Plaintiff Brian Strauss owns valuable real estate in Chicago's Wicker Park neighborhood. Until recently, the ground floor of his building at 1572 North Milwaukee Avenue was occupied by an iconic rock club known as the Double Door. In 2015, however, Strauss initiated legal action against Double Door's owners for various lease violations. This action did not sit well with the local alderman, Defendant Proco Joe Moreno, who responded by proposing changes to the property's zoning restrictions. Strauss filed suit in this court, alleging a host of state and federal claims, and then amended the complaint after the Chicago City Council later adopted a variation of Moreno's proposed ordinance. Defendants now move to dismiss. For the reasons explained below, Defendants' motion [35] is granted.
BACKGROUND
Plaintiff Brian J. Strauss is a resident of Illinois and the president of 1572 North Milwaukee Avenue Building Corporation. (Second Am. Compl. (hereafter "SAC") [32] ¶ 5.) That Corporation's sole asset is real property it owns and operates at 1572 North Milwaukee Avenue in Chicago, Illinois. (Id. ; Pl.'s Resp. Br. [42], at 10.) The property consists of a four-story, mixed-use building near the intersection of Milwaukee Avenue, North Avenue, and Damen Avenue, the heart of a thriving commercial district on Chicago's near-northwest side. (Id. ) The property shares its southeast wall with another mixed-use building. (Id. at ¶ 54.) The property's southwest wall abuts elevated rail tracks operated by the Chicago Transit Authority. (Ex. 5 to Pl.'s Resp. Br.)
The Strauss family's involvement with the property stretches back more than forty years. (SAC ¶ 10.) Brian's father, Harry Strauss, began leasing commercial space there in 1977, and purchased the entire building "a few years later." (Id. at ¶ 11.) At some point, Harry transferred ownership of the property to the Corporation of which Brian is now the president. (Id. at ¶ 12.) By the mid-2010s, when the events giving rise to this lawsuit are alleged to have occurred, the building at 1572 North Milwaukee Avenue had become "attractive to business tenants and prospective purchasers." (SAC ¶ 14.) In Brian's estimation, the market value of the building "was approximately 10 million dollars" at the time the parties' dispute arose. (Id. at ¶ 15.)
That market value was affected by the municipal zoning regulations to which the property and its neighbors were subject. From 1974 until 2017, Chicago's zoning ordinance classified 1572 North Milwaukee Avenue as "B3-2." (Id. at ¶ 16.) At all times relevant to this suit, "all other buildings
Prior to 2016, Plaintiff leased some or all of this commercial space to an entity called Double Door Liquors, Inc. (hereafter "Double Door"). (Id. at ¶ 19.) Plaintiff's Amended Complaint provides no details about the identity of his former commercial tenant, the court takes judicial notice of the fact that Double Door was a well-known bar and live-music performance venue. FED. R. EVID. 201(b)(1) ; WIKIPEDIA , Double Door , http://en.wikipedia.org/wiki/Double_Door (last visited Sept. 28, 2018).
According to Plaintiff, "[n]umerous problems existed during the landlord-tenant relationship between [Brian Strauss] and Double Door." (SAC ¶ 19.) These problems included "constantly high noise levels," "drug and alcohol abuse by [Double Door's] customers," and "extensive ... damage to the property." (Id. ) At some point, Double Door "fail[ed] to pay percentage rent" and "fail[ed] to properly exercise" an option to renew its lease. (Id. )
In late 2015, Plaintiff filed a forcible entry and detainer lawsuit against Double Door in the Circuit Court of Cook County, Illinois-presumably due to one or more of the problems cited above, though the pleadings are not explicit on this. (Id. at ¶ 20.) The lawsuit attracted the attention of the local alderman, Defendant Proco Joe Moreno, who Plaintiff alleges "had a personal and financial relationship with the owners of Double Door." (Id. at ¶ 21.) Plaintiff does not offer any details about the nature of this "personal and financial relationship," though he alleges that Alderman Moreno told Plaintiff years ago, at some point in 2012, that "only Double Door would be allowed in Strauss' building." (Id. at ¶ 22.)
