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Oxford Bank & Trust and v. Village of La Grange

July 17, 2012


The opinion of the court was delivered by: Judge John J. Tharp, Jr.


The plaintiffs, Oxford Bank & Trust (as Trustee) and Fifth Avenue Property Management, are companies that own and manage a commercial property at 71 South LaGrange Road, in the downtown area of the Village of La Grange, Illinois. John and Larry Brannen, and other family members, own or manage these entities and the properties they own. The plaintiffs (or "landlords") sued the Village, the Village President, and the Village Manager, (together, the "Village defendants") after a change in the Village's zoning ordinance prevented their tenant from opening a pawn shop. The tenant, Andrew Grayson, is not a party to this action. The landlords' 23-count, 315-paragraph Amended Complaint alleges that the Village violated the plaintiffs' federal and state constitutional rights and committed various state-law torts, including conspiracy, thereby depriving them of a lucrative long-term lease with Grayson. The relief sought includes a declaratory judgment and damages, including punitive damages against the individually named Village officials.

Currently pending are the parties' cross-motions for summary judgment and cross-motions to strike. Each party's initial summary-judgment filing consists of a motion, the statement of uncontested material facts required by Local Rule 56.1(a)(1)(3), and a supporting memorandum. Each party's response consists of a brief as well as an answer to the moving party's factual statement and a separate statement of additional material facts pursuant to Rule 56.1(b)(3)(B) and (C). Finally, the parties each filed a reply brief and a further response to the other's statement of additional material facts. As if these were not enough, both parties also filed and fully briefed cross-motions to strike large portions of each other's Rule 56.1 statements and responses as argumentative, unsupported by the evidence, or otherwise improper.

The motions to strike are denied. This Court agrees with its colleagues that motions to strike are disfavored in summary judgment proceedings unless they expedite the Court's work. E.g., Indep. Trust Corp. v. Fidelity Nat. Title Ins. Co. of New York, 577 F. Supp. 2d 1023, 1052 (N.D. Ill. 2008). Here the parties' motions to strike do nothing to clarify the factual record and amount to little more than additional, unauthorized pages of briefing in support of their respective summary-judgment motions-the rules for which already provide ample opportunity to respond to and rebut the other party's version of events. The Court is capable of disregarding statements or responses that contain legal conclusions or argument, are evasive, contain hearsay or are not based on personal knowledge, or contain unfounded, irrelevant, or unsupported assertions of fact. Thus, consistent with its obligations under the federal and local rules, the Court will rely only on material statements of fact which are both admissible and supported by the record. See Fed.R.Civ.P. 56(e); L.R. 56.1; see also Davis v. Elec. Ins. Trs., 519 F. Supp. 2d 834, 836 (N.D. Ill. 2007); Lawrence v. Bd. of Election Com'rs, 524 F. Supp. 2d 1011, 1014 (N.D. Ill. 2007).

The core facts of this dispute can be stated briefly (additional facts, applicable to particular arguments, will be discussed in the context of those arguments). On May 20, 2009, the landlords executed a commercial lease with Andrew Grayson, who intended to open a pawn shop in the space and who, on May 22, 2009, received a business license from the Village of La Grange for that purpose. Shortly thereafter, opponents of the pawn shop, including Michael LaPidus, president of the La Grange Business Association, held an "urgent" community meeting and began lobbying the village government to prevent the store from opening. In the meantime, Grayson applied for building permits to renovate the property. But while those applications were pending, an ordinance was introduced that would make various changes to the zoning in the C-1 district, the area encompassing the Village's central business district, including making pawn shops a prohibited use. The proposed ordinance was taken up by the Village's Plan Commission at a special public meeting on June 29, 2009. The Plan Commission voted to recommend adoption of all of the proposed zoning changes. At its public meeting on July 13, 2009, the Village Board, which includes defendant Asperger, adopted the amending ordinance by unanimous vote. As a result of the amendments, Grayson effectively lost his business license, and the landlords lost the benefit of their lease, which required Grayson to use the space for "resale/pawn shop and its related services." The store never opened, nor was it remodeled. Neither the landlords nor the tenant requested zoning relief from the Village or challenged the zoning classification in state court. Instead, the landlords filed this action.

The landlords primarily allege violations of their federal and state constitutional rights to procedural and substantive due process and equal protection on a "class of one" theory (Counts One through Eighteen of the Amended Complaint). The remainder of the Amended Complaint alleges common-law claims of interference with vested rights, conspiracy, and tortious interference with contractual rights. For the reasons discussed below, the Court grants judgment for the defendants on all of the claims asserted.


The individual defendants raise various immunity defenses (legislative, qualified, and statutory) and further contend, along with the Village, that as a matter of law the plaintiffs fail to establish any constitutional violations or torts arising from the zoning amendments. The defendants also argue, particularly with respect to the due process claims, that the landlords lack standing to enforce their tenant's property interest in the business license he received before the Village outlawed pawn shops in the zoning district. For their part, the plaintiffs argue that they have garnered sufficient evidence not only to withstand summary judgment, but to be entitled to judgment themselves on all 23 counts of their Amended Complaint.

Summary judgment will be granted when the moving party shows that there is no genuine issue as to any material fact and that it is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c); Davis v. Ockomon, 668 F.3d 473, 477 (7th Cir. 2012). The Court construes all facts and draws all reasonable inferences in favor of the nonmoving party. Davis, 668 F.3d at 477. When cross-motions for summary judgment are being resolved together, this same standard applies in favor of the party against whom the motion under consideration is made. Edwards v. Briggs & Stratton Ret. Plan, 639 F.3d 355, 359 (7th Cir. 2011). Further, if the non-moving party fails to establish an essential element of a claim on which it will bear the burden of proof at trial, summary judgment is appropriate against that party. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

Before addressing the merits, however, the Court first considers several threshold issues.

