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January 11, 1989

PONTARELLI LIMOUSINE, INC., et al., Plaintiffs,
THE CITY OF CHICAGO, a municipal corporation, et al., Defendants

The opinion of the court was delivered by: DUFF


 This case involves a plan implemented by the City of Chicago ("the City") in 1975 to deal with traffic congestion at O'Hare International Airport ("O'Hare"). The plaintiffs are ten livery companies with City livery licenses. The defendants are the City of Chicago as well as a number of livery companies not licensed by the City, two city-licensed livery companies affiliated with non-city-licensed livery companies, and an unincorporated organization of non-city-licensed livery companies. (All non-city defendants are referred to collectively as "the suburban livery companies").

 Count I names the City alone and alleges violations of the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Count II names all defendants and alleges a conspiracy to violate the plaintiffs' due process and equal protection rights. Both counts arise under 42 U.S.C. § 1983. *fn1" Currently pending are motions for summary judgment by all parties, *fn2" as well as a motion in limine by the City to prevent the plaintiffs from asserting a theory of damages not raised until nearly four years into the lawsuit. *fn3" The court will deal with the motions in turn.


 Because both the plaintiffs and the defendants have moved for summary judgment, setting forth a statement of facts for these motions presents a somewhat trickier task than in a typical summary judgment ruling. Ordinarily, of course, "all factual inference are to be taken against the moving party and in favor of the opposing party." Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986) (quoting International Administrators, Inc. v. Life Insurance Co. of North America, 753 F.2d 1373, 1378 (7th Cir. 1985)). Because both sides here have moved, however, the court must draw the inferences differently on any genuine issues of fact that exist. As it turns out, the underlying facts in this case are not in dispute; the appropriate inferences to be drawn from these facts will be addressed in the discussions of the various motions.

 A livery is a public passenger vehicle, usually a limousine, in which a passenger agrees in advance to pay a specified amount for ground transportation to a destination of the passenger's choice. Liveries differ from taxicabs in that livery fares are not determined by taximeters measuring distance and time. And they differ from buses in that they do not follow specified routes.

 The City issues a limited number of licenses for livery vehicles. An applicant for a City license must meet certain requirements, such as residency within City limits and a reputation for financial responsibility. A City licenseholder must pay an annual fee of $ 100 per year.

 Under City law, only livery vehicles with City livery licenses ("city liveries") may transport passengers between two locations within the City. All other livery vehicles -- that is, those with only state livery licenses ("suburban liveries") -- may transport passengers into and out of the City, but not between two City locations. O'Hare Airport is within the City, so it is unlawful for a livery vehicle that is not licensed by the City to transport passengers from O'Hare to downtown Chicago. Any livery vehicle, however, may pick-up a passenger at O'Hare and transport him to the suburbs.

 Travelers arriving at O'Hare acquire livery service in two ways. Some passengers, referred to herein as "reserved passengers," make reservations in advance and meet their liveries when their flights arrive. Others -- so-called "walk-up passengers" -- choose livery service only after they arrive at the airport, and must then seek out available liveries willing and able to transport them to their destinations.

 City law has long made it unlawful for livery drivers to solicit business within the terminals at O'Hare. This law is designed, at least in part, to avoid the traffic congestion caused by livery vehicles parking for long periods of time at the curbside outside the terminals while their owners solicit walk-up passengers within the terminals. The law also prevents the harrassment of travelers arriving at O'Hare.

 In the early 1970's, livery drivers were permitted to park outside the terminals and leave their cars unattended while they went inside to find reserved passengers and help them with their bags. Livery drivers not meeting reserved passengers could also stop outside the terminals, but they had to remain with their vehicles and wait for walk-up passengers leaving the terminals in search of livery service.

