Unity Ventures v. County of Lake

• Decision Date: 19 March 1986
• Docket Number: No. 81 C 2745.,81 C 2745.
• Parties: UNITY VENTURES, et al., Plaintiffs, v. COUNTY OF LAKE, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

631 F. Supp. 181

UNITY VENTURES, et al., Plaintiffs, v. COUNTY OF LAKE, et al., Defendants.

No. 81 C 2745.

United States District Court, N.D. Illinois, E.D.

March 19, 1986.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

James P. Chapman, Alan Mills, Robert J. Zaideman, James P. Chapman & Associates, Ltd., Chicago, Ill., for plaintiffs.

Fred L. Foreman, State's Atty. of Lake County by Clifford L. Weaver, Gerald P. Callaghan, Waukegan, Ill., for defendants Lake County, George Bell, and Norman Geary.

Clifford L. Weaver, William Freivogel, Robert C. Newman, Kathryn A. Knue, Diana C. White, Burke, Bosselman, Freivogel, Weaver, Glaves & Ryan, Chicago, Ill., for all defendants.

Phillip Areeda Cambridge, Mass., of counsel, to all defendants as to Antitrust Issues only.

MEMORANDUM ORDER

BUA, District Judge.

Before the Court is the defendants' motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. For the reasons stated herein, the motion for a judgment n.o.v. is granted, and the motion for a new trial is denied.

I. INTRODUCTION

Unity Ventures, LaSalle National Bank, and William Alter brought this suit for damages and injunctive relief against Lake County, Illinois, The Village of Grayslake, Illinois, the members of the Lake County Board, individually and as board members, Edwin M. Schroeder, as mayor of Grayslake, and the trustees of the Village of Grayslake. Plaintiffs alleged that defendants conspired to prevent the development of Alter's land by a series of wrongful acts, including denying access to sanitary sewer service, in violation of plaintiffs' rights under the due process and equal protection clauses of the Fourteenth Amendment and the Civil Rights Act of 1871, 42 U.S.C. § 1983.

All claims, except for those based on procedural due process, were tried to a jury. On January 12, 1984, the jury returned a verdict in favor of the plaintiffs and against the defendants for $9,500,000 on the antitrust claim and on the civil rights claim. The verdict on the antitrust claim was trebled and the Court entered judgment in favor of the plaintiffs in the amount of $28,500,000. Thereafter, the defendants filed a timely motion for j.n.o.v. or, in the alternative, for a new trial.

II. FACTS

In 1972, plaintiffs obtained an option to purchase approximately 585 acres of farmland ("the Unity property") in a then unincorporated portion of Lake County. The Unity property is located directly south of Grayslake and southeast of the then existing boundaries of Round Lake Park. On August 15, 1976, Alter entered into an annexation agreement with Round Lake Park providing for the development of Unity. By the terms of the agreement, Round Lake Park adopted an ordinance annexing the Unity property and in return received contributions of land and money for municipal facilities. On October 21, 1976, Alter exercised his option to purchase and acquired title to the property.

At the time that Alter and Round Lake Park were engaged in plans for annexation and development of Unity, Lake County was preparing to replace the existing sewage systems by constructing a countywide sanitary sewer system with a network of "interceptors" (large trunk or main sewer lines). Central Lake County was to be served by two principal interceptors. One, known as the Northeast Central Interceptor, was to provide service from Grayslake and communities along its path to a new treatment plant in Gurnee, Illinois. The other, known as the Northwest Central Interceptor, was to provide trunk service to Round Lake Park and communities along its path to a new treatment plant in Fox Lake, Illinois. Under grants approved by the Illinois Environmental Protection Agency (IEPA), and by the terms of the revenue bond issue and regional plans for the construction of the Interceptor, Unity was in an area designated to be served by the Northeast Interceptor.

On April 20, 1976, Grayslake entered into an agreement with Lake County for sewage disposal whereby the County was to provide service to Grayslake through the Northeast Interceptor. Pursuant to this agreement, Grayslake was granted a "sphere of influence" that included areas of Lake County outside the boundaries of Grayslake, over which Grayslake had the right to approve all connections to Lake County's Northeast Interceptor. The pertinent part of the agreement provided:

The County shall preserve the function of County interceptors located within the sphere of influence of the Village (as delineated in Exhibit "A" attached hereto and made a part hereof) by not permitting any direct connection hereto by any person, firm, corporation or municipality unless the Village consents in writing to such direct connection.