In April 2016, "just before" Plaintiff's forcible entry lawsuit was scheduled to go to trial, Defendant Moreno introduced an ordinance to the Chicago City Council's Zoning Committee, a body comprised of Moreno himself, Alderman Daniel Solis (the Committee's chairman), and 16 other members of the City Council. (Id. at ¶¶ 8, 23-24.) This ordinance would have changed the zoning classification of the property at 1572 North Milwaukee Avenue from B3-2 to B1-1. (Id. at ¶ 24.) A B1-1 classification "allows for fewer options for the type of commercial or retail tenants" than a B3-2 classification. (Id. ) The B1-1 classification, for example, would bar Plaintiff from using the property's commercial space for "general restaurants, medium and large entertainment venues, and hotels or motels." (Id. at ¶ 28.)
The Zoning Committee never sent Moreno's April 2016 downzoning proposal to the full City Council for a vote. (Id. at ¶ 37.) But the Committee did not reject the proposal, either. Instead, it "held Moreno's downzoning proposal in committee," thereby
At some point in the summer of 2016, both Moreno and a co-owner of Double Door (an individual by the name of Sean Mulroney, who is not a party here) told Plaintiff that Moreno had "introduced the downzoning ordinance to protect Double Door by making the property less appealing to future renters." (Id. at ¶ 26.) On or around July 19, 2016, Plaintiff met with Moreno at Moreno's office, and Moreno repeated his earlier assertion that "only Double Door would be allowed in Strauss' building." (Id. at ¶ 38.)
On August 15, 2016, the Circuit Court of Cook County found that Double Door had indeed breached the terms of its lease with Plaintiff, and ordered Double Door to vacate the premises by December 31, 2016. (Id. at ¶ 40.) It is not clear exactly what happened next, but Double Door apparently did not vacate the property until February 6, 2017, more than a month after the deadline set by the Circuit Court of Cook County. (Id. at ¶ 41.) Two days later, on February 8, Plaintiff and Defendant Moreno attended a private meeting at Chicago's City Hall, which was convened by the City's Commissioner of Planning and Development, David L. Reifman. (Id. at ¶ 42.) Also present at this meeting were Double Door's co-owners, Zoning Committee Chairman Daniel Solis, Zoning Administrator Patricia A. Scudiero, and an assistant to Mayor Rahm Emanuel named Claudia E. Chavez. (Id. ) Reifman began the meeting by advising the parties that he did not want to discuss Moreno's April 2016 downzoning proposal. (Id. at ¶ 44.) Reifman then "tried to broker a sale of [the property at 1572 North Milwaukee Avenue] between Strauss and Double Door for a purchase price far less than what the building was worth." (Id. ) Both Plaintiff and Double Door rejected Reifman's proposal.
On February 25, 2017, Moreno spoke with Strauss on the sidewalk in front of 1572 North Milwaukee Avenue. (Id. at ¶ 47.) During this conversation, Moreno warned Strauss that "you're not gonna have a tenant in here for three years.... It's gonna be an empty building with no income for you or your family." (Id. ) Moreno also told Strauss that "I'm gonna have inspectors in here on a daily basis, you watch." (Id. )
On or about May 10, 2017, an unidentified individual agreed in writing to purchase the property for $9.6 million, on the condition that Strauss "inform" the individual "of any pending zoning change." (Id. at ¶ 49.) The individual subsequently "cancel[led]" the contract with Strauss on June 8, 2017, two days after Moreno unveiled a second proposal to downzone the property. (Id. ) Unlike Moreno's earlier proposal, which would have changed the property's classification from B3-2 to B1-1, this new proposal would change the classification of the property to RS-3. (Id. at ¶ 51.) That classification "is intended to accommodate the development of single-unit detached houses on individual lots." (Id. at ¶ 52.) All
Plaintiff subsequently attempted to lease the commercial space formerly occupied by Double Door to other commercial lessees. Although he "received several written letters of intent from restaurants to rent that space at market rates"-approximately $35,000 per month-"these potential tenants refused to sign a lease" due to concerns that the property's zoning classification would not "remain at B3-2." (Id. at ¶ 50.)
