Sypolt v. Ill. Gaming Bd., No. 19-cv-05991

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
Writing for the CourtJudge Andrea R. Wood
PartiesKEVIN SYPOLT, et al., Plaintiffs, v. THE ILLINOIS GAMING BOARD, et al., Defendants.
Docket NumberNo. 19-cv-05991
Decision Date31 March 2021

KEVIN SYPOLT, et al., Plaintiffs,
THE ILLINOIS GAMING BOARD, et al., Defendants.

No. 19-cv-05991


March 31, 2021

Judge Andrea R. Wood


In 2018, Plaintiffs Kevin Sypolt, Trudy's Café, LLC, and Phase IV-D, Inc. submitted applications for video gaming establishment licenses to the Illinois Gaming Board ("IGB" or "Board"). After the IGB failed to take any action with respect to their applications, Plaintiffs brought this lawsuit, alleging various constitutional violations and common law torts committed by the IGB and certain current and former Board members, employees, and administrators. Defendants now seek dismissal of Plaintiffs' complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. (Dkt. No. 21.) For the following reasons, Defendants' motion is granted.


For the purposes of the motion to dismiss, the Court accepts all well-pleaded facts in the complaint as true and views those facts in the light most favorable to Plaintiffs as the non-moving parties. Killingsworth v. HSBC Bank Nev., N.A., 507 F.3d 614, 618 (7th Cir. 2007).

The IGB is a state agency composed of five members who are responsible for implementing and enforcing the Illinois Video Gaming Act, 230 ILCS 40/1, et seq. (Compl. ¶ 8, Dkt. No. 1); see also 230 ILCS, 10/5(b), 40/78. Board members are tasked with, among other

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things, reviewing applications for gaming licenses and making approval determinations, as well as renewing and revoking current licenses when appropriate. See 230 ILCS 10/5(b)(1). The Administrator is a non-Board member who performs any and all duties assigned to him by the Board, id. at 10/5(a)(9), and the Board may employ other personnel as necessary to carry out its functions, id. at 10/5(a)(8).

Sypolt is the principal shareholder of Trudy's Café, LLC and a majority shareholder of Phase IV-D, Inc. (Compl. ¶ 5.) Plaintiffs run bars and restaurants located throughout Illinois. (Id. ¶¶ 26-27, 29.) On September 26, 2018 and November 29, 2018, Plaintiffs applied for video gaming establishment licenses for two of their locations. (Id. ¶¶ 27, 29.) The licenses would have allowed Plaintiffs to place and operate video gaming terminals1 at those establishments. See 230 ILCS 40/5. However, Sypolt withdrew the applications in September 2019, as he could not afford to keep his establishments open while waiting for the Board to vote on the applications. (Compl. ¶¶ 28-29.) Plaintiffs claim that the Board refused to vote on their applications to retaliate against Sypolt for prevailing in a prior lawsuit against it. (Id. ¶¶ 34, 37-41.) According to Plaintiffs, while their applications were pending, three different establishments in the same areas as and similar in every material respect to Plaintiffs' establishments applied for and received video gaming establishment licenses. (Id. ¶¶ 31-33.)

After withdrawing the applications, Plaintiffs filed this lawsuit, asserting the following six claims: (1) a claim for violation of the Equal Protection Clause of the Fourteenth Amendment under 42 U.S.C. § 1983, brought against current Board members, the current Administrator, and current agents (collectively, the "Current Board Defendants"); (2) a claim for violation of the Due

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Process Clause of the Fourteenth Amendment under § 1983 against the Current Board Defendants; (3) an Illinois common law claim for tortious interference with prospective economic advantage against the Current Board Defendants; (4) the same tortious interference claim against former Board members and a former Administrator (collectively, the "Former Board Defendants"); (5) a common law civil conspiracy claim against the Current Board Defendants; and (6) the same civil conspiracy claim against the Former Board Defendants. Each Board member and agent is sued in his or her individual capacity.


To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This pleading standard does not necessarily require a complaint to contain detailed factual allegations. Twombly, 550 U.S. at 555. Rather, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).

I. Claims Against the IGB

Although Plaintiffs do not appear to have asserted any particular claim against the IGB itself, they have named the IGB as a Defendant in the caption and listed it under the "Parties" heading in the complaint. (See Compl. ¶ 8.) Defendants move to dismiss any claims Plaintiffs might be seeking to assert against the Board because it is a state agency that cannot be sued under § 1983 and because a suit against the Board in federal court is barred by the Eleventh Amendment. In their response, Plaintiffs fail to address Defendants' arguments for dismissal of

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the IGB. For present purposes, the Court therefore accepts that the IGB is a state agency. See, e.g., Kashani v. Purdue Univ., 813 F.2d 843, 845 (7th Cir. 1987) ("The jurisdictional bar of the Eleventh Amendment protects the state and its agencies; it does not shield political subdivisions.").

