Zummo v. City of Chi.

• Decision Date: 01 November 2018
• Docket Number: No. 17-cv-09006,17-cv-09006
• Citation: 345 F.Supp.3d 995
• Parties: Thomas A. ZUMMO, Plaintiff, v. CITY OF CHICAGO, Defendant.
• Court: U.S. District Court — Northern District of Illinois

345 F.Supp.3d 995

Thomas A. ZUMMO, Plaintiff,

v.CITY OF CHICAGO, Defendant.

No. 17-cv-09006

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

Signed November 1, 2018

Thomas A. Zummo, Chicago, IL, pro se.

Thomas P. McNulty, Jordan Alexander Rosen, City of Chicago Department of Law Constitutional Law and Commercial Litigation, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Honorable Edmond E. Chang, United States District Judge

Thomas A. Zummo was a taxicab driver. He brought this pro se lawsuit, alleging that the City of Chicago¹ has denied him constitutional rights, violated antitrust laws, and violated various state laws by failing to regulate what a City ordinance calls "Transportation Network Providers" (such as Uber and Lyft) in the same way as taxicabs.² R. 10, Compl.³ He further alleges that by impounding his car and failing to allow him to contest fines related to his expired taxicab license and an unpaid water bill, the City denied him due process and committed extortion. Id. at 10, 12. The City moves to stay the case pending resolution of charges that Zummo is facing in the Department of Administrative Hearings, arguing that Younger abstention principles bar the Court from considering Zummo's claims. R. 20, Def. Mot. Dismiss. In the alternative, the City moves to dismiss the Complaint for failure to adequately state a claim under Rule 12(b)(6). Id. For the following reasons, the City's motion to stay is granted in part and denied in part, and the motion to dismiss is granted as to all claims.

I. Background

For purposes of this motion, the Court accepts as true the allegations in the Complaint. Erickson v. Pardus , 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). Zummo has been a taxi driver in Chicago for 32 years. Compl. at 1. For some 20 years, he owned a Chicago taxi medallion, which allowed him to operate his own car as a taxicab under Chicago's municipal regulations. Id. at 13. About three years before filing the Complaint in this case, Zummo paid a City department, known as the Business Affairs and Consumer Protection Public Vehicle Operations Division, a $1,200 medallion fee and a $1,000 tax to operate his taxi for the following two years. Id. at 7. He paid this medallion fee expecting only to compete with 7,000 licensed taxicabs and 300 licensed limos in the City of Chicago. Id. Since becoming a driver, Zummo has driven seven days a week to afford maintaining his taxi medallion. Id. at 8.

Zummo alleges that, in about early 2014, the Business Affairs Division conspired to commit fraud by allowing "Transportation Network Providers" (known by their acronym, TNPs) to provide ridesharing services within Chicago without requiring them to comply with the same regulations as taxicabs. Compl. at 6, 8; see also MCC § 9-115 et seq. (legislation regulating TNPs enacted in May 2014). Zummo "mistakenly assumed" that the City would "prohibit[ ] unlicensed non-public commercial vehicles" to operate in Chicago. Compl. at 9. Because of this "two-tiered system" of regulation of the transportation industry, Zummo alleges that he has been unable to make money as a taxi driver, and as a result, has suffered financial problems. Id. at 7, 10. According to Zummo, because it failed to protect his investments in his medallion, the Business Affairs Division forced him into involuntary default on his debts and foreclosure of both his home and his taxicab. Id. at 10.

Zummo claims that by avoiding the regulation of TNPs at the expense of the taxicab industry, the City has denied him due process and engaged in restraint of trade and tortious interference. Compl. at 9, 30. Zummo also brings a claim against the City for promissory estoppel based on: (1) his understanding that only a limited number of taxicabs would be driving in Chicago; (2) his financial investment in his medallion; and (3) the City's issuance of only minimal regulation in allowing TNPs to enter the market. Id. at 31. Finally, Zummo alleges that the City engaged in deceptive practices by allowing "unlicensed vehicles" to drive in Chicago and "br[e]aking of regulations." Id. at 9, 24, 31.

