O'Brien v. Vill. of Lincolnshire, 19-1349

• Decision Date: 07 April 2020
• Docket Number: No. 19-1349,19-1349
• Citation: 955 F.3d 616
• Parties: Dixon O'BRIEN, et al., Plaintiffs-Appellants, v. VILLAGE OF LINCOLNSHIRE, a Municipal Corporation, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

955 F.3d 616

Dixon O'BRIEN, et al., Plaintiffs-Appellants,

v.VILLAGE OF LINCOLNSHIRE, a Municipal Corporation, et al., Defendants-Appellees.

No. 19-1349

United States Court of Appeals, Seventh Circuit.

Argued September 4, 2019

Decided April 7, 2020

James Connolly, Jr., Attorney, Robert A. Paszta, Attorney, Dale D. Pierson, Attorney, IUOE Local 150 Legal Department, Countryside, IL, Kara Pomerantz Principe, Attorney, Joseph P. Sweeney, Attorney, Indiana Illinois Iowa Foundation for Fair Contracting, Countryside, IL, Kenneth Lumb, Attorney, Corboy & Demetrio, Chicago, IL, for Plaintiffs-Appellants Dixon O'Brien and International Union of Operating Engineers, Local 150, AFL-CIO.

James Connolly, Jr., Attorney, Robert A. Paszta, Attorney, Dale D. Pierson, Attorney, IUOE Local 150 Legal Department, Countryside, IL, Terrance B. McGann, Attorney, Karen M. Rioux, Attorney, McGann Ketterman & Rioux, Chicago, IL, Kara Pomerantz Principe, Attorney, Joseph P. Sweeney, Attorney, Indiana Illinois Iowa Foundation for Fair Contracting, Countryside, IL, for Plaintiff-Appellant John Cook.

Robert A. Paszta, Attorney, IUOE Local 150 Legal Department, Countryside, IL, for Plaintiff-Appellant Chicago Regional Council of Carpenters, United Brotherhood of Carpenters and Joiners of America.

Lorilea Buerkett, Attorney, Daniel Hamilton, Attorney, Brown, Hay & Stephens, LLP, Springfield, IL, for Defendants-Appellees.

Brian J. Connolly, Attorney, Otten Johnson Robinson Neff & Ragonetti PC, Denver, CO, for Amicus Curiae.

Before Rovner, Scudder, and St. Eve, Circuit Judges.

Rovner, Circuit Judge.

Dixon O'Brien, John Cook, and the unions to which they belong sued the Village of Lincolnshire and the Illinois Municipal League claiming violations of their rights under the First Amendment and the Equal Protection Clause of the Fourteenth Amendment, as well as violations of state law. The district court dismissed their federal claims under Federal Rule of Civil Procedure 12(b)(6) and declined to exercise supplemental jurisdiction over their remaining state law claims. We affirm.

I.

In reviewing a grant of a motion to dismiss, we are required to assume that the facts alleged in the complaint are true. Savory v. Cannon , 947 F.3d 409, 411–12 (7th Cir. 2020). At the time they filed their Complaint, both O'Brien and Cook were residents of Lincolnshire.¹ Both paid a variety of municipal taxes including property and sales taxes to the Village. O'Brien is a member of the International Union of Operating Engineers, Local 150, AFL-CIO. Cook is a member of Carpenters Local 250, an affiliate of the Chicago Regional Council of Carpenters, United Brotherhood of Carpenters and Joiners of America. We will refer to them collectively as the Unions. The Unions represent members who reside in, work in, and pay taxes to Lincolnshire.

Under Illinois law:

The corporate authorities of each municipality may provide for joining the municipality in membership in the Illinois Municipal League, an unincorporated, nonprofit, nonpolitical association of Illinois cities, villages and incorporated towns and may provide for the payment of annual membership dues and fees. The member cities, villages and incorporated towns acting by, through and in the name of such instrumentality may provide and disseminate information and research services, and may do all other acts for the purpose of improving local government.

65 ILCS 5/1-8-1. Lincolnshire is one of more than a thousand dues-paying members of the Illinois Municipal League ("League" or "IML"). Lincolnshire uses tax revenue to pay those dues, specifically, money from the Village's General Fund. The General Fund, in turn, comes from utility, sales and income taxes, among other things. Over a five year period extending from 2013 to 2018, Lincolnshire paid at least $5,051 in voluntary dues and fees to the League.

Consistent with the statutory description of the League, the organization's Bylaws provide that the League:

shall be an instrumentality of its member cities, villages and incorporated towns. Its purpose shall be to cooperate with its member municipalities in the development and improvement of their governments and to promote efficient municipal administration. The League shall furnish such service to municipalities as may be determined by the Board of Directors and through the Executive Director.

