This case arises out of a decision by Calumet City (the "City") to deny Plaintiff Shaneka Dyson a business license to operate a banquet hall. Dyson, along with two of her businesses, Jump N' Jam Inflatables, Inc. ("JNJ") and The Atrium Venue, Inc. (the "Atrium"),
BACKGROUND
The following facts are drawn from the complaint and are taken as true for purposes of the defendants' Rule 12(b)(6) motion. Yeftich v. Navistar, Inc. ,
Dyson started the process for obtaining City approval to renovate the property in March 2015 as well. After meeting with city inspectors and a city engineer, Dyson's drawings were approved for "assembly" and she was instructed by Defendant Randy Barron, the then-director of inspectoral services, to apply for building permits, which would allow her to begin the necessary renovations. (Id. ¶¶ 11, 20-22.) In June 2015, Dyson was issued three building permits; one for plumbing, one for electrical work, and another for a sprinkler system. (Id. ¶¶ 25, 28-29.) In reliance of these building permits, Dyson began renovating the property. (Id. ¶¶ 26, 30.)
Around the same time Dyson applied for building permits, she also inquired with the City about obtaining a liquor license. (Id. ¶ 23.) That inquiry attracted the attention of Defendant Michelle Qualkinbush, the mayor of Calumet City, who visited the site in April 2015. (Id. ) The following month, Dyson emailed the mayor an explanation of her business proposal. (Id. ¶ 24.) Dyson followed up with Qualkinbush about her proposal "every few days" thereafter, and on June 11, 2015, Qualkinbush informed Dyson that she would bring the liquor license request before the city council. (Id. ¶¶ 24, 27.) The two met again on August 4, 2015, at which time Qualkinbush told Dyson that the liquor license would be discussed and decided during a city council meeting the following week. (Id. ¶ 31.)
Later in August, however, Dyson's business plan began to unravel. At first, she was informed that the property passed its electrical and plumbing inspections and that an occupancy permit would be issued once an HVAC problem was corrected. (Id. ¶¶ 32-33.) But then, on August 27, 2015, Qualkinbush informed Dyson that the property "had outstanding issues with zoning" and that she would need to present her liquor license request to the city council personally during a meeting in early September. (Id. ¶ 24.) The following day, Barron delivered a letter to Dyson which indicated that "no further permits would be issued" until Dyson obtained a business license. (Id. ¶ 35.) The letter further stated that "a banquet hall" or "special venue meeting room" license was not "permitted under the current zoning of the property" and that "the Zoning Board and City Council must approve a change in the zoning to permit this use." (Id. ; see also id. ¶ 36.) According to Dyson, late August was the first time she was "made aware there was an issue with how the property was zoned." (Id. ¶ 34.) Moreover, between May 2015, when she obtained her first building
In September 2015, Dyson attempted to get her business plan back on track. She first attended a city council meeting on September 8, 2015, during which she met briefly with Alderman Antoine Collins and obtained a dry bar permit for the property. (Id. ¶ 43.) Later in September, Dyson filed a petition with the Calumet City Zoning Board of Appeals ("ZBA") to allow her banquet hall as a special use. (Id. ¶ 44.) The ZBA held a public hearing on that request on November 2, 2015, and ten days later, issued its findings and recommendations to the city council. (Id. ¶ 45.) By a vote of two to two, the ZBA determined not to favorably recommend Dyson's special use application. (Id. ) The following month, on December 10, 2015, the city council met and adopted the ZBA's finding and recommendations, thereby "codifying" the denial of Dyson's request. (Id. ¶ 47.) The city attorney then sent Dyson a letter on December 18, 2015, which stated that she would not be issued a business or liquor license for the property. (Id. ¶ 48.) Dyson inquired about how to appeal the decision (with whom, the complaint does not say), and was informed that she "would have to begin the process anew." (Id. ¶ 49.)
In May 2016, Dyson submitted a second application for a business license, but proposed a new business plan. Instead of operating a banquet hall, she proposed to open a youth center for teens called the "JNJ Spot, Inc." (Id. ¶ 50.) Dyson followed up on this application several times over the next month. In early June, she emailed Defendant James Patton, the special assistant to the mayor, to check on the status of this application. (Id. ¶ 53.) Patton responded that the application was in the process for zoning approval by Rose Bonato of the City Clerk's office. (Id. ) Two weeks later, Dyson followed up with Bonato, but was told there "was no update" on the application. (Id. ¶¶ 54-55.)