 In 1973 the City determined that traffic congestion had become a major problem at O'Hare, and that the growing number of livery vehicles parking outside the terminals was a substantial factor in this problem. The City was also concerned about the increasing amount of unlawful soliciting by livery drivers, a practice difficult to prevent so long as livery drivers (pretending to be meeting reserved passengers) were able to park outside the terminals and leave their cars unattended for extended periods of time. The City hired the aviation consulting firm Landrum & Brown to undertake a study of traffic congestion in the roadways around the terminals at O'Hare and to recommend solutions.

 Landrum & Brown undertook an extensive study of traffic conditions at O'Hare. The firm determined that suburban liveries were the fourth highest users of airport roadways in terms of vehicle volume while city liveries were the eighth highest users. The firm also found that approximately 23% of the suburban liveries and 50% of the city liveries were left unattended outside the terminals; however, because the vast majority of livery vehicles servicing O'Hare at the time were suburban liveries, and because Landrum & Brown found that most City-bound passengers made reservations in advance, the firm concluded that the suburban liveries posed the greater problem in terms of congestion and soliciting.

 Landrum & Brown recommended that a livery dispatch system be established. Under the proposed plan, all liveries coming to the airport without passengers would be required to park in a staging area away from the terminals until informed that a passenger was waiting at the terminals. Once a livery driver received word that a passenger was waiting, he would drive to a designated loading area, load the passenger and depart.

 Despite the differences between city liveries and suburban liveries noted by Landrum & Brown in its study, the proposed plan did not provide for any difference in their entitlement to use the livery dispatch system. *fn4" All liveries without passengers were to be required to proceed to the staging and wait for either a reserved passenger to arrive or for notice that a walk-up passenger was seeking livery service at the terminals.

 The proposed plan did treat city liveries differently than suburban liveries, however, in one significant respect. Based on Landrum & Brown's determination that most City-bound passengers made reservations in advance, city liveries were to be allowed 15 minutes in the designated loading areas so that their drivers could meet the reserved passengers inside the terminals and assist them with their bags. On the other hand, because the suburban liveries were the primary transgressors of the no-soliciting law, and because most suburb-goers were walk-up passengers in any case, Landrum & Brown recommended that the suburban livery drivers be prohibited from leaving their vehicles unattended and be given just five minutes to load their customers and depart.

 Landrum & Brown proposed three alternative livery dispatch systems -- that is, methods of informing livery drivers in the staging area that customers seeking livery transport were waiting at the terminals. Under the "on-site" system, customers would use telephones in the terminals to call dispatchers in the staging area, who would then inform the livery drivers that a customer was waiting. Under the "terminal system", customers would approach dispatchers at booths inside the terminals; these dispatchers would then telephone the dispatchers in the staging area. Under the "off-site" system, customers would use telephones in the terminals to call dispatchers in the offices of the livery companies, who would in turn contact the livery drivers in the staging area. All three proposals were designed to reduce traffic congestion caused by livery vehicles standing unattended at the terminals. They were also expected to reduce soliciting, since suburban drivers would have to remain with their vehicles outside the terminals and, under the "terminal system," the dispatchers inside the terminals would have to remain at their booths.

 Following Landrum & Brown's release of its study and proposed solutions in February, 1974, the City held a series of meetings with suburban livery operators and representatives from the Northern Illinois Livery Owners Association ("the NILOA"), an organization of suburban (i.e., non-city-licensed) livery companies. After initially objecting to any dispatch system, the suburban livery operators and NILOA representatives expressed a preference for the "terminal system" -- i.e., the system employing dispatch booths within the terminals. A NILOA attorney drafted a contract that would have permitted only NILOA members to have access to the booths and would have provided for the payment of rent to the City, but this contract was never executed.

 In January, 1975, the City promulgated regulations putting Landrum & Brown's proposed "terminal system" into effect, with one important change. Rather than allowing all liveries to receive passenger requests for service from the dispatch booths, only the suburban livery companies were allowed to use the booths, which were to be manned by representatives of these companies. City liveries, even those willing to transport passengers to the suburbs, were prohibited from receiving orders from the dispatch booths, and could use the staging area only to wait for reserved passengers. Thus, city liveries coming to O'Hare without reserved passengers -- e.g., when dropping off passengers -- had no (lawful) way to obtain business from walk-up passengers, and had to leave the airport empty.