R. 40, Ex. A, at A-3.² According to the Bylaws, the Board of Directors is comprised of elected officers, each of whom must be the chief elected official in his or her respective municipality. The Board consists of a President, a First Vice President, a Second Vice President, thirty-six Vice Presidents, and any Past Presidents who are still the chief elected officials of their municipalities. The Executive Director is appointed by the Board of Directors, and manages the affairs of the League "under the general direction of the Board[.]" R. 40, Ex. A, at A-5, A-7. The Executive Director is expressly "responsible for League legislative and legal activities under the general supervision of the Board of Directors." R. 40, Ex. A, at A-8.

Only municipalities, cities, villages and incorporated towns may join the League.

The plaintiffs allege that the League is a "private, nonpublic organization" that, contrary to the statutory description of the League as nonpolitical, engages in political activity including lobbying and contributing to candidates.³ According to the plaintiffs, in March 2015, the League issued two emails to its members promoting the so-called "Turnaround Agenda" of then-Governor Bruce Rauner. The plaintiffs alleged that, on March 4, the League sent an email "lobbying Illinois units of government, urging them to adopt Illinois Governor Bruce Rauner's ‘Turnaround Agenda[.]’ " R. 40, at 4. On March 23, the League, "per Governor Rauner's request, emailed Illinois units of government a draft of ‘Governor Rauner's Turnaround Agenda Resolution.’ " R. 40, at 5.

The March 23, 2015 IML email acknowledged ongoing correspondence between the IML and the Governor's office, stating, "[t]he Governor's office has asked that we follow-up with mayors and managers on the Turnaround Agenda information and provide a resolution ... that is supportive of his administration's effort to address collective bargaining, unfunded mandates, prevailing wage requirements, workers' compensation costs and legal empowerment zones, among other things noted in the attachment ... [i]f you do adopt it locally, please send me a copy electronically ... and mail me a copy to the Governor's office ..."

R. 40, at 5⁴ (all punctuation as it appears in ¶ 32 of the Complaint). The plaintiffs also alleged that the League urged its members to adopt local ordinances creating "right to work" zones as part of the Turnaround Agenda. Lincolnshire was the only unit of local government in Illinois to adopt a "right to work" ordinance.⁵

The plaintiffs complain that, as tax-paying residents of Lincolnshire, some of their money goes to support the Village's payment of dues to the League, thereby subsidizing private speech with which the plaintiffs disagree. O'Brien demanded a refund of the portion of his tax money that went to fund Lincolnshire's dues in the League, a demand that has gone unanswered by the Village. Citing these allegations, the first count of the Complaint asserted that Lincolnshire violated the First Amendment rights of O'Brien and Cook by compelling them to support private speech with which they disagreed. The second count pled that Lincolnshire violated the First Amendment rights of O'Brien, Cook and the members of their respective Unions who reside in the Village by compelling them to associate with the League. The third count asserted that the Village violated the Equal Protection Clause of the Fourteenth Amendment by compelling all of the plaintiffs to support political activities with which they disagreed while allowing some unnamed others to refuse to do so. For each of these federal counts, the plaintiffs sought an injunction preventing the Village from using tax revenue to fund the League's private speech, a declaration that Lincolnshire's use of taxpayer money to pay dues to the League violates the federal rights of Cook and O'Brien, an order requiring Lincolnshire to refund to Cook and O'Brien the portion of their taxes used to fund the League, and other relief. The remaining counts pled state law causes of actions against the Village and the League which we need not address.

On the defendants' motion, the district court dismissed the federal claims and declined to exercise supplemental jurisdiction over the state law claims. The court rejected the defendants' assertion that the plaintiffs lacked standing to bring their claims, finding that they adequately alleged an injury-in-fact as municipal taxpayers. See Hinrichs v. Speaker of House of Representatives of Indiana General Assembly , 506 F.3d 584, 600 n.9 (7th Cir. 2007) (municipal taxpayer challenges to municipal action are not subject to the same stringent standing requirements as state and federal taxpayers seeking to challenge state and federal actions, respectively); Clay v. Fort Wayne Community Schools , 76 F.3d 873, 879 (7th Cir. 1996) (municipal taxpayers have standing when they object to a disbursement of funds occasioned solely by the alleged unconstitutional conduct). But the court concluded that the plaintiffs' First Amendment claims failed as a matter of law because the challenged communications constituted government speech that is not subject to First Amendment scrutiny. The court also found that the Equal Protection claim failed as a matter of law because it depended on the validity of the First Amendment claims. The court dismissed the federal claims with prejudice and the state law claims without prejudice. The plaintiffs appeal.

II.

On appeal, the plaintiffs contend that the district court erred in dismissing their First Amendment claims for violation of their speech and association rights as well...