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520 South Michigan Avenue Associates, Ltd. v. Fioretti

September 28, 2009

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

The Congress Plaza Hotel & Convention Center ("the Hotel") sued Alderman Robert Fioretti in his official capacity and the City of Chicago*fn1 claiming, among other things, that their refusal to issue permits for the Hotel to operate a sidewalk café for the 2006-09 seasons violated its rights under the Fourteenth Amendment and the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq. On July 8, 9 and 13, 2009, the Court held a bench trial on plaintiff's: (1) 42 U.S.C. § ("section") 1983 damage claim; (2) claim for a declaration that defendants' denial of the permits violates section 1983 and the NLRA; and (3) claim for an injunction restraining defendants from interfering with its ongoing negotiations with Local 1 of the Hotel Employees and Restaurant Employees International Union ("the Union"). The Court finds as follows.

The Hotel is a limited partnership with its headquarters and principal place of business in Chicago, Illinois where it is engaged, inter alia, in the hotel business at 520 South Michigan Avenue. It is an employer in an industry affecting commerce within the meaning of the NLRA. (Proposed Final Pretrial Order, Statement A, Parties' Joint Statement Uncontested Facts ("Uncontested Facts" ¶¶ 2, 3.) The Hotel is located in the City's Second Ward.

In June 2003, the Hotel's Union employees went on strike and have been picketing in front of the Hotel ever since. (Id. ¶ 1; Trial Tr. ("Tr.") 254.) The Union's labor dispute with the Hotel is governed by the NLRA.

From 1993 until May 18, 2007, Madeleine L. Haithcock was the Alderman of the City's Second Ward. (Uncontested Facts ¶ 8; Tr. 17.) In her final bid for re-election, she was defeated by Robert Fioretti, who has been the Second Ward Alderman since May 21, 2007.

Aldermanic Authority

To succeed on its claims, plaintiff must prove that the Second Ward Alderman's actions can properly be attributed to the City. In the context of section 1983, that means plaintiff must prove that the Alderman had "final policymaking authority" with respect to its applications for sidewalk café permits. Chortek v. City of Milwaukee, 356 F.3d 740, 748 (7th Cir. 2004). Whether Haithcock and/or Fioretti "ha[ve] final policymaking authority is a question of state law" that the Court resolves by "[r]eviewing the relevant legal materials, including state and local positive law, as well as custom or usage having the force of law." Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 737 (1989) (quotations omitted).

Illinois law grants "the corporate authorities of each municipality," in this case, the "mayor and aldermen," authority to "pass all ordinances and make all rules and regulations proper or necessary, to carry into effect the powers granted to municipalities." 65 Ill. Comp. Stat. 5/1-1-2(a), 5/1-2-1. Pursuant to that authority, the City has enacted the Municipal Code of Chicago ("Municipal Code") which, among other things, prohibits the operation of a sidewalk café without a permit. Id. § 10-28-805. The Municipal Code instructs those who wish to open a sidewalk café to submit a permit application to the City's Department of Business Affairs and Consumer Protection, formerly known as the Department of Business Affairs and Licensing ("the Department"). Id. §§ 10-28-800, 810. Thereafter, the Municipal Code, states:

[T]he department shall review a submitted application for compliance with this article [of the Municipal Code] and regulations. . . . If the Director finds that the applicant meets the requirements of this article and the regulations promulgated hereunder, the director shall provide the application to the alderman of the affected ward, together with a recommendation for introduction of an ordinance approving the application. Such approval shall not be unreasonably withheld. Upon passage and publication of an ordinance approving the application, the director shall issue the sidewalk café permit to the applicant.

Id. § 10-28-820(A). A sidewalk café permit is valid from March 1 through December 1 of the year for which is issued. Id. § 10-28-805.

Though the Municipal Code makes aldermanic approval, evidenced by introduction of an ordinance, a pre-condition to obtaining a permit, in theory, that requirement does not give aldermen absolute power over permits. Their power is ostensibly limited by the Municipal Code's admonition that aldermen "not unreasonably withh[o]ld" approval and its requirement that the City Council vote on all permit ordinances. Id. In reality, however, as the evidence clearly shows, the City Council delegated its final decision making authority over the Hotel's sidewalk café permit applications to the Second Ward Alderman. City of St. Louis v. Praprotnik, 485 U.S. 112, 124 (1988) (stating that "[a]uthority to make municipal policy may be granted directly by a legislative enactment or may be delegated by an official who possesses such authority" (quotation omitted)).

