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DIETZ'S, INC. v. CITY OF CHICAGO

October 11, 2005.

DIETZ'S, INC., an Illinois Corporation, Plaintiff,
v.
CITY OF CHICAGO, a municipal corporation, Defendant.



The opinion of the court was delivered by: JOAN LEFKOW, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Dietz's, Inc. ("Dietz's"), filed a three-count Second Amended Complaint against defendant, City of Chicago ("City"), pursuant to 42 U.S.C. § 1983, alleging violations of its rights under the Contracts Clause and the Fifth and Fourteenth Amendments of the Constitution. The City has moved pursuant to Rule 12(b)(6), Fed.R.Civ.P., to dismiss Dietz's Second Amended Complaint for failure to state a claim upon which relief may be granted. This court has jurisdiction over Dietz's claims pursuant to 28 U.S.C. §§ 1331 and 1343. For the reasons set forth below, the court grants the City's motion to dismiss.

MOTION TO DISMISS STANDARDS

  A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the complaint for failure to state a claim upon which relief may be granted. Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). Dismissal is appropriate only if it appears beyond a doubt that the plaintiff can prove no set of facts in support of its claim that would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Kennedy v. Nat'l Juvenile Det. Ass'n, 187 F.3d 690, 695 (7th Cir. 1999). In ruling on the motion, the court accepts as true all well pleaded facts alleged in the complaint, and it draws all reasonable inferences from those facts in favor of the plaintiff. Jackson v. E.J. Brach Corp., 176 F.3d 971, 977 (7th Cir. 1999); Zemke v. City of Chicago, 100 F.3d 511, 513 (7th Cir. 1996).

  ALLEGATIONS OF THE SECOND AMENDED COMPLAINT

  I. Background

  Dietz's is an Illinois corporation doing business in Chicago, Illinois. (Second Am. Compl. at ¶ 4, hereinafter "¶ ___"). The City is an Illinois municipal corporation. (¶ 5).

  Until January 1, 2004, Dietz's performed work for and received reimbursement from the City as a participant in the City's Hired Truck Program. (¶¶ 9, 38). The City required its Hired Truck Program participants, including Dietz's, to comply with various program requirements. (¶ 7). These requirements included displaying signage on vehicles, maintaining insurance coverage, supplying all drivers with cellular telephones, hiring and maintaining sufficient personnel to meet the requirements of the Hired Truck Program, maintaining trucks and equipment, participating in inspections as required by the City, maintaining all required permits and certification, and completing all documents as required by the City. Id. Dietz's spent substantial amounts of money and resources to comply with the requirements of the Hired Truck Program. (¶ 8).

  On or about May 2004, the City announced certain changes to its Hired Truck Program that required some or all Hired Truck Program participants to reapply to the program. (¶¶ 10-11). Dietz's re-applied (¶ 12). In a letter dated May 26, 2004, the City notified Dietz's that it was "conditionally approved" to participate in the Hired Truck Program "pending an equipment review by the City's Department of Fleet Management and an internal administrative review." (¶ 13, Compl. Ex. A). Dietz's subsequently received a letter from the City dated June 16, 2004, notifying Dietz's that its application was "suspended until further investigation is completed." (¶ 14, Compl. Ex. B). Dietz's has asked the City about the nature and status of this investigation but has received no reply. (¶ 15). Dietz's also requested a hearing on the suspension of the admission process. (¶ 16, Compl. Ex. C). The City has not set a hearing or taken any further action on Dietz's application, effectively barring Dietz's from participating in the Hired Truck Program. (¶ 16, 17, 19).

  II. The Rules of the Hired Truck Program*fn1

  The Hired Truck Program manual contained the rules governing the Hired Truck Program, including the rules relevant to participation in the program. The 2000 edition of the Hired Truck Program manual stated, "Placement on the hired truck list signifies that the company is eligible to work with participating user departments and is not a guarantee that a company will be called for work with the City." (Def. Mot. to Dismiss Ex. 4 at 6). Similarly, the April 2000 edition of the Hired Truck Program manual stated, "Placement on the hired truck list signifies certification that your company is eligible to work with participating user departments and is not a guarantee that you will be called for work with the City." (Def. Mot. to Dismiss Ex. 5 at 1-2). The April 2000 manual further specified that the rules governing hired trucks

  may be changed without notice, and nothing in these rules or the Company, Truck or Driver Registration Forms gives any contractual, procedural, or other rights to any company. Furthermore, the City remains free to suspend or terminate any company from a hired truck list for reasons other than those set forth in these rules. (Def. Mot. to Dismiss Ex. 5 at 20). The Hired Truck Program application from April 2004 also provided that "[t]he City has the right to change the rules of the Hired Truck Program and to terminate the Hired Truck Program at any time. . . ." (Def. Mot. to Dismiss Ex. 6 at I-2). The application further stated:
The Company understands and agrees that submitting this application does not guarantee admission to or participation in the Hired Truck Program, that the City has the right to terminate or modify the Hired Truck Program at any time and that any expenses or risks incurred by the Company, including equipment leases and purchases, are exclusively those of the Company and are not the responsibility of the City.
(Def. Mot. to Dismiss Ex. 6 at I-2) (emphasis in original).

  III. Dietz's Claims Against the City

  Dietz's alleges that the rules of the Hired Truck Program created a contract between Dietz's and the City and that the City's actions impaired this contract, thereby depriving Dietz's of its rights, privileges, and immunities under the Contracts Clause of the Constitution. (¶ 23, 24). Specifically, Dietz's claims that it expended financial resources to comply with all of the requirements of the Hired Truck Program and that it is now prevented from continuing performance in the Program. (¶¶ 29-30) As a result, it will not receive reimbursement from the City. (¶¶ 30, 39). Additionally, Dietz's alleges that the City's actions deprived Dietz's of its property interests, in violation of the Fifth and Fourteenth Amendments, because Dietz's had a property interest in its ...


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