Opinion
IP 01-0058-C-T/K
March 7, 2002
ENTRY ON DEFENDANTS' MOTION TO DISMISS,
This Entry is a matter of public record and is being made available to the public on the court's web site, but it is not intended for commercial publication either electronically or in paper form. Although the ruling or rulings in this Entry will govern the case presently before this court, this court does not consider the discussion to be sufficiently novel or instructive to justify commercial publication of the Entry or the subsequent citation of it in other proceedings.
Defendants filed a Motion to Dismiss. Plaintiff opposes the Motion. This court now GRANTS the Motion in part and DENIES the Motion in part.
I. Factual Background
According to the facts of the complaint, Plaintiff, Ernest E. Stone, owns and operates E. Stone's Mobile Home Park in the Town of Hope, Bartholomew County, Indiana. Hope Utilities provides the water and sewer service for the trailer park. On September 8, 1987, the Town of Hope approved Stone's application for the installation of one single and nineteen double meters on Stone's trailer park. These meters allowed the residents of the trailer park to be billed individually for their water and sewer usage.
Before installation of the meters, Stone was required to obtain the necessary approvals from the Indiana State Board of Health. Stone also paid $6,975.00 in hook-up fees to Hope Utilities to install the meters.
On December 6, 1999, the Defendants sent Stone a letter indicating their desire to install a single meter in his trailer park. The letter indicated that Stone would be given sixty days notice prior to changing meters. Without any notice, in early June 2000, Hope Utilities installed a single meter on Stone's trailer park. Plaintiff then filed a complaint against the Town of Hope, Hope Utilities, the Hope Town Council, and John Glick, individually and as Hope Utilities Manager, alleging violations of the Due Process Clause and Equal Protection Clause, inverse condemnation, and breach of contract. On March 6, 2001, Defendants filed this Motion to Dismiss the Complaint. On May 30, Plaintiff amended his complaint. On June 25, Defendants filed a Motion to Dismiss the Amended Complaint which Plaintiff opposed on July 16. This court now rules as follows.
II. Standard
Under Rule 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss tests the sufficiency of the complaint, not the merits of the suit. See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990).
Rule 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief," that will "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Leatherman v. Tarrant County Narcotics Intelligence Coordination Unit, 507 U.S. 163, 168 (1993) (citation and quotations omitted). When considering a motion to dismiss, the complaint's allegations are accepted as true and viewed in the light most favorable to the plaintiff. See Hentosh v. Herman M. Finch Univ. of Health Sciences/The Chicago Med. Sch., 167 F.3d 1170, 1173 (7th Cir. 1999).
The court must review the plaintiff's statement of the claim to determine whether the plaintiff has set forth facts supporting a cause of action that would entitle them to relief.
Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Beam v. IPCO Corp., 838 F.2d 242, 244 (7th Cir. 1988). However, the court is not required to accept legal conclusions, inferences, or allegations unwarranted by the facts as presented in the pleadings. Mid-Am. Reg'l Bargaining Ass'n v. Will County Carpenters Dist. Council, 675 F.2d 881, 883 (7th Cir. 1982). The accepted standard for determining the sufficiency of the complaint does not permit dismissal "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley, 355 U.S. at 45-46. This is a technical determination not based upon the veracity of the facts alleged. The court cannot dismiss a complaint merely because it doubts that the plaintiff can prove the facts it alleges. Neitzke v. Williams, 490 U.S. 319, 327 (1989). Thus, a defendant's motion to dismiss can only be granted if the plaintiff has failed to allege sufficient facts to entitle the plaintiff to relief if the facts alleged are taken as true. "[I]f the plaintiff . . . pleads facts, and the facts show that he is entitled to no relief, the complaint should be dismissed. There would be no point in allowing such a lawsuit to go any further; its doom is foretold." Am. Nurses' Ass'n v. Illinois, 783 F.2d 716, 727 (7th Cir. 1986).
III. Due Process
A. Property Interest
Defendants first contend that the procedural due process claims against them must be dismissed because the complaint fails to assert a property interest that is recognized under the Fourteenth Amendment. Specifically, Defendants claim that the complaint alleges a loss of effort and money which is not a property right. Plaintiff counters that the property interest in question is an implied contract which arose when he payed money in hook-ups fees and obtained approval from the Town of Hope and the Indiana State Board of Health for his application for separately metered lots on his property. In response to this claim Defendants contend that not every breach of contract claim constitutes a denial of a property interest under the Fourteenth Amendment.
This motion presents the interesting question of what constitutes a property interest under the Fourteenth Amendment. The seminal case on this point is Goldberg v. Kelly, 397 U.S. 254, 262 n. 8 (1970), in which the Supreme Court ruled that welfare benefits were a property interest under the Fourteenth Amendment because "they are essential, fully deserved, and in no sense a form of charity." In order for there to be a property interest, the interest must be created by independent sources that "secure certain benefits and that support claims of entitlement to those benefits." Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). Although the Seventh Circuit has acknowledged that many contracts establish legitimate claims of entitlement, it has refused to hold that all contract rights are property rights. Mid-Am. Waste Sys., Inc. v. City of Gary, 49 F.3d 286, 290 (7th Cir. 1995). If a claim is an ordinary breach of contract claim, the "opportunity to litigate in the courts of [the state] . . . is all the process `due.'" Id. at 291. However, if a contract creates an entitlement by establishing firm rules such as "if X then Y" or "unless X then not-Y," then the Constitution requires "a procedure to find out whether the condition has been satisfied." Id. at 289.
