Tri-State Disposal, Inc. v. Vill. of Riverdale, Corp.

• Decision Date: 26 March 2019
• Docket Number: No. 18 C 2138,18 C 2138
• Parties: TRI-STATE DISPOSAL, INC., an Illinois corporation, Plaintiff, v. The VILLAGE OF RIVERDALE, a municipal corporation; and Lawrence Jackson, Mayor of the Village of Riverdale, Defendants.
• Court: U.S. District Court — Northern District of Illinois

369 F.Supp.3d 866

TRI-STATE DISPOSAL, INC., an Illinois corporation, Plaintiff,

v.The VILLAGE OF RIVERDALE, a municipal corporation; and Lawrence Jackson, Mayor of the Village of Riverdale, Defendants.

No. 18 C 2138

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

Signed March 26, 2019

Mark Anthony LaRose, David Jonathan Aron, Marissa Renee Alaska, LaRose & Bosco, Ltd., Chicago, IL, for Plaintiffs.

Erin Elizabeth Blake, John Patrick Wise, Richard F. Bruen, Jr., Montana & Welch, LLC, Palos Heights, IL, for Defendants.

OPINION AND ORDER

SARA L. ELLIS, United States District JudgeSimilar to the CW television series "Riverdale," this case alleges intrigue, political subterfuge, and the darkness lurking just under the surface of a seemingly picture perfect small town. After the Village of Riverdale (the "Village") passed Ordinance Number 2017-22 (the "Ordinance") granting Riverdale Materials, LLC ("Riverdale Materials") a special use permit to operate a waste collection business in Riverdale, Illinois, Tri-State Disposal, Inc. ("Tri-State") filed this lawsuit against the Village and its Mayor, Lawrence L. Jackson. Tri-State brings claims against the Village for violation of procedural and substantive due process (Counts I and II) and equal protection (Count III), and breach of contract (Count VII). It also seeks judicial review of the Ordinance (Count IV). Finally, Tri-State contends that the Village and Jackson engaged in political retaliation in violation of the First Amendment (Counts V and VI). Defendants move to dismiss the first amended complaint under Rule 12(b)(1) for lack of standing and Rule 12(b)(6) for failure to state a claim upon which relief can be granted. The Court concludes that Tri-State has standing to pursue its claims but dismisses the due process claims for failure to allege a deprivation of a protected property interest and the equal protection claim because the first amended complaint and exhibits reveal a conceivable rational basis for the Village's actions. Tri-State also cannot pursue common law certiorari review of the Ordinance, where the zoning decision involves a legislative, not administrative, action. But the Court concludes that Tri-State has sufficiently stated its political retaliation and breach of contract claims, which may proceed to discovery.

BACKGROUND¹

Tri-State operates a solid waste, construction, and demolition transfer station in Riverdale, having provided waste services for the Village since 2002. In 2012, Tri-State and the Village entered into a written contract for waste services in Riverdale. The contract requires, among other things: Tri-State to pick up trash from Village residents, Tri-State to conduct a spring clean-up, and the Village to pay Tri-State's invoices within fifteen days. Additionally, pursuant to a settlement agreement entered in 2002 between the parties, Tri-State agreed to post a $ 50,000 bond for the benefit of the Village as security for its site and to pay royalties to the Village. The contract and settlement agreement are currently still in effect. The contract has an end date of July 31, 2019.

Initially, Tri-State supported Jackson's administration. In the summer of 2017, it came to light that a competing disposal business, Riverdale Materials, sought to establish itself in Riverdale with Jackson's support. Riverdale Materials applied for a special land use ordinance to operate a solid waste transfer station, construction demolition station, dirt transfer station, and stone processing facility on its property in Riverdale.² Jackson assured Tri-State that Riverdale Materials would have to post the same security and pay the same royalties outlined in the original contract and settlement agreement between Tri-State and the Village to operate in Riverdale. At some point, Tri-State learned that the Village did not plan to require Riverdale Materials to comply with these conditions.

Tri-State's facility is less than one mile from Riverdale Materials' site. Riverdale Materials' property sits on a former landfill that the courts shut down in 1962 because of the environmental condition of the property. The property remains unremediated. In its application for the special use ordinance, Riverdale Materials represented it would use an on-site retention pond for drainage and storm water control. But this pond is not located on its property nor does Riverdale Materials have the right to use it.