Having still not received a resolution on her request, (id. ¶ 56), Dyson filed suit in December 2016. She alleges in her complaint that the City's handling of her business license and special use requests violated numerous federal and Illinois constitutional guarantees, including equal protection, due process, and the prohibition of takings without just compensation. Dyson further alleges that city officials conspired to violate her constitutional rights and that the denial of her requests amount to tortious interference of contract and business expectancy, as Dyson lost future clients and business when she was unable to open her banquet hall. In April 2017, the defendants filed a motion to dismiss the complaint under Rule 12(b)(6), arguing that Dyson failed to state any claim for relief. (Defs. Joint Mot. to Dismiss, ECF No. 30.) The motion having been fully briefed, the Court finds that none of Dyson's claims may proceed to discovery as alleged.
DISCUSSION
The defendants move to dismiss the complaint in its entirety under Rule 12(b)(6). To overcome a Rule 12(b)(6) motion, "a complaint must 'state a claim to relief that is plausible on its face.' " Adams v. City of Indianapolis ,
Dyson's federal claims rest on
Among the nine counts in the complaint, there is no Monell claim labeled as such, even though Counts I, V, and VI allege federal constitutional violations by the City. The Court might be warranted in dismissing these claims against the City on that basis alone, but doing so would elevate form over function. The crux of this suit is that the defendants improperly denied Dyson's business license and special use requests. According to the complaint, the basis of those denials was a zoning decision that was voted on and "codifi[ed]" by the city council. (Compl. ¶ 47.) A codification of a zoning decision by the city council is nothing if not the "policy" of the City, enacted by those with final policy-making authority. See Benedix v. Village of Hanover Park ,
I. Class-of-One Equal Protection (Count IV)
The Court turns first to Dyson's contention that she has been deprived of the Fourteenth Amendment's guarantee of equal protection. The Equal Protection Clause prohibits state action that discriminates on the basis of membership in a protected class or that irrationally targets an individual for discriminatory treatment as a so-called "class of one." Brunson v. Murray ,
The elements of a class-of-one claim have been in flux since the Seventh Circuit's en banc decision in Del Marcelle v. Brown County Corp. ,
Whatever the resolution of this debate may be, the Seventh Circuit since has stated that even under the "least demanding standard[,] ... a class-of-one plaintiff must, to prevail, negative any reasonably conceivable state of facts that could provide rational basis for the classification." Miller v. City of Monona ,
A plaintiff in a class-of-one case typically demonstrates an absence of a rational basis by identifying some similarly situated person who was treated differently-that is, a comparator.
Dyson's allegations, however, fall short of establishing a pattern of misconduct or overt hostility that excludes any rational explanation. Her story seems to be that city officials lured her into believing that she could operate a banquet hall, but then short-circuited those plans by revealing that the property was not zoned for such use and denying her special use and business license requests. (Pl. Opp'n 17-18.) As evidence of this scheme, Dyson points to the fact that city officials waited several months to raise the zoning issue and only after she had spent roughly $150,000 to get her new business up and running. She also argues that the ZBA disregarded its own rules to deny her special use application (more accurately, elected to send her application to the city council with an unfavorable recommendation) in that it voted with less than a quorum and reached a tie vote. Finally, she asserts that after her requests were denied, she was told to start the process over again, and after she did, her application was held in limbo.
Unlike in Geinosky and Swanson , however, this story does not inevitably lead to the conclusion that Dyson was the target of an illegitimate exercise of municipal power. See Fares Pawn ,
And whether permits were issued by mistake or not, there plainly was a possible rational basis for the denial of Dyson's business license and special use applications: Dyson's proposed business did not meet the City's existing zoning requirements. The Seventh Circuit has made clear "time and again" that federal courts "are not zoning boards of appeal" and, as such, "[s]tate and local land-use decisions are entitled to great deference when constitutional claims are raised in federal court." CEnergy-Glenmore Wind Farm No. 1, LLC v. Town of Glenmore ,
Moreover, Dyson has not even established that the ZBA's vote on her special use application was out of the ordinary. She contends that a quorum for the ZBA consists of more than the four members who voted on her application-how many more is unclear-(Pl. Opp'n 17), but offers no support for that proposition. At most, Dyson points to a section of the municipal code that states that the ZBA "shall consist of seven (7) members." Calumet City, Ill., Code App'x B, § 12.5 (1980). But that provision says nothing about how many members must be present for a vote.
