Patel v. City of Chicago, 03-1170.

• Decision Date: 07 September 2004
• Docket Number: No. 03-1170.,03-1170.
• Citation: 383 F.3d 569
• Parties: Manu PATEL, et al., Plaintiffs-Appellants, v. CITY OF CHICAGO, et al. Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 569

383 F.3d 569

Manu PATEL, et al., Plaintiffs-Appellants, v. CITY OF CHICAGO, et al. Defendants-Appellees.

No. 03-1170.

United States Court of Appeals, Seventh Circuit.

Argued October 30, 2003.

Decided September 7, 2004.

Appeal from the United States District Court for the Northern District of Illinois, Wayne R. Andersen, J.

James P. Chapman (argued), Chicago, IL, for Plaintiffs-Appellants.

Kerrie Maloney Laytin (argued), Office of the Corporation Counsel, Chicago, IL, for Defendants-Appellees.

Before RIPPLE, MANION, and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

Manu Patel, Chanchal Patel, and Mukti Enterprises, Inc. ("the Plaintiffs") own eleven motels on Chicago's far north side. After the Chicago City Council passed an ordinance designating the area surrounding the motels as a redevelopment zone and identifying the motels as potential targets for acquisition through eminent domain, the Plaintiffs filed suit against the City of Chicago, Mayor Richard M. Daley, and Alderman Patrick J. O'Connor ("the Defendants"). The Plaintiffs allege that the City's placement of their properties on this acquisition list was arbitrary and thus violates the equal protection clause of the Fourteenth Amendment to the U.S. Constitution. After deciding that the Plaintiffs' claim was not ripe for review in federal court, the district court granted the Defendants' motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). We hold that the Plaintiffs' claim, whether labeled an equal protection claim or a takings claim, is subject to the special ripeness standards for constitutional property rights claims established in Williamson County Regional Planning Commission v. Hamilton Bank, 473 U.S. 172, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). Because the Plaintiffs have not yet satisfied those standards, we affirm.

I

On November 3, 1999, the Chicago City Council passed an ordinance entitled, "Authorization for Approval of Tax Increment Development Plan for Lincoln Avenue Redevelopment Project Area" ("the Ordinance"). Pursuant to the Illinois Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1 et seq., the Ordinance authorizes the use of tax increment financing to fund the redevelopment of an area on the City of Chicago's far north side. In passing the ordinance, the City Council made the finding that the Redevelopment Project Area "on the whole has not been subject to growth and development through investment by private enterprise and would not reasonably be expected to be developed without the adoption of the Plan." The Ordinance specifically provides:

In compliance with Section 5/11-74.4-4(c) of the Act and with the Plan, the Corporation Council is authorized to negotiate for the acquisition by the City of parcels contained within the Area. In the event the Corporation Counsel is unable to acquire any of said parcels through negotiation, the Corporation Counsel is authorized to institute eminent domain proceedings to acquire such parcels.

The Ordinance incorporates Map 4, the "Acquisition Map," which indicates "the parcels currently authorized to be acquired for clearance and redevelopment in the Redevelopment Project Area," and Exhibit 3, entitled, "Acquisition by Block and Parcel Identification Number."

The Lincoln Avenue Redevelopment Project Area includes a range of businesses in various states of repair and disrepair, but the Ordinance's acquisition map identified only the Plaintiffs' eleven motel properties as pre-authorized for acquisition. According to the Plaintiffs, their motels "are not in a deteriorated condition, do not have obsolescence, excessive land coverage or other blighting characteristics, and, in fact, are in much better condition than many structures in the Project Area." The City sees matters differently. It has said that "the environment of some businesses along Lincoln Avenue, especially the motels, is characterized by transient 24-hour traffic along alleys abutting residential uses, inefficient ingress and egress, and a lack of upkeep." Likewise, the press has reported that Mayor Daley has described the motels as "hotbeds — if you'll excuse the term — of drugs and prostitution." David Roeder, Developers plot the end of Lincoln Ave.vice strip, CHI. SUN-TIMES, Sept. 11, 2002, at 53.