A. Subject Matter Jurisdiction

First, although the parties have not raised the issue, this Court is obligated consider its own jurisdiction sua sponte, and a red flag appears when a party primarily challenges the zoning of his property. Although exhaustion of remedies, in the typical sense, is not a prerequisite to a § 1983 suit, the term "exhaustion" is often used as shorthand for the ripeness rule of Williamson County Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172 (1985). There, the Supreme Court held that a constitutional claim challenging a taking of property without just compensation cannot be ripe for adjudication in federal court until there has been (1) a conclusive determination whether plaintiff will be denied the proposed use of its property and (2) an action for compensation through the procedures the State has provided. See id. at 194-95; Behavioral Institute of Indiana, LLC v. Hobart City of Common Council, 406 F.3d 926, 930-31 (7th Cir. 2005). The first would entail seeking a zoning variance and appealing a denial; the second speaks to an action for just compensation for a regulatory taking. B.I.I., 406 F.3d at 930. If inverse condemnation proceedings are shown to be unavailable or inadequate, that requirement is excused. Greenfield Mills, Inc. v. Macklin, 361 F.3d 934, 958 (7th Cir. 2004)

Although the landlords have not made a takings claim per se, the Seventh Circuit has been clear that Williamson County's ripeness rule applies to all constitutional cases that at their core complain of government interference with the use of physical property. Thus, the rule applies with full force to due process claims (both procedural and substantive) and to equal protection claims when based on the same essential facts as a takings claim. See Flying J., Inc. v. City of New Haven, 549 F.3d 538, 543-44 (7th Cir. 2008); Hager v. City of West Peoria, 84 F.3d 865, 869 (7th Cir. 1996). In short, "[l]abels do not matter." See River Park, Inc. v. City of Highland Park, 23 F.3d 164, 167 (7th Cir. 1994). Thus, the Seventh Circuit has instructed:

"Even in cases where a developer's proposed use is clearly at odds with local zoning ordinances, the developer must first seek a variance in the local zoning law and then pursue whatever state court remedies are available." Flying J., Inc, 549 F.3d at 543. The plaintiffs here have done none of these things.

But while the landlords allege that the profitable use of their property has been restricted by government regulation, the Court concludes that they do not allege a "taking" within the meaning of Williamson County, for at least two reasons. First, the facts of the case are sufficiently different than a true takings case to avoid application of the doctrine; "[i]n order to qualify as a regulatory taking, the measure must place such onerous restrictions on land as to render it useless." Muscarello v. Ogle Cnty Bd. of Comm'rs., 610 F.3d 416, 421 (7th Cir. 2010). Here-as in Muscarello-"the alleged economic effects are a far cry from the denial of all economically beneficial or productive use of the land" required to constitute a "taking." See id. The landlords did not lose the beneficial use of their property; they lost a single tenant. They remained able to lease to all sorts of commercial tenants, and indeed they eventually did, albeit about a year and a half later. See Pl. Mot., Doc. #81 at ¶ 14; Pl. Mem. of Law, Doc. # 84 at 4.

Even if the zoning change had worked more substantial restrictions on the property, the so-called "bona fide equal protection" exception to the Williamson County ripeness requirement would appear to provide jurisdiction over at least the equal protection and substantive due process claims. As the Seventh Circuit explained in Flying J., "courts in this circuit have recognized an exception to the Williamson County ripeness requirement for 'bona fide equal protection claims,'" 549 F.3d at 543, including those based, at least in part, on alleged "malicious conduct of a government agent, in other words, conduct that evidences a spiteful effort to 'get' [the plaintiff] for reasons unrelated to any legitimate state objective." Id. The landlords allege precisely that, claiming that they were treated differently because the Village defendants "were motivated by animus and improper motive." Am. Compl. ¶¶ 78, 166. They elaborate on summary judgment that the Village defendants "were bitter and hostile" toward the plaintiffs in the wake of a failed real estate deal and that "Defendants' prior dealings with Plaintiffs spurned [sic] them and fostered a vengeful animus toward their property rental business that colored their decision to amend the zoning code." Pl. Mem. in Opp., Doc. # 80 at 3-4.

While the Court ultimately concludes that the plaintiffs' allegations of animus, ill-will, and spiteful conduct are substantively inadequate to save their equal protection claim, they suffice to vest this Court with jurisdiction over those claims. The same holds true as to the substantive due process claim, which alleges that the landlords were targeted out of spite and bad faith.*fn1 So, although this whole case boils down to the landlords' dissatisfaction with the effect of zoning regulations on their property, the Court concludes that all of the constitutional claims are sufficiently different from a true takings claim to avoid Williamson County's ripeness requirement and to imbue this court with subject matter jurisdiction.

B. Legislative Immunity

Next, the Court must address the Village defendants' argument that absolute immunity insulates the individual defendants from suit because the zoning changes were accomplished through a duly enacted ordinance. Tenney v. Brandhove, 341 U.S. 367 (1951), held that state legislators are absolutely immune in any action for damages under § 1983*fn2 for their actions that are "legitimate legislative activity" and not done "for their private indulgence." Id. at 376-77.

The Court further declared that "the claim of an unworthy purpose does not destroy the privilege." Id. at 377. The immunity also extends to local legislators. See Bogan v. Scott-Harris, 523 U.S. 44, 49 (1998); Rateree v. Rockett, 852 F.2d 946 (7th Cir. 1988). "[T]here is no material distinction between the need to insulate legislators at the national level to protect the public ...

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