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Unity Ventures v. County of Lake

decided: March 9, 1988.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 81 C 2745 -- Nicholas J. Bua, Judge.

Cummings and Wood, Jr., Circuit Judges, and Eschbach, Senior Circuit Judge.

Author: Wood

WOOD, JR., Circuit Judge.

The plaintiffs, Unity Ventures, LaSalle National Bank, and William Alter, sued defendants Village of Grayslake, Lake County, and three officials under the fourteenth amendment to the United States Constitution, 42 U.S.C. § 1983, and the Sherman Act, 15 U.S.C. § 1. The plaintiffs allege that the defendants improperly denied plaintiffs' request for sewage service in order to control the use of plaintiffs' property, violating the plaintiffs' rights to equal protection, substantive and procedural due process, and section one of the Sherman Act. Alter trial, the jury returned verdicts against all defendants on the equal protection, substantive due process, and antitrust claims. The court trebled the jury's award of $9,500,000 in damages under the antitrust count and on January 16, 1984, entered judgment on the verdict in favor of plaintiffs in the amount of $28,500,000. Defendants filed a timely motion for judgment notwithstanding the verdict or a new trial. On March 19, 1986, the district court granted defendants' motion for judgment n.o.v., denied their motion for a new trial, and denied plaintiffs' procedural due process claims and their request for injunctive relief. Plaintiffs have appealed, raising the following issues: (1) whether there was sufficient evidence to support the jury's finding that defendants violated plaintiffs' rights to substantive due process and equal protection; (2) whether defendants violated plaintiffs' rights to procedural due process by failing to provide plaintiffs with notice and an opportunity to be heard before denying their request for sewer hookups, and by failing to articulate standards for their decision; (3) whether the evidence supported the jury's finding that defendants' agreement on the provision of sewage treatment services eliminated competition between municipalities and between developers, in violation of section one of the Sherman Act; and (4) whether defendants' anticompetitive conduct constituted state action and was therefore immune from the antitrust laws. Defendants have cross-appealed from the denial of their motion for a new trial. We affirm the district court's judgment notwithstanding the verdict on the grounds that the plaintiffs' claims were not ripe for adjudication.


Our review of the "district court's decision to enter a judgment n.o.v. must be . . . de novo. " Graefenhain v. Pabst Brewing Co., 827 F.2d 13, 15 (7th Cir. 1987). We do not, however, judge the credibility of the witnesses, or substitute our judgment on the weight of the evidence for that of the jury. La Montagne v. American Convenience Prods., 750 F.2d 1405, 1410 (7th Cir. 1984). Our task is to determine whether the evidence, and all reasonable inferences which may be drawn from it, is substantial enough to support the jury's verdict, "when viewed in the light most favorable to the non-moving party." Graefenhain, 827 F.2d at 15. With this standard in mind, we turn to a brief discussion of the facts of the case.


We draw our discussion of the facts, in large part, from the district court's opinion. Unity Ventures v. County of Lake, 631 F. Supp. 181 (N.D. Ill. 1986).

In 1972, Alter obtained an option to purchase 585 acres of farmland (the Unity property) in an unincorporated area of Lake County, Illinois. The Unity property was south of Grayslake and southeast of Round Lake Park. On August 15, 1976, Alter and Round Lake Park entered into an annexation agreement providing for development of the Unity property. The Village adopted an ordinance annexing the property and Alter contributed land and money to the Village for municipal facilities. Alter exercised his option to purchase the Unity property on October 21, 1976.

In 1973 Lake County completed a plan for a system of regional sewage treatment plants. Under the plan, unincorporated and annexed properties would be served through an off-site connection: an underground pipe would extend from the property or municipality to the main interceptor, a larger underground pipe that connected to the treatment plant serving that area. Two principal interceptors would serve central Lake County. The Northeast Central Interceptor was designed to serve the area of Grayslake and communities along its path to a new sewage treatment plant in Gurnee, Illinois. The Northwest Central Interceptor would serve the area of Round Lake Park and communities along its path to another new treatment plant in Fox Lake, Illinois. The Unity property, under grants approved by the Illinois Environmental Protection Agency (IEPA), the terms of the revenue bond issue, and regional construction plans, was located in the proposed Northeast Interceptor's service area.

Lake County and the Village of Grayslake agreed, on April 20, 1976, that the County would provide service to Grayslake through the Northeast Interceptor. The County granted to Grayslake jurisdiction over a "sphere of influence" including unincorporated areas in Lake County adjacent to Grayslake. The Village had the right to approve all connections to the County's Northeast Interceptor from this area. The County and the Village agreed that "[t]he County shall preserve the function of County interceptors located within the sphere of influence of the Village . . . by not permitting any direct connection hereto by any person, firm, corporation or municipality unless the Village consents in writing to such direct connection." Unity Ventures, 631 F. Supp. at 185. The 1976 agreement reflected some changes in the sewage disposal arrangement that the parties had reached in 1973. The word "municipality" was an addition, and Grayslake's sphere of influence was increased to include the Unity property and a 2,500-acre parcel in unincorporated Lake County known as the Heartland property. The district court found that neither the plaintiffs nor Round Lake Park officials knew of the sphere of influence agreement between Grayslake and Lake County until October of 1978. Id. at 186.

In August of 1978 Alter submitted to the Lake County Public Works Department two plans for the construction of a connection between the Unity property and the Northeast Interceptor. One plan provided for a connection to serve only the Unity property for which Alter would pay the construction costs. The second plan provided for a connection to serve both the Unity property and the Heartland property which lay between Unity and Grayslake. Alter would pay for the bulk of this sewer with Grayslake paying only for the additional costs of oversizing to accommodate the larger area. Martin Galantha, Director of the Lake County Public Works Department, approved the plans and sent them on to Mayor Edwin M. Schroeder for Grayslake's approval according to the sphere of influence agreement. Galantha also sent a letter indicating that although Round Lake Park generally would be served by the Northwest Interceptor, the Unity property, because it lay within the Des Plaines River basin, "should be tributory [sic] to the County's Northeast Central interceptor system." Id. (quoting Plaintiffs' Exhibit 50).

The plaintiffs learned of the sphere of influence agreement on October 31, 1978, at a meeting with Galantha, Mayor Schroeder, Mayor Walter Bengson of Round Lake Park, and others to discuss Alter's proposals. Mayor Schroeder declined to consent to Unity's connection into the Northeast Interceptor at that time.

Round Lake Park appealed Grayslake's veto of Alter's requested sewage connection to the Lake County Board through Joseph Tobolik, Round Lake Park's representative on the Board. On March 16, 1979, the Board's Public Service Committee obtained a legal opinion from the law firm of Chapman & Cutler as to the propriety of Grayslake's veto power. Chapman & Cutler found the sphere of influence agreement to be of questionable legality. Because it vested Grayslake with arbitrary authority, the agreement could violate the requirements of due process and, moreover, according to the opinion, if the agreement was not considered to be an exercise of state action it might violate the antitrust laws as well. After receiving this opinion, the Public Service Committee sought the State's Attorney's advice about ...

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