II. Due Process and Takings Claims (Counts I, II, V, VI)
Dyson also alleges that the defendants violated the substantive and procedural due process guarantees of the Fourteenth Amendment, as well as the Takings Clause of the Fifth Amendment (as incorporated by the Fourteenth Amendment). The defendants move to dismiss these claims on several grounds, including that they are not ripe, that Dyson fails to plead a threshold property interest, and that Dyson has otherwise failed to allege the remaining requirements under the Due Process and Takings Clauses. Although the Court finds that Dyson's claims are ripe for adjudication and that there is a property interest at stake (though not the interest that Dyson posits), it agrees with the defendants that Dyson has not otherwise pled a due process or takings claim.
A. Ripeness
The defendants contend that the takings and due process claims are barred under the ripeness doctrine set forth in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City ,
The parties dispute whether Williamson applies in this case. The defendants contend that Dyson's takings and due process claims are bound up in the same facts-both are underlined by the City's refusal to grant a zoning exception-and that Dyson has an adequate takings remedy under 735 ILCS 30/10-5-5. (Defs. Mot. 8-10.) Dyson rejoins that the doctrine is inapplicable because her damages are much more extensive than a state court could award in an inverse condemnation action and because this case is "not simply a land use dispute," but rather a dispute about procedures due to Dyson and the City's failure to follow those procedures. (Pl. Opp'n 14-16.)
B. Protected Property Interest
The defendants next argue that Dyson fails to establish a threshold property interest. Because Dyson alleges that the defendants' conduct constitutes a taking of her property without just compensation and without due process of law, she must first establish a protected property interest. Bell v. City of Country Club Hills ,
Dyson's complaint and opposition brief are less than clear about what property interests are at stake in this case. For purposes of due process, the complaint alleges that Dyson has an interest in the business licenses, and to some extent the special use permit, that she was denied. (Compl. ¶¶ 60, 87, 95). But in her brief, she argues only for a property interest in the building permits and dry bar license she was issued by the City. (Pl. Opp'n 7-8). On the takings front, Dyson alleges that she was deprived of the use "of the properties referenced in the complaint supra ," (Compl. ¶ 73), which could mean anything from her actual use of the property as a banquet hall to any one of the licenses or permits discussed above, though her brief indicates that the former is the focus of her takings claim, (Pl. Opp'n 14 ("There was no other viable use for the space outside of a banquet hall, therefore Defendants' actions constituted an over regulation and taking of property.") ). Despite the lack of clarity and consistency, the Court will address each interest in turn.
Nor do the building permits give rise to a protected property interest. It is true that in some instances, permits and licenses, once granted, can constitute protected property interests, at least for due process purposes. See Image Media Adver., Inc. v. City of Chicago , No.