In February 2001, the Plaintiffs filed a three-count complaint. Count I alleged that the City and Mayor Daley violated the Plaintiffs' right to equal protection under the Fourteenth Amendment by enacting an ordinance that authorized the City to institute eminent domain proceedings against the motels; Count II charged the City and Alderman O'Connor with violating the Plaintiffs' rights under the Illinois Constitution by threatening to use the City's eminent domain authority in bad faith; and Count III alleged that the Defendants wrongfully attempted an inverse condemnation of the motels, also in violation of the Illinois Constitution. At the time the Plaintiffs filed suit, the City had not appropriated funds to acquire their properties nor had it initiated condemnation proceedings against them. On this basis, Defendants filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). On March 25, 2002, the court granted the Defendants' motion under Rule 12(b)(1) on the grounds that the Plaintiffs lacked standing to file suit and that their claim was not yet ripe for review. Having found that it lacked subject matter jurisdiction to hear the Plaintiffs' equal protection claim, the court then dismissed the Plaintiffs' supplemental state law claims. Later, the district court granted the Plaintiffs' motion to vacate the judgment and for leave to file an amended complaint, but on December 20, 2002, the court again granted the Defendants' motion to dismiss pursuant to Rule 12(b)(1). The Plaintiffs then appealed.

Since the Plaintiffs filed their appeal, there have been several developments relevant to this case of which we take note. Most significantly, the Ordinance's pre-authorization of the Plaintiffs' motels as potential targets for eminent domain proceedings has expired. With respect to the Plaintiffs' properties, the Ordinance stipulates:

[T]he acquisition of occupied properties by the City shall commence within four years from the date of the publication of the ordinance approving the Plan. Acquisition shall be deemed to have commenced with the sending of an offer letter. After the expiration of this four-year period, the City may acquire such property pursuant to this Plan under the Act according to its customary procedures.

The Ordinance was published on November 10, 1999, see 1 Journal of the Proceedings of the City Council of the City of Chicago, Illinois, Nov. 10, 1999, at 14777, causing it to expire on November 10, 2003, shortly after we heard argument in this case. In response to our request for a status report regarding whether the City had re-authorized the Ordinance, the City filed a statement on November 7, 2003, confirming that the Ordinance "will expire in a matter of days" and reporting that it "has plans to pursue the acquisition of two of the plaintiffs' motels, the Lincoln Motel and the Patio Motel. With respect to the other nine motels, the City has not made the decision to proceed with acquisition." The City also acknowledged that "as to the Lincoln and Patio Motels, after November 10, 2003, the City may only acquire these properties if it follows its customary procedures. These procedures include seeking a recommendation from the Community Development Commission to the City Council, and obtaining the passage of an ordinance approving the acquisitions by the City Council." Subsequently, in March 2004, the Plaintiffs filed a motion to supplement the record, which included letters from the City offering to purchase two of their properties and indicating its intention to commence eminent domain proceedings if they declined its offer.

II

We review de novo the district court's grant of a motion to dismiss under Rule 12(b)(1). Tobin for Governor v. Ill. State Bd. of Elections, 268 F.3d 517, 521 (7th Cir.2001), cert. denied, 535 U.S. 929, 122 S.Ct. 1300, 152 L.Ed.2d 212 (2002). In doing so, "[w]e accept all of the well-pleaded factual allegations in the plaintiff's complaint as true and draw all reasonable inferences in favor of the plaintiff. We shall affirm the district court's dismissal of the complaint only if it appears beyond doubt that the plaintiff cannot prove any set of facts that would entitle it to relief." Id. (internal citations omitted).

The Plaintiffs have attempted to state an equal protection claim arising from the Defendants' decision to target their properties for eminent domain proceedings merely by including them in the Ordinance's acquisition list and map. Specifically, they allege that "the Ordinance states no rational reason to single out for acquisition by the City through eminent domain or by other means the parcels on which the Motels are located. The designation of such parcels for acquisition is arbitrary and capricious and exhibits an animus by defendants towards plaintiffs." It therefore appears that they are not claiming that they have been singled out as "members of a vulnerable group, racial or otherwise, for unequal treatment." Esmail v. Macrane, 53 F.3d 176, 178 (7th Cir.1995). Instead, they appear to be claiming that the Ordinance is a law that rests on wholly irrational distinctions, presumably between their properties and all others in the City. See id. (noting that this theory rarely succeeds). Or, they may in part be trying to assert the type of equal protection claim that arises when a party is subject to "a spiteful effort to `get' him for reasons wholly unrelated to any legitimate state objective." Id. at 180 (providing the example of "an ordinance saying: `No one whose last name begins with "F" may use a portable sign in front of a 24-hour food shop, but everyone else may.'") (...