Mainstreet Organ. of Realtors v. Calumet City, 06-4377.

Citation505 F.3d 742
Decision Date17 October 2007
Docket NumberNo. 06-4377.,06-4377.
PartiesMAINSTREET ORGANIZATION OF REALTORS, successor by name change to Realtor Association of West/South Suburban Chicagoland, Plaintiff-Appellee, v. CALUMET CITY, ILLINOIS, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Philip C. Stahl (argued), Grippo & Elden, Chicago, IL, for Plaintiff-Appellee.

John B. Murphey (argued), Rosenthal, Murphey, Coblentz & Janega, Chicago, IL, Mark H. Sterk, Odelson & Sterk, Evergreen Park, IL, for Defendant-Appellant.

Before BAUER, POSNER, and SYKES, Circuit Judges.

POSNER, Circuit Judge.

The plaintiff in this civil rights lawsuit is an association of real estate brokers in a portion of the Chicago metropolitan area that includes Calumet City. The City enacted an ordinance that forbids the sale of a house without an inspection to determine whether it is in compliance with the City's building and zoning codes. If it is not, the house must be brought into compliance with the code. Such "point of sale" ordinances are common. They aim to prevent the surreptitious conversion of single-family homes to multi-family dwellings and to retard the physical deterioration of the housing stock. Delman v. City of Cleveland Heights, 41 Ohio St.3d 1, 534 N.E.2d 835, 836-37 (1989); Butcher v. City of Detroit, 156 Mich.App. 165, 401 N.W.2d 260, 262 (1986) (per curiam); Currier v. City of Pasadena, 48 Cal.App.3d 810, 121 Cal. Rptr. 913, 914-15 (1975); see also Dome Realty, Inc. v. City of Paterson, 83 N.J. 212, 416 A.2d 334, 337-38 (1980). The association currently claims that the ordinance deprives homeowners of property without due process of law; other claims have fallen by the wayside. The suit seeks to enjoin the enforcement of the ordinance. The association sought and obtained a preliminary injunction from the district court and the City has appealed.

We do not reach the merits of the suit or express an opinion on them. Real estate brokers, in our judgment, do not have standing to challenge a law that impedes the sale of property they would like to broker; and their association's standing is derivative from theirs and falls with it. National Solid Waste Management Ass'n v. Pine Belt Regional Solid Waste Management, 389 F.3d 491, 497-99 (5th Cir. 2004).

A complication is that there are two concepts of standing. There is Article III standing, which requires just an injury in fact, and "prudential" standing, a more complex, judge-made concept of standing. We think there is standing in the first sense but not the second. There is standing in the first sense because the brokers may well be harmed by the ordinance. By adding to the cost of selling residential property, the ordinance (if allowed to go into effect) is likely to reduce the brokers' commissions in two ways. The higher the cost of selling property, the less property will be sold, and so the fewer commissions the brokers will be paid. And anything that reduces the salability of property reduces its market value, and the lower the price at which a house is sold the smaller the commission the broker will receive. Of course a seller might try to charge a higher price in order to cover some of the cost of complying with the ordinance, and a broker's commission is normally a percentage of the sale price. But the seller's attempt would fail if indeed the ordinance reduces the value of the property to prospective purchasers.

Against this it can be argued that the ordinance will boost property values in Calumet City and by doing so perhaps make the brokers better off rather than worse off. That is possible, but standing in the Article III sense does not require a certainty or even a very high probability that the plaintiff is complaining about a real injury, suffered or threatened. A suit to redress an injury to the plaintiff is a "case" or "controversy" within the meaning that the courts have imprinted on these words of Article III of the Constitution, Allen v. Wright, 468 U.S. 737, 750-51, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984), as long as there is some nonnegligible, nontheoretical, probability of harm that the plaintiff's suit if successful would redress. As we have noted repeatedly, the fact that a loss or other harm on which a suit is based is probabilistic rather than certain does not defeat standing. E.g., Korczak v. Sedeman, 427 F.3d 419, 422-23 (7th Cir. 2005); North Shore Gas Co. v. EPA, 930 F.2d 1239, 1242 (7th Cir.1991). Thus, as we said in Hoover v. Wagner, 47 F.3d 845, 847 (7th Cir.1995), in reliance on the Supreme Court's decision in Pennell v. City of San Jose, 485 U.S. 1, 8, 108 S.Ct. 849, 99 L.Ed.2d 1 (1988), "All that a plaintiff need show to establish standing to sue [in the Article III sense] is a reasonable probability—not a certainty—of suffering tangible harm unless he obtains the relief that he is seeking in the suit." A case is not dismissed for failure to invoke federal jurisdiction just because the plaintiff fails to prove injury. Ordinarily and here the allegation is enough.