The Village ordinance requires a hearing and recommendation from the Village Plan Commission for conditional use applications. Because the Village does not have a Plan Commission, the notices for hearing regarding Riverdale Materials' special use application indicated that the Zoning Board of Appeals (the "Zoning Board") would hold the hearings sitting as the Plan Commission. No documents or records identify that the Zoning Board had authority to act as the Plan Commission. The Zoning Board held hearings to consider Riverdale Materials' application on September 7, 2017, and November 2, 2017. Tri-State appeared at these Zoning Board hearings and submitted documents in opposition to the conditional use. It criticized the hearing process and the environmental impact of Riverdale Materials' proposed facility, raising concerns about hazardous waste, contamination at the site, storm water runoff and drainage, and the apparent special treatment Riverdale Materials was receiving from the Village. At the hearings, Riverdale Materials misrepresented the environmental condition of its property, its drainage plans, and its receipt of all necessary permits to operate the site. Members of the public testified in opposition to the proposed conditional use, raising concerns that the proposed facility would endanger public health and cause property values to decline, that Riverdale Materials' facility did not have adequate drainage, that Riverdale did not need another transfer station, and that Riverdale Materials was already operating without permits and illegally dumping at the site.

After the Zoning Board heard substantive testimony, Jackson fired its chairperson, who had expressed some reservations about the application, and appointed new members with political connections to Jackson. Despite objection from Tri-State and other members of the public, one of the Village attorneys acted as the de facto chair of the hearings without authority to do so. On November 2, 2017, the Zoning Board voted four to two to recommend that the Village Board grant the conditional use. The Village Board then took up Riverdale Materials' application on November 28, 2017. At that meeting, the Village Board unanimously passed the Ordinance, allowing Riverdale Materials to operate. The Village Board did not take public comment on the application prior to voting and refused to accept written materials, including from Tri-State, for the record. Jackson strongly supported the application, with a sign at the Riverdale Materials site indicating it was another business Jackson brought to Riverdale.

In early 2018, Tri-State sought to schedule the spring clean-up for that year in accordance with its agreement with the Village. The Village did not respond to Tri-State's numerous attempts to schedule this event and instead advertised a May 5 cleanup conducted by Flood Brothers, another waste contractor. On February 23, 2018, Tri-State filed this lawsuit. Subsequently, at a March 27, 2018, Village Board meeting, the Village Board passed a motion directing the Chief of Staff to provide notice to Tri-State declining all potential extensions provided in the 2012 agreement with Tri-State and informing Tri-State that the agreement would therefore expire on July 19, 2019. On April 25, 2018, Jackson sent Tri-State a letter in which he complained that Tri-State representatives had harassed him and his staff and requested that Tri-State cease all communications by phone with the Village. The Village also refused to pay Tri-State's invoices from January through April 2018.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(1) challenges the Court's subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). The party asserting jurisdiction has the burden of proof. United Phosphorus, Ltd. v. Angus Chem. Co. , 322 F.3d 942, 946 (7th Cir. 2003), overruled on other grounds by Minn-Chem, Inc. v. Agrium, Inc. , 683 F.3d 845 (7th Cir. 2012). The standard of review for a Rule 12(b)(1) motion to dismiss depends on the purpose of the motion. Apex Digital, Inc. v. Sears, Roebuck & Co. , 572 F.3d 440, 443–44 (7th Cir. 2009). If a defendant challenges the sufficiency of the allegations regarding subject matter jurisdiction (a facial challenge), the Court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in the plaintiff's favor. See id. ; United Phosphorus , 322 F.3d at 946. If, however, the defendant denies or controverts the truth of the jurisdictional allegations (a factual challenge), the Court may look beyond the pleadings and view any competent proof submitted by the parties to determine if the plaintiff has established jurisdiction by a preponderance of the evidence. See Apex Digital , 572 F.3d at 443–44 ; Meridian Sec. Ins. Co. v. Sadowski , 441 F.3d 536, 543 (7th Cir. 2006).

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed. R. Civ. P. 12(b)(6) ; Gibson v. City of Chicago , 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. AnchorBank, FSB v. Hofer , 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; see also Bell Atl....