 From 1975 through 1977, the 1975 regulations remained in effect, and the City attempted to enforce them. Although soliciting, particularly by suburban liveries, continued to be a problem, it was reduced. And city liveries, though occasionally receiving word that a city-bound passenger had found his way to a dispatch booth, were largely precluded from the livery dispatch system and, consequently, the walk-up passenger market.

 In 1977, however, two of the suburban livery companies, Amm's Limousine Service, Inc. ("Amm's Limousine") and O'Hare-Midway Limousine Service, Inc. ("O'Hare-Midway Limousine"), acquired city licenses by assignment. Both companies established affiliated companies to use the City licenses -- Amm's Limousine Service, Inc. No. 2 ("Amm's No. 2") and O'Hare-Midway Limousine Service, Inc. No. 2 ("O'Hare-Midway No. 2").

 Soon thereafter, dispatchers in the livery booths began calling liveries from Amm's No. 2 and O'Hare-Midway No. 2 whenever city-bound passengers requested service at the dispatch booths. At about the same time, a dispatcher with the Midwest Livery Association ("the MLA"), another organization of suburban livery companies, began to make arrangements with individual drivers of city-licensed liveries to call them if they encountered someone seeking livery transportation from O'Hare to downtown. Some City officials knew that a limited number of city livery companies were using the livery dispatch system to obtain City-bound passengers, but permitted this activity to continue.

 Beginning in 1977, then, all travelers arriving at O'Hare who had not made ground transportation plans in advance could obtain livery service by having dispatchers at the livery dispatch booths call for liveries waiting at the staging area. Livery passengers heading for the suburbs might find themselves in the vehicles of any one of a number of livery services. Livery passengers destined for a location within the City, however, would receive service from only two limousine companies, Amm's No. 2 and O'Hare-Midway No. 2.

 In 1977, three city livery companies not affiliated with suburban liveries filed suit in Illinois state court against Amm's Limousine, O'Hare-Midway Limousine and the City. They alleged, inter alia, that the City was discriminating against them by unlawfully permitting the two defendant companies to use the livery dispatch system while prohibiting the plaintiff companies from doing so, and that the defendant companies were unlawfully using the terminal dispatch booths to solicit City-bound passengers for their affiliated companies. Chicago Rental Courtesy, Inc. v. City of Chicago, 77 CH 6972 (Circuit Court of Cook County).

 On January 6, 1982, Judge Porter ruled against the City. He first found that the City's policy with respect to the plaintiff city livery companies violated their Fourteenth Amendment rights to the equal protection of the laws. He then granted the plaintiffs injunctive as well as monetary relief, ordering the City to permit the plaintiff companies to use the livery dispatch system, and awarding the plaintiffs a total of nearly $ 2 million in damages.

 On September 10, 1982, after both sides had filed appeals of the trial court's ruling, the parties entered into settlement agreements. The agreements provided that all appeals were to be voluntarily dismissed and that the City was to pay the plaintiffs a total of around $ 1.2 million in damages; the injunction was to remain in full force and effect.

 From 1982 through 1986, the Chicago Courtesy plaintiffs together with Amm's No. 2 and O'Hare-Midway No. 2 employed the livery dispatch system to provide livery service to City-bound passengers from O'Hare. All other city livery companies, however, remained barred from the livery dispatch system.

 In March, 1986, the City removed the livery booths from O'Hare. Soon thereafter, the City and the Chicago Courtesy plaintiffs entered into another set of settlement agreements. In these agreements, the City agreed to pay the plaintiffs an additional total of approximately $ 53,000 as the second "installments" of their 1982 agreements. In return, the plaintiffs agreed to join the City in a motion before the Circuit Court to vacate the 1982 judgments. On June 20, 1986, the court entered an Agreed Final Judgment in the Chicago Courtesy ...

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