Flower Cab Co. v. Petitte, 82 C 4538.

• Decision Date: 27 March 1987
• Docket Number: No. 82 C 4538.,82 C 4538.
• Citation: 658 F. Supp. 1170
• Parties: FLOWER CAB COMPANY, Checker Taxi Company, Inc., and Yellow Cab Company, Plaintiffs, v. Karen PETITTE, Individually and as Commissioner, Department of Consumer Services of the City of Chicago, and the City of Chicago, Defendants.
• Court: U.S. District Court — Northern District of Illinois

658 F. Supp. 1170

FLOWER CAB COMPANY, Checker Taxi Company, Inc., and Yellow Cab Company, Plaintiffs, v. Karen PETITTE, Individually and as Commissioner, Department of Consumer Services of the City of Chicago, and the City of Chicago, Defendants.

No. 82 C 4538.

United States District Court, N.D. Illinois, E.D.

March 27, 1987.

Bernard J. Nussbaum, Harold C. Hirshman, Sonnenschein Carlin Nath & Rosenthal, Chicago, Ill., for plaintiffs.

Terence J. Moran, City of Chicago Corp. Counsel, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

NORDBERG, District Judge.

The plaintiffs instituted this action pursuant to 42 U.S.C. § 1983 to contest the Commissioner of the Department of Consumer Services of the City of Chicago's ("the Commissioner") unilateral imposition of a moratorium on the transfer of taxicab licenses.¹ Plaintiffs Checker Cab Co. ("Checker") and Yellow Cab Co. ("Yellow") have filed a motion for summary judgment with respect to Count I of their three-count amended complaint. Count I alleges that the imposition of this moratorium violated plaintiffs' due process and equal protection rights guaranteed by the Fourteenth Amendment to the United States Constitution. For the following reasons, the court grants plaintiffs' motion for summary judgment with respect to Count I, and finds that plaintiffs are entitled to damages for the deprivation of their Fourteenth Amendment rights.

Factual and Procedural Background

The underlying facts of this case are undisputed. Checker is one of the largest taxicab operators in the City of Chicago. At the time of the events in question, it owned 1,500 of the City's 4,600 taxicab licenses. In mid-1981, it decided to assign some of its licenses pursuant to the existing procedure set forth in chapter 28 § 28-9.1 of the Municipal Code of the City of Chicago. Checker notified the City of its plan to assign a minimum of three hundred licenses in July of 1981, and frequently conferred with City officials over the next six months to discuss the assignments (Feldman Aff. Ex. A). On February 10, 1982, Karen Petitte, the Commissioner, wrote to Checker indicating approval of the contemplated assignment (Feldman Aff. Ex. B). Between March and June of 1982, Checker attended several meetings with City officials. At no time did the City give any indication that it would seek to prevent or prohibit the contemplated assignments. On July 9, 1982, Checker representatives met with then Mayor Jane Byrne, the Commissioner, and members of the City's Corporation Counsel, none of whom mentioned any disapproval of the assignments or possible impediments to the proposed transfers (Feldman Aff. ¶¶ 5-9).

On July 13, 1982, Checker contracted to assign thirteen taxicab licenses to Flower Cab Co. ("Flower"). Flower filed applications for processing the assignments with the Commissioner two days later. The Municipal Code of the City of Chicago, chapter 28, § 28-9.1 permitted assignment of these licenses if the assignee met certain standard qualifications. These applications generally required two to five days to process. The routine nature of the processing of assignments is evidenced by the fact that, in the three years prior to Flower's application, the City had processed every application for assignment filed with the Commissioner.²

An ordinance prohibiting the sale, transfer or assignment of any taxicab licenses was introduced in the City Council on the same day that Flower filed its applications with the Commissioner. On July 16, 1982, the Commissioner announced a moratorium on the processing of all applications for assignment and refused to consider Flower's applications because of the pendency of the ordinance. As a result, Flower and Checker filed this action pursuant to § 1983 for injunctive relief.

This court issued a preliminary injunction on July 26, 1982, ordering the Commissioner to process Flower's applications by August 6, 1982, in the ordinary course of its established procedure, thereby returning the parties to the status quo prior to the moratorium. The Seventh Circuit granted the City's motion for a stay pending appeal, Flower Cab Co. v. Petitte, 685 F.2d 192 (7th Cir.1982), and denied plaintiffs' subsequent motion to vacate and rehear en banc Flower Cab Co. v. Petitte, No. 82-2208 (7th Cir. Aug. 20, 1982) (unpublished order).

