Roy L. Endsley III and Stephen Graham, Individually and on Behalf of Those Similarly Situated v. City of ChicagoRoy L. Endsley III and Stephen Graham, Individually and on Behalf of Those Similarly Situated v. City of Chicago
Plaintiffs challenge the City of Chicago’s use of tolls collected on the Chicago Sky-way to pay for some of the City’s non-Skyway related transportation improvements. In 1995, the Skyway began producing revenue that exceeded its operating expenses. Prior to that time, the City used Skyway tolls exclusively to operate and maintain the Skyway. In 1996, the City decided to refinance outstanding Sky-way debt and raise additional revenues for non-Skyway expenses through a new bond issue (“Series 1996 Bond Issue”). Plaintiffs seek to prevent use of Skyway revenues to pay for non-Skyway expenses and challenge the City’s action on four separate grounds: (1) violation of federal transportation statutes; (2) violation of antitrust laws; (3) violation of the Constitution’s dormant Commerce Clause; and (4) violation of various state laws. The district court dismissed plaintiffs’ complaint in its entirety for failure to state a claim. Because we find that the City’s use of Skyway revenue for non-Skyway projects does not amount to a constitutional violation of any sort, we affirm.
I
Roy Endsley and Stephen Graham are users of the Chicago Skyway toll bridge, a 7.8 mile long high-speed, limited access highway that joins the Indiana Tollway with the rest of Interstate 90 at the Illinois — Indiana border. The Skyway is one of two Interstate routes that connect Chicago’s Dan Ryan Expressway (Interstate 90/94) to the Indiana Tollway. The other is the Borman/Kingery/Bishop Ford Expressway (Interstate 80/94). When the Skyway was constructed in the late 1950s, it was paid for with private funds raised from the sale of revenue bonds in 1955 and 1957. Under the terms of the sale, the bonds were to be repaid solely from available Skyway toll revenues and the City itself was not obligated to repay the bonds.
The revenue raised by the Skyway tolls is heavily dependent on traffic volume. When traffic on the Skyway is heavy, more drivers pay the toll and more revenue is generated. Conversely, when traffic is low, the Skyway produces less revenue. On several occasions prior to 1996 (fourteen times), the City has raised the toll rates in order to pay the Skyway’s maintenance and operating costs and to make the Skyway “a self-sufficient enterprise.” 1 As a result, the current toll rate schedule ($2.00 or 25.6 cents per mile for most automobiles) is higher than the rate for other highways in the area.
Endsley and Graham brought a class action suit against the City challenging its use of the $52 million raised by the 1996 Bond Sale for non-Skyway improvements. The City filed a motion to dismiss the action which the district judge granted pursuant to
II
On appeal, plaintiffs maintain that the City’s use of proceeds from the 1996 Bond Sale for non-Skyway improvements violated various federal transportation statutes, antitrust laws, and the Commerce Clause of the Constitution. We consider each challenge in turn.
A. Federal Transportation Statutes
Plaintiffs contend that the City has violated two federal transportation statutes,
Nothing in the express language of the statute suggests that
Furthermore, a close review of the language, structure, and history of
As we noted above, neither the language nor the structure of
The provision upon which plaintiffs rely,
As in other cases where the Supreme Court has found no implied right of private action,
Seeking to salvage their transportation statute claims, plaintiffs also challenge the district court’s denial of their motion for leave to amend the complaint. The district court correctly denied this motion. For even if plaintiffs were to bring the
B. Section 2 of the Sherman Act
Plaintiffs next seek relief under § 2 of the Sherman Act.
7
The district court held that plaintiffs failed to plead sufficient facts to show the City possessed monopoly power as required under the Act. Section 2 forbids not the intentional pursuit of monopoly power but the employment of unjustifiable means to gain that power.
See
3 P. Areeda & D. Turner,
Antitrust Law
¶ 626c, at 76 (1978). “The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.”
Eastman Kodak Co. v. Image Technical Servs.,
As a preliminary matter, plaintiffs argue that the district judge erred in taking up the question of market power on a motion to dismiss. He did not. We acknowledge that frequently, questions of whether the defendant possessed the requisite market power to establish a monopoly are addressed in a motion for summary judgment or trial.
See State of Ill. v. Panhandle E. Pipe Line Co.,
Here, plaintiffs’ complaint does not contain facts allowing an inference that the City has monopoly power. It is true that
Leatherman v. Tarrant County,
Even if it could be said that the City possessed monopoly power, plaintiffs have not presented sufficient facts to meet the second requirement under § 2, anti-competitive behavior or abuse of market power. The mere existence of the power to control prices or exclude competition is not unlawful unless it is coupled with intent.
