-19-
reason. Taking the occurrence of the meeting as fact, as we must,
we still cannot conceive of any scenario in which the meeting
reasonably would have prevented plaintiffs from suing on time.
Although plaintiffs do not tell us when the meeting took place, in
the end, it does not matter. Suppose the meeting took place
following plaintiffs’ receipt of the “welcome” letter, but in the
days prior to the enforcement of the ordinances (e.g., requiring
earlier closing times and forbidding expansion), then, as soon as
the ordinances were enforced, plaintiffs were on notice that
Sherwin had lied when he said “the City had no intention of
interfering with their business.” Alternatively, if the meeting
occurred after the enforcement of the ordinances, then their
proffered reliance on Sherwin’s statement that he would not
interfere with their business would be entirely unreasonable. It
had already happened. Either way, as soon as the ordinances were
enforced against All Stars (which we understand to be a matter of
days, not months, after the annexation), any obstacles that
defendants had put in the way of plaintiffs timely filing suit had
cleared. From that time on, plaintiffs still had nearly two years
remaining before time had run on their claims. Thus, any reprieve
that plaintiffs could claim by application of equitable estoppel
would be, at best, a matter of days, and not the approximately five
months necessary to rescue their claims.

Proceeding then to equitable tolling, this doctrine, unlike


-13-
Q’ Brien, the Supreme Court, relying on “settled principles,” held
that legislative motive could not be a basis for declaring
legislation unconstitutional:

It is a familiar principle of constitutional
law that this Court will not strike down an
otherwise constitutional statute on the

basis of an alleged illicit legislative
motive. As the Court long ago stated: ‘The
decisions of this court from the beginning
lend no support whatever to the assumption
that the judiciary may restrain the exercise
of lawful power on the assumption that a
wrongful purpose or motive has caused the
Power to be exerted.’ McCray v. United States,
195 U.S. 27, 56, 24 S.Ct. 769, 776, 49 L.Ed. 78
(1904).

391 U.S. 367, 383, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968).
This principle was later applied by the Seventh Circuit in

DiMa_ Co v. Town of Hallie, where an adult bookstore owner
claimed that a municipal ordinance regulating the book store’s use
was unconstitutional because evidence showed that the law was
passed out of a desire to close down the bookstore. See 185 F.3d
823, 828 (7th Cir. 1999). Citing O’Brien, the Seventh Circuit had
no trouble turning down plaintiff’s argument:

We can reject DiMa’s first argument rather

easily .. . [A]ttacking the ordinance

because it was enacted by persons with

“impure hearts” gets DiMa nowhere. The

actual motives of those who enacted the

ordinance are irrelevant to our First
Amendment analysis...

* * *

{W]e do not ask whether the motives of
the Board can be justified . . . but



-23-
pleadings pursuant to Fed.R.Civ.P. 12(c) is entered in favor of

defendants and against plaintiffs.

DATE: December 29, 2003

ENTER: Fi COu_l,
q

John rady, United States District



-4.
and building code matters which are now

administered locally rather than from the
remote county offices in downtown Chicago.

* * *

All business licenses, permits and liquor

licenses will be issued through the City of

Northlake. You are requested to make

application for your liquor license and

business license as soon as possible.’
Prior to its annexation into Northlake, All Stars was located in an
I-3 General Industrial District of unincorporated Cook County, and
was subject to Cook County’s jurisdiction regarding liquor licenses
and adult use zoning. Upon annexation, however, All Stars’ site
was zoned in Northlake under an R-1 single family residential
classification (Northlake’s most restrictive), even though the site
is surrounded by property zoned as an I-2 Heavy Industrial District
area. All Stars also became subject to the laws of Northlake,
including its zoning and liquor license ordinances.

Plaintiffs allege two injuries from the annexation. First,
under Northlake’s zoning ordinances, All Stars is prohibited from
structurally altering or improving its current facilities, thereby
thwarting All Stars’ remodeling and expansion plans. Second,

Northlake’s liquor licensing ordinance, which is more restrictive

than Cook County’s, required All Stars to cut back its hours of

*The complaint does not allege an exact date on which
Northlake annexed All Stars’ property, only that it occurred
sometime in August 2000. We can infer from the complaint,
however, that it was prior to August 25th.