Nevertheless, the Court finds that there is enough in the complaint to establish a property interest on which Dyson
C. Substantive Due Process
The Court begins with substantive due process. This claim largely mirrors Dyson's class-of-one equal protection claim, which is unsurprising considering both types of claims address arbitrary conduct by state actors. Substantive due process protects against government power arbitrarily and oppressively exercised, either through legislative or executive action. County of Sacramento v. Lewis ,
Even if the City's decision were irrational, Dyson's substantive due process claim would fail anyway because there is a prerequisite to advancing such a claim that she has not established. Before a court will consider if there was an arbitrary and irrational interference with property, a plaintiff must "first establish either an independent constitutional violation or the inadequacy of state remedies to redress
Dyson does not directly address the state remedies issue in the context of her substantive due process claim, but elsewhere in her brief she contends that Illinois courts are inadequate because they cannot both correct the deprivation at issue and address her damages. (Pl. Opp'n 10-11, 15.) The Court disagrees. For starters, Dyson could have asserted an equitable estoppel claim against the City to address her license and permit issues. Illinois courts may in some circumstance prevent a municipality from enforcing a zoning ordinance-the root of Dyson's problems-where the plaintiff had begun construction on a project upon "affirmative action and apparent approval by public authorities." Cities Serv. Oil Co. v. City of Des Plaines ,
D. Procedural Due Process
Dyson's procedural due process claims do not fare any better. She argues that a number of procedural irregularities occurred during her bid to open up a banquet hall. The Court has already addressed two of those issues-that only four ZBA members voted on her special use application and that the ZBA's vote resulted a tie-and found that Dyson has not establish that those actions were unlawful or even out of the ordinary. Even if the ZBA's vote were irregular, moreover, Dyson cannot show that that it amounted to a deprivation of due process. As a general matter, "the procedures 'due' in zoning cases are minimal." River Park ,
The other two issues that Dyson raises are not actionable either. She first contends that the defendants' decision to keep her second application for a business license (for the youth center) "in a state of limbo" violates due process. (Compl. ¶¶ 94-102.) But the Seventh Circuit's decision in River Park shows the futility of this argument. In that case, a property owner applied for a zoning change to permit the development of a residential subdivision. River Park ,
The final procedural issue relates to the City's improper issuance of building permits. Dyson argues that it "is axiomatic that a government body violates due process when it fails to follow the process itself has codified in law." (Pl. Opp'n 8.) Dyson's statement of the law is unavailing because she conflates the process provided by state law with the process due under federal law. A state or municipality's failure to follow its own rules does not give rise to a federal due process violation. Indiana Land Co. ,
Dyson's takings claim is also deficient. "Takings jurisprudence encompasses four basic claims: permanent physical invasion, deprivation of all beneficial use, exactions, and partial regulatory takings." Goodpaster ,
The complaint does not come close to pleading a total taking. It states only that the defendants have denied (or at least effectively denied) two of Dyson's proposed uses for the property: a banquet hall and a youth venue. But it does not follow from these allegations that Dyson is unable to use the property for any economically beneficial purpose; that the defendants have denied two uses does not mean that the property is now useless. There is no indication, for example, that Dyson's lease agreement allows only for the operation of a banquet hall or special room venue. Cf. Image Media ,
Although Dyson stakes her all on a theory of total loss, her claim may be more appropriately viewed as a partial regulatory taking. Some regulatory actions can be so onerous that they violate the Takings Clause even without destroying all economically beneficial use of a property. Horne v. Dep't of Agric. , --- U.S. ----,
But even under this rubric, Dyson's takings claim is subject to dismissal. While she alleges facts that show how the City's decision has impacted her economically (she claims she is out over $150,000 in rent and renovation costs, and has lost business opportunities), Dyson does not plead enough information to evaluate the other two factors. Namely, the complaint fails to identify how the property is actually zoned and what uses are permitted under its current classification. Without such information, the Court cannot evaluate the nature of the City's action or the degree that action has interfered with Dyson's investment-based expectations. Consequently, Dyson fails to adequately allege a takings claim and Count II is dismissed.
III. Conspiracy (Count III)
The final section 1983 claim Dyson asserts is for conspiracy, but it too falls short. As an initial matter, Dyson cannot maintain a conspiracy claim when all of her underlying constitutional violations have been dismissed. Smith v. Gomez ,
Even if a constitutional claim had survived, the conspiracy claim still would be dismissed. Dyson's theory of conspiracy is based on the following: "Beginning in March of 2015 ... the individual Defendants, among themselves, expressly or impliedly formed a conspiracy to violate Plaintiff's constitutional rights" and that "[i]n furtherance of this conspiracy, the individual Defendants agreed to deny [Dyson's] business license without a basis for denial." (Compl. ¶¶ 77-78.) In short, these conspiracy allegations are nothing more than an unsupported legal conclusion that the Court is not bound to accept as true. See Redd v. Nolan ,
Dyson argues that her conspiracy allegations are sufficient for two reasons, both of which are meritless. She first contends that they satisfy Walker v. Thompson ,
Perhaps recognizing as much, Dyson's second contention, citing Geinosky , is that she need only allege "a plausible account of conspiracy." (Pl. Opp'n 16.) While true, the Seventh Circuit also has stated that some conspiracy claims require "a high standard of plausibility." Cooney v. Rossiter ,
IV. State Law Claims (Counts VII, VIII, and IX)
Having dismissed all of the federal claims, the Court declines to exercise supplemental jurisdiction over the remaining state law claims. See
V. Individual Defendants
Because Dyson will be afforded an opportunity to replead her federal claims, and in the interest of encouraging both parties to put their best foot forward sooner rather than later, the Court will note two additional issues that, although not raised by the defendants in their challenge to the initial complaint, seem likely to surface should Dyson amend her complaint.
