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International College of Surgeons v. City of Chicago

August 1, 1996

INTERNATIONAL COLLEGE OF SURGEONS, A NOT-FOR-PROFIT CORPORATION, UNITED STATES SECTION OF THE INTERNATIONAL COLLEGE OF SURGEONS, A NOT-FOR-PROFIT CORPORATION, AND ROBIN CONSTRUCTION CORPORATION, A FOR-PROFIT CORPORATION,

PLAINTIFFS-APPELLANTS,

v.

CITY OF CHICAGO, ILLINOIS, A MUNICIPAL CORPORATION, CHICAGO PLAN COMMISSION, AND ITS COMMISSIONERS, REUBEN L. HEDLUND, ET AL.,

DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division.

No. 91 C 7849 John F. Grady, Judge.

Before BAUER and RIPPLE, Circuit Judges, and SKINNER, District Judge. *fn*

RIPPLE, Circuit Judge.

ARGUED NOVEMBER 6, 1995

DECIDED AUGUST 1, 1996

The International College of Surgeons and the United States Section of the International College of Surgeons (collectively the "College") applied to the Commission on Chicago Historical and Architectural Landmarks (the "Landmarks Commission") for the demolition permits required to redevelop certain landmarked property on Lake Shore Drive in Chicago. The Landmarks Commission denied this application and the College's subsequent request for an economic hardship exemption. The College, alleging various federal and state constitutional grounds, challenged the Commission's decisions in separate complaints for administrative review filed in the Circuit Court of Cook County. The City of Chicago removed the complaints to federal court. The district court later granted the City's motion to dismiss certain of the College's challenges and entered summary judgment against the College on the remaining claims. For the reasons set forth in the following opinion, we reverse the judgment of the district court and remand with instructions that the case be remanded to the Circuit Court of Cook County. *fn1

I. BACKGROUND

The College owns two parcels of land on Lake Shore Drive in Chicago. The first parcel, located at 1516 Lake Shore Drive, is improved with a four-story mansion known as the Edward T. Blair House. The second parcel, at 1524 Lake Shore Drive, is improved with a three-story mansion known as the Eleanor Robinson Countiss House. The College uses the buildings, which are connected by a bridge that enables their use as one structure, to house administrative offices and a museum.

In July 1988, the Landmarks Commission made a preliminary determination that seven buildings on Lake Shore Drive, including the properties at issue here, met the criteria for landmark designation set out in the Chicago Landmarks Ordinance. *fn2 The Landmarks Commission voted to recommend to the City Council that the seven buildings receive landmark designation and, on June 28, 1989, the Chicago City Council passed the "Seven Houses on Lake Shore Drive District Ordinance" (the "Designation Ordinance") designating the landmark district.

In February 1989, before the enactment of the Designation Ordinance, the College executed a contract for the sale and redevelopment of the property. The $17 million contract, which provided for the demolition of all but the facades of the Blair and Countiss residences and the construction of a forty-one-story condominium building behind the facades, was contingent on the College's ability to obtain all the permits and approvals necessary for redevelopment of the property. Robin Construction Corporation, a developer of high-rise residential developments and one of the plaintiffs here, acquired the contract purchaser's interest later in 1989.

When the College applied for permission to demolish the buildings at 1516 and 1524 Lake Shore Drive, its applications were forwarded to the Landmarks Commission. The Commission rendered its final decision denying the College's permit requests on January 9, 1991. The College then filed its first complaint in the Circuit Court of Cook County (No. 91 CH 1361); it sought judicial review of the administrative decision to deny the permits. The defendants removed this complaint to the United States District Court for the Northern District of Illinois, where it was docketed as number 91 C 1587.

Pursuant to section 21-86 of the Landmarks Ordinance, the College also filed an application seeking an economic hardship exception to the Landmarks Commission's denial of the demolition permits. The Commission concluded that its denial of the demolition permits had not resulted in "the loss of all reasonable and beneficial use of or return from the property" -- the standard that appears in the Landmark Ordinance -- and denied the College's application. The College then filed its second complaint in the Circuit Court of Cook County (No. 91 CH 7289) seeking judicial review of the administrative decision to deny the economic hardship exception. Again, the defendants removed the action to federal district court, where it was docketed separately as number 91 C 5564.

Because the property also is governed by the Lake Michigan and Chicago Lakefront Protection Ordinance, the College was required to obtain approval for its proposed development under that ordinance as well. The Chicago City Council rejected the College's application for permits under the Lakefront Protection Ordinance, and the College filed a "Complaint for Declaratory Judgment and Other Relief" in the district court, where it was docketed as number 91 C 7849.

The district court consolidated the three cases and stayed case 91 C 7849 -- the declaratory judgment action -- pending disposition of the other cases. In an order dated January 10, 1992, the court granted in part and denied in part the City's motion to dismiss cases 91 C 1587 and 91 C 5564 -- the complaints for administrative review. The College then filed an amended "Consolidated Complaint for Administrative Review" in the two cases, again alleging federal and state law claims. On December 30, 1994, the district court entered summary judgment in favor of the City on all of the plaintiff's claims; it thus affirmed the Landmarks Commission's decision denying the College's application for demolition permits and denying its application for an economic hardship exception. Having reached this conclusion, the court dismissed case 91 C 7849 with prejudice as moot and with leave to reinstate if the court's judgments in cases 91 C 1587 and 91 C 5564 were vacated, reversed or remanded on appeal. The College filed a notice of appeal in all three cases.

II. DISCUSSION

Before proceeding to the issues raised by the parties, we must determine whether the district court had subject matter jurisdiction over the claims raised in the College's complaint. The parties did not address the issue in their initial presentations to this court; *fn3 subject matter jurisdiction, however, cannot be waived. Courts have a duty to resolve apparent jurisdictional problems sua sponte. *fn4

A.

The College commenced the judicial proceedings in this case in the Circuit Court of Cook County. The College sought, by way of its "Complaint for Administrative Review," judicial review of the Landmarks Commission's decision to deny its application for demolition permits.

The complaint was filed pursuant to the Illinois Administrative Review Act ("IARA"), see 735 ILCS 5/3-103 et seq., because the Landmarks Ordinance makes the final decision of the Commission approving or disapproving an application for a permit a "final administrative decision" appealable under the Act. See MCC sec. 2-120-800. *fn5 The College filed a second "Complaint for Administrative Review" after the Commission denied its application for an economic hardship exception. See MCC sec. 2-120-860. *fn6 The ...


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