                                             Fourth Division
                                             May 29, 1997









No. 1-96-1781

HEIDENHAIN CORPORATION,                 ) APPEAL FROM THE
individually and on behalf of           ) CIRCUIT COURT OF
all others similarly situated,          ) COOK COUNTY.
                                        )
          Plaintiff-Appellant,          )
                                        )
     v.                                 )    
                                        )
LYNN QUIGLEY DOHERTY, Director of       )
the Illinois Department of              )
Employment Security,                    ) HONORABLE
                                        ) DOROTHY KIRIE KINNAIRD,
          Defendant-Appellee.           ) JUDGE PRESIDING. 


     PRESIDING JUSTICE WOLFSON delivered the opinion of the 

court:

     This case is about the way the Illinois Department of
Employment Security (IDES) treats corporate overpayments of
unemployment insurance assessments. 
     The Heidenhain Corporation overpaid.  First, it received a
credit for the overpayment, later the credit was removed.  When
Heidenhain discovered it had lost its credit, it complained to
the IDES Director.  The Director would not hear the claim because
Heidenhain waited too long.
     Heidenhain sued the Director.  The suit was dismissed by the
trial court because Heidenhain did not pursue its administrative
remedies.  Heidenhain appeals that dismissal.  We affirm.
FACTS
     The plaintiff-appellant in this case is Heidenhain
Corporation (Heidenhain).  The defendant-appellee is Lynn Quigley
Doherty (the Director), the Director of the Illinois Department
of Employment Security (the Department).  
     Heidenhain sued the Director in a class action suit.  It
contended that the Director had improperly refused to return to
it and other class members credits which the Department had
previously given them.  It claimed the Department had taken away
the credits without notice or opportunity to be heard.
     The plaintiff alleged the following facts:
     Occasionally, employers overpay their unemployment insurance
assessment because of mathematical errors.  Before January 1,
1988, if the Department discovered this error, it automatically
adjusted the account, crediting the overpayment to a later
quarter.  
     If an employer later underpaid its assessment, the
Department used the credit to make up the difference.  Otherwise,
the Department rolled over the credit to the next quarter. 
Possibly, the credit rolled over and remained in an employer's
account for years.  The accounts were adjusted to reflect these
credits.
     The employers did not have to take any action to earn these
credits.  The Department never told the employers the credits
were in their accounts.  Unless the employers discovered their
earlier errors, they would not know about the credits.
     The calculations that led to these credits were not
disputed.  The employers did not attempt to get refunds.  
     In 1988, the procedure changed.  A new law required the
Director to pay interest on refunds of "erroneously paid
contributions."  The law also required the Director to "quarterly
furnish each employer with a statement of credit balances in the
employer's account" starting after January 1, 1988.  820 ILCS
405/2201.1 (West 1992).  At this point, the Department stopped
automatically giving and rolling over credits.  It did not notify
the employers.
     Starting on January 1, 1988, the Director changed the
Department's position concerning the application of the three-
year limitation described in 820 ILCS 405/2201.  Before this
time, the Illinois Unemployment Insurance Act (the Act) provided
a formal mechanism for employers to recoup disputed overpayments. 
The employers had three years to file any claim.  The mechanism
was used only for disputed claims.
     After January 1, 1988, the Director applied the three-year
limit to undisputed overpayments.  Those employers who had credit
because of their mathematical errors permanently lost those
credits after three years if they did not file a claim with the
Director.
     Heidenhain lost $15,000 in credit it had earned before
January 1, 1988.  It contends it did not know it had earned the
credit.  The credit was removed from Heidenhain's account after
January 1, 1988.  
     Heidenhain did not discover it had overpaid its contribution
until 1994.  As soon as Heidenhain became aware of this, it
demanded that the Department refund the credits.  The Director
refused.  Heidenhain filed a formal request for a refund with the
Department.  The Director rejected this claim because it was
filed outside the three-year limit.  In its report, the
Director's representative said because the claim was filed past
the limit, the Director had no power to act.  
     Heidenhain did not pursue any other administrative remedy. 
Nor did it seek administrative review of the Department's
rejection of its claim.  Instead, it filed a lawsuit in the
circuit court.  The Director moved to dismiss, contending that
the claim was barred because Heidenhain failed to pursue all
administrative remedies.  Heidenhain claimed it did not need to
exhaust all administrative remedies because the Director lacked
jurisdiction to hear its case.  Heidenhain argued that either the
authorizing statute did not apply to its claim or that the
Director lacked jurisdiction because more than three years had
passed.  The trial court granted the Director's section 2-619
motion to dismiss.  Heidenhain appeals.
DECISION
     Heidenhain contends it is not seeking a refund of any
overpayments it made, but is asking for a return of the credits
that the Department had already put into its account and then 
took out.  That being true, says Heidenhain, this case does not
fall within the authority of the Director or section 2201 of the
Act.  Since the Director had no authority to act, the reasoning  
goes, it was not necessary to pursue administrative remedies
before the Director or in court.  This independent lawsuit, then,
was the only proper way to proceed.
     True, if the Director never had subject matter jurisdiction
to consider Heidenhain's claim, Heidenhain's only recourse would
have been a new action in the circuit court.  See Landfill, Inc.
v. Pollution Control Board, 74 Ill. 2d 541, 549-51, 387 N.E.2d
258 (1978).
     After examining Heidenhain's complaint in light of the
provisions of section 2201, we are convinced the Director had 
subject matter jurisdiction in the matter until the time for 
hearing it ran out.  Heidenhain's restatement of the issue is 