On July 20, 2017, Plaintiff filed suit in this court, alleging that Moreno and the City of Chicago violated his constitutional rights. (Id. at ¶ 64.) The following day, a different individual (also unidentified in the Second Amended Complaint) offered to purchase Plaintiff's building, this time for $9.1 million. (Id. at ¶ 66.) Plaintiff alleges that this individual "knew of the pending downzoning amendments," though he does not specify when or how this individual became aware of them. (Id. at ¶ 66.) On August 7, 2017, after meeting with Defendant Moreno, the individual "cancelled" the purchase agreement. (Id. )
Later that month, Moreno introduced a third proposal directed at Plaintiff's property. (Id. at ¶ 70.) This ordinance would reclassify Plaintiff's property (and no others) as B2-2, a classification "intended to spur development in commercial corridors with low demand for retail." (Id. at ¶¶ 70-71.) The B2-2 classification would permit "permit fewer options for the types of commercial or retail tenants" than the existing B3-2 classification. (Id. at ¶ 73.)
Plaintiff suggests that several city officials "worked with [Moreno] to devise this third proposal," including Zoning Administrator Patricia Scudiero, Alderman Solis, and unidentified "members of the Department of Law." (Id. at ¶ 69.) But Plaintiff also alleges that, during a subsequent hearing on the proposal, Scudiero told the Zoning Committee that neither the City's Department of Planning nor its Department of Law could "recommend the actions of Moreno." (Id. at ¶ 67.) It is not clear to which of Moreno's "actions" Scudiero was referring, or what she or anyone else who allegedly "worked with" Moreno actually said to him.
On September 11, 2017, the Zoning Committee voted to approve the proposed ordinance-apparently in the same form Moreno had proposed in late August, though the Amended Complaint is not entirely clear on this point. (Id. at ¶ 83.) In doing so, the Committee acted pursuant to an "unwritten tradition of 'Aldermanic Prerogative,' " whereby city council members "defer[ ] local matters to the alderman of the affected ward" and "blindly support" that alderman's position on such matters, "knowing full well that they will get the support they need from that colleague, should they want to pass zoning legislation in their ward in the future." (Id. at ¶¶ 84-85.)
At some point that same day, Moreno made the following remark to his Chief of Staff, Raymond Valadez, while the two men were speaking in City Hall Chambers: "Fuck with them, it makes their lawsuit weaker." (Id. at ¶ 81.) It is not obvious to whom the word "them" refers in this sentence, or what exactly Moreno believed would make "their" lawsuit weaker. Plaintiff implies-and the court assumes, for
On September 21, the unidentified individual who had previously offered to purchase Plaintiff's building for $9.1 million reduced his or her offer to $6.5 million. (Id. at ¶ 87.)
On October 11, 2017-more than a year after Plaintiff prevailed in his state-court lawsuit against Double Door-the full City Council enacted the third iteration of Moreno's proposal into law. (Id. at ¶ 88.)
As noted, Plaintiff filed his original Complaint in this matter on July 20, 2017, before Defendant Moreno introduced the third and final iteration of his proposal to rezone Plaintiff's property. Plaintiff filed a First Amended Complaint [21] shortly after the City Council enacted that proposal into law, and a Second Amended Complaint [32] on November 30, 2017. The Second Amended Complaint includes eighteen counts alleging deprivations of various rights under the Illinois and United States constitutions, as well as claims for conspiracy, tortious interference with contract, tortious interference with prospective economic advantage, and intentional infliction of emotional distress. (See SAC ¶¶ 108-213.) Plaintiff names only Alderman Moreno and the City of Chicago as Defendants, and they now move to dismiss all of Plaintiff's claims under Rule 12(b)(1) and/or Rule 12(b)(6).