First, the present complaint fails to plead allegations that allow the Court to draw the reasonable inference that several of the defendants are liable on an individual basis for the constitutional misconduct alleged. Individuals cannot be liable under section 1983, of course, unless they have a "personal involvement in the alleged constitutional deprivation." Colbert v. City of Chicago ,
The allegations concerning Barron, the former director of inspectional services, and Patton, the special assistant to the mayor, are similarly deficient. So far as is alleged, Barron's involvement in this case is limited to issuing the building permits, overseeing the inspection of Dyson's renovations, and informing Dyson in August 2015 that no further permits would be issued until she obtained a business license. (Compl. ¶¶ 11, 20-22, 34-35.) None of those activities, however, show that he had anything to do with Dyson's special use or business license requests. Nor does Barron's role in issuing the building permits expose him to liability; as discussed above, issuing permits in violation of local law does not raise a constitutional concern. Patton's connection to this lawsuit is even weaker than Barron's. The only role he played was to inform Dyson that her second request for a business license was pending a zoning approval. (Id. ¶ 53.) That action alone does not provide an adequate basis for individual liability under 42 U.S.C § 1983.
As to the remaining individual defendants, Qualkinbush, Donna Zwart, and William Nadey (the latter two being the "ZBA Defendants"), Dyson may wish to consider whether those defendants are shielded by the doctrine of absolute legislative immunity. In Tenney v. Brandhove , the Supreme Court held that state legislators are absolutely immune in any suit for damages arising under section 1983 for actions that are "legitimate legislative activity" and not done "for their private indulgences."
The allegations against the ZBA defendants are limited to their recommendation to the city council that Dyson's special use permit be denied. That decision would seem to be a legislative one. Taking the allegations as true, the ZBA followed statutory procedures in reaching its decision. See Bagley ,
Moreover, to the extent that Qualkinbush is being sued for her role in voting on the special use application, (see Compl. ¶ 91 (alleging that "the City Council and Mayor Qualkinbush erroneously ... denied [Dyson's] proposed special use without due process") ), she may be immune from suit as well, see Bogan ,
* * *
Accordingly, for the reasons stated above, the Court grants the defendants' motion to dismiss Dyson's federal claims pursuant to Rule 12(b)(6) and declines to exercise supplemental jurisdiction over the remaining state-law claims. The complaint is dismissed without prejudice. Dyson has until February 23, 2018 to file an amended complaint.
Notes
Dyson is the president and sole shareholder of JNJ and the Atrium, (Compl. ¶¶ 6-7, ECF No. 1), so the Court refers to the plaintiffs collectively as "Dyson" throughout the opinion.
No defendant has asserted a claim of qualified or absolute immunity.
Dyson also asserts section 1983 claims against several of the municipal officers, including Qualkinbush, Figgs, Barron, Patton, and Tillman, in their official capacities. These claims are indistinguishable from the federal constitutional claims asserted against the City. Walker v. Sheahan ,
To be clear, property interests are not treated identically under both the Takings and Due Process Clauses; the Takings Clause views property more narrowly than the Due Process Clause. Pro-Eco, Inc. v. Bd. of Comm'rs ,
The Court declines to consider whether Dyson has a protected property interest in the dry bar license. It is not apparent to the Court how that license has any bearing on Dyson's federal constitutional claims. Moreover, Dyson provides no support in her brief for her theory that the dry bar license was "functionally voided" without due process. (Pl. Opp'n 8-9.)
Dyson has not challenged the zoning ordinance that forbids operating a banquet hall on the property. Rather, she challenges only her ability to operate a banquet hall as a special use.
Dyson alternatively contends that the defendants' conduct-which specific conduct is unclear-constitutes a "random and unauthorized" deprivation; thus, the Court must look at the sufficiency of her post-deprivation remedies as well. (Pl. Opp'n 10). But this argument is meritless. As alleged, this is not one of the "relatively rare" cases that involve "random and unauthorized" conduct. Simpson v. Brown County ,
