Dolly's Cafe, LLC v. Illinois Gaming Board

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

)

DOLLY’S CAFÉ LLC,

)

)

Plaintiff,

)

) No. 19 C 01666

v.

)

) Judge Virginia M. Kendall

ILLINOIS GAMING BOARD, et al.,

)

)

Defendants.

)

)

MEMORANDUM OPINION AND ORDER

Plaintiff Dolly’s Café, LLC, doing business as Lulu’s Place, brings this suit

pursuant to 42 U.S.C. § 1983. Plaintiff’s three-count Amended Complaint alleges

violations of the Due Process and Equal Protection clauses, along with a state law

claim for Administrative Review under 735 ILCS 5/3-101. (Dkt. 17). Plaintiff

operates a video gaming establishment and is challenging the decision of the Illinois

Gaming Board to shut down all five gaming terminals at its location. Defendants

filed the instant Motion to Dismiss for lack of subject-matter jurisdiction and failure

to state a claim. For the reasons outlined below, Defendants’ Motion is granted, and

Plaintiff’s Amended Complaint is dismissed.

BACKGROUND

Plaintiff applied to the Illinois Gaming Board for a video gaming license on

October 12, 2015. (Dkt. 17, pg. 5). After multiple visits by the Gaming Board to

Plaintiff’s premise, the Gaming Board approved Plaintiff’s license application on

November 16, 2017. (Id. at pg. 6). About one year later, Defendant Ron Jones, a

Gaming Board investigator, visited Plaintiff’s location. (Id.). Plaintiff and the

establishment immediately next door to it share a common owner. (Id. at pg. 16).

Jones informed Plaintiff that it was not allowed to own and operate adjacent

establishments which both had gaming licenses. (Id.). Later that day, the Gaming

Board shut down the video game terminals at Lulu’s Place. (Id.). The same day, the

Gaming Board provided Plaintiff with its reasoning for shutting down the gaming

terminals. (Id.). The letter read, in part:

When two or more adjacent businesses appear to the Administrator to

be a single business, or are operated by the same or commingled

ownership, then the Administrator may limit those businesses to the

maximum number of video gaming terminals. The maximum will be the

number permitted under Illinois law for one business as the total

number of video gaming terminals authorized for both or more such

businesses, where the administrator determines that the limitation

would further the intent of the Act and the integrity of video gaming in

the State of Illinois.

(Id.). The letter from the Gaming Board also informed Plaintiff that, “pursuant to

Board Rule 1800.615, [Plaintiff] may request a hearing of this determination.” (Dkt.

32, pg. 29). Further, the Gaming Board explained that any hearing challenging the

decision would “be a de novo proceeding where [Plaintiff] will have the burden of

proving by clear and convincing evidence [its] suitability to maintain 5 video gaming

terminals at each establishment.” (Id.). Plaintiff does not allege it undertook any

efforts to seek relief before the Illinois Gaming Board or in the state court system and

instead attempts to redress these purported violations at the first instance in federal

court. Plaintiff asserts it has sustained $152,684.00 in lost business revenue. (Dkt.

17, pg. 14).

Defendants first moved to dismiss Plaintiff’s Original Complaint filed March

8, 2019. (Dkt. 12). The Court entered a briefing schedule on the motion and instead

of responding, Plaintiff filed, without seeking leave, its Amended Complaint nearly a

month after its response to the motion to dismiss was due. (Dkts. 15, 17). Regardless,

the Court accepted the Amended Complaint and Defendants’ first motion to dismiss

was rendered moot. (Dkt. 21). Thereafter, Plaintiff filed a Motion to Seal and

Supplement its Amended Complaint. (Dkt. 22). The motion sought to file a sealed

Second Amended Complaint due to certain personally sensitive material contained

within. (Id.). The proposed Second Amended Complaint was contained within the

motion, not attached as a separate exhibit. (Id.). The Court granted the motion to

file a sealed Second Amended Complaint (Dkt. 23), but Plaintiff never filed the

proposed Second Amended Complaint on the docket. Because of this, Defendants

moved to dismiss the Amended Complaint—which, as the docket currently stands,

appears as the operative Complaint. Despite Plaintiff’s failure and Defendants’

excusable oversight, the confusion is of no import here. The Amended Complaint and

Second Amended Complaint are identical, with the only difference being Plaintiff’s

intent to have the latter filed under seal. Therefore, any arguments in favor of, or

opposed to, dismissal are applicable to either pleading and the outcome would be the

same regardless.