nothing more than an attempted end run around the Administrative
Review Act.  735 ILCS 5/3-101 - 5/3-113 (West Supp. 1996).
     The relevant part of section 2201 provides:   
     "Not later than 3 years after the date upon which any
     contributions, interest or penalties thereon were paid,
     an employing unit which has paid such contributions,
     interest or penalties thereon erroneously, may file a
     claim with the Director for an adjustment thereof in
     connection with subsequent contribution payments, or
     for a refund thereof where such adjustment cannot be
     made***"  (Emphasis added.)
     In its prayer for relief, Heidenhain asks that the Director
be required "to refund to the class all such credits and
overpayments, plus interest***"  Throughout its complaint,
Heidenhain speaks of its entitlement to "adjustments or refunds."
In this appeal, however, Heidenhain contends it is suing for a
return of its credits to its account.  That, says Heidenhain, is
something different than seeking adjustments or refunds.
     We do not see the difference.  Using creative terminology
does not change the substance of the relief sought.  It is the
same relief Heidenhain asked for in June 1994, when it demanded
that the Director give it an appropriate adjustment or refund. 
If the Director were to return a credit to an employer's account,
that would be an "adjustment" under the statute.  When Heidenhain
realized the time for seeking adjustment or refund had run out,
it abandoned the settled way of challenging an administrative
action and filed this lawsuit.
     The amounts in dispute reflect erroneous payments by
employers.  Section 2201 is directed at those overpayments.  It
does not distinguish between disputed and undisputed
overpayments.  The overpayments never were correct.  They always
were too high.  When the new Act went into effect in 1988,
granting interest on overpayments and requiring quarterly
reports, the rules changed.  Perhaps the Department could have
done more to announce changes in procedures, but the employers
had ample time to find out what would happen to their
overpayments under the new statute.
     The Director had subject matter jurisdiction for three years
after the making of an overpayment.  Judicial review of
administrative decisions is barred for jurisdictional reasons
once the time for filing a complaint for review has passed.
Fredman Brothers Furniture, Inc. v. Department of Revenue, 109
Ill. 2d 202, 211, 486 N.E.2d 893 (1985).
     Heidenhain cannot successfully claim the Director's lack of
jurisdiction authorizes an independent lawsuit.  If that were
true, every party who fails to file a timely claim under the
Administrative Review Act would be free to challenge an
administrative decision simply by filing a lawsuit based on a
lack of agency jurisdiction. 
     Our Supreme Court has spoken about the policy behind
requiring a party to pursue its administrative remedies:
     "Requiring the exhaustion of remedies allows the
     administrative agency to fully develop and consider
     the facts of the cause before it; it allows the agency
     to utilize its expertise; and it allows the aggrieved
     party to ultimately succeed before the agency, making
     administrative review unnecessary.  [Citations.]  The
     doctrine also helps protect agency processes from
     impairment by avoidable interruptions, allows the agency
     to correct its own errors, and conserves valuable
     judicial time by avoiding piecemeal appeals.  [Citation.]"
     Castaneda v. Illinois Human Rights Comm'n, 132 Ill.
     2d 304, 308, 547 N.E.2d 437 (1989).
     The Administrative Review Act (735 ILCS 5/3-101 - 5/3-113
(West Supp. 1996)) was "an innovation and departure from the
common law, [and] the procedures it establishes must be
pursued***."  Fredman Brothers, 109 Ill. 2d at 210, quoting
Winston v. Zoning Board of Appeals, 407 Ill. 588, 595, 95 N.E.2d
864 (1950).  The Act is clear: "***unless review is sought of an
administrative decision within the time and in the manner
provided therein, the parties to the proceeding before the
administrative agency shall be barred from obtaining a judicial
review."  Fredman Brothers, 109 Ill. 2d at 210-11.  (Emphasis in
original.) 
     We realize there are exceptions to the general requirement
of strict compliance with the exhaustion of remedies doctrine.
For example, where an agency cannot provide an adequate remedy, 
or where no issues of fact or agency expertise exist, or where
the agency's jurisdiction is attacked because it is not
authorized by statute.  Castaneda, 132 Ill. 2d at 308-09.
Heidenhain does not come within these or any other established
exceptions.  More importantly, it is not seeking judicial review
of an administrative decision.  Instead, this lawsuit purports to
be a claim for damages on a tort theory.  We see it as an attempt
to avoid the impact of a missed deadline for action.
     The fact that Heidenhain frames this lawsuit as a class
action does not alter the conclusion we have reached.  The issues
raised in the purported class action are the same as those
presented to the Director by Heidenhain.  We have said:
     "If [the plaintiff] cannot prevail in challenging the
     manner in which [the Department] is applying the law
     in an administrative review procedure, it cannot have
     the same issues decided in a class action.  An
     administrative review judgment cannot be avoided by
     bringing a subsequent class action."  Midland Hotel 
     Corp. v. Director of Employment Security, 282 Ill. App.
     3d 312, 321, 668 N.E.2d 82 (1996).
     Another way of avoiding the exhaustion of remedies doctrine
is to establish that the statute at issue is unconstitutional on
its face.  Castaneda, 132 Ill. 2d at 308-09.  But Heidenhain is
not making a facial invalidity attack.  It is claiming section
2201 was applied to it in an unconstitutional manner.  In that
case, "***the party must first seek relief through the
administrative remedies provided." Phillips v. Graham, 86 Ill. 2d
274, 289, 427 N.E.2d 550 (1981).
     In short, we do not believe Heidenhain has an independent
lawsuit for damages.  Stripped of excess verbiage, Heidenhain's
lawsuit is an attempt to obtain a refund of the company's
overpayments.  Failure to exhaust administrative remedies is
fatal in this case.  We believe the trial court was correct when
it dismissed the lawsuit.
                         CONCLUSION
     For the reasons stated, we affirm the trial court's order
dismissing the plaintiff's lawsuit.
     AFFIRMED.
     McNAMARA and CERDA, JJ., concur.