In general, the record shows, the process for obtaining a sidewalk café permit begins when the applicant submits the completed application and supporting drawings to the local alderman. Once the alderman approves the application, by signing the line in the "Aldermanic Approval" box that is printed on the application, he or she submits it to the City Clerk to be introduced as an ordinance at a City Council meeting. After the application/ordinance is introduced, the City Council refers it to its Committee on Transportation and Public Way ("Transportation Committee"). After the application has been referred to the Committee, but before it is approved by the Committee or the full City Council, the Department issues a temporary permit to the applicant, which allows it to open the sidewalk café. The Committee then holds a public hearing at which sidewalk café permits are approved en masse by a single vote without any discussion. The approved applications are then sent to the full City Council, which votes on them en masse. After that vote, an ordinance issues approving the sidewalk café and the applicant can obtain its permit. (Tr. 313-15.)

That was the process the City followed with respect to the Hotel's 2006 sidewalk café permit application. Former Alderman Haithcock testified that she received and approved the Hotel's application in March 2006. (Id. 22.) At the June 28, 2006 City Council meeting, she introduced the application as an ordinance to be referred to the Transportation Committee. (Id.; see Pl.'s Ex. 26.) A month later, the Hotel received a document from the Department entitled "CITY OF CHICAGO DEPARTMENT OF BUSINESS AFFAIRS AND LICENSING SIDEWALK CAFÉ PERMIT." (Pl.'s Ex. 14.) The permit, which was "issued on 07/27/2006," states: "Pursuant to the Ordinances passed by the city council of the city of Chicago on 06/28/2006 (pending passage) permission and authority is hereby given and granted to THE CONGRESS HOTEL . . . to maintain and use a portion of the right-of-way for a sidewalk café . . . ." (Id.) It authorizes the Hotel to operate the sidewalk café "from and after March 1, 2006 through and including December 1, 2006" but also says that "THIS PERMIT IS REVOCABLE by the Director of Business Affairs and Licensing at any time." (Id.)

Less than a month later, Alderman Haithcock wrote a letter to Alderman Allen, Chairman of the Transportation Committee, asking that "item number three [on the agenda for the Transportation Committee's meeting later that day] . . . for the Congress Hotel . . . for a sidewalk café . . . be deferred until further notice." (Pl.'s Ex. 12 (emphasis original).) Haithcock did not give any reason for the deferral request, and the Transportation Committee did not ask for one. Instead, it simply granted her request. (Pl.'s Ex. 15.) As a result, the Department told the Hotel in an August 28, 2006 letter, "the permit issued pending passage of the ordinance has been canceled. You must cease and desist operation of the sidewalk café." (Id.)

After receiving that letter, plaintiff's attorney, Dan Graham, asked the Department why the permit had been canceled. He was told to speak to Alderman Haithcock because it was her vote to defer the Transportation Committee's consideration of the application that triggered the permit cancellation. But Alderman Haithcock was not a member of the Transportation Committee, and thus, could not possibly have voted for the deferral. (Tr. 35.)*fn2

On September 1, 2006, Graham wrote a letter to Alderman Haithcock asking for an explanation. (Id. 483.) Her office responded that she was concerned because she had received some complaints about the Hotel's condition.*fn3 (Id.) Graham offered to hold a meeting at the Hotel so the Alderman could see it and requested a copy of the complaints she had received. (Id. 483-84.)

Haithcock's office never gave Graham any documents, but the parties did meet on September 12, 2006 at the Alderman's office. (Id. 485.) During the meeting, Haithcock said she was impressed with the Hotel's presentation and would once again support its sidewalk café application. (Id. 487-88.) Shortly thereafter, Graham sent a letter to Transportation Committee Chairman Allen, reporting that Alderman Haithcock had renewed her support for the Hotel's application.

On September 19, 2006, Allen sent a letter to the Department, saying: Alderman Madeleine L. Haithcock (2nd Ward) introduced an ordinance at the June 28, 2006 City Council meeting granting permission to the Congress Plaza Hotel & Convention Center to maintain and use a portion of the public right-of-way for a sidewalk café adjacent to the premises at 520 South Michigan Avenue.