LEGAL STANDARD

In reviewing a motion to dismiss pursuant to Rule 12(b)(1) for lack of subject-

matter jurisdiction, the court must assess whether the plaintiff carried its burden of

establishing that jurisdiction is proper. Ctr. for Dermatology & Skin Cancer, Ltd. v.

Burwell, 770 F.3d 586, 588-89 (7th Cir. 2014). “Federal courts are courts of limited

jurisdiction. They possess only that power authorized by Constitution and statute,

… which is not to be expanded by judicial decree.” Kokkonen v. Guardian Life Ins.

Co., 511 U.S. 375, 377 (1994). To determine whether jurisdiction exists, the court

turns to the complaint along with evidence outside of the pleadings. Apex Digital,

Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 444 (7th Cir. 2009). A court lacking

subject-matter jurisdiction must dismiss the action without proceeding to the merits.

Intec USA, LLC v. Engle, 467 F.3d 1038, 1041 (7th Cir. 2006).

To survive a motion to dismiss pursuant to Rule 12(b)(6), the complaint must

“state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). A Rule 12(b)(6) motion is meant to challenge the legal

sufficiency of the complaint. Christiansen v. Cnty. of Boone, Ill., 483 F.3d 454, 457

(7th Cir. 2007). The Court accepts all well-pleaded allegations as true and views

them in a light most favorable to plaintiff. Appert v. Morgan Stanley Dean Witter,

Inc., 673 F.3d 609, 622 (7th Cir. 2012). Though, the Court need not accept as true

statements of law or statements that are merely conclusory and unsupported factual

allegations. McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011). Plaintiff’s

complaint must allege facts that establish its right to relief is more than speculative.

Cochran v. Ill. State Toll Highway Auth., 828 F.3d 597, 599 (7th Cir. 2016).

“Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

DISCUSSION

I. Proper defendants in § 1983 actions

The Eleventh Amendment serves as a bar to certain federal court actions

“against a state, state agencies, or state officials acting in their official capacities.”

Indiana Prot. & Advocacy Servs. v. Indiana Family & Soc. Servs. Admin., 603 F.3d

365, 370 (7th Cir. 2010). While exceptions do exist, suits under § 1983 are not one of

those recognized exceptions. Thomas v. Illinois, 697 F.3d 612, 613 (7th Cir. 2012)

(“[A] state and its agencies are not suable ‘persons’ within the meaning of section

1983.”).

Initially, to the extent that Plaintiff seeks to name the Illinois Gaming Board

in either of its Fourteenth Amendment claims, the Gaming Board, as a state agency,

is dismissed as an improper party. Thomas, 697 F.3d at 613. Plaintiff’s Amended

Complaint is less than clear with regard to whether Defendants are sued in their

individual or official capacities and whether Plaintiff seeks monetary or injunctive

relief.1 On its face, the Amended Complaint seeks to hold the individual Defendants

1 Unfortunately, this is representative of Plaintiff’s counsel’s approach to this case as a whole. Aside

from the noted failure of Plaintiff’s counsel to properly file the Second Amended Complaint and his

dilatory nature exhibited in multiple rounds of Motion to Dismiss briefing, the Amended Complaint

and Response brief leave much to be desired from a member of the Bar. Aside from frequent

typographic and grammatical errors, Plaintiff’s submissions to this Court consist of meandering and

oftentimes wholly irrelevant argument. For instance, portions of Plaintiff’s Response seem to be copied

from a brief filed in an unknown case in Florida state court. See (Dkt. 32, pg. 16). At times, Plaintiff

aimlessly transitions between speaking in the first and third person, leaving the Court guessing as to

liable on the Due Process and Equal Protection claims solely in their official capacity.

(Dkt. 17, pg. 9). Yet, Plaintiff goes on to seek compensatory and punitive damages

against each Defendant. (Id. at pg. 14). In an attempt to clarify its position, Plaintiff

states in its Response brief “that the Defendants are sued in their individual capacity

for money damages [sic] in their official capacities for injunctive relief.” (Dkt. 32, pg.

8).

