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Dyson v. City of Calumet City

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

January 23, 2018



          John J. Tharp, Jr. United States District Judge

         This case arises out of a decision by Calumet City (the “City”) to deny Plaintiff Shaneka Dyson a business license to operate a banquet hall. Dyson, along with two of her businesses, Jump N' Jam Inflatables, Inc. (“JNJ”) and The Atrium Venue, Inc. (the “Atrium”), [1] have filed suit against the City and several of its officials, alleging, among other theories, that the City's handling of her license application violated her federal and state equal protection and due process rights, as well as constituted a taking without just compensation. The defendants responded by moving to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state any claim for relief. Because the Court concludes that the complaint does not plausibly allege any federal constitutional violations, it grants the defendants' motion with respect to Dyson's federal claims and declines to exercise supplemental jurisdiction over the remaining state-law claims. Nevertheless, the complaint is dismissed without prejudice. Dyson is afforded another opportunity to address the deficiencies outlined in this opinion, if she is able. Any amended pleading is due no later than February 23, 2017.


         The following facts are drawn from the complaint and are taken as true for purposes of the defendants' Rule 12(b)(6) motion. Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013). Dyson has owned and operated JNJ in Calumet City for several years. (Compl. ¶ 15.) In early 2015, she sought to open a banquet hall called the Atrium. (Id. ¶ 16.) Dyson executed a lease agreement in March 2015 that allowed her to combine the property used to operate JNJ with the property next door, and renovate both into a banquet hall. (Id. ¶¶ 16-18.) (The two properties have since been converted into a single address-1582 Huntington Drive in Calumet City-and are referred to in this opinion simply as the “property.”) On the same day, Dyson applied to the City for a business license to operate a banquet hall. (Id. ¶ 19.)

         Dyson started the process for obtaining City approval to renovate the property in March 2015 as well. After meeting with city inspectors and a city engineer, Dyson's drawings were approved for “assembly” and she was instructed by Defendant Randy Barron, the then-director of inspectoral services, to apply for building permits, which would allow her to begin the necessary renovations. (Id. ¶¶ 11, 20-22.) In June 2015, Dyson was issued three building permits; one for plumbing, one for electrical work, and another for a sprinkler system. (Id. ¶¶ 25, 28-29.) In reliance of these building permits, Dyson began renovating the property. (Id. ¶¶ 26, 30.)

         Around the same time Dyson applied for building permits, she also inquired with the City about obtaining a liquor license. (Id. ¶ 23.) That inquiry attracted the attention of Defendant Michelle Qualkinbush, the mayor of Calumet City, who visited the site in April 2015. (Id.) The following month, Dyson emailed the mayor an explanation of her business proposal. (Id. ¶ 24.) Dyson followed up with Qualkinbush about her proposal “every few days” thereafter, and on June 11, 2015, Qualkinbush informed Dyson that she would bring the liquor license request before the city council. (Id. ¶¶ 24, 27.) The two met again on August 4, 2015, at which time Qualkinbush told Dyson that the liquor license would be discussed and decided during a city council meeting the following week. (Id. ¶ 31.)

         Later in August, however, Dyson's business plan began to unravel. At first, she was informed that the property passed its electrical and plumbing inspections and that an occupancy permit would be issued once an HVAC problem was corrected. (Id. ¶¶ 32-33.) But then, on August 27, 2015, Qualkinbush informed Dyson that the property “had outstanding issues with zoning” and that she would need to present her liquor license request to the city council personally during a meeting in early September. (Id. ¶ 24.) The following day, Barron delivered a letter to Dyson which indicated that “no further permits would be issued” until Dyson obtained a business license. (Id. ¶ 35.) The letter further stated that “a banquet hall” or “special venue meeting room” license was not “permitted under the current zoning of the property” and that “the Zoning Board and City Council must approve a change in the zoning to permit this use.” (Id.; see also Id. ¶ 36.) According to Dyson, late August was the first time she was “made aware there was an issue with how the property was zoned.” (Id. ¶ 34.) Moreover, between May 2015, when she obtained her first building permit, and August 28, 2015, the date she received the letter from Barron, Dyson spent over $150, 000 renting and renovating the property. (Id. ¶ 42.)

