Tri-State Disposal, Inc. v. The Village of Riverdale

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

TRI-STATE DISPOSAL, INC., )

an Illinois corporation, )

)

Plaintiff, )

) No. 18 C 2138

v. )

) Judge Sara L. Ellis

THE VILLAGE OF RIVERDALE, )

a municipal corporation; and )

LAWRENCE JACKSON, )

Mayor of the Village of Riverdale, )

)

Defendants. )

OPINION AND ORDER

After the Village of Riverdale (the “Village”) passed Ordinance Number 2017-22 (the

“Ordinance”), Plaintiff Tri-State Disposal, Inc. (“Tri-State”) filed this lawsuit against Defendants

the Village and its Mayor, Lawrence J. Jackson. The Ordinance granted Riverdale Materials,

LLC (“Riverdale Materials”) a special use permit to operate a waste collection business in

Riverdale, Illinois, where Tri-State also operates a waste collection business. After concluding

that Tri-State had standing to pursue its claims, the Court dismissed Tri-State’s first amended

complaint (“FAC”) in part. Doc. 45. The Court dismissed Tri-State’s due process claims for

failure to allege deprivation of a protected property interest. The Court also dismissed Tri-

State’s equal protection claim because the FAC and exhibits demonstrated a conceivable rational

basis for the Village’s decision to pass the Ordinance. Finally, the Court dismissed Tri-State’s

claim for common law certiorari review of the Ordinance because the zoning decision involved

a legislative, rather than administrative, action. Notwithstanding, the Court concluded that Tri-

State sufficiently pleaded its political retaliation and breach of contract claims.

Tri-State subsequently filed a second amended complaint (“SAC”). In the SAC, Tri-State

made minor changes to the FAC, realleged due process, breach of contract, and political

retaliation claims against Defendants, and did not plead any new claims. Defendants move to

dismiss the SAC pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court again

dismisses Tri-State’s due process claims. The SAC fails to allege a deprivation of a protected

property interest, and Tri-State’s due process claims fail even if the Court assumes a property

interest. Although Defendants initially moved to dismiss Tri-State’s political retaliation claims,

Defendants subsequently withdrew their motion to dismiss with respect to those claims.

Doc. 61. Therefore, Tri-State may still proceed on its claims for political retaliation and breach

of contract.

BACKGROUND1

Tri-State operates a solid waste, construction, and demolition transfer station in the

Village and has provided waste services to the Village since 2002. On July 24, 2012, Tri-State

and the Village entered into a written contract for waste services in Riverdale (the “Contract”).

The Contract required Tri-State to pick up trash from Village residents and conduct a spring

clean-up. The Contract also required the Village to pay Tri-State’s invoices within fifteen days.

The parties also entered into a settlement agreement in 2002, wherein Tri-State agreed to post a

$50,000 bond for the benefit of the Village as security for its site and pay royalties to the Village.

The Contract was in effect until July 31, 2019.

1 The facts in the background section are taken from the SAC as well as the exhibits attached thereto and

are presumed true for the purpose of resolving Defendants’ motion to dismiss. See Virnich v. Vorwald,

664 F.3d 206, 212 (7th Cir. 2011); Local 15, Int’l Bd. of Elec. Workers, AFL-CIO v. Exelon Corp., 495

F.3d 779, 782 (7th Cir. 2007). Although the Court presumes familiarity with the factual background set

forth in its March 26, 2019 Opinion, Doc. 45, the Court recounts the allegations again here, including any

additional allegations from the SAC.

Initially, Tri-State supported Mayor Jackson’s administration. In the summer of 2017,

Tri-State learned 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. Riverdale Materials

subsequently withdrew its request to operate a solid waste transfer station from its application.

Jackson assured Tri-State that Riverdale Materials would have to post security and pay royalties,

as the Village required Tri-State to do. At some point, Tri-State learned that the Village did not

plan to require Riverdale Materials to comply with such conditions.

Tri-State’s facility is less than one mile from Riverdale Materials’ site. Riverdale

Materials’ site is on a former landfill that courts shut down in 1962 due to its environmental

condition. 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, and Riverdale Materials does not have

the right to use the retention pond. Tri-State owns a retention pond adjacent to the Riverdale

Materials site.2 Runoff and other drainage from Riverdale Materials’ site adversely affect the

retention pond.

