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520 South Michigan Avenue Associates, Ltd. v. Fioretti

November 5, 2008

520 SOUTH MICHIGAN AVENUE ASSOCIATES, LTD., D/B/A THE CONGRESS PLAZA HOTEL & CONVENTION CENTER, PLAINTIFF,
v.
ALDERMAN ROBERT FIORETTI AND THE CITY OF CHICAGO, DEFENDANTS.



The opinion of the court was delivered by: Judge Ronald A. Guzmán

MEMORANDUM OPINION AND ORDER

Alderman Robert Fioretti and the City of Chicago denied Congress Hotel building permits for a sidewalk café, four-story addition and a rooftop addition that includes a pool, restaurant and health club. Congress Hotel has sued Fioretti in his official capacity and the City for: (1) violating its due process and equal protection rights as guaranteed under the Fourteenth Amendment to the U.S. Constitution pursuant to 42 U.S.C. § ("section") 1983; (2) a declaration that defendants' denial of the permits violates section 1983 and such denial is a violation of the Supremacy Clause and preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq.; (3) an injunction to restrain defendants from, among other things, interfering with its ongoing negotiations with Local 1; and (4) a writ of mandamus pursuant to Illinois law ordering the City of Chicago to issue permits for the planned improvements. Before the Court is defendants' motion to dismiss the Amended Complaint. For the reasons provided herein, the Court grants in part and denies in part the motion.

FACTS

Congress Hotel, located at 520 South Michigan Avenue in Chicago, Illinois, has been negotiating a new collective bargaining agreement with the Hotel Employees and Restaurant Employees International Union, Local 1 ("Local 1") since its old one expired on December 21, 2002. (Am. Compl. ¶¶ 1, 19-20.) A work stoppage has ensued during these negotiations. (Id. ¶ 20.) Congress Hotel hired an architectural firm to prepare plans and drawings as part of its planned improvements that will include a sidewalk café, a four-story addition, and a one-story rooftop addition of a pool, health club and restaurant. (Id. ¶ 21.) On June 28, 2006, then-Alderman Madeline L. Haithcock introduced an ordinance authorizing Congress Hotel's sidewalk café permit. (Id. ¶ 22.) On July 27, 2006, the City of Chicago issued a permit pending passage of the ordinance that authorized Congress Hotel to operate a sidewalk café from March 1, 2006 through December 1, 2006. (Id. ¶ 22; id., Ex. A, Sidewalk Café Permit (Pending Passage).) The permit stated that it was revocable "by the Director of Business Affairs and Licensing at any time." (Id., Ex. A, Sidewalk Café Permit (Pending Passage).) After the permit was issued, Congress Hotel purchased tables, chairs and other equipment necessary and began operating the sidewalk café. (Id. ¶ 23.) On August 28, 2006, the City's Department of Business Affairs and Licensing notified Congress Hotel of its cancellation of the sidewalk café permit and ordered the hotel to cease and desist operation of the café. (Id.; id., Ex. B, Cease and Desist Order.) On September 19, 2006, Thomas R. Allen, Chairman of the Committee on Transportation and Public Way, requested that Scott V. Bruner, Director of the Department of Business Affairs & Licensing, issue the appropriate permits for the sidewalk café pending passage of the ordinance in Allen's committee. (Id., Ex. C, Letter of 9/19/06 from Allen to Bruner.)

Haithcock introduced a new ordinance re-approving the issuance of the sidewalk café permit. (Id. ¶ 24.) On October 3, 2006, however, a city council committee rejected the hotel's application to continue the sidewalk café permit based on Haithcock's recommendation to reject the permit. (Id.) Congress Hotel alleges that Haithcock recommended to reject the permit at the insistence of Local 1 because Congress Hotel refused to concede to Local 1's demands during labor negotiations. (Id.)

In April 2007, Haithcock lost the aldermanic election for the second ward. (Id. ¶ 29.) However, she continued to serve as alderman for the remainder of her term. (Id.)

On May 1, 2007, Congress Hotel's architect requested Haithcock's approval of Congress Hotel's application to the Department of Construction and Permits ("DCAP"), Landmarks Division, regarding the one-story roof top recreation and food service addition, rear south tower four-story addition, and ground floor restaurant with outside seating. (Id. ¶ 27.) On May 2, 2007, Haithcock stated in a letter to Brian Goeken, Deputy Commissioner of the Department of Planning and Development Landmarks Division, that she had reviewed Congress Hotel's plans and had no objections to the necessary permits. (Id. ¶ 27; id., Ex. E, Letter of 5/2/07 from Haithcock to Goeken.)

In late May 2007, newly elected Alderman Robert Fioretti began his four-year aldermanic term. (Id. ¶ 29.) On July 9, 2007, at a meeting with Congress Hotel's President, Fioretti declared that he would not issue or approve any permits for the Congress Hotel until the strike by Local 1 was resolved because he made a promise to the union before he was elected alderman. (Id. ¶ 31.) Although Fioretti was advised at the meeting that his position was improper and illegal, he stated that he was not changing his position because he promised Local 1 he would support it in its labor negotiation with the Congress Hotel. (Id. ¶ 33.) Fioretti concluded the meeting by stating that the hotel should "do what you have to do." (Id.)

Fioretti is allegedly quoted in Local 1 literature as stating "Just wait until [the Congress] hotel comes to us for a variance because they want to put a luxury park or pool on the roof . . . I know they have violations in there-- we'll fine them for everything!" (Id. ¶ 32.) Defendants insist that Congress Hotel must settle its labor negotiation with Local 1 before they will issue permits that Congress Hotel is otherwise qualified to obtain. (Id. ¶ 35.)

It is the custom and practice of the City of Chicago that the alderman of the affected ward has original authority to determine who may obtain a permit. (Id. ¶ 26.) It is also the custom and practice of the City of Chicago that if an alderman refuses to approve a permit, it is impossible for an applicant to obtain a permit through any other means because no other alderman will submit an ordinance for approval of the permit to the City Council. (Id.)

Discussion

"A plaintiff's complaint need only provide a 'short and plain statement of the claim showing that the pleader is entitled to relief' that is also sufficient to provide the defendant with 'fair notice' of the claim and its basis." Windy City Metal Fabricators & Supply, Inc. v. CIT Technical Fin. Servs., Inc., 536 F.3d 663, 667 (7th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007), and Fed. R. Civ. P. 8(a)(2)). "In order to demonstrate that he is entitled to relief, however, the pleader must show through his allegations that it is plausible, rather than merely speculative, that he is entitled to relief." Id. (quotation omitted).

I. NLRA Preemption

Defendants argue that Congress Hotel fails to state a claim for a violation of the Constitution's Supremacy Clause, which provides in pertinent part that "the Laws of the United States . . . shall be the Supreme Law of the land." See U.S. Const., art. VI, cl. 2. "This provision invalidates all state laws that conflict or ...


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