-20-
equitable estoppel, does not assume blameworthy conduct by the

defendant. Cada v. Baxter Healthcare Corp, 920 F.2d 446, 451 (7th

Cir. 1990). Rather, equitable tolling applies when the plaintiff
knows he has been injured, but “despite the exercise of all due
diligence he is unable to obtain vital information bearing on the
existence of his claim.” Shropshear, 275 F.3d at 595. As
explained above, no later than August 2000, plaintiffs had
knowledge of, or immediate access to all “vital information,”
Matters of public record, which were necessary to state their
claims. Accordingly, this doctrine does not help plaintiffs
either.

Finally, plaintiffs argue that because the ordinance
annexing All Stars’ property is alleged to be unconstitutional from
its inception, plaintiffs’ claims are not subject to any
limitations period. If the annexation ordinance was
unconstitutional, and therefore void from the onset, it could not
have triggered the running of any statute of limitations, or so the
argument goes. Although plaintiffs cite several cases, not one
supports their novel theory. Plaintiffs’ best case, Graf v. Vill.
of Lake Bluff, only stands for the proposition that lack of
contiguity is the sole exception to the applicability of a statute
of limitations to a state claim challenging an annexation; thus,
when lack of contiguity exists, the annexation is void ab initio

and may be challenged at any time. See 321 I1l.App.3d 897, 748


-22-
And because complaints need not anticipate or plead around

affirmative defenses (see Gomez, 446 U.S. at 640), we cannot hold

that plaintiffs’ action fails to state a claim on which relief may
be granted solely because it was untimely. See Leavell v. Kieffer,
189 F.3d 492, 494-95 (7th Cir. 1999).

Therefore, since defendants had the opportunity for response
that Rule 12(c) requires, and our holding does not depend on any
documents beyond the pleadings, we grant defendants a judgment on
the pleadings pursuant to Rule 12(c) on the grounds that the
complaint, in its entirety, is time-barred. See id. Ease of
discussion allowed us to save this issue until the end because it
is merely a technical procedural point with no effect on the
outcome of the case. A motion under Rule 12(c) is reviewed under
the same standard as a motion to dismiss pursuant to Rule 12(b) (6).

See Northern Indiana Gun & Outdoor Shows, Inc. v. City of South

Bend, 163 F.3d 449, 452 (7th Cir. 1998) (“Like Rule 12(b) motions,
courts grant a Rule 12(c) motion only if it appears beyond doubt
that the plaintiff cannot prove any facts that would support his
claim for relief.”) (citation and internal quotations omitted.)
CONCLUSION
Accordingly, for the foregoing reasons, defendants’ motions
to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) are

denied because that Rule is inapplicable. Instead, judgment on the


-17-
period. The Seventh Circuit has explained the two doctrines as
follows:

A defendant who through misleading
representations or otherwise prevents the
plaintiff from suing in time will be
estopped to plead the statute of
limitations. This is equitable estoppel.
But even when the defendant is faultless,
if plaintiff, because of disability,
irremediable lack of information, or other
circumstance beyond his control just cannot
reasonably be expected to sue in time, the
statute of limitations will be tolled until
he is able through the exercise of proper
diligence to file his suit. This is
equitable tolling.

Miller and AMF v. Runyon, 77 F.3d 189, 191 (7th Cir. 1995). We

address equitable estoppel first. That doctrine applies where the
defendant takes active, affirmative steps to prevent the plaintiff
from timely bringing suit. See Shropshear v. Corp. Counsel of the
City of Chicago, 275 F.3d 593, 595 (7th Cir. 2001). It presupposes
that the plaintiff has discovered, or should have discovered the
injury, but “denotes efforts by the defendant, above and beyond the
wrongdoing upon which the plaintiff’s claim is founded, to prevent,
by fraud or deception, the plaintiff from suing in time.” Id.
Plaintiffs proffer two acts by defendants which allegedly
prevented them from timely asserting their claims. First,
plaintiffs argue that the August 25, 2000 “welcome” letter was
misleading because it espoused the “benefits” of All Stars’
annexation into Northlake and omitted the true intent of the

annexation - to put All Stars out of business. We need not tarry


-9-
hypothesize a set of facts that would entitle a plaintiff to relief
consistent with the complaint’s allegations, dismissal of the
plaintiff’s claims under Rule 12(b)(6) is not warranted. See

Graehling v. Village of Lombard, 58 |F.3d 295, 297 (7th Cir. 1995).

Defendants meet each of th ‘twenty-three counts in the
complaint with multiple challenges !including “failure to state a
claim,” statute of limitations, standing, and immunity arguments.
We take up defendants’ statute of limitations argument first,
because, if accepted, it disposes of the complaint in its entirety.