Section 1983 allows individuals to sue "persons acting under the color of state law" for civil rights violations. Cosgriff v. County of Winnebago, 876 F.3d 912, 915 (7th Cir. 2017). The Supreme Court has determined that a State is not a person under § 1983. Will v. Mich. Dep't of State Police, 491 U.S. 58, 65-66 (1989). That logic extends to state agencies, which are also not considered "persons" for § 1983 purposes. See, e.g., Carroll v. DeTella, 255 F.3d 470, 471 (7th Cir. 2001). Since the Board is a state agency, it is not a "person" for purposes of a § 1983 claim.

Further, Defendants argue that the Eleventh Amendment precludes the Board, a state agency, from being sued in federal court. The Eleventh Amendment's prohibition on federal suits against the States extends to state agencies. See Kroll v. Bd. of Trs. of Univ. of Ill., 934 F.2d 904, 907 (7th Cir. 1991) ("[A] state agency is the state for purposes of the eleventh amendment."). Suits against the State are barred unless the State has waived its immunity, Congress has validly abrogated the States' immunity, or the suit is against a state official seeking prospective equitable relief. Darne v. State of Wis., Dep't of Revenue, 137 F.3d 484, 488 (7th Cir. 1998). Because no exception applies in this case,2 the Eleventh Amendment bars Plaintiffs from suing the Board in federal court.

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II. Section 1983 Claims

A. Quasi-judicial Immunity for Board Members

Among the Defendants named in Plaintiffs' § 1983 claims are five current members of the Board. Defendants contend that quasi-judicial immunity shields those Defendants from the § 1983 claims.

Quasi-judicial immunity attaches to individuals whose roles are "functionally comparable" to that of a judge, affording them absolute immunity from liability. Butz v. Economou, 438 U.S. 478, 513-14 (1978). In assessing whether government officials are entitled to quasi-judicial immunity, the Supreme Court applies a "functional approach," which looks to "the nature of the function performed, not the identity of the actor who performed it." Heyde v. Pittenger, 633 F.3d 512, 517 (7th Cir. 2011) (internal quotation marks omitted). The Supreme Court has also identified six non-exhaustive factors for courts to consider in making a determination of quasi-judicial immunity:

(a) the need to assure that the individual can perform his functions without harassment or intimidation; (b) the presence of safeguards that reduce the need for private damages actions as a means of controlling unconstitutional conduct; (c) insulation from political influence; (d) the importance of precedent; (e) the adversary nature of the process; and (f) the correctability of error on appeal.

Cleavinger v. Saxner, 474 U.S. 193, 202 (1985) (citing Butz, 438 U.S. at 512). "The Seventh Circuit has broadly considered these factors, without treating them as a test." Wilson v. Ill. Dep't of Fin. & Pro. Regul., 376 F. Supp. 3d 849, 864 (N.D. Ill. 2019).

Only a handful of cases—most of which were brought in Nevada—have considered whether gaming board members are entitled to quasi-judicial immunity. It appears that every time this question has been presented, courts have found immunity to be warranted. See Keystone Redevelopment Partners, LLC v. Decker, 631 F.3d 89, 96 n.3 (3d Cir. 2011) ("[F]ederal courts

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have uniformly concluded that state licensing bodies charged with deciding whether to award discretionary licenses are entitled to quasi-judicial immunity.").

In Rosenthal v. State of Nevada, 514 F. Supp. 907 (D. Nev. 1981), the district court highlighted the Nevada Gaming Commission's "power to issue subpoenas, compel attendance of witnesses, and administer oaths," and noted that "the Commission's hearings are conducted in a manner which has many of the traditional safeguards of a regular court." Id. at 914; see also Kraft v. Jacka, 669 F. Supp. 333, 337 (D. Nev. 1987) (adopting the reasoning articulated in Rosenthal to find the Nevada Gaming Control Board immune). The Ninth Circuit later agreed in Romano v. Bible, 169 F.3d 1182 (9th Cir. 1999), that the Nevada Gaming Commission is entitled to quasi-judicial immunity. The Ninth Circuit discussed many of the factors considered in Rosenthal, as well as the Nevada Gaming Commission's insulation from political influence. Id. at 1187 (noting that Commission members are appointed for fixed terms, no...

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