(Pl.Ex. 30, p. 8.)

The 1976 agreement contained two changes over the previous sewage disposal agreement executed in 1973 between Grayslake and the County: the addition of the Unity property and Heartland property to Grayslake's sphere of influence and the addition of the word "municipality" in the paragraph cited above. These changes brought the Unity property and development within Grayslake's sphere of influence and, thus, Grayslake had control over any connection of sanitary sewer service from Unity to the Northeast Interceptor. Neither plaintiffs nor the officials of Round Lake Park knew of the sphere of influence agreement between Grayslake and Lake County until October 1978.

In August 1978, Alter prepared and submitted to the Lake County Public Works Department two plans for the proposed construction of a connection between Unity and the Northeast Interceptor. The first plan provided for the construction of a connection which would serve only Unity, the cost of which would be borne by Alter. The second plan provided for the construction of a connection which would serve not only Unity but also an area lying between Unity and Grayslake, known as the Heartland development, which Grayslake was contemplating annexing.

On August 23, 1978, these plans were submitted to Martin Galantha, Director of the Lake County Public Works Department. In a letter dated September 25, 1978 to Mayor Schroeder, Galantha described the plans:

Although most of Round Lake Park is to be provided sewer service as part of the Northwest regional system, the Unity Venture development lies within the Des Plaines River basin and therefore, should be tributory to the County's Northeast Central interceptor system.

(Pl.Ex. 50, p. 1.) Galantha approved of the plans and sent them to Mayor Schroeder for Grayslake's approval pursuant to the sphere of influence agreement.

On October 31, 1978, plaintiffs met with Mayor Schroeder, Galantha, Walter Bengson, Mayor of Round Lake Park, and others to discuss the proposed sewer connection to the Northeast Interceptor. At this meeting, Alter learned of the sphere of influence agreement. Mayor Schroeder told Alter that Grayslake would not consent to Unity connecting to the Northeast Interceptor at that time.

On March 16, 1979, the Public Service Committee of the Lake County Board obtained a legal opinion from the law firm of Chapman & Cutler about the propriety of Grayslake's veto power under the sphere of influence agreement. (Pl.Exs. 147 and 148). In particular, Chapman & Cutler advised the Board:

Due process of law requires that intelligible standards be provided to guide the recipient of a delegation of power.... However, the Agreement vests the Village with entirely arbitrary authority and therefore, could be held void in whole or in part....

(Pl.Ex. 113, p. 2).

Chapman & Cutler also suggested that Grayslake's veto might violate the antitrust laws insofar as the veto power was not per se immune under the state action doctrine as applied to the antitrust laws. Defendants Geary, Schroeder and Bell objected to the Public Service Committee after it asked the State's Attorney what it should do about the veto and the sphere of influence agreement. (Pl.Exs. 112, 111 and 149, respectively.) Finally, the Public Service Committee agreed to drop any further inquiry into the legality of Grayslake's veto and directed that "the County should take whatever action may be required to support the validity of this contract." (Pl.Ex. 130.)

Since it appeared that the County would not provide sewer service to the Unity property via the Northeast Central Interceptor, plaintiffs and Round Lake Park prepared plans for construction of a sewage treatment plant for Unity. In November 1979, they obtained a needed variance from the Illinois Pollution Control Board without objection after a recommendation from the IEPA. This order was not appealed to the Illinois Appellate Court. In December 1979, Round Lake Park and a sewer company created for this purpose executed an agreement for construction of the facility.

Meanwhile, the Heartland property had been the subject of a proposed development and annexation by Grayslake for several years. In November 1980, because Grayslake had not proceeded with the annexation, the developer of Heartland sought annexation by Round Lake Park. On December 22, 1980, the Grayslake Board of Trustees passed and tendered to Round Lake Park a resolution providing that Grayslake would agree to the sewer connection of Unity to the Northeast Interceptor if Round Lake Park would agree to engage in the mutual planning of Heartland and to refrain from annexing Heartland without the approval of Grayslake. On January 3, 1981, Round Lake Park rejected the Grayslake resolution and on January 14, it passed a resolution authorizing the annexation of Heartland. Thereupon, the trustees of Grayslake unanimously rescinded their resolution which provided for the conditional connection of Unity with the Northeast Interceptor.

After Heartland requested annexation to Round Lake Park, Lake County and Grayslake filed with the IEPA objections to the construction of the sewage treatment plant for Unity. On June 3, 1981, the defendants filed an action in the Circuit...