DISCUSSION
Defendants argue that Plaintiff lacks standing, that Plaintiff's federal claims are unripe, that Alderman Moreno is entitled to absolute and/or qualified immunity from suit in his individual capacity, and that each of Plaintiff's individual claims fails on the merits. The court considers these arguments in turn. In doing so, it accepts well-pleaded facts as true and draws all reasonable inferences in Plaintiff's favor. See Bell v. City of Chicago ,
I. Standing
Defendants first suggest that Brian Strauss lacks standing to assert rights that properly belong to the corporation of which he is president. Even if that corporation has few or no other shareholders, they argue, none of those shareholders "have standing to sue for harms to the corporation, even for the derivative harm to themselves that might arise from a tort or other wrong to the corporation." Hammes v. AAMCO Transmissions, Inc. ,
It is true, as Defendants point out, that some Seventh Circuit authority states that "[a] shareholder has no right to seek damages for an injury to the corporation, even if he is the sole shareholder," Creek v. Vill. of Westhaven ,
The precise corporate form at issue in this case is not clear from the pleadings. Nor is the court certain of the precise relationship between Brian Strauss and the corporation, beyond the fact that he is its "president." The caption to Plaintiff's Second Amended Complaint states that he is suing as an individual and "d/b/a 1572 North Milwaukee Avenue Building Corporation."
II. Ripeness
Defendants next argue that none of Plaintiff's constitutional claims are ripe for adjudication, because Plaintiff has not yet sought and been denied compensation in a state-court action for inverse condemnation. This argument is premised on the special ripeness doctrine announced in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City ,
For two reasons, the Supreme Court concluded that the dispute was not yet ripe. First, the developer had not requested a "variance"-that is, an individualized exemption from otherwise generally applicable rules-from the county's Board of Zoning Appeals, which had the authority to grant such variances. Because there had been no "final decision that no variances would be granted," the Court explained, the plaintiff had not yet suffered a legally cognizable injury.
The prerequisites for a federal lawsuit announced in Williamson -a final administrative decision and a state-court action for inverse condemnation-apply only to alleged regulatory takings and closely related
The Seventh Circuit has interpreted Williamson broadly in the land-use context. In River Park, Inc. v. City of Highland Park , for example, it declared that "Federal courts are not boards of zoning appeals," and suggested that the Williamson prerequisites apply not only to takings claims, but also to any other constitutional claim requiring analysis of the scope of an economic injury arising from governmental interference with the value of physical property.
In this case, the takings claim in Count IV of the Second Amended Complaint is clearly premature, as Strauss does not allege that he has been denied just compensation in a state-court action for inverse condemnation.
So too with the procedural due process claim in Count III of the Second Amended Complaint, which raises the same core issue as Plaintiff's takings claim. Plaintiff makes much of the alleged animus that Defendant Moreno demonstrated when he confronted Plaintiff outside the building at 1572 North Milwaukee Avenue. But this alleged animus would only deprive Plaintiff of due process if the resulting government action reduced his property's value so severely that it necessitated something more than the "scant process" usually required in the land-use regulatory context. River Park ,
That leaves Plaintiff's equal protection claim in Count I, his First Amendment claim in Count II, and his substantive due process claim in Count III. None of these claims are premised on an allegation of excessive regulation, as Plaintiff's takings and procedural due process claims are. Rather, each focuses on allegations of disparate treatment, irrationality, and/or improper retaliatory motivation. Plaintiff's alleged injury in these claims occurred as soon as the government carried out the alleged discriminatory, irrational, or improperly motived actions. The logic of Williamson therefore does not apply. See Oxford Bank & Tr. & Fifth Ave. Prop. Mgmt. v. Vill. of La Grange ,
III. Immunity
Defendant Moreno argues that he is entitled to absolute legislative immunity from all Plaintiff's claims. Local officials are immune from civil liability for "all actions taken in the sphere of 'legitimate legislative activity.' " Bogan v. Scott-Harris ,