In this case, there are facts which, although not specifically pleaded in the complaint, would allow the Plaintiff to recover. The Plaintiff mentions municipal regulations in his brief. If these regulations provided a list of criteria that when met entitled Plaintiff to separate water hook-ups, this would be the type of breach of contract claim protected by the Due Process Clause. Alternatively, these municipal regulations could provide that the City is allowed to alter existing water hook-ups only after certain conditions are met. This too would be enough to make out a claim under the Due Process Clause. If, however, there are no municipal regulations and the City's decision is entirely discretionary, it does not appear that Plaintiff could make out a claim. See S. Ill. Grain Inspection Serv., Inc. v. United States, 881 F. Supp. 1229, 1234 (S.D.Ind. 1995). Finally, if Plaintiff's claim is that the City could never alter the water hook-ups, this too does not appear to present a claim under the Due Process Clause. Because this court can conceive of facts that when accepted as true would allow the Plaintiff to prevail, Defendants' Motion to Dismiss on this issue must be denied.
B. Adequate State Law Remedies
Defendants also claim that Plaintiff's complaint must be dismissed under the principles announced in Parratt v. Taylor, 451 U.S. 527 (1981). In Parratt, the Supreme Court held that deprivations of property which result from random and unauthorized acts of state actors are not violations of procedural due process if there are meaningful post-deprivation remedies available. Defendants claim that because there are adequate state law remedies available to Plaintiff for his loss, he has no claim under the Due Process Clause. Plaintiff claims that the state law remedies are not adequate because they merely provide monetary damages.
Both Plaintiff and Defendants ignore the requirement in Parratt that the property deprivation result from "random and unauthorized" acts of a state actor. This phrase was coined in Parratt when discussing the loss of a prisoner's hobby kit by prison officials. The Supreme Court later looked at the predictable nature of a deprivation and whether additional safeguards could prevent similar losses in the future to determine that plaintiff's admission to a state hospital under a voluntary statutory procedure where the hospital should have known plaintiff was not competent to sign the admission forms presented a claim under the Due Process Clause. Zinermon v. Burch, 494 U.S. 113, 132-34 (1990).
In this case, Plaintiff's alleged loss of the individual water hook-ups is not the type of property deprivation that is random and unauthorized under Parratt. The Defendants sent Plaintiff a letter indicating that they would notify the Plaintiff before changing the hook-ups six months before they actually changed the water hook-ups (without the promised notification). This is not the type of situation where the loss was random, but rather it was planned. Furthermore, additional predeprivation procedural safeguards, such as a hearing, could prevent this problem in the future. Because the loss was not random and unauthorized, Defendants' Motion to Dismiss on this point must also be denied
C. Qualified Immunity
Defendants also claim that Glick is entitled to qualified immunity on this claim.
State actors are entitled to qualified immunity so long as their conduct did "not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). In Jenkins v. Keating, 147 F.3d 577, 584-85 (7th Cir. 1998), the Seventh Circuit emphasized the rationale behind the doctrine of qualified immunity, explaining that "[t]he necessity of protecting [officials] from undue interference with their duties and from potentially disabling threats of liability has given rise to the doctrine of qualified immunity. . . ." (internal quotations omitted). See also Harlow, 457 U.S. at 806; Tangwall v. Stuckey, 135 F.3d 510, 514 (7th Cir. 1998). Moreover, immunity acts as a safeguard to government and protects the public at large by "avoid[ing] excessive disruption of government and permitt[ing] the resolution of many insubstantial claims on summary judgment." Harlow, 457 U.S. at 818.
The court must first determine whether the plaintiff has alleged a deprivation of a constitutional right and then whether that right was clearly established. Townsend v. Vallas, 256 F.3d 661, 672 (7th Cir. 2001). To be clearly established, "the contours of a right . . . must be sufficiently clear that a reasonable official would understand that what he or she is doing violates that right." Id.
Burdens borne by the different parties regarding the issue of qualified immunity have been explained by the Supreme Court in Siegert v. Gilley, 500 U.S. 226, 232-35 (1991), and by the Seventh Circuit in Pounds v. Griepenstroh, 970 F.2d 338, 340 n. 2 (7th Cir. 1992), and Rakovich v. Wade, 850 F.2d 1180, 1209 (7th Cir. 1988) (en banc). The Seventh Circuit summed up the shifting burdens as follows:
Initially, the plaintiff must allege the violation of some constitutional right. Next, the plaintiff must attempt to demonstrate that the right was clearly established by referring the court to analogous cases that would have put the defendants on notice that their acts were illegal. Finally, the defendants must respond to the plaintiff's argument by proving, through prior decisions or otherwise, that they could reasonably have believed that their acts were constitutionally permissible . . . because the plaintiff's right was not so clearly established that the unlawfulness of their acts was apparent. . . .