In late September 2017, Zummo's taxicab was impounded because he was driving with an allegedly expired license and medallion.⁴ Compl. at 10. Zummo alleges that the Business Affairs Division impounded his car without giving him an opportunity to contest the impoundment, thus denying him due process. Id. at 11. The Department of Administrative Hearings then issued multiple Administrative Notices of Violation of the municipal code to Zummo, including engaging in consumer fraud, unfair methods of competition or deceptive practices in violation of MCC § 2-25-090(a), and driving a taxicab without a license in violation of MCC § 9-112-020 and MCC § 9-112-260. R. 21, Def. Br. Exh. B.⁵

Around the same time, the City collected on a water bill that Zummo did not pay. Compl. at 10. By denying him a chance to contest the basis of the water bill, Zummo alleges, the City denied him due process and committed extortion. Id. Although Zummo is currently paying the water bill in monthly installments under a payment plan, he alleges that the City is denying him due process by refusing to reinstate his now-expired license and medallion without letting him contest the bill and other administrative fines (discussed below) until they are paid in full. Id.

On November 7, 2017, the Department of Administrative Hearings entered a default judgment against Zummo, ordering him to pay $10,040 in fines. Compl. at 20. In January 2018, the Department vacated the default judgment and granted a motion to continue, setting a hearing date of March 1, 2018. Def. Br. Exh. C. On that date, the Department granted a continuance of the hearing, setting another hearing date in April 2018. Def. Br. Exh. B. The latest filing in this federal case shows that, on June 13, 2018, the administrative hearing was continued to July 25, 2018. R. 31, Def. Second Reply Exh. A.⁶ Neither side has provided a further update on the administrative proceedings.

II. Standard of Review

Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This short and plain statement must "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (alteration in original) (internal quotation marks and citation omitted). The Seventh Circuit has explained that this rule "reflects a liberal notice pleading regime, which is intended to ‘focus litigation on the merits of a claim’ rather than on technicalities that might keep plaintiffs out of court." Brooks v. Ross , 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A. , 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) ).

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7 , 570 F.3d 811, 820 (7th Cir. 2009). "[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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). These allegations "must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal , 556 U.S. at 678-79, 129 S.Ct. 1937.

III. Analysis

A. Younger Abstention

Based on Younger abstention, Younger v. Harris . 401 U.S. 37, 41, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), the City first moves to stay this case pending resolution of the administrative proceedings against Zummo. Under Younger , federal courts must abstain from deciding federal constitutional issues when those issues can be decided in ongoing state criminal proceedings. Id. at 41. In a case known as Middlesex County , the Supreme Court expanded this abstention doctrine to apply to civil proceedings when a plaintiff is subject to (1) ongoing state proceedings, (2) which implicate important state interests, and (3) which provide the plaintiff with an opportunity to raise constitutional challenges. Middlesex Cty. Ethics Comm. v. Garden State Bar Ass'n , 457 U.S. 423, 432, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982) ; see also Forty One News, Inc. v. Cty. of Lake , 491 F.3d 662, 666 (7th Cir. 2007). But the Supreme Court has cautioned that the application of Younger based on an underlying civil enforcement proceeding is the "exception, not the rule," holding that Younger only applies to civil proceedings when they are sufficiently criminal in nature. Sprint Commc'ns v. Jacobs , 571 U.S. 69, 81-82, 134 S.Ct. 584, 187 L.Ed.2d 505 (2013) (cleaned up).⁷

1. Two-Tiered System

The City argues that Younger abstention is appropriate for Zummo's claims arising out of the "two-tiered" system of regulation because the Middlesex County test is satisfied. Def. Br. at 4. Younger abstention, however, does not apply to every case in which there is a state court proceeding case that simply touches on the same subject matter. See Sprint Commc'ns , 571 U.S. at 72, 134 S.Ct. 584. When the issues in the federal suit are substantially different from the issues in the state proceedings and the relief requested in federal court would not unduly interfere with the state proceedings, Younger abstention is not warranted. See Am. Fed'n of State Cty. and Mun. Emps. v. Tristano , 898 F.2d 1302, 1305 (7th Cir. 1990) (holding comity and federalism concerns underlying Younger doctrine inapplicable where state arbitration proceedings relating to collective bargaining agreement were substantially different from...