Lehman v. Village of Oak Park, Il

• Decision Date: 06 March 2006
• Docket Number: No. 05 C 1048.,05 C 1048.
• Citation: 420 F.Supp.2d 892
• Parties: David LEHMAN, individually, and Lehman Real Estate, Inc., an Illinois corporation, Plaintiffs, v. The VILLAGE OF OAK PARK, ILLNOIS, a unit of local Government, and Joanne Trapani, in her official capacity as Mayor of the Village of Oak Park, Illinois, and Diana Carpenter, Gus Kostopoulos, Ray Johnson, and David Pope, Trustees, Defendants.
• Court: U.S. District Court — Northern District of Illinois

420 F.Supp.2d 892

David LEHMAN, individually, and Lehman Real Estate, Inc., an Illinois corporation, Plaintiffs, v. The VILLAGE OF OAK PARK, ILLNOIS, a unit of local Government, and Joanne Trapani, in her official capacity as Mayor of the Village of Oak Park, Illinois, and Diana Carpenter, Gus Kostopoulos, Ray Johnson, and David Pope, Trustees, Defendants.

No. 05 C 1048.

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

March 6, 2006.

Luke A. Casson, Andreou & Casson, Ltd., Chicago, IL, for Plaintiffs.

Richard Freund Friedman, Jerome A. Stegan, Jonathan Douglas Leach, Neal and Leroy, LLC, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

BUCKLO, District Judge.

David Lehman and Lehman Real Estate, Inc., an Illinois corporation of which Mr. Lehman is the president, sue the Village of Oak Park, Illinois (Village), Joanne Trapani, the Mayor of the Village in her official capacity, Diana Carpenter, Gus Kostopoulos, Ray Johnson and David Pope. Ms. Carpenter and Mr. Kostopoulos are former Trustees of the Village. Mr. Johnson is currently a Trustee, and Mr. Pope is currently the President and is also a former Trustee of the Village. The first amended complaint (amended complaint) alleges: 1) a claim brought under 42 U.S.C. § 1983 for denial of procedural due process of law; 2) a claim seeking declaratory and injunctive relief with respect to a Tax Increment Financing ordinance (TIF) promulgated by the Village; and 3) a claim under Illinois law for civil conspiracy. The defendants move pursuant to Rule 12(b)(6), Fed.R.Civ.P., to dismiss all three claims for failure to state a claim on which relief can be granted. I grant the motion and dismiss the action.

I. Factual Allegations

The amended complaint alleges in essence the following facts. A TIF (Tax Increment Financing) District was established in the Village along Lake Street pursuant to local ordinance No.1983-0-91, as amended, and 65 ILCS 5/11-74.7. The property along the Lake Street TIF is not a blighted area. The Village solicited a developer called Whiteco to present and prepare a plan for redevelopment. In December 2002, a Redevelopment Agreement (RDA) with Whiteco was approved and referred to the Plan Commission of the Village. In or about April 2003, Whiteco's application was withdrawn by agreement and the Village determined that the original RDA was still in effect. Employees of the Village and others entered into an illegal conspiracy to steer and direct the RDA to Whiteco, to the exclusion of all others. In January 2004 the Village purchased additional land to add to the original RDA proposal. The parcel subject to the RDA has a market value in excess of $6.5 million dollars.

The Village sold the parcel to Whiteco for $2,250,000.00 with "financial considerations" equaling an additional $4.0 million dollars. The property is not in a blighted area in need of TIF support. Other developers, including plaintiff, have sought permission to bid for the property without success. The Village did not consider or review any other bids. Whiteco was provided with inside information and access to Village resources in the preparation of its bid, and other potential bidders were not. The bidding process was closed to all developers except Whiteco. Whiteco's bid substantially increases the cost to taxpayers, increases traffic density, and decreases tax revenue to the Village. The TIF Act requires that a TIF district be established only where private investment would not otherwise occur. The Lake Street TIF continues to attract private sector investment without a TIF designation and evidences no level of blight as defined by the TIF Act.

The Village, by custom and practice, competitively bids municipal development projects. In this case, the defendants have refused to provide statutory and practical protections to taxpayers, including plaintiffs. Plaintiff David Lehman is representative of a class of Village residents whose tax dollars are and will continue to be subject to waste, mismanagement and malfeasance of the Village and its Trustees. The defendants' actions were designed to deprive the plaintiffs access to bidding procedures. The corporate plaintiff has a protectable property interest under the Due Process Clause of the United States Constitution and a legitimate claim of entitlement to a constitutionally protected property interest. The corporate plaintiff submitted a bid to develop the property in February 2005 and was the lowest responsible bidder. Rejection of its bid was in bad faith, arbitrary, capricious and against the public trust. The corporate plaintiff was not provided a hearing in relation to its bid.

II. Motion to Dismiss

Rule 8(a), Fed.R.Civ.P., requires only a short and plain statement of a claim. The claim must give sufficient facts to give the opposing party fair notice of its basis. While a party need not allege all of the relevant facts, the allegations "must at least include the operative facts on which the plaintiff bases his claim." Brokaw v. Mercer County, 235 F.3d 1000, 1014 (7th Cir.2000). I accept all well-pleaded allegations in the complaint as true. Turner/Ozanne v. Hyman/Power, 111 F.3d 1312, 1319 (7th Cir.1997), and grant the motion only if the plaintiff can prove no set of facts to support the allegations in his claim. Strasburger v. Bd. Of Educ., 143 F.3d 351, 359 (7th Cir.1998). I must view the allegations in the light most favorable to the plaintiff. Gomez v. Illinois State Bd. of Education, 811 F.2d 1030, 1039 (7thCir.1987). However, a plaintiff can plead himself out of court by pleading facts that undermine the allegations set forth in the complaint. Lekas v. Briley, 405 F.3d 602, 613-14 (7th Cir.2005).

Plaintiffs' first claim is that their right to procedural due process under the Fourteenth Amendment to the United States Constitution has been denied. Under well established law, a plaintiff alleging a violation of procedural due process must first allege that he has a protectable property interest (or liberty interest but that is not alleged to be at stake here), founded in some basis under state law. E.g., Omosegbon v. Wells, 335 F.3d 668, 674 (7th Cir.2003). In this case, plaintiffs appeared to allege that they had such an interest in obtaining a municipal contract. However, in response to defendants' motion to dismiss, they specifically disclaimed any such allegation. ("The plaintiffs do not plead that they have a protectable property interest in a municipal contract, therefore Kim Construction Company, Inc. v. Board of Trustees of the Village of Mundelein, 14 F.3d 1243 (7th Cir.1994) is inapplicable." Plaintiffs' Response to ...