Plaintiff concedes that the acts of "introducing" and voting on municipal ordinances ordinarily fall within the scope of legislative immunity. (See Pl.'s Resp. Br. 12.) But he maintains that the ordinances at issue in this case were not "legislative"
The separation of powers at the local level of government tends to be less rigid than at the state and federal levels. See, e.g. , Land & Lakes Co. v. Illinois Pollution Control Bd. ,
At least one court in this district has cited Haskell approvingly. See Chicago Miracle Temple Church v. Fox ,
Moreno is shielded by legislative immunity from liability for his other allegedly unlawful actions, as well. Plaintiff contends that Moreno threatened to interfere with Plaintiff's ability to find a new commercial tenant because Plaintiff evicted Double Door, and that these threats were not legislative acts. But Plaintiff does not say why Moreno's acts were not legislative; Moreno's alleged threats described the potential financial impact of proposed legislation. This court concludes that explaining the purpose and potential consequences of proposed legislation to constituents is "inextricably intertwined with the legislative process of introducing and voting on the zoning ordinances and cannot be separated from those legislative functions." Biblia Abierta ,
IV. Equal protection and substantive due process claims
In counts I and III of the Second Amended Complaint, Plaintiff asserts equal protection and substantive due process claims against the City of Chicago, premised on the City Council's enactment of the ordinance that rezoned Plaintiff's property. See Pembaur v. City of Cincinnati ,
Even if Alderman Moreno was not particularly concerned about these issues-Plaintiff alleges that Moreno was motivated solely by his animus toward Plaintiff and/or his unspecified personal and financial connections to Double
V. First Amendment retaliation claim
Plaintiff's retaliation claim under the First Amendment is more complicated. To avoid dismissal of this claim, Plaintiff must plausibly allege (1) that he was "engaged in activity protected by the First Amendment," (2) that he "suffered a deprivation that would likely deter First Amendment activity in the future," and (3) that "the First Amendment activity was 'at least a motivating factor' in the Defendants' decision to take the retaliatory action." Woodruff v. Mason ,
Plaintiff's state-court lawsuit against Double Door was protected conduct under the petition clause of the First Amendment. See Guth ,
Plaintiff also suggests that he suffered a deprivation when Alderman Moreno told him that "you're not gonna have a tenant in here for three years," and that "I'm gonna have inspectors in here on
In this case, it is not clear that the threatened regulatory action was sufficiently "imminent" to reasonably deter future protected conduct. In other cases where courts found that threats of adverse regulatory action could support a retaliation claim, the individual issuing the threat was an executive branch official with the power to initiate enforcement proceedings. In this case, in contrast, the threatening party is a single legislator who lacked the formal authority to carry out the threatened actions. Compare Blankenship v. Manchin ,
The court need not decide whether the threatened regulatory actions in this case were, in fact, sufficient to deter future protected conduct, because even if they were, Plaintiff could not collect damages from either Defendant. Moreno is entitled to legislative immunity from suit in his individual capacity, as the court has already explained. And the City of Chicago cannot be held liable for the constitutional torts of its employees or agents under a respondeat superior theory. See Monell v. Dep't of Social Services ,
Plaintiff does not allege any express municipal policy of retaliating against property owners who go to court to evict their tenants. Nor does he allege an unwritten-but-widespread practice of retaliating against such property owners-or even a practice of retaliating against property owners who evict friends of an Alderman. Plaintiff argues that "aldermanic privilege existed and allowed the constitutional harm to happen" in this case. (Pl.'s Resp. Br. 19.) But "allow[ing] the constitutional harm to happen" is not enough. Even if the court assumes that the practice of aldermanic privilege was sufficiently widespread, entrenched, and well-known to constitute a municipal custom for purposes of a Section 1983 claim, none of Plaintiff's allegations suggest that this custom was "the moving force" behind Alderman Moreno's own retaliatory actions, which this court has already found to be the only plausible basis for a constitutional claim here. Instead, Plaintiff repeatedly alleges that the driving force behind Moreno's actions was his personal animus toward Plaintiff and/or his personal friendship with one or more of Double Door's co-owners. (See, e.g. , SAC ¶¶ 36, 40, 45, 95, 117, 121, 171, 209.)