See United States v. Griffith,
The City’s decision to raise the cost of Skyway tolls and raise additional revenue for other transportation projects is not, in and of itself, anti-competitive. To the contrary, we have recognized that “[virtually all business behavior is designed to enable firms to raise their prices above the level that would exist in a perfectly competitive market.”
Panhandle E. Pipe Line,
C. Commerce Clause
Finally, plaintiffs assert that because the Skyway financing scheme and the tolls charged are not apportioned to the use or cost of operating the Skyway, the City has unreasonably burdened interstate commerce and violated the Constitution’s dormant Commerce Clause. The Commerce Clause is an affirmative grant of power to Congress.
Under dormant Commerce Clause precedent, “a levy is reasonable ... if it (1) is based on some fair approximation of use of the facilities, (2) is not excessive in relation to the benefits conferred, and (3) does not discriminate against interstate commerce.”
Northwest Airlines, Inc. v. County of Kent, Mich.,
.Therefore, the question before us is whether in operating the Skyway, the City was acting as a participant or regulator of the local highway system. Here, plaintiffs sealed their own fate by including in their complaint the following: “Since its inception, the City has operated the Skyway as a proprietary enterprise, and not in its governmental capacity.” We have long held that a plaintiff may plead himself out of court by including factual allegations which, if true, show that his legal rights were not invaded..
See Stewart v. RCA Corp.,
Even if plaintiffs had not plead themselves out of court, the facts suggest that the City was indeed a market participant. “The market-participant doctrine permits a State to influence a discrete, identifiable class of economic activity in which it is a major participant.”
South-Central Timber Dev. v. Wunnicke,
Plaintiffs contend that while the City may be acting as a market participant, at the same time, by levying a toll on the Skyway, it is acting (in a hybrid role) as a market regulator. Courts interpreting the Commerce Clause have long struggled to draw the line between that which is considered a government function or regulatory activity and that which is considered proprietary activity.
See Garcia v. San Antonio Metropolitan Transit Auth.
A government entity is acting as a market regulator when it enacts rules that “whether by statute, regulation, or contract, ... have a substantial regulatory effect outside of that particular market.”
South-Central Timber,
Ill
For the reasons set forth above, we AfFIRM.
Notes
. Oftentimes, the toll rates were increased pursuant to a federal court order which came out of a lawsuit brought by bondholders against the City.
.
Before the Secretary may permit Federal participation under this subsection in construction of a highway, bridge, or tunnel located in a State, the public authority (including the State transportation department) having jurisdiction over the highway, bridge, or tunnel must enter into an agreement with the Secretary which provides that all toll revenues received from operation of the toll facility will be used first for debt service, for reasonable return on investment of any private person financing the project, and for the costs necessary for the proper operation and maintenance of the toll facility, including reconstruction, resurfacing, restoration, and rehabilitation. If the State certifies annually that the tolled facility is being adequately maintained, the State may use any toll revenues in excess of amounts required under the preceding sentence for any purpose for which Federal funds may be obligated by a State under this title.
. In
Clallam County v. Washington,
the Ninth Circuit held that
. Under
Cort,
to determine if Congress intended to create a private right of action, the court would consider: 1) whether the plaintiff is a member of the class for whose benefit the statute was enacted; 2) whether there is any indication of legislative intent to create or deny such a remedy; 3) whether an implied remedy is consistent with the underlying purposes of the statutory scheme; and 4) whether the cause of action is one traditionally relegated to the states so that it would be inappropriate to infer a federal remedy.
Cort,
. Generally, the Intermodal Surface Transportation Efficiency Act of 1991 Pub. L. 102-240, 105 Stat. 1914, was established "to develop a national intermodal surface transportation system, to authorize funds for construction of highways, for highway safety programs, and for mass transit programs, and for other purposes.” (codified as amended at
. "The public-private partnership is important and should be encouraged. From the Federal perspective, one of the ways to approach infrastructure improvement would be to ease unnecessary Federal constraints preventing the mixing of Federal dollars with private funds on projects.” Id. at 13, 1991 U.S.C.C.A.N. at 1539.
.
. See
O.K. Sand & Gravel,
. On appeal, plaintiffs rely solely on their assertion that the City abused its market power by raising the Skyway tolls and using revenues for non-Tollway expenses. They do not revisit their argument that the City has engaged in an unlawful lying arrangement by conditioning access to the Skyway on payment of money to fund non-Skyway transportation improvements. Even if they did, a review of the law and common sense suggests that this argument also fails. "A tying arrangement cannot exist unless two separate product markets have been linked.”
Jefferson Parish Hosp. Dist. No. 2 v. Hyde,
. As we have found that plaintiffs cannot meet the requirements to show a § 2 Sherman Act violation, we need not reach the City's state action immunity defense.
. Even though it considered the Port’s activity a hybrid of market regulation and partic