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Munguia v. State

August 11, 2010

MANUEL MUNGUIA AND DOROTHY MCGHEE, ON BEHALF OF THEMSELVES INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
STATE OF ILLINOIS, GARY HANNIG, JOE CLARY, REGIONAL HON. HARRY D. LEINENWEBER TRANSPORTATION AUTHORITY, ILLINOIS DEPARTMENT OF TRANSPORTATION, SECRETARY OF THE ILLINOIS DEPARTMENT OF TRANSPORTATION, DIRECTOR OF ILLINOIS DEPARTMENT OF TRANSPORTATION'S DIVISION OF PUBLIC AND INTERMODAL TRANSPORTATION, AND NORTHEAST ILLINOIS REGIONAL COMMUTER RAILROAD CORPORATION, D/B/A METRA, DEFENDANTS.



The opinion of the court was delivered by: Harry D. Leinenweber, Judge United States District Court

MEMORANDUM OPINION AND ORDER

Before the Court are Motions to Dismiss filed by Defendants State of Illinois, Regional Transportation Authority and Northeast Illinois Regional Commuter Railroad Corporation, d/b/a Metra. In addition to the above motions, Plaintiffs' have filed a Motion to Strike References to Materials Extraneous to the Pleadings. For the reasons stated herein, Plaintiffs' Motion to Strike is denied, and Defendants' Motions to Dismiss are granted.

I. BACKGROUND

Plaintiffs Manuel Munguia and Dorothy McGhee filed a class action complaint which claims that Defendants discriminate against minorities in the City of Chicago by disproportionately funding suburban mass transit over urban mass transit. This general claim is broken down into three counts which each allege the violation of a particular law: (Count I) Fourteenth Amendment Equal Protection Clause through 42 U.S.C. § 1983, (Count II) Title VI of the Civil Rights Act of 1964, and (Count III) Illinois Civil Rights Act of 2003.

A. Facts

Plaintiffs filed a fifty-six page complaint which details the history of mass transit in the Chicago region and describes the present effects of this history. Rather than recreate the description, this Court will only briefly describe the most relevant facts for these motions to dismiss.

The Chicago metropolitan area is served by a collection of mass transit organizations. Defendant Regional Transit Authority (the "RTA") is responsible for overseeing three Service Boards: the Chicago Transit Authority (the "CTA"), Commuter Rail Board (known as "Metra"), and Suburban Bus Board (known as "Pace"). The CTA is not a party to this suit, but serves the City of Chicago and the most densely populated portions of suburban Cook County with a mixture of heavy rail and bus service. Defendant Metra primarily serves commuters in the suburbs of Cook County and the "collar counties" of Lake, McHenry, Kane, DuPage, and Will with heavy rail service. Pace is not a party to this suit, but primarily serves the suburban areas with bus service and provides paratransit service to the entire the RTA region. Plaintiffs allege that the service areas have different demographics, resulting in CTA's 60% minority ridership compared to Metra's 30% minority ridership.

The RTA was established in 1974 by the Illinois General Assembly with concurrent approval by a referendum in Cook County and the collar counties. The 1974 RTA Act was intended to address mass transit shortcomings in the Chicago metropolitan region by creating a central authority that could improve service and provide financial stability for mass transit operations. The 1974 RTA Act was unpopular with suburban residents, who criticized the system and advocated for changes in the way the RTA was structured and operated. Just as an example, although the RTA referendum passed by a vote of 684,266 to 671,287 overall, almost 81% of voters in the collar counties voted "no." See Paul Gapp, RTA Referendum Shows Widening City, Suburb Rift, Chi. Trib., Apr. 28, 1974.

In 1983, the RTA Act was amended and the RTA was reorganized. Although the system has been modified since 1983 by further legislation, the essence of the regional organization has not been fundamentally changed since the 1983 amendment. The organizational scheme vests operational responsibilities in the Service Boards, leaving the RTA with general oversight duties. The RTA is responsible for reviewing and approving the budgets, capital plans, and expenditures of the Service Boards as well as developing a five-year capital plan for the region. The RTA is also responsible for distributing certain funds to the Service Boards. Some of these funds are distributed pursuant to strict statutory mandates, while other funds are distributed according to the discretion of the RTA.