It is true that if the federal courts could decide cases brought by persons on whom a defendant's alleged misconduct could not possibly inflict tangible harm, so that a person living in California who read about Calumet City's point of sale ordinance could have brought the present suit, the power of the federal courts relative to the other branches of government would be magnified alarmingly. In Aurora Loan Services, Inc. v. Craddieth, 442 F.3d 1018, 1024 (7th Cir.2006), we gave the following example of the kind of case that Article III standing therefore excludes from the federal courts: "[T]here is a sense in which I am `injured' when I become upset by reading about the damage caused that fine old vineyard in Burgundy by a band of marauding teetotalers, yet that injury would not be an `injury' that conferred standing to sue under Article III." That is not this case. This is not a case of some abstract psychic harm or a one-day-I'll-be-hurt allegation, as in Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The challenged ordinance is quite likely to delay the sale of homes in the area serviced by the real estate brokers whose association has brought this suit, to reduce sales prices, and thus to reduce the brokers' commissions, and this likelihood of a tangible economic loss to them suffices to confer Article III standing.

But there is also a nonconstitutional doctrine, entirely judge-made, of standing, to which the unilluminating term "prudential standing" has been affixed. Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 474-75, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982); Majors v. Abell, 317 F.3d 719, 722 (7th Cir.2003); Grand Council of Crees v. Federal Energy Regulatory Commission, 198 F.3d 950, 954 (D.C.Cir.2000); Prime Media, Inc. v. City of Brentwood, 485 F.3d 343, 349 (6th Cir. 2007). This doctrine precludes the federal courts from exercising jurisdiction over some types of case that Article III would not forbid the courts to adjudicate. It is this doctrine that bars the present suit from being adjudicated in a federal court.

The doctrine is various. The strand relevant to this case governs the situation in which the injury on which the plaintiff founds his suit is derivative from the injury suffered by the defendant's immediate victim. Often the harm from a harmful act will ramify far beyond that victim, as the present case illustrates. The initial victims of an ordinance impeding the sale of homes are homeowners who would like to sell—or perhaps all homeowners subject to the ordinance; for as we said, any impairment of the salability of a property reduces its value because salability ("alienability" in an older legal vocabulary) is one of the rights that, along with such other rights as the right to the exclusive enjoyment of the property, make a fee-simple interest more valuable than other interests in property, such as that of a licensee. But anything that impedes the sale of property, and by impeding it reduces the number of sales and the average sale price, harms other people besides the owners. It harms real estate brokers, sure, but it also harms title insurance companies, mortgage lenders, termite inspectors, moving companies, interior decorators, renovators, prospective home buyers, sellers of "for sale" signs, suppliers of paint for the "for sale" signs, lessors of real estate brokers' offices, colleges that the children of real estate brokers can no longer afford to attend because the brokers' incomes have declined (and the children themselves, of course), and so on ad infinitum, or at least ad nauseam. If all these incidental victims could sue, the courts would be overwhelmed. Moreover, the victims with the largest stakes—namely the homeowners impeded in selling their homes—who are also the potential plaintiffs with the first-hand information about the operation of the ordinance, are likely to be trampled in the rush to the courthouse. It is not only in bankruptcy that "clouds of persons indirectly affected by the acts and entitlements of others may buzz about, delaying final resolution of cases." In re Deist Forest Products, Inc., 850 F.2d 340, 341 (7th Cir.1988).

The brokers' suit thus is barred by the principle that, subject to certain exceptions, one cannot sue in a federal court to enforce someone else's legal rights. Id.; Elk Grove Unified School District v. Newdow, 542 U.S. 1, 17-18, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004); Warth v. Seldin, 422 U.S. 490, 508-10, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); Massey v. Helman, 196 F.3d 727, 740-42 (7th Cir.1999). The brokers are not suing to enforce their constitutional property rights; they have no rights in commissions they may someday earn on sales of property with whose owners they have as yet no brokerage...

To continue reading

Request your trial
128 cases
  • In re Sindesmos Hellinikes-Kinotitos of Chicago, Case No. 18bk34548
    • United States
    • United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois
    • October 25, 2019
    ...... , Dillon v. City of Chi. , 866 F.2d 902, 904 (7th Cir. 1988) ... MainStreet Org. of Realtors v. Calumet City , 505 F.3d 742, ......
  • Kumar v. Frisco Indep. Sch. Dist.
    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • March 6, 2020
    ......, and his family, purchased a home in the City of Frisco and his two daughters were accordingly ... III standing is.’ ") (citing MainStreet Org. of Realtors v. Calumet City, Ill. , 505 ......
  • Rawoof v. Texor Petroleum Co., Inc., 06-1720.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • April 7, 2008
    ......City of Chicago, 234 F.3d 979, 989 (7th Cir.2000) ...2197, 45 L.Ed.2d 343 (1975); MainStreet Org. of Realtors v. Calumet City, Ill., 505 F.3d ......
  • Wirtz v. City of South Bend, Cause No. 3:11–CV–325–RLM.
    • United States
    • United States District Courts. 7th Circuit. United States District Court of Northern District of Indiana
    • September 7, 2011
    ......2130 (internal quotations omitted); accord MainStreet Organization of Realtors v. Calumet City, Ill., 505 F.3d ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT