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Falkner v. Redflex Traffic Systems, Inc.

United States District Court, N.D. Illinois, Eastern Division

April 10, 2015

MATTHEW G. FALKNER, on behalf of himself and all others similarly situated, Plaintiff,
v.
REDFLEX TRAFFIC SYSTEMS, INC., and REDFLEX HOLDINGS, LTD., Defendants.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Judge.

Defendant Redflex Traffic Systems, Inc. ("Defendant" or "Redflex") has filed a motion to dismiss Plaintiff's Amended Complaint (the "Amended Complaint"). For the following reasons, the Court grants Defendant's motion [36] without prejudice.

FACTUAL BACKGROUND

The following facts are taken from Plaintiff's Amended Complaint. (R. 30.) On or about January 19, 2013, the City of Chicago (the "City") issued Plaintiff Matthew G. Falkner ("Plaintiff" or "Falkner") a ticket through the City's automated red light camera system. (Id. ¶ 5.) Redflex began installing and operating the City's red light cameras in 2003. (Id. ¶¶ 6, 12.) The City has approximately 384 red light cameras, and issues $100 tickets for violations of its red light ordinance. (Id. ¶ 3.) In 2010, a whistle-blower reported that Redflex had bribed the City of Chicago to secure its contract with the City, and Redflex has since admitted that the bribery took place. (Id. ¶ 1.)

Plaintiff alleges that as a result of Redflex's bribery scheme, Redflex secured two contract provisions with the City of Chicago that caused him injury. (Id. ¶ 2.) First, Plaintiff asserts that Redflex's bribery caused the City to agree to "supra market" compensation for Redflex-revenues above what Redflex would otherwise have been able to charge the City for installing and operating its red light cameras. (Id. ) Plaintiff claims that the above-market compensation caused him injury because the City paid a portion of his $100 red light fine to Redflex. (Id. ¶ 5.) Second, Plaintiff alleges that Redflex's bribery resulted in the "unlawful and unconstitutional delegation of police power to a private for-profit organization, namely Defendant." (Id. ¶ 2.) In other words, Plaintiff claims that Redflex's bribery caused the City of Chicago to unlawfully delegate to Redflex the City's police power to decide whether motorists in Chicago violated its red light ordinance. Based on these theories, Plaintiff brings two counts for unjust enrichment against Redflex on behalf of himself and a proposed class of individuals to whom the City of Chicago issued red light tickets. He requests that Redflex disgorge to the proposed class the entire $100 million in revenues that the City allegedly compensated Redflex for installing and operating the City's automated red light cameras. (Id. ¶ 3.) Plaintiff alleges, and Redflex does not dispute, that the Court has subject matter jurisdiction over this matter under the Class Action Fairness Act provisions of 28 U.S.C. § 1332(d). (Id. ¶ 9.) Redflex now moves to dismiss Plaintiff's claims on several grounds, including Plaintiff's lack of standing to bring suit against it.

LEGAL STANDARD

Article III standing is a threshold jurisdictional requirement in every federal action. See Johnson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 719 F.3d 601, 606 (7th Cir. 2013); Horne v. Flores, 557 U.S. 433, 445, 129 S.Ct. 2579, 174 L.Ed.2d 406 (2009). "Standing arises under the case or controversy' requirement, found in U.S. Const. art. III, § 2, and serves to identify those disputes which are appropriately resolved through the judicial process.'" Johnson, 719 F.3d at 606 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). Accordingly, Rule 12(b)(1) motions for lack of subject matter jurisdiction properly address standing issues. See Scanlan v. Eisenberg, 669 F.3d 838, 841 (7th Cir. 2012).

"As a jurisdictional requirement, the plaintiff bears the burden of establishing standing." Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009). The plaintiff must establish each of the following three elements:

(1) the plaintiff must have suffered an "injury in fact"-that is, "an invasion of a legally protected interest which is (a) concrete and particularized, " and (b) actual or imminent, not conjectural or hypothetical; (2) "there must be a causal connection between the injury and the conduct complained of" ( i.e., the injury must be fairly traceable to the challenged action of the defendant); and (3) "it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."

Sierra Club v. EPA, 774 F.3d 383, 388 (7th Cir. 2014) (quoting Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130). "[E]ach element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Lac Du Flambeau Band of Lake Superior Chippewa Indians v. Norton, 422 F.3d 490, 496 (7th Cir. 2005) (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130). "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we presum[e] that general allegations embrace those specific facts that are necessary to support the claim.'" Id. Further, "[i]n reviewing the standing question, the court must be careful not to decide the questions on the merits for or against the plaintiff, and must therefore assume that on the merits the plaintiffs would be successful in their claims.'" Sierra Club, 774 F.3d at 389 (quoting City of Waukesha v. EPA, 320 F.3d 228, 235 (D.C. Cir. 2003)).

ANALYSIS

Defendant moves to dismiss the Amended Complaint on several bases. It argues that the Amended Complaint fails as a matter of law because Plaintiff does not have Article III standing to bring either claim. It also asserts that the Court should dismiss the Amended Complaint because the City of Chicago is an indispensable party under Rule 19 that Plaintiff has not named as a defendant. Finally, Defendant contends that neither count states a claim for unjust enrichment because Plaintiff cannot show that he is entitled to the revenues that the City paid Redflex, and that the Court should dismiss Count Two because Plaintiff does not sufficiently plead an unlawful delegation of the City's police power. Because the Court finds that Plaintiff does not establish that he has standing to bring either claim, the Court dismisses the Amended Complaint without reaching Defendant's other arguments.

I. Standing

The Court begins by addressing the Article III standing issue because "without a case or controversy under Article III, [a court has] no authority to proceed to the merits." United States v. $304, 980.00 in U.S. Currency, 732 F.3d 812, 818 (7th Cir. 2013) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)). Defendant argues both that Plaintiff has not alleged an "injury in fact, " and that there is no "causal connection" between Plaintiff's alleged injury and Redflex's conduct. The Court conducts the standing analysis independently for each of Plaintiff's two counts. See Rifkin v. ...


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