Irrespective of the relief sought, Plaintiff has failed to state any claim against

Defendants Lorenzini and Tracy. At a bare minimum, Plaintiff must allege that

Defendants were “personally responsible for the alleged deprivation of the plaintiff’s

constitutional rights.” Mitchell v. Kallas, 895 F.3d 492, 498 (7th Cir. 2018); Franklin

v. Bowens, 777 Fed.Appx. 168, 169 (7th Cir. 2019). This personal responsibility

requirement can be “satisfied if the constitutional violation occurs at a defendant’s

direction or with her knowledge or consent.” Id. Here, Plaintiff fails to meet even

this relatively low bar. Aside from listing Defendants Tracy and Lorenzini as parties

to the case, the Amended Complaint is completely devoid of any mention of them,

much less an allegation connecting them to Plaintiff’s alleged constitutional

deprivations. Even after Defendants note this defect in their Motion to Dismiss,

Plaintiff fails to even acknowledge this fatal oversight. To the extent Plaintiff

attempts to overcome this shortcoming with generalized allegations of vicarious

liability or respondeat superior, those arguments similarly fail as government

officials are not deemed liable merely because of their official title. Iqbal, 556 U.S. at

the Plaintiff’s allegations. See (Dkt. 17, pg. 5). Moreover, Plaintiff repeatedly relies upon centuries-

old case law as opposed to providing this Court with up-to-date precedent from this circuit.

676 (“Because vicarious liability is inapplicable to Bivens and § 1983 suits, a plaintiff

must plead that each Government-official defendant, through the official’s own

individual actions, has violated the Constitution.”). Plaintiff has failed to state any

claim against Tracy and Lorenzini and consequently, Defendants’ Motion to Dismiss

is granted as it pertains to the two respective Defendants. As such, the following

analysis applies solely to the remaining individual Defendant, Defendant Jones.

II. Due Process Clause

For Plaintiff’s Procedural Due Process claim to survive a Motion to Dismiss, it

must allege “(1) deprivation of a protected interest, and (2) insufficient procedural

protections surrounding that deprivation.” Michalowicz v. Vill. of Bedford Park, 528

F.3d 530, 534 (7th Cir. 2008). Determining the existence of a protected interest is not

an exercise of simply referring to the Constitution, rather interests “’are created and

their dimensions are defined by existing rules or understandings that stem from an

independent source such as state law.’” Barrows v. Wiley, 780 (7th Cir. 2007) (quoting

Deen v. Darosa, 414 F.3d 731, 734 (7th Cir. 2005)).

Plaintiff’s Procedural Due Process claim falters on the first prong. Plaintiff

fails to even allege a protected interest in its Amended Complaint or remedy this

failure in its Response.2 Even reading between the lines and making the assumption

on behalf of Plaintiff that it does in fact allege a protected interest in the form of its

2 Instead, as one such example of the previously mentioned references to a Florida proceeding, Plaintiff

points to some wrong “committed by the Circuit Court for the State of Florida whose power deprives

from the Constitution of the Great State of Florida” and in the very next sentence jumps to the

conclusory statement that “[t]herefore, this prong is satisfied.” (Dkt. 32, pg. 16). The response then

quickly devolves into a confused screed, engaging in broad platitudes on the abstract importance of

due process, and curiously referencing the Magna Carta. (Id. at pgs. 16-17).

now revoked gambling license would not be enough to defeat Defendants’ Motion.

The Supreme Court of Illinois has addressed the issue and flatly foreclosed the notion

that a protected liberty interest exists in the form of a gambling license. J & J

Ventures Gaming, LLC v. Wild, Inc., 2016 IL 119870, ¶ 26, 67 N.E.3d 243, 251 (“There

is no common-law right in Illinois to engage in or profit from gambling. … The Act,

which legalized the use of video gaming terminals under certain limited

circumstances, is an exception to the general prohibition against gambling. …

Consequently…gaming contracts that do not conform to the applicable regulatory

requirements are void.”) (internal citations omitted). Plaintiff has identified no other

source of its supposed liberty interest and the Court is aware of none. Thus, Plaintiff

has failed to state a claim for violation of the Due Process clause and Defendants’

Motion is granted as to Count I.

III. Equal Protection Clause

To successfully plead a class-of-one Equal Protection claim, a plaintiff must

allege “(1) that he has been intentionally treated differently from others similarly

situated, and (2) that there is no rational basis for the difference in treatment.” Fares

Pawn, LLC v. Indiana Dep’t of Fin. Institutions, 755 F.3d 839, 845 (7th Cir. 2014)

(citing Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000)). To fulfill the first

prong, “a comparator must be ‘identical or directly comparable’ to the plaintiff ‘in all

material respects.’” Miller v. City of Monona, 784 F.3d 1113, 1120 (7th Cir. 2015)

(quoting LaBella Winnetka, Inc. v. Vill. of Winnetka, 628 F.3d 937, 942 (7th Cir.

