statutory language. Therefore, we conclude that under the law as of the date of the motion to dismiss, it was objectively reasonable for the defendants to argue for the extension of Castaneda." Ambrose, 274 Ill. App. 3d at 685.