A Village ordinance requires a hearing and recommendation from the Village Plan

Commission for conditional use applications. The Village does not have a Plan Commission,

thus, the notices for hearings about Riverdale Materials’ special use application indicated that the

Zoning Board of Appeals (the “Zoning Board”) would hold the hearings sitting as the Plan

2 The SAC does not specify when Tri-State obtained ownership rights of the retention pond. In Tri-

State’s opposition to Defendants’ motion to dismiss the SAC, Tri-State indicates that it did not own the

retention pond when the Village evaluated whether to pass the Ordinance. Rather, Tri-State acquired

ownership rights prior to filing the SAC.

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 the Zoning Board hearings

and submitted documents in opposition to the proposed conditional use. Tri-State criticized the

hearing process and the environmental impact of Riverdale Materials’ proposed facility, raising

concerns about hazardous waste, contamination at the site, and storm water runoff and drainage.

Tri-State also communicated concerns about the apparent special treatment that the Village gave

Riverdale Materials. 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 the facility lacked 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 the chairperson who

had expressed some reservations about the application. Jackson then appointed new members

with political connections to him. One of the Village attorneys acted as the de facto chair of the

hearings without authority to do so, despite objections from Tri-State and other members of the

public. On November 2, 2017, the Zoning Board voted four to two to recommend that the

Village Board grant Riverdale Materials the conditional use.

On November 28, 2017, the Village Board unanimously passed the Ordinance, which

allowed Riverdale Materials to operate. The Village Board did not take public comment on the

application prior to voting and refused to accept written materials for the record, including

materials from Tri-State. The Village passed the Ordinance despite the documented history of

environmental contamination and the lack of any on-site storm water or drainage facility.

Jackson strongly supported the application, and a sign at Riverdale Materials’ site advertised it as

another business Jackson brought to Riverdale.

On February 23, 2018, Tri-State filed this lawsuit. In March 2018, Tri-State sought to

schedule the spring clean-up for that year in accordance with its contract with the Village. The

Village did not respond to Tri-State’s numerous attempts to schedule this event and instead

advertised a cleanup to occur on May 5, 2018, conducted by another waste contractor. At a

meeting on March 27, 2018, the Village Board passed a motion that directed the Chief of Staff to

provide notice to Tri-State that the Village would decline all potential extensions provided in the

Contract and inform Tri-State that the contract would therefore expire on July 19, 2019. On

April 25, 2018, Jackson sent Tri-State a letter in which Jackson complained that Tri-State

representatives had harassed him and his staff and requested that Tri-State cease all telephonic

communications 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)(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 (2009);

see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “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.” Iqbal, 556 U.S. at 678.

ANALYSIS

Tri-State alleges that the Village violated its procedural and substantive due process

rights. Tri-State contends it had property interests in its business in the Village and rendering the

services contemplated by its Contract with the Village. In the SAC, Tri-State also alleges a

property interest in a retention pond adjacent to the Riverdale Materials site, which is “adversely

affected by illegal drainage and runoff[.]” Doc. 49 ¶ 82. The Village argues that the Court

should dismiss both claims because the Village’s actions did not deprive Tri-State of a

constitutionally protected property interest and even if the Court finds a constitutionally

protected property interest, Tri-State fails to adequately plead how the Village’s passage of the

Ordinance deprived it of such property interest. The Court again concludes that Tri-State failed

to allege a constitutionally protected interest and so dismisses the due process claims.

I. Procedural Due Process (Count I)

Tri-State alleges that the Village violated its procedural due process rights in passing the

Ordinance. The Village argues that (1) the Village’s passage of the Ordinance could not have

deprived Tri-State of its interest in the retention pond because Tri-State did not own the pond at

that time and did not assert a deprivation of its property during the hearings and (2) Tri-State was

afforded due process through its participation in public hearings and submissions to the Village,

which contained its objections to the Ordinance. The Fourteenth Amendment of the Constitution

of the United States prevents a State from depriving any person of “life, liberty, or property,

without due process of law.” U.S. Const. amend. XIV, § 1. “An essential component of a

procedural due process claim is a protected property or liberty interest.” Khan v. Bland, 630

F.3d 519, 527 (7th Cir. 2010) (quoting Minch v. City of Chicago, 486 F.3d 294, 302 (7th Cir.