2010)); Chicago Studio Rental, Inc. v. Illinois Dep’t of Commerce, 940 F.3d 971, 980

(7th Cir. 2019) (“[Plaintiff] must show that it was treated differently than another

entity that is prima facie identical in all relevant aspects.”) (internal quotations

omitted). The second prong of the analysis is more demanding and requires the

plaintiff show the absence of any rational basis for the state action. Miller, 784 F.3d

at 1120. Even alleging that the state acted with malice or an improper motive is

insufficient because “’a given action can have a rational basis and be a perfectly

logical action for a government entity to take even if there are facts casting it as one

taken out of animosity.’” Fares Pawn, 755 F.3d at 845 (quoting Flying J Inc. v. City

of New Haven, 549 F.3d 538, 547 (7th Cir. 2008)). To defeat a class-of-one claim at

the pleadings stage, defendants need only identify a single “conceivable rational basis

for the different treatment; it does not need to be the actual basis for defendant’s

actions.” Chicago Studio Rental, 940 F.3d at 980.

Plaintiff has failed to successfully plead that Defendants lacked a rational

basis for revoking its gaming license and therefore its Equal Protection claim fails.

Plaintiff concentrates its effort on the first prong of the Equal Protection claim—that

it was treated differently than a similarly situated entity—and outside the conclusory

assertion that “there exists no rational or legitimate basis for the” Defendants’

actions, Plaintiff does not address the second prong regarding Defendants’ basis for

the action. (Dkt. 32, pg. 19). There is little doubt that Illinois “has a legitimate

interest in creating and maintaining public confidence and integrity in the video

gaming industry.” Dotty’s Café v. Illinois Gaming Bd., 2019 IL App (1st) 173207, ¶

38. These interests are intimately related to the well established state interests of

consumer protection and public health—both areas which are unquestionably within

the realm of legitimate state interests. Id. The action Plaintiff complains of was

made pursuant to Illinois Gaming Board Rule 810(c). (Dkt. 17, pg. 6). Rule 810(c)

places certain limits on the number of gaming terminals adjacent businesses can

operate when those businesses have a common ownership. (Id.). In its Motion,

Defendants proffer three bases for the Rule and their action specifically with respect

to Plaintiff : (1) to “keep[] the number of terminals limited to make regulation easier,”

(2) “to prevent a heavy concentration of terminals in one business because that may

increase the potential for fraud and corruption,” and (3) to be fair to other businesses

that abide by the rules. (Id. at pgs. 13-14). To dispose of Plaintiff’s Equal Protection

claim, Defendants need only identify a single conceivable rational basis for their

action. Chicago Studio Rental, 940 F.3d at 980. Here, they offer three, with each

rationally and reasonably related to an important state interest. Each of the

justifications remains unrebutted. Therefore, Plaintiff has failed to state an Equal

Protection claim and Count II is dismissed.

IV. Administrative Review

Pendent jurisdiction allows a court which has jurisdiction over one claim to

exercise jurisdiction over other claims where jurisdiction may otherwise be

independently lacking. See Robinson Eng'g Co. Pension Plan & Tr. v. George, 223

F.3d 445, 449-50 (7th Cir. 2000). District Courts maintain broad discretion to

relinquish pendent jurisdiction over state law claims when the "anchor" federal claim

drops out of the proceeding. See Dietchweiler by Dietchweiler v. Lucas, 827 F.3d 622,

631 (7th Cir. 2016). Plaintiff's federal claims, Counts I and II, have been dismissed.

With no independent basis for federal question jurisdiction over Count III, the Court

declines to exercise pendent jurisdiction over Plaintiffs claim for administrative

review. Count III is dismissed for lack of subject-matter jurisdiction.

CONCLUSION

For the reasons detailed above, Defendants’ Motion to Dismiss is granted.

Plaintiff has now filed three Complaints in this matter—none of which have

sufficiently stated a claim. Plaintiff's Due Process and Equal Protection claims

(Counts I and II) are dismissed with prejudice for failure to state a claim and its

Administrative Review claim (Count III) is dismissed for want of subject-matter

jurisdiction.

J baer! Henstetr

por reel FS AMEE

ginia M. Kendall

United States District Judge

Date: December 6, 2019

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