United States District Court, N.D. Illinois, Eastern Division
CHICAGO TEACHERS UNION LOCAL 1, AMERICAN FEDERATION OF TEACHERS, AFL-CIO, et al., Plaintiffs,
BOARD OF EDUCATION OF THE CITY OF CHICAGO, a body politic and corporate, Defendants.
MEMORANDUM OPINION AND ORDER
JORGE L. ALONSO UNITED STATES DISTRICT JUDGE.
matter is before the Court on the motion of
Plaintiff/Counter-Defendant Chicago Teachers Union
(“CTU”) to dismiss the counterclaim of
Defendant/Counter-Plaintiff Board of Education of the City of
Chicago (“Board”). CTU also moves to strike the
Board's third affirmative defense. For the following
reasons, the Court grants CTU's motion as to the
counterclaim and denies the motion as to the third
2012, CTU, a labor organization representing teachers
employed by the Board, brought this class action under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et seq. CTU alleges the Board violated Title VII by
engaging in a pattern and practice of racial discrimination
through its layoff policy, which had a disparate impact on
African American teachers and para-professionals.
CTU filed its Second Amended Complaint, the Board filed its
Answer, which included affirmative defenses and a
counterclaim. (Pl.'s 2d Am. Compl., Dkt. # 167; see
also Def.'s Answer, Dkt. # 178.) The Board's
counterclaim alleges that CTU breached the implied duty of
good faith and fair dealing arising out of the 2007-2012
collective bargaining agreement (“CBA”) between
CTU and the Board by filing this class action case, which
allegedly interferes with the Board's right to receive
the “fruits” of the CBA and violates CTU's
own constitution and bylaws to the extent it advocates on
behalf of some members to the detriment of others.
(See Def.'s Answer, Dkt. # 178, pp. 35-39,
¶¶ 4-8, 17-25.)
answer, the Board pleaded three affirmative defenses, the
third alleging that CTU lacks standing to be a class
representative. The crux of the third affirmative defense,
which overlaps with parts of the counterclaim, is that CTU
violated its own constitution in bringing its lawsuit because
CTU's House of Delegates did not authorize the lawsuit
and because the lawsuit promotes the interest of some CTU
members to the possible detriment of other members.
(See Def.'s Answer, Dkt. # 178, pp. 33-34,
¶¶ 1-7.) CTU has moved to dismiss the Board's
counterclaim pursuant to Fed.R.Civ.P. 12(b)(1) and (6) and to
strike the Board's third affirmative defense pursuant to
Motion to Dismiss
12(b)(6) motion “tests whether the complaint states a
claim on which relief may be granted.” Richards v.
Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). To survive
a motion to dismiss for failure to state a claim, a
plaintiff's complaint must contain “a short and
plain statement of the claim[s] showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a)(2). The short
and plain statement under Rule 8(a)(2) must
“‘give the defendant fair notice of what . . .
the claim is and the grounds upon which it rests.'”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).
Under federal notice-pleading standards, a complaint's
“[f]actual allegations must be enough to raise a right
to relief above the speculative level, ”
Twombly, 550 U.S. at 555, by including
“sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Twombly, 550 U.S. at 570).
“In reviewing the sufficiency of a complaint under the
plausibility standard, [courts must] accept the well-pleaded
facts in the complaint as true, but [they] ‘need[ ] not
accept as true legal conclusions, or threadbare recitals of
the elements of a cause of action, supported by mere
conclusory statements.'” Alam v. Miller Brewing
Co., 709 F.3d 662, 665-66 (7th Cir. 2013) (quoting
Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)).
when considering a Rule 12(b)(1) motion to dismiss, a
district court accepts as true all well-pleaded factual
allegations and draws reasonable inferences from the
allegations in favor of the pleading party. Kelley v.
Med-1 Solutions, LLC, 548 F.3d 600, 604 (7th Cir. 2008)
(citing Capitol Leasing Co. v. FDIC, 999 F.2d 188,
191 (7th Cir. 1993)).
Breach of Implied Covenant
support of its motion to dismiss, CTU argues that the
Board's allegations that CTU breached the implied duty of
good faith and fair dealing in the CBA by filing this lawsuit
fail to state a claim.
correctly explains, there is no stand-alone cause of action
for breach of the implied covenant of good faith and fair
dealing under Illinois law. Every contract contains an
implied covenant of good faith and fair dealing, but the
implied covenant is not an independent source of duties;
rather, it guides the interpretation of the terms of the
contract. Beraha v. Baxter Health Care Corp., 956
F.2d 1436, 1443 (7th Cir. 1992); see also Voyles v. Sania
Mortg. Corp., 751 N.E.2d 1126, 1131 (Ill. 2001)
(recognizing that the implied duty of good faith and fair
dealing is generally not “‘an independent source
of duties giving rise to a cause of action in
tort'”) (quoting Cramer v. Ins. Exch.
Agency, 675 N.E.3d 897, 903 (Ill. 1996)). Where a
contract vests one of the parties with discretion in
performing an obligation, and that party exercises that
discretion in bad faith, unreasonably, or in a manner
inconsistent with the reasonable expectations of the parties,
the party breaches the implied covenant of good faith and
fair dealing. Hickman v. Wells Fargo Bank N.A., 683
F.Supp.2d 779, 792-93 (N.D. Ill. 2010). But “[t]he
covenant . . . does not enable a [party] to read an
obligation into a contract that does not exist.” N.
Tr. Co. v. VIII S. Michigan Assocs., 657 N.E.2d 1095,
1104 (Ill.App.Ct. 1995). “To properly allege breach of
the covenant, a party must plead the existence of contractual
discretion, ” Bank of Am., N.A. v. Shelbourne Dev.
Grp., Inc., 732 F.Supp.2d 809, 824 (N.D. Ill. 2010)
(emphasis added), by identifying provisions of the contract
that vest the opposing party with discretion. See Bank
One, Springfield v. Roscetti, 723 N.E.2d 755, 764
(Ill.App.Ct. 1999). The party asserting the claim must
identify “in the express contract of the parties a
satisfactory basis which makes it necessary to imply certain
duties and obligations in order to effect the purposes of the
parties making the contract.” Mid-West Energy
Consultants, Inc. v. Covenant Home, Inc., 815 N.E.2d
911, 916 (Ill.App.Ct. 2004).
Board does not identify any provisions of the CBA that vest
CTU with discretion either that CTU exercised unfairly or
that might have served as the basis for the action that the
Board complains of in its counterclaim, i.e., filing
this lawsuit. (See Def.'s Answer, Dkt. # 178,
pp. 35-39.) This deficiency warrants dismissal. See,
e.g., Bywater v. Wells Fargo Bank, N.A., 2014
WL 1256103, at *7 (N.D. Ill. 2014) (noting plaintiff's
failure to plead contractual discretion meant “her
breach of good faith allegation would not be sufficient
standing alone to state a claim for breach of
contract.”). The Court ...