2007)). To establish a procedural due process violation, Tri-State must demonstrate “(1) a

cognizable property interest; (2) a deprivation of that property interest; and (3) a denial of due

process.” Hudson v. City of Chicago, 374 F.3d 554, 559 (7th Cir. 2004) (quoting Buttitta v. City

of Chicago, 9 F.3d 1198, 1201 (7th Cir. 1993)). There is no protected property interest here, and

even if the Court found a protected property interest, the Village did not violate Tri-State’s

procedural due process rights. Therefore, the Court dismisses Tri-State’s procedural due process

claim.

A. Property Interest

As the Court previously explained, to state a claim under the Due Process Clause, Tri-

State must first establish a constitutionally protected property interest. See Citizens Health Corp.

v. Sebelius, 725 F.3d 687, 694 (7th Cir. 2013) (“The threshold question in any due process challenge

is whether a protected property or liberty interest actually exists.”); see also Khan, 630 F.3d at 527.

A constitutionally protected property interest is created by “existing rules or understandings that stem

from an independent source such as state law.” Kim Constr. Co. v. Bd. of Trs. of the Vill. of

Mundelein, 14 F.3d 1243, 1245–46 (7th Cir. 1994) (quoting Bd. of Regents v. Roth, 408 U.S. 564,

577 (1972)). In previously evaluating the due process claims that Tri-State repeats here, the

Court concluded that Tri-State failed to establish a constitutionally protected property interest.

Doc. 45 at 12. Specifically, the Court found that Tri-State did not have a property interest in

doing business with the Village, its Contract with the Village, or its ownership of property in the

Village. Doc. 45 at 12; see also Kim, 14 F.3d at 1246–47 (explaining that an unsuccessful bidder

for a public contract does not have a property interest in the award); Taake v. Cty. of Monroe,

530 F.3d 538, 542 (7th Cir. 2008) (“[M]ere breaches of contract by the government do not

support substantive due process claims under the Constitution.”); Alarm Detection Sys., Inc. v.

Orland Fire Prot. Dist., 326 F. Supp. 3d 602, 624 (N.D. Ill. 2018) (concluding there was no due

process violation where the plaintiff failed to demonstrate a protected property interest in municipal

business). The Court also concluded that even if Tri-State established a protected property

interest, Tri-State failed to plead how the Ordinance deprived it of such interest. Doc. 45 at 13.

Despite the opportunity to replead its claims by asserting a constitutionally protected

property interest, Tri-State filed the SAC in substantially the same form. Again, Tri-State fails to

articulate a basis for finding its alleged property interests constitutionally protected. It does not

provide any reason to question the Court’s determination that doing business with the Village, a

Contract with the Village, and ownership of nearby property do not amount to protected property

interests. Tri-State does include two additional allegations pertaining to a constitutionally

protected property interest, however. In the SAC, Tri-State contends that it owns a retention

pond adjacent to Riverdale Materials’ site, which is adversely affected by activities on the site.

The Village argues that Tri-State failed to include additional facts regarding its ownership of the

adjacent retention pond and that Tri-State did not specify the rule or law that establishes a

constitutionally protected property interest. The Village further argues that Tri-State did not

assert its ownership in the retention pond during the Village’s evaluation of the Ordinance. Tri-

State concedes that it did not own the retention pond during the hearings surrounding the

Ordinance and acquired ownership rights “prior to filing its Second Amended Complaint.”

As the Court previously explained, Tri-State’s property is not subject to the Ordinance,

thus, Tri-State does not have a protected property interest in its new allegations as an adjacent

landowner. Doc. 45 at 12–13. The Ordinance only applies to Riverdale Materials’ site. In

Muscarello v. Ogle County Board of Commissioners, the Seventh Circuit concluded that the

plaintiff failed to allege a due process claim because there was no protectable property interest.

See 610 F.3d 416, 423 (7th Cir. 2010). There, the plaintiff owned nonresidential property

adjacent to property subject to a zoning ordinance. Id. at 418, 423. The Court explained that the

plaintiff was “unable to describe a property interest that [was] not speculative.” Id; see also

Residences at Riverbend Condo. Ass’n v. City of Chicago, 5 F. Supp. 3d 982, 986 (N.D. Ill.