         In September 2015, Dyson attempted to get her business plan back on track. She first attended a city council meeting on September 8, 2015, during which she met briefly with Alderman Antoine Collins and obtained a dry bar permit for the property. (Id. ¶ 43.) Later in September, Dyson filed a petition with the Calumet City Zoning Board of Appeals (“ZBA”) to allow her banquet hall as a special use. (Id. ¶ 44.) The ZBA held a public hearing on that request on November 2, 2015, and ten days later, issued its findings and recommendations to the city council. (Id. ¶ 45.) By a vote of two to two, the ZBA determined not to favorably recommend Dyson's special use application. (Id.) The following month, on December 10, 2015, the city council met and adopted the ZBA's finding and recommendations, thereby “codifying” the denial of Dyson's request. (Id. ¶ 47.) The city attorney then sent Dyson a letter on December 18, 2015, which stated that she would not be issued a business or liquor license for the property. (Id. ¶ 48.) Dyson inquired about how to appeal the decision (with whom, the complaint does not say), and was informed that she “would have to begin the process anew.” (Id. ¶ 49.)

         In May 2016, Dyson submitted a second application for a business license, but proposed a new business plan. Instead of operating a banquet hall, she proposed to open a youth center for teens called the “JNJ Spot, Inc.” (Id. ¶ 50.) Dyson followed up on this application several times over the next month. In early June, she emailed Defendant James Patton, the special assistant to the mayor, to check on the status of this application. (Id. ¶ 53.) Patton responded that the application was in the process for zoning approval by Rose Bonato of the City Clerk's office. (Id.) Two weeks later, Dyson followed up with Bonato, but was told there “was no update” on the application. (Id. ¶¶ 54-55.)

         Having still not received a resolution on her request, (id. ¶ 56), Dyson filed suit in December 2016. She alleges in her complaint that the City's handling of her business license and special use requests violated numerous federal and Illinois constitutional guarantees, including equal protection, due process, and the prohibition of takings without just compensation. Dyson further alleges that city officials conspired to violate her constitutional rights and that the denial of her requests amount to tortious interference of contract and business expectancy, as Dyson lost future clients and business when she was unable to open her banquet hall. In April 2017, the defendants filed a motion to dismiss the complaint under Rule 12(b)(6), arguing that Dyson failed to state any claim for relief. (Defs. Joint Mot. to Dismiss, ECF No. 30.) The motion having been fully briefed, the Court finds that none of Dyson's claims may proceed to discovery as alleged.


         The defendants move to dismiss the complaint in its entirety under Rule 12(b)(6). To overcome a Rule 12(b)(6) motion, “a complaint must ‘state a claim to relief that is plausible on its face.'” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” W. Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). This Court “must accept as true all factual allegations in the . . . complaint and draw all permissible inferences” in Dyson's favor. Id. (quoting Bible v. United Student Aid Funds, Inc., 799 F.3d 633, 639 (7th Cir. 2015) (internal quotation marks omitted)). However, “[w]hile a plaintiff need not plead ‘detailed factual allegations' to survive a motion to dismiss, she still must provide more than mere ‘labels and conclusions or a formulaic recitation of the elements of a cause of action' for her complaint to be considered adequate under [Rule] 8.” Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016) (quoting Iqbal, 556 U.S. at 678).

         Dyson's federal claims rest on 42 U.S.C. § 1983. To state a claim under section 1983, “a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law.” L.P. v. Marian Catholic High School, 852 F.3d 690, 696 (7th Cir. 2017) (citing West v. Atkins, 487 U.S. 42, 48 (1988)). Here, Dyson alleges that several city officials, ranging from the mayor and her assistant, to the current and former directors of inspectoral services and members of the ZBA, deprived her of several of her constitutional rights.[2] Dyson also alleges, however, that the City itself is responsible for many of the same constitutional deprivations as its agents. While a municipality is subject to suit under section 1983, liability may flow to the municipality only by way of a claim under Monell v. Department of Social Services, 436 U.S. 658 (1978). A Monell claim requires that a plaintiff plead and prove that she was injured not by the unlawful actions of a municipality's agents, but by (1) the enforcement of an express policy, (2) a widespread practice that is so permanent and well settled as to constitute a custom or usage with the force of law, or (3) a person with final policymaking authority. Estate of Sims ex. rel. Sims v. County of Bureau, 506 F.3d 509, 514-15 (7th Cir. 2007).[3]

