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Jamax Corp. v. City of Bridgeport

April 11, 2006

JAMAX CORPORATION, PLAINTIFF,
v.
CITY OF BRIDGEPORT, AN ILLINOIS MUNICIPAL CORPORATION, ET AL., DEFENDANTS.



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

MEMORANDUM AND ORDER

This matter comes before the Court on Defendants' Motion to Dismiss Pursuant to Section 12(b)(6) of The Federal Rules of Civil Procedure (Doc. 6). Defendants submitted a brief in support of this motion (Doc. 7), to which Plaintiff JAMAX Corporation ("Jamax") has responded (Doc. 13). For the following reasons, this motion will be DENIED in part and GRANTED in part.

BACKGROUND

Jamax originally filed its complaint in the Circuit Court of the Second Judicial Circuit, Lawrence County, Illinois on November 4, 2005, alleging an ordinance passed by the City of Bridgeport ("Bridgeport") violated the Commerce Clause and the Equal Protection and Due Process Clauses of the Fourteenth Amendment (Doc. 2).*fn1 Defendants timely removed the action on November 14, 2005 (Doc. 1) invoking this Court's federal question jurisdiction. 28 U.S.C. § 1331.

As this matter comes before this Court on a motion to dismiss, the Court must accept all well-pleaded allegations in Jamax's complaint as true. Brown v. Budz, 398 F.3d 904, 908 (7th Cir. 2005). Jamax is an Indiana corporation in the waste management business that has refuse removal contracts with residents and businesses in the City of Bridgeport ("Bridgeport"). It filed this suit after Bridgeport passed certain ordinances restricting the waste management business in the City. The Counsel adopted Ordinance No. 558, titled "An Ordinance Regarding Garbage Collector License" ("558") (Doc. 2 ex. F) on August 12, 2005.*fn2 Among other things, this ordinance restricted the hours during which garbage could be collected, mandated that only single-axle trucks weighing less than 25,000 pounds (empty) could collect garbage in the city, and required all those wishing to provide garbage collection services in the City to be licensed.*fn3 The stated reason for passing the ordinance was to protect Bridgeport's streets. (Doc. 2 at 7).*fn4 On August 24, 2005, the Counsel passed a second ordinance relevant here, No. 559, titled "An Ordinance Pertaining to the Municipal Collection and Hauling of Garbage, Refuse, and Ashes Within the City of Bridgeport, Illinois." ("559") (Doc. 2 ex. A). This ordinance established a municipal garbage collection and disposal service for Bridgeport residents and businesses.

After the passage of these ordinances, Bridgeport established its own garbage collection and disposal service and purchased a single-axle garbage truck weighing less than 25,000 pounds. Bridgeport began its garbage collection business in August or September 2005. It attempted to force its citizens to pay for its new garbage service by adding fees to their water bills; it made no distinction between those residents with existing contracts with private garbage collectors and those without. (Doc. 2 at 3). Several Bridgeport residents complained to the Counsel of being billed for services they were not using, and, in response, Schauf stated publicaly that those residents "would not be charged for the city trash service until their contract expired." (Id. at 3). In earlier Counsel meetings where Schauf was speaking of the City's plans regarding its trash service, he told residents that Bridgeport would not issue any more trash permits to private haulers in 2006. (Id.).

Jamax claims that these ordinances have damaged its business because it has had and continues to have a number of refuse collection contracts with Bridgeport residents and businesses. As Jamax only has multi-axle trucks weighing more than 25,000 pounds and needs the freedom to operate beyond the hours set by the City, these ordinances make it impossible for it to do business in Bridgeport. Since the adoption of these ordinances Schauf and Masterson have repeatedly delayed and hindered Jamax's business operations by directing City police to divert and impound Jamax trucks and drivers while servicing customers along Jamax's normal routes -- despite the fact that 558 does not provide for the impoundment or diversion of trucks as enforcement mechanisms. ((Doc. 2 Ex. F at § 16-1-14). As a result of these activities, many Jamax customers have cancelled their contracts. Bridgeport revoked Jamax's garbage collection license without a hearing on October 19, 2005.

ANALYSIS

When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts all allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. Budz, 398 F.3d at 908; Holman v. Indiana, 211 F.3d 399, 402 (7th Cir. 2000). The Court should not grant such a motion unless it appears beyond doubt that the plaintiff cannot prove its claim under any set of facts consistent with the complaint. Brown, 398 F.3d at 908-09; Holman, 211 F.3d at 405. "[I]f it is possible to hypothesize a set of facts, consistent with the complaint, that would entitle the plaintiff to relief, dismissal under Rule 12(b)(6) is inappropriate." Brown, 398 F.3d at 909 (internal quotations omitted). The complaint need only provide a short and plain statement of the claim sufficient to fairly put the defendant on notice of the claim and its basis. Leatherman v. Tarrant Co. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 168 (1993); Brown, 398 F.3d at 908; see also Fed. R. Civ. P. 8(a).

A. Standing

Defendants claim Jamax does not have standing to bring this action because it is an unregistered foreign corporation that conducts intrastate business in Illinois. See 805 ILCS § 5/13.70. Section 5/13.70(a) states that "[n]o foreign corporation transacting business in this State without authority to do so is permitted to maintain a civil action in any court of this State, until the corporation obtains that authority." 805 ILCS § 5/13.70(a). Defendants request the Court to take judicial notice that Jamax is not registered to business in Illinois with the Illinois Secretary of State. They maintain that because Jamax's suit arises solely from its intrastate transactions, it is without the capacity to maintain this suit. In its response, Jamax claims Defendants have failed to meet their burden of establishing that Jamax is transacting business in Illinois in violation of the Business Corporation Act.

Under Illinois law, a foreign corporation is not required to obtain a certificate of authority if it is "simply conducting interstate commerce[,]" Subway Rests., Inc. v. Riggs, 696 N.E.2d 733, 737 (Ill. App. Ct. 1 Dist. 1998), and a defendant bears the burden of establishing that the plaintiff is conducting business in violation of the Business Corporation Act. Id.; Mass Transfer Inc. v. Vincent Const. Co., 585 N.E.2d 1286, 1289 (Ill. App. Ct. 5th Dist. 1992). In its complaint, Jamax alleges that it is an Indiana corporation that does business in Illinois and it plainly asserts that it conducts an interstate business (Doc. 2 at ¶¶ 1, 97, 98, 99, 100, and 101). As the cases cited by Jamax show, whether a particular business is registered to do business in the state is not dispositive of the standing issue under 805 ILCS § 5/13.70(a). Riggs, 696 N.E.2d at 737; Mass Transfer Inc., 585 N.E.2d at 1289. Thus, Defendants' conclusory allegation that "plaintiff's lawsuit relates solely to plaintiff's intrastate transactions" is insufficient to meet their burden. Neither side has adequately detailed how courts have interpreted the phrase "simply conducting interstate commerce" for purposes of 805 ILCS § 5/13.70(a). Without more detailed information as to how that standard has been applied and the precise nature of Jamax's business, the Court is without sufficient information to decide the standing issue. Defendants have failed to persuade the Court that Jamax cannot bring this suit because of 805 ILCS § 5/13.70(a).

B. Commerce Clause Claims

Art. I, § 8, cl. 3, of the Constitution gives Congress the power to "regulate Commerce with foreign Nations, and among the several States, and the Indian Tribes." U.S. Const. Art. 1, § 8, cl. 3. Though an affirmative grant of power, it "has long been recognized as a self-executing limitation on the power of ...


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