2013) (concluding that the plaintiffs did not have a constitutionally protected property interest in

property adjacent to the property subject to an ordinance). Tri-State attempts to establish a non-

speculative interest by alleging that it owns an adjacent retention pond that is affected by runoff

from the site. However, the Village passed the Ordinance in 2017, and Tri-State became the

owner of the retention pond in 2019. Therefore, Tri-State did not own the retention pond when

the Village passed the Ordinance, and Tri-State knew of the Ordinance when it acquired

ownership rights to the retention pond. Because Tri-State did not own the adjacent retention

pond at the time of the hearings, it cannot claim that the Ordinance deprived it of a property

interest in the retention pond. See Ind. Land Co., LLC v. City of Greenwood, 378 F.3d 705, 709

(7th Cir. 2004) (explaining “a contract to buy something is not tantamount to ownership of the

thing” for purposes of a property interest); see also Khan, 630 F.3d at 527 (“To claim a property

interest protected by the Fourteenth Amendment, ‘a person . . . must have more than a unilateral

expectation of [the claimed interest]. He must, instead, have a legitimate claim of entitlement to

it.’” (quoting Roth, 408 U.S. at 577)). Tri-State acquired the retention pond after the hearings

and cannot assert now that the Ordinance deprived it of a property interest in the retention pond.

And without any protected property interest, Tri-State’s procedural due process claim fails again.

B. Deprivation of Property Interest and Denial of Due Process

Even if the Court assumes a protected property interest, Tri-State failed to plead how the

Village’s actions in passing the Ordinance violated its rights under the Due Process Clause. Tri-

State contends that the Village failed to provide a meaningful opportunity for it to be heard and

the hearings did not occur before the proper body. The Village argues that Tri-State was

involved in the Village’s public hearings and had a meaningful opportunity to be heard.

Additionally, Tri-State did not assert a property interest in the retention pond during that process

and cannot argue a due process violation now.

“[P]rocedures ‘due’ in zoning cases are minimal.” River Park, Inc. v. City of Highland

Park, 23 F.3d 164, 166 (7th Cir. 1994). “[L]ocal governments are not required to respect

property owners’ rights, and there is therefore no obligation to provide hearings to ascertain a

protected core.” Id. at 167. Moreover, when a legislative body makes zoning decisions, the

impacted parties have no right to notice and an opportunity to be heard. See Ind. Land Co., 378

F.3d at 710 (“[L]egislation normally is general in scope rather than targeted on a specific

individual, and its generality provides a safeguard that is a substitute for procedural

protections[.]”). Here, Tri-State acknowledges that it participated in public hearings and shared

its opinion about the Ordinance with the Village. Tri-State appeared at the hearings on

September 7 and November 2, 2017, and submitted documents at those hearings. Tri-State had

multiple opportunities to raise its concerns about the Ordinance. The Village not only provided

notice and an opportunity to be heard, but Tri-State actively participated in the process. The

Village offered more process than the Due Process Clause requires. See, e.g., Pro-Eco, Inc. v.

Bd. of Comm’rs of Jay Cty., Ind., 57 F.3d 505, 513 (7th Cir. 1995) (concluding the plaintiff was

afforded procedural due process when it attended a public hearing and was not denied an

opportunity to speak). Additionally, it is immaterial that the Village used procedures different

than the procedures set forth in its municipal code. See, e.g., River Park, 23 F.3d at 166 (“[T]he

Constitution does not require state and local governments to adhere to their procedural

promises.”). Therefore, the Court dismisses Tri-State’s procedural due process claim.3

II. Substantive Due Process (Count II)

Tri-State also claims that the Village violated its substantive due process rights because

the Village’s decision to pass the Ordinance was arbitrary and capricious. The Village argues

that there is no fundamental right at stake and the Ordinance has a rational basis because the

Village identified specific justifications for its enactment. “Intrusion upon a cognizable property

interest is a threshold prerequisite to a substantive due process claim.” Khan, 630 F3d at 535

(quoting Gen. Auto Serv. Station v. City of Chicago, 526 F.3d 991, 1002 (7th Cir. 2008)). As

discussed, Tri-State has failed to establish a property interest. And even if a property interest

exists, Tri-State’s substantive due process claim fails because it does not involve a fundamental

right and the Village had a reasonable basis for passing the Ordinance.