Pounds, 970 F.2d at 340 n. 2.
In this case, although Plaintiff has sufficiently alleged a deprivation of a constitutional right, he has not established that the constitutional right was a clearly established right. The issue of what constitutes a property interest under the due process clause is a murky one at best. In Plaintiff's original complaint, although he discussed the amounts he expended in obtaining the separate hook-ups, he did not appear to be contending the quasi-contract theory on which he now relies. His theories appear to be evolving over time. Furthermore, even if a clear breach of contract claim is present in this case, as discussed above, the law is unclear on which breaches of contract subject Defendants to liability under the Due Process Clause. Plaintiff has presented this court with no cases (or laws, ordinances, or regulations for that matter) which demonstrate that he had a clearly established right to have his water hook-up arrangement remain permanently unaltered. Thus, Plaintiff has not shown that Glick reasonably should have known that his actions violated the Plaintiff's rights. Because it is not clear that Defendant Glick violated a clearly established constitutional right of the Plaintiff, Glick is entitled to qualified immunity on the procedural due process claim against him in his individual capacity.
IV. Equal Protection
A. Animus
Defendants first claim that the equal protection claim should be dismissed because Plaintiff has failed to allege that he was treated differently due to animus or malice.
Although Defendants are correct that, in order to establish a claim under the Equal Protection Clause, Plaintiff must show either an invidious class-based discrimination or a difference in treatment based on malice, Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000), Plaintiff's claim clearly alleges an equal protection claim and does not, at this stage, need to allege such particularity. The complaint contends that Defendants arbitrarily and capriciously metered Plaintiff's trailer park as one water hook-up while at the same time allowing other trailer park owners in the City of Hope to have separate meters for each lot. The Plaintiff further details that this is a violation of the Equal Protection Clause of the Fourteenth Amendment. All reasonable inferences are to be drawn in favor of the Plaintiff. Under this standard, the Plaintiff has provided Defendants with fair notice of his claims and the grounds upon which they are based.
B. Ripeness
Defendants also contend that Plaintiff's equal protection claim must be dismissed because it is not ripe. Defendants argue that this court should look beyond the label of the constitutional claim and determine that the ripeness analysis of Williamson County Regional Planning Community v. Hamilton Bank, 473 U.S. 172 (1985), applies to this claim. In Williamson County, the Supreme Court held that a property owner could not bring a takings claim until after having attempted to use the state law procedure to obtain compensation and being denied. In Indiana, this would appear to require bringing an inverse condemnation claim prior to being able to sue under the Takings Clause of the Fifth Amendment. This ripeness requirement applies to equal protection claims if they are merely takings claims in disguise. Forseth v. Village of Sussex, 199 F.3d 363, 370 (7th Cir. 2000). The issue is whether the plaintiff has a bona fide equal protection claim arising from land-use decisions. The Seventh Circuit has held that "[a]bsent a fundamental right or a suspect class, to demonstrate a viable equal protection claim in the land-use context, the plaintiff must demonstrate governmental action wholly impossible to relate to legitimate governmental objectives." Id. (quotations and citations omitted).
In this case, evaluating the complaint in the light most favorable to the Plaintiff, it does appears that he claims governmental action "wholly impossible to relate to legitimate governmental objectives." Plaintiff's complaint alleges that other trailer parks in the City of Hope were treated differently, that the Defendants' actions were arbitrary, capricious, and "not taken so as to advance a legitimate state interest," and that Defendants intentionally discriminated against Plaintiff. Although the complaint does not specifically contend animus, using the liberal notice pleading standard, it appears to imply animus and action not related to legitimate governmental objectives. Because at this stage of the proceeding this court cannot say that the Plaintiff has merely presented a takings claim in disguise, the ripeness requirement does not apply and Defendants' Motion to Dismiss on this point must be denied.
C. Qualified Immunity
Defendants also claim that Defendant Glick is entitled to qualified immunity on the equal protection claim. As discussed above, state actors are entitled to qualified immunity so long as their conduct did "not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). In this case, the equal protection law is fairly well defined and Plaintiff has arguably presented a claim under the Equal Protection Clause. The Seventh Circuit has clearly recognized "class of one" claims under the Equal Protection Clause based on individual animus. See Esmail v. McCrane, 53 F.3d 176, 179-80 (1995). As discussed above, Plaintiff has presented notice of his equal protection claim and the basis for that claim.
Because the constitutional rights Defendant Glick is accused of violating are clearly established and Plaintiff presents a cognizable claim under the Equal Protection Clause, Defendants' Motion to Dismiss based on qualified immunity is denied.
V. State Law Claims
Finally, Defendants ask this court to remand Plaintiff's state law claims because this court may decline to exercise supplemental jurisdiction if all of the claims over which it has original jurisdiction are dismissed. However, because this court only dismissed one of the claims over which it had original jurisdiction, this argument is inapplicable and unpersuasive.
VII. Conclusion
For the foregoing reasons, the Defendants' Motion to Dismiss is GRANTED in part and DENIED in part. The due process claim against Defendant Glick is dismissed.