         Among the nine counts in the complaint, there is no Monell claim labeled as such, even though Counts I, V, and VI allege federal constitutional violations by the City. The Court might be warranted in dismissing these claims against the City on that basis alone, but doing so would elevate form over function. The crux of this suit is that the defendants improperly denied Dyson's business license and special use requests. According to the complaint, the basis of those denials was a zoning decision that was voted on and “codifi[ed]” by the city council. (Compl. ¶ 47.) A codification of a zoning decision by the city council is nothing if not the “policy” of the City, enacted by those with final policy-making authority. See Benedix v. Village of Hanover Park, 677 F.3d 317, 318 (7th Cir. 2012) (finding that “legislation makes the elimination of Benedix's position the Village's official policy”). Thus, the Court addresses the claims against the City to the extent they would be cognizable under Monell; that is, to the extent they are clearly based on the City's enacted policy, rather than vicarious liability for its agent's actions. Moreover, because Dyson asserts her federal constitutional claims in a collective fashion, the Court assesses each constitutional theory as to all of the defendants at once.

         I. Class-of-One Equal Protection (Count IV)

         The Court turns first to Dyson's contention that she has been deprived of the Fourteenth Amendment's guarantee of equal protection. The Equal Protection Clause prohibits state action that discriminates on the basis of membership in a protected class or that irrationally targets an individual for discriminatory treatment as a so-called “class of one.” Bunson v. Murray, 843 F.3d 698, 705 (7th Cir. 2016) (citing Geinosky v. City of Chicago, 675 F.3d 743, 747 (7th Cir. 2012)). Dyson proceeds under the later theory. In short, she argues that the defendants singled her out for abuse by stringing along her business license application and then pulling the rug out from underneath her, all while ignoring local law and all because of the defendants' spite for Alderman Collins, with whom Dyson is affiliated. (Pl. Mem. in Opp'n to Defs. Joint Mot. to Dismiss 17-18, ECF No. 44.) The defendants counter that Dyson's class-of-one claim fails for two reasons. First, there is a conceivable rational basis for the denial of her business license and special use requests; namely, that the property did not comply with existing city zoning requirements. (Defs. Mot. 16-17.) Second, Dyson fails to identify any similarly situated individuals to demonstrate that city officials acted irrationally. (Id. at 17-18.) The defendants have the better of this argument, but they are only half right.

         The elements of a class-of-one claim have been in flux since the Seventh Circuit's en banc decision in Del Marcelle v. Brown County Corp., 680 F.3d 887 (7th Cir. 2012). In that case, the judgement dismissing a purposed class-of-one claim was affirmed by a tie vote, which resulted in three decisions. The “lead” opinion, signed by four judges, concluded that such claims arise only when a state actor intentionally singles out the plaintiff for unfavorable treatment, with both discriminatory intent and effect, and without justification-that is, for personal reasons not grounded in the official's public duties. Id. at 889. Judge Easterbrook penned a solo concurrence, in which he opined that a plaintiff must demonstrate only that there is no possible justification or rational basis for the defendant's actions; intent, per se, plays no rule under this approach. Id. at 900. Finally, the dissenters proposed a standard that requires a plaintiff to plead and prove only that he was the victim of, and was injured by, intentional discrimination at the hands of a state actor who lacked a rational basis for singling out the plaintiff; under this approach, the presence or absence of animus may have evidentiary significance but it is not dispositive. Id. at 913.

         Whatever the resolution of this debate may be, the Seventh Circuit since has stated that even under the “least demanding standard[, ] . . . a class-of-one plaintiff must, to prevail, negative any reasonably conceivable state of facts that could provide rational basis for the classification.” Miller v. City of Monona, 784 F.3d 1113, 1121 (7th Cir. 2015) (internal quotation marks and citations omitted). “Thus, even at the pleadings stage, ‘all it takes to defeat a class-of-one claim is a conceivable rationale basis for the difference in treatment.'” Id. (quoting D.B. ex rel. Kurtis B. v. Kopp, 725 F.3d 681, 686 (7th Cir. 2013)) (emphasis and alterations omitted).