“[S]ubstantive due process is not a blanket protection against unjustifiable interference

with property. And it does not confer on federal courts a license to act as zoning boards of

appeals.” Frey Corp. v. City of Peoria, Ill., 735 F.3d 505, 508 (7th Cir. 2013) (quoting Gen.

Auto Serv. Station, 526 F.3d at 1000–01). “[T]he scope of substantive due process is very

limited.” Campos v. Cook Cty., 932 F.3d 972, 975 (7th Cir. 2019) (alteration in original)

(quoting Tun v. Whitticker, 398 F.3d 899, 902 (7th Cir. 2005). To state a substantive due

process claim, Tri-State must “demonstrate either that the ordinance infringes a fundamental

liberty interest or that the ordinance is arbitrary and unreasonable, having no substantial relation

3 In its Opposition to Defendants’ motion to dismiss, Tri-State argues for the first time that the Village’s

actions constitute a taking in violation of the Constitution. Tri-State’s argument on this issue is

underdeveloped, and as such the Court will not consider it. See Puffer v. Allstate Ins. Co., 675 F.3d 709,

718 (7th Cir. 2012) (holding that a party waives an argument if it is “underdeveloped, conclusory, or

unsupported by law”); TinleySparks, Inc. v. Vill. Of Tinley Park, 181 F. Supp. 3d 548, 561 (N.D. Ill.

2015) (same).

to the public health, safety, morals, or general welfare.” Greater Chicago Combine & Ctr., Inc.

v. City of Chicago, 431 F. 3d 1065, 1071 (7th Cir. 2005) (quoting Pro-Eco, 57 F.3d at 514).

“Substantive due process protects only the most egregious and outrageous governmental action.”

Campos, 932 F.3d at 975.

The Court previously questioned whether Tri-State could allege a fundamental right for

purposes of a substantive due process claim. Doc. 45 at 13 n.5. In the SAC, Tri-State again fails

to allege that the Village infringed on a fundamental right, and the Court cannot discern any

fundamental right at stake here. See Mid-Am. Waste Sys., Inc. v. City of Gary, Ind., 49 F.3d 286,

291 (7th Cir. 1995) (“Depositing garbage in landfills is not exactly a fundamental right, either . .

. A claim that the Constitution protects this industry from public control—even when the landfill

is public property—would bring nothing but belly laughs.”); see also Pro-Eco, 57 F.3d at 514

(concluding the plaintiff failed to plead a fundamental liberty interest in its challenge to an

ordinance that prevented it from building a landfill in the county). Moreover, “[c]orporations do

not have fundamental rights[.]” Pro-Eco, 57 F.3d at 514 (quoting Mid-Am. Waste Sys, 49 F.3d at

291).

Additionally, Tri-State cannot adequately allege that the Ordinance is arbitrary and

unreasonable. “[G]overnmental action passes the rational basis test if a sound reason may be

hypothesized.” Greater Chicago, 431 F.3d at 1071–72 (quoting Pro-Eco, 57 F.3d at 514). In

previously evaluating Tri-State’s equal protection claim, the Court identified rational bases for

the Village’s actions, including that the Village could have had different priorities for waste

facilities than it did when it entered the settlement agreement with Tri-State in 2002. Doc. 45 at

15. Additionally, the Village could have thought the Ordinance would positively impact the

local economy. Because there are potential sound reasons for the Village’s decision to pass the

Ordinance, Tri-State’s substantive due process claim also fails.

Tri-State has failed to state claims under the Due Process Clause. Because the Court

already provided Tri-State an opportunity to remedy its FAC and Tri-State’s response to the

present motion to dismiss failed to address any of the deficiencies identified in the Court’s prior

Opinion and Order, the Court dismisses Tri-State’s due process claims with prejudice.

CONCLUSION

For the foregoing reasons, the Court grants Defendants’ motion to dismiss [57]. The

Court dismisses Counts I and II with prejudice.

yi

Dated: January 28, 2020 ey

SARA L. ELLIS

United States District Judge

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