Please issue the appropriate permits to Congress Plaza Hotel & Convention Center pending passage of this ordinance in the Committee on Transportation and the Public Way. (Pl.'s Ex. 26 (emphasis original).) In addition, Graham received a notice from Allen saying that, in light of Alderman Haithcock's renewed approval, he would have the application placed on the agenda for the next Transportation Committee meeting. (Tr. at 490-93.)

As Allen promised, the Hotel's application was on the agenda for the October 3, 2006 Transportation Committee meeting. (See Pl.'s Ex. 162.) At that meeting, however, Haithcock once again withdrew her support for the Hotel's application. She did so, Graham said she told him, because the Union opposed the application and she needed its support in the upcoming election. (Tr. 499-501.) She suggested plaintiff bring the permit application back to her in the spring, after she had been re-elected. (Id. 501.)

Not surprisingly, Haithcock's recollection of that meeting is somewhat different. Though she admitted that the Union had opposed her in the primary election (id. 27-28), she could not recall there being any relationship between her desire to secure its support in the general election and her actions on the Hotel's permit application. (Id. 29-30.) Rather, she said she received complaints about roaches, dirty carpets, and "a lot of different things" from people who stayed at the Hotel. (Id. 37.) However, she did not investigate the source of these complaints and could not provide any details about them. (Id. 42-44.) Moreover, she had no personal knowledge of any problems with the Hotel and, in any event, did not deem them serious enough to mention them in the deferral request she sent to Transportation Committee Chairman Allen. (Id.)

Regardless of her reasons, the result of Haithcock's withdrawal of support is undisputed: The Hotel's application was not sent to the City Council for a vote.

This evidence establishes that neither the Transportation Committee nor the Department independently examined the merits of the Hotel's application before scheduling and deferring a vote on the application or issuing and canceling the temporary permit. Rather, they considered only one thing: whether Alderman Haithcock approved. After she approved the Hotel's application and introduced it as an ordinance at the June 28, 2006 City Council meeting, the Transportation Committee put the application on its agenda and the Department issued a permit "pending passage" to the Hotel. A few weeks later, when Haithcock withdrew her support for the Hotel's application, the Committee refused to consider it and the Department cancelled the temporary permit. Later, when the Alderman renewed her support, the Transportation Committee immediately put the Hotel's application on the agenda for its next meeting. When she withdrew her support once again, the Transportation Committee again deferred consideration of the application. The only reasonable conclusion that can be drawn from the lock-step actions of Haithcock, the Department and the Transportation Committee is that the alderman, and the alderman alone, controlled the fate of the Hotel's 2006 application for a sidewalk café permit.

After Fioretti was elected Second Ward Alderman in May 2007, the Hotel approached him, as it had Haithcock before him, for approval of its café permit. Fioretti said he spoke with Hotel representatives about permit applications, but his memory of those interactions was spotty. For example, when he was asked whether "at any . . . time for the 2007 sidewalk season, [he ever] approved or signed anything for the Congress Hotel relating to a sidewalk café?", Fioretti responded: "I have to say that I was never given an outdoor café license request application from the hotel." (Tr. 85-86.) However, after seeing the Hotel's permit application for the 2007 season (Pl.'s Ex. 156-9), Fioretti recalled receiving it but had no idea why it had been sent to him:

Q: Do you recognize this document?

A: Do I recognize it?

Q: Yes.

A: No. I have no idea. It's a fax copy. Yes, I do -- I do know what it is.

Q: What is it?

A: Well, I would say it was a sidewalk café application.

Q: And can you tell from this document, sir, what year it's for?

A: 2007.

Q: And do you see on the first page of the application a box on the bottom that talks about aldermanic approval? Do you see that, sir?

A: Ald -- yes.

Q: Did you ever sign the hotel's application of which this is a copy? . . . .

A: My answer is no. I don't know why it was given to me.

(Id. 87-88; see id. 89 ("I have no idea why I was given the document.").) Given that the permit application says "You must obtain approval from the alderman of the ward where your proposed use of the public way is located" and contains a line for the "alderman's signature" (Pl.'s Ex. 156-9), this testimony has no credence.

Fioretti also suggested that the 2007 application was flawed or incomplete, saying he had "some concerns" about it when plaintiff's architect brought it in. But his ...


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