The region's mass transit system has a complex funding scheme. There are a number of funding sources, including fare revenues as well as local, state, and federal government funding. Some of this funding is mandated by statute or based on tax revenues while other funding is grant based. While Plaintiffs complain about the funding scheme as a whole, it is clear from the nature of the complaint and the types of facts alleged that the allocation of sales tax revenues is a major component of the funding scheme and therefore a critical part of their Complaint.

The RTA sales tax, currently 1.25% in Cook County and 0.5% in the collar counties, is allocated to the transit agencies based in part on where the tax is collected. These tax rates are a relatively recent development, as the rates were 1.0% and 0.25% until they were each increased by 0.25% in 2008. The table below was created using the Complaint, the relevant statute, and some math, and it summarizes how sales tax revenues are allocated based on the area in which the taxes were collected. [Compl. ¶ 84, 128]; 70 ILCS 3615/4.03.3.

Recipient Taxes Collected In of Taxes City of Chicago Suburban Cook County Collar Counties

CTA 68% 20.4% 0% Metra 0% 37.4% 29.75% Pace 0% 10.2% 12.75% RTA 12% 12% 7.5% Special (see below) 20% 20% 50%

The funds in the "special" category are those raised from the 0.25% increase in sales tax. These funds are first used to pay a specific amount, which varies annually according to a formula, to the "ADA Paratransit Fund," the "Suburban Community Mobility Fund," and the "Innovation, Coordination and Enhancement Fund." 70 ILCS 3615/4.03.3. After this set-aside is removed from the total, the balance is allocated 48% to CTA, 39% to Metra, and 13% to Pace. Id. at 4.03.3(c).

The funds allocated to the RTA are used for multiple purposes, such as paying for its own costs and servicing debt. However, The RTA can funnel a portion of this funding to the Service Boards, and has some discretion in choosing where to send the funding and for what projects. While the RTA has this discretion, Plaintiffs admit in the Complaint that The RTA has "given the CTA the bulk of the 15% discretionary fund" ever since the inception of the funding scheme. The "15% discretionary fund" refers to the RTA's total sales tax allocation, which is 15% of the proceeds from the original 1.0% and 0.25% sales tax rates.

The RTA also has some discretion in setting the recovery ratios that each Service Board must meet. The recovery ratio for a Service Board is the percentage of operating costs which must be recovered through fare revenues. The RTA is required by statute to attain an overall recovery ratio of 50% among the three Service Boards, but they may set the recovery ratio for each Service Board separately. The Complaint claims that the current recovery ratio set for the CTA is discriminatory, but it does not list the current recovery ratios set for the three Service Boards. It only mentions that Pace has historically been given a ratio in the 40% range while the CTA has been given a ratio of over 50%, which is similar to the ratio set for Metra.

B. Procedure

Plaintiffs Munguia and McGhee filed a Class Action Complaint against Defendants seeking to change this funding scheme on the grounds that it discriminated against minorities, in particular African American and Hispanic citizens.

Count I alleges that all the Defendants except the State of Illinois and the Illinois Department of Transportation have violated Plaintiffs' right to equal protection of the laws under the Fourteenth Amendment. Count II alleges that all the Defendants have violated Title VI of the Civil Rights Act of 1964. Count III alleges that the RTA and Metra have violated the Illinois Civil Rights Act of 2003.

The State Defendants (the State of Illinois; Gary Hannig, Secretary of the Illinois Department of Transportation; Joe Clary, Director of the Illinois Department of Transportation's Division of Public and Intermodal Transportation; and the Illinois Department of Transportation) move to dismiss based on Plaintiffs' lack of standing, Plaintiffs' failure to state a claim upon which relief can be granted, and the statute of limitations.

Defendant RTA moves to dismiss based on Plaintiffs' lack of standing, Plaintiffs' failure to state a claim upon which relief can be granted, laches or the statute of limitations, and federal law prohibitions against the suit.

Defendant Metra moves to dismiss based on Plaintiffs' failure to state a claim upon which relief may be granted.

Plaintiffs responded to all three motions to dismiss, and move to strike exhibits attached to the motions to dismiss by the RTA and Metra because such exhibits were not attached to the Complaint and are improper for a motion to dismiss.

II. LEGAL STANDARD

A Rule 12(b)(6) motion to dismiss should be granted if the complaint fails to satisfy Rule 8's pleading requirement of "a short and plain statement of the claim showing that the pleader is entitled to relief." For a motion to dismiss, the Court accepts as true all factual allegations in a complaint. Papasan v. Allain, 478 U.S. 265, 286 (1986). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible ...


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