On September 14, 1982, the City Council conducted a hearing on the proposed ordinance. Plaintiffs were afforded the opportunity to participate in the hearing. At the hearing, the Commissioner testified that the new ordinance was drafted "in response to a plan by one of the cab companies Checker to sell its medallions³ at prices of up to $15,000 per medallion, a matter which was viewed by at least some as windfall profits for the cab companies." (Transcript of September 14, 1982 Hearings Before the Committee on Local Transportation, at 7).⁴ The City Council passed the proposed ordinance on September 15, 1982. The ordinance contained several amendments to the taxicab licensing procedure; the most significant changes for the purposes of this lawsuit are the repeal of chap. 28 § 28-9.1 and the creation of a new provision retroactively banning all transfers of licenses as of July 15, 1982, the date of the moratorium.

The Seventh Circuit vacated this court's July 26, 1986 preliminary injunction in an unpublished order on October 7, 1982. Flower Cab v. Petitte, 692 F.2d 760 (7th Cir.1982). Noting the change in circumstances created by the passage of the September 15 amendments, the court remanded the action to this court to consider the validity of the new ordinance and its effect on this litigation. On remand, the plaintiffs filed an amended complaint attacking the validity of the ordinance, and the court granted plaintiffs' motion to add Yellow Cab Co. as a party plaintiff.⁵

The plaintiffs then renewed their motion for a preliminary injunction, and the defendants filed a motion to dismiss the amended complaint. The court denied both motions in a memorandum opinion and order entered June 17, 1983. With respect to the motion to dismiss, the court held that Count I of the amended complaint adequately stated a cause of action under § 1983 and that the ordinance did not moot the amended complaint. See Flower Cab Co. v. Petitte, No. 82 C 4538, slip op. at 3-9 (N.D.Ill. June 17, 1983).⁶ The court also denied plaintiffs' motion for a preliminary injunction, finding that the plaintiffs had failed to establish that they had no adequate remedy at law and they would be irreparably harmed if an injunction did not issue. Id. at 12-14.

Motion For Summary Judgment

The motion for summary judgment filed by Yellow and Checker addresses only Count I of the amended complaint. This count alleges that the Commissioner's July 16, 1982 moratorium violates plaintiffs' rights to due process and equal protection and deprives plaintiffs of a valuable property right without due process of law. Yellow⁷ and Checker have filed affidavits and other evidentiary materials in support of their motion. They seek a declaratory judgment and injunctive relief, or, in the alternative, damages for the monetary losses caused by the alleged unconstitutional imposition of this moratorium.

The standards for granting a motion for summary judgment are well-established in this circuit. On a motion for summary judgment, the moving party has the burden of establishing that there is no genuine issue of material fact, and that it is entitled to judgment as a matter of law. Cedillo v. International Ass'n of Bridge & Structural Iron Workers, 603 F.2d 7, 19 (7th Cir.1979). The nonmoving party is entitled to all reasonable inferences that can be made in its favor. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). However, the defendant may not merely rely on conclusory pleadings to withstand summary judgment. In responding to a motion for summary judgment, he must set forth specific facts in affidavits or otherwise showing that there are genuine issues that must be decided at trial. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983).

The purpose of the summary judgment procedure is to eliminate trial in cases where a trial is unnecessary and only results in delay and expense. Mintz v. Mathers Fund, Inc., 463 F.2d 495, 498 (7th Cir. 1972). As the Seventh Circuit has noted, with the ever-increasing burden on the judiciary, persuasive reasons exist for the utilization of summary judgment procedures whenever possible. Kirk v. Home Indemnity Co., 431 F.2d 554, 559-60 (7th Cir. 1970). Courts therefore will not strain to find the existence of a genuine issue where none exists. Id.

42 U.S.C. § 1983

In order to establish a violation of Section 1983, plaintiffs must prove that defendants acted under color of state law, and that their conduct deprived plaintiffs of a right, privilege or immunity secured by the Constitution of the United States. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1981). In the present case, the defendants concede that the Commissioner's moratorium prohibiting transfer of taxicab licenses constitutes state action. They argue, however, that the plaintiffs have failed to establish that this moratorium deprived them of any rights protected by the Constitution.⁸

According to plaintiffs, chap. 28 § 28-9.1 of the Municipal Code creates a substantive right to assign taxicab licenses, and the Commissioner's unilateral imposition of a moratorium on transfer of these licenses deprives them of this property right without due process of law. The City disputes plaintiffs' characterization of the license and its assignability as "property rights" protected by the Fourteenth Amendment. In Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d...