Some language in Plaintiff's response brief hints at a slightly different argument for municipal liability: that the practice of aldermanic privilege gave Alderman Moreno de facto "authority to make final policy decisions on behalf of the municipality." Rice ,
VI. Conspiracy claims
In counts V and VI of the Second Amended Complaint, Plaintiff alleges a conspiracy to violate his civil rights among Alderman Moreno and the various city officials who attended the February 8, 2017 meeting in the office of David Reifman, the City's Commissioner of Planning and Development. According to Plaintiff, these officials "knew or should have known" from Moreno's comments at that meeting that his proposals to rezone Plaintiff's property were motivated solely by his "personal agenda to get revenge on behalf of Double Door." (SAC ¶¶ 134, 137.) The other officials at the meeting therefore "should have instructed" Moreno and/or the Zoning
These allegations are insufficient to state a claim for multiple reasons. Even if the court assumes that the various city officials who participated in the February 8 meeting did, in fact, agree to violate Plaintiff's rights-a generous assumption, in light of Plaintiff's own allegation that several of the attendees at the meeting were members of the same city agencies that later refused to "recommend" Moreno's proposals to the Zoning Committee-Plaintiff's claims are still barred by the so-called intra-corporate conspiracy doctrine. Under that doctrine, the agents of a corporation "jointly pursuing its lawful business do not become 'conspirators' when acts within the scope of their employment are said to be discriminatory or retaliatory." Wright v. Illinois Dep't of Children & Family Services ,
Plaintiff argues that the doctrine does not apply here for one or more of the following reasons: (1) because individuals unaffiliated with the City also participated in the February 8 meeting, thereby broadening the conspiracy beyond the City's own employees; (2) because the conspiracy they hatched at that meeting was "unlawful," in that it was aimed at depriving Plaintiff of his civil rights; or (3) because the conspiracy was motivated solely by "personal bias" against Plaintiff, and thus was not undertaken within the course of the various co-conspirators' employment with the City. (See Pl.'s Resp. Br. 28.) None of these arguments are persuasive. The mere presence of Double Door's co-owners at the February 8 meeting-which was convened for the purpose of brokering their purchase of Plaintiff's building-does not make them co-conspirators in city officials' later efforts to "work with" Moreno to make his proposal more "defensible." See Stenson ,
Even if the court were to overlook the applicability of the intra-corporate conspiracy doctrine here, Plaintiff's allegations still would not state a claim for municipal liability. As previously noted, Plaintiff does not allege any facts suggesting an official municipal policy or an entrenched, widespread practice of conspiring against property owners who go to court to evict their tenants. Nor does he allege that the purported co-conspirators had final policymaking authority in any domain that is relevant to the alleged conspiracy. As a result, his conspiracy claims against the City must be dismissed.
VII. Failure-to-intervene claim
Finally, the court considers Plaintiff's claim in Count VII: that the City neglected its duty to prevent a conspiracy to violate Plaintiff's rights, pursuant to
CONCLUSION
"When all federal claims in a suit in federal court are dismissed before trial, the presumption is that the court will relinquish federal jurisdiction over any supplemental state-law claims." Al's Serv. Ctr. v. BP Prod. No. Am., Inc. ,
Notes
Plaintiff also alleges that the B1-1 classification would bar Plaintiff from "tak[ing] new leases" for the apartment units on the building's upper floors, but this does not obviously follow from the language of the ordinance, see Mun. Code of Chicago § 17-3-0207, and the court need not accept Plaintiff's legal conclusions as true, Virnich v. Vorwald ,
It is clear why Plaintiff would refuse to sell the building for "far less" than it was worth, but he does not offer an explanation for Double Door's alleged rejection of the proposed deal.
Strauss did file suit against Defendants in the Circuit Court of Cook County on January 8, 2018-several months after he filed this lawsuit-alleging similar claims to those in the Second Amended Complaint at issue here. Defendants removed that suit to federal court, and it has been stayed pending resolution of Defendants' motion to dismiss in this case. See Strauss v. City of Chicago , No.
Insofar as Plaintiff is arguing that legislation lacking any rational basis cannot provide a basis for legislative immunity because it is not "legitimate" in the constitutional sense, he is similarly off base. The applicability of legislative immunity turns on whether an allegedly unlawful action can be legitimately classified as legislative in nature, not whether a concededly legislative action can withstand constitutional scrutiny on the merits.
The property's new B2-2 zoning classification precludes its use as an entertainment venue having a maximum occupancy of greater than 149 persons. It also precludes use of the property as a tavern, a hotel, an "entertainment cabaret," or a banquet hall, among other potential sources of noise pollution and substance abuse. See Mun. Code of Chi. § 17-3-207.
Plaintiff cites two cases from this district asserting that "[t]he deprivation of civil rights is unlawful and the intra-corporate doctrine only applies when members of a corporation are jointly pursuing the corporation's 'lawful business.' " Sassak v. City of Park Ridge ,