         A plaintiff in a class-of-one case typically demonstrates an absence of a rational basis by identifying some similarly situated person who was treated differently-that is, a comparator. Id. at 1120 (citing Fares Pawn, LLC v. Ind. Dep't of Fin. Insts., 755 F.3d 839, 845 (7th Cir. 2014)). But contrary to the defendant's contention, Dyson's failure to identify a comparator in the complaint is not fatal to the claim; the existence of a comparator is not an element of the claim but simply a type of evidence that may help support it. Capra v. Cook Cnty. Bd. of Review, 733 F.3d 705, 717 (7th Cir. 2013) (“Plaintiffs alleging class-of-one equal protection claims do not need to identify specific examples of similarly situated persons in their complaints.”); Geinosky, 675 F.3d at 748 n.3 (“Even in a case where a plaintiff would need to identify a similarly situated person to prove his case, . . . we see no basis for requiring the plaintiff to identify the person in the complaint.”) So long as Dyson alleges a pattern of misconduct or acts of overt hostility that exclude any rational explanation for why local officials targeted her, her class-of-one claim survives dismissal. See Geinosky, 675 F.3d at 745-48 (finding plaintiff could proceed on class-of-one claim without comparator where officers from single police unit allegedly issued 24 bogus parking tickets over the course of 14 months because “[r]eason and common sense provided no answer to why [the plaintiff] was targeted that could be considered a legitimate exercise of policy discretion”); Swanson v. City of Chetek, 719 F.3d 780, 785 (7th Cir. 2013) (reversing grant of summary judgment on class-of-one claim where plaintiff's allegations of mayor's prolonged harassment against him showed that the mayor's actions were “illegitimate on their face” and “demonstrate[d] overt hostility”).

         Dyson's allegations, however, fall short of establishing a pattern of misconduct or overt hostility that excludes any rational explanation. Her story seems to be that city officials lured her into believing that she could operate a banquet hall, but then short-circuited those plans by revealing that the property was not zoned for such use and denying her special use and business license requests. (Pl. Opp'n 17-18.) As evidence of this scheme, Dyson points to the fact that city officials waited several months to raise the zoning issue and only after she had spent roughly $150, 000 to get her new business up and running. She also argues that the ZBA disregarded its own rules to deny her special use application (more accurately, elected to send her application to the city council with an unfavorable recommendation) in that it voted with less than a quorum and reached a tie vote. Finally, she asserts that after her requests were denied, she was told to start the process over again, and after she did, her application was held in limbo.

         Unlike in Geinosky and Swanson, however, this story does not inevitably lead to the conclusion that Dyson was the target of an illegitimate exercise of municipal power. See Fares Pawn, 755 F.3d at 845 (“[A] given action can have a rational basis and be a perfectly logical action for a government entity to take even if there are facts casting it as one taken out of animosity.”) (quoting Flying J Inc. v. City of New Haven, 549 F.3d 538, 547 (7th Cir. 2008)). Government abuse may be one possible explanation for what happened, but it certainly is not the only one. To begin with, it is conceivable that the City's issuance of the building permits, which supposedly led Dyson to believe the property was zoned to permit a banquet hall, was simply a mistake, perhaps due to a misinterpretation of the municipal code, oversight by some official, or some other reason. Dyson alleges that it was an “intentional” act rather than “the result of government incompetence, ” (Compl. ¶¶ 82, 84), but the Court need not accept this wholly conclusory allegation at face value, Iqbal, 556 U.S. at 681, especially when class-of-one claims must be based on something more than “ordinary and inevitable mistakes by government officials, ” Geinosky, 675 F.3d at 747 (“[T]he purpose of entertaining a ‘class of one' equal protection claim is not to constitutionalize all tort law nor to transform every claim of improper provision of municipal services . . . into a federal case.”) (quoting McDonald v. Village of Winnetka, 371 F.3d 992, 1009 (7th Cir. 2004)).

         And whether permits were issued by mistake or not, there plainly was a possible rational basis for the denial of Dyson's business license and special use applications: Dyson's proposed business did not meet the City's existing zoning requirements. The Seventh Circuit has made clear “time and again” that federal courts “are not zoning boards of appeal” and, as such, “[s]tate and local land-use decisions are entitled to great deference when constitutional claims are raised in federal court.” CEnergy-Glenmore Wind Farm No. 1, LLC v. Town of Glenmore, 769 F.3d 485, 487 (7th Cir. 2014) (internal quotation marks and citations omitted); see also Maum Mediation House of Truth v. Lake County, 55 F.Supp.3d 1081, 1089 (N.D. Ill. July 16, 2014) (“In general, zoning ordinances imposing restrictions on use and occupation of private land . . . satisfy the rational basis test.”) (citation omitted). The complaint indicates that the property was not zoned to permit use as a banquet hall or meeting venue-hence Dyson's special use request-and that the City refused to issue a business license until the zoning issue was addressed. (Compl. ¶¶ 34-35, 44-48.) Moreover, the municipal code, which Dyson cites throughout the complaint, shows that applicants must meet several requirements before the ...

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