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THILLENS, INC. v. FRYZEL

April 7, 1989

THILLENS, INC., Plaintiff,
v.
MICHAEL E. FRYZEL, etc., Defendant


Milton I. Shadur, United States District Judge.


The opinion of the court was delivered by: SHADUR

MILTON I. SHADUR, UNITED STATES DISTRICT JUDGE

 Thillens, Inc. ("Thillens") has brought a four-count Amended Complaint (the "Complaint") *fn1" against Michael E. Fryzel ("Fryzel") in his individual capacity as the Director of the Department of Financial Institutions of the State of Illinois ("DFI"). Because Thillens invokes several patently inapplicable bases for his lawsuit, *fn2" the only ones that merit any discussion at all are those alleging:

 
1. unlawful deprivation of Thillens' civil rights in violation of 42 U.S.C. § 1983 ("Section 1983") (Count I);
 
2. conspiracy and "neglect or refusal to prevent" the wrong conspired to be done in violation of Section 1983 (Count II); and
 
3. unlawful conspiracy and combination in restraint of trade in violation of the Sherman Act, 15 U.S.C. §§ 1 and 2 (Counts III and IV).

 Fryzel has moved under Fed. R. Civ. P. ("Rule") 12(b)(6) to dismiss the entire Complaint for failure to state a claim. For the reasons stated in this memorandum opinion and order, Fryzel's motion is granted, and not only the Complaint but this action itself is dismissed.

 Background3

 In brief summary, Thillens' lengthy and rambling Complaint charges that certain provisions of the Community Currency Exchange Act (the "Act"), Ill. Rev. Stat. ch. 17, paras. 4802-4852, *fn4" are both unconstitutional and anticompetitive as applied to Thillens. This opinion will substantially abridge the story that unfolds in the Complaint, for no more is necessary to decide the present motion.

 At the time of its original passage on July 1, 1943 *fn5" the Act's application was limited to "community currency exchanges," defined as organizations engaging in providing facilities for and actually cashing checks and money orders and issuing money orders, all for a fee. It brought such exchanges under the licensing authority of the Auditor of Public Accounts, DFI's predecessor. Two years after the Act's passage McDougall v. Lueder, 389 Ill. 141, 58 N.E.2d 899 (1945) held it a constitutional exercise of the police power (both in federal and state constitutional terms).

 Beginning in 1934 Melvin Thillens ran a business (later incorporated in 1949 as Thillens, Inc.) that served as a "mobile check cashing service" -- an armored truck that traveled to other businesses on paydays, cashing employees' paychecks for a fee. People ex rel. Barrett v. Thillens, 400 Ill. 224, 79 N.E.2d 609 (1948) decided that business was not within the Act's purview. Then in 1951 the Act was amended to embrace what was defined as an "ambulatory currency exchange," thus bringing Thillens under the statute. *fn6" Section.01 of the 1951 amendment (which became Paragraph 4801 when the Act was later codified in Ill. Rev. Stat. ch. 17) was a preamble stating the findings and declaration of the General Assembly. In material part that preamble found:

 
1. Community currency exchanges were "affected with a public interest and should be licensed and regulated as a business affecting the convenience, general welfare, and economic interest of the people of this State."
 
2. Ambulatory currency exchanges, which competed with other currency exchanges and were "hazardous and dangerous to the public safety," should be similarly regulated.

 Accordingly the amendment required Thillens to obtain and pay for a license for each location it served.

 Six years later Thillens, Inc. v. Morey, 11 Ill. 2d 579, 144 N.E.2d 735 (1957) held the amended Act, as applied to Thillens, violated neither the due process clause nor the equal protection clause of the Illinois Constitution. *fn7" Then in 1959 the Act was further amended to increase licensing fees (and to make other minor changes). Paragraph 4801 was amended to include a policy to limit the number of ambulatory currency exchanges according to community needs. Thillens then claimed the DFI discriminated against it in granting licenses, and that attack was rejected in Thillens, Inc. v. Department of Financial Institutions, 24 Ill. 2d 110, 180 N.E.2d 494 (1962).

 In June 1965 an article in Chicago's American revealed a bribery and corruption scheme involving members of the Community Currency Exchange Association (the "Association") and various state legislators, in which bribes were given in exchange for preferential treatment to Association members and maltreatment for Thillens. That article led to an investigation that ultimately culminated in 1979-80 with the indictment, trials and convictions of several legislators and Association members. According to the Complaint the origins of the conspiracy trace back to January 1958.

 In 1977 (apparently in the midst of the ongoing investigations) the General Assembly passed Illinois P.A. 80-442, its sole provision being the repeal of Paragraph 4801. In a Senate floor debate on passage of the repeal provision, Senator David Shapiro said the provision should be repealed because its findings were fictitious and unsubstantiated. But it is important to note -- as neither litigant has -- that the General Assembly simultaneously (by P.A. 80-438, effective the same date as P.A. 80-442) adopted a new set of findings (now Paragraph 4838) that, while eliminating the earlier pejorative characterization of ambulatory currency exchanges, specifically found that both such exchanges and the community currency exchanges required comparable regulation by the DFI "in the public interest, convenience, welfare and good."

 Thillens adverts to its efforts from 1965 to 1986 to "cure the defects and inequities" in the Act by supporting 41 pieces of legislation, almost all unsuccessfully (para. 21). As a result Thillens has had 425 license applications rejected from 1960 to 1987 and has seen the number of businesses it serves decline from 1400 in 1958 to 500-550 currently.

 Thillens' Claims

 Thillens grounds its claims in large part (though not entirely) in the alleged conspiracy between the Association and its member exchanges and individuals on the one hand and certain public officials on the other. Those public officials consisted primarily of state legislators who accepted bribes in exchange for passing "anti-Thillens" legislation and DFI administrators (not Fryzel) who promulgated guidelines and regulations, and rendered licensing decisions, adverse to Thillens and in favor of Association member exchanges.

 Although the Complaint is far from clear, it asserts the Act and actions of DFI under the Act's authority:

 
1. deprive Thillens of the equal protection of the laws as guaranteed by the ...

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