The parties do not dispute that section 1983 claims arising
in Illinois are governed by a two-year limitations period. See
Licari v. City of Chicago, 298 F.3d 664, 667-68 (7th Cir. 2002).°
Our first task, then, is to determine when the statute of
limitations clock began to run, or, when plaintiffs’ claims
accrued. Defendants argue that plaintiffs’ claims accrued on
August 7, 2000, the date they proffer as the date of enactment of

the All Stars annexation ordinance, or at the latest, on August 25,

5Section 1983 does not provide its own statute of
limitations. However, in Wilson v. Garcia, the Supreme Court
filled that legislative gap by holding that section 1983 claims
should be treated as personal injury claims for statute of
limitations purposes. See 471 U.S. 261, 276-80, 105 S.Ct. 1938,
85 L.Ed.2d 254 (1985). Thus, we apply to plaintiffs’ claims the
personal injury statute of limitations in the state where the
alleged injury occurred. See id. Because plaintiffs’ alleged
injury occurred in Illinois, its two-year personal injury statute
of limitations governs this case. See 735 ILCS 5/13-202.



-6-
scheme to shut down All Stars, plaintiffs refer to an article
authored by Sherwin and published in a September 2002 Northlake
newspaper. The article, titled “Gentlémen’s Club,” states:

Originally, the propertiyjon| which the
gentlemen’s club is lodated|was in
unincorporated Cook County. The County’s
zoning had allowed th lub to flourish.
Campaign donations we adi Oo the Cook
County Sheriff. City /df|Nofthlake

officials had heard rumors -hat this club
was planning to expand |and that the County
was going to allow this to happen. To
prevent this, we took aggressive steps

to surround the club with land incorporated
in the City of Northlake through
annexations. If Northlake could surround
the club, it could then be forcibly annexed
into the City and the expansion plans would
be halted as the property would be a
“non-conforming” use. We were successful

in doing so, and forcibly annexed this
property in 2001. However, one of the

other property owners who was annexed brought
a lawsuit against the City protesting this
action. This litigation was finally settled
on August 23, 2002, allowing the City
Council to take action against this club. At
the August 19th City Council meeting, the
City Council directed the City’s attorney to
draft an ordinance ending the club’s
non-conforming use within 12 months, which
means that the club must cease operating
within that time. This cancer of corruption
must be cut out of our community. I fully
expect the City Council to approve this
action at the September meeting.

Michals read this article sometime in September 2002.3

3Although the article states that Northlake “forcibly
annexed [All Stars’] property in 2001,” we take as true the
complaint’s allegation (re-affirmed in plaintiffs’ response
brief) that the annexation occurred in August 2000.


-5-
operation. This restriction has “severely reduced” the revenue
received by All Stars.

Lastly, in what plaintiffs |
to eliminate . . . All Stars," |
Sherwin, have “recently recommende

would render All Stars subject

requiring that All Stars terminate | t ess at its current location
and which leaves as the only possible location for All Stars to
relocate, the... 1-3 zoning district ....” However, the I-3
zoning district is, according to plaintiffs, legally unavailable.
Within 1000 feet of each parcel in the I-3 District sits a public
nursing home and/or a public park and/or a cemetery, and state law
prohibits the operation of adult entertainment facilities within
1000 feet of such properties. In addition, plaintiffs allege that
the I-3 District is unsuitable for adult uses because the area is
accessible only by a single private road which is crowded 24 hours
a day with semi-tractor trucks.

In support of its overriding allegation that Northlake’s
legislative measures (the three ordinances enacted in February
1998, the ordinances annexing the Norkol and Inland properties in
January 2000, the ordinance annexing All Stars’ property in August
2000, the resulting application of Northlake’s more stringent

zoning and liquor license ordinances, and finally, the

“recommended” amortization ordinance) were enacted as part of a


-18-

long here. Drawing all inferences in plaintiffs’ favor, as we
must, we still find nothing in this letter that reasonably could be
construed as containing any misrepresentations which would prevent
plaintiffs from suing on time. Quite the contrary, the letter
served as a clear warning to plaintiffs that they were then subject
to the laws of Northlake, the same laws which they now contest.

Turning to plaintiffs’ second proof, “[p]laintiffs would
testify that after they learned that the property had been annexed
into the City of Northlake, they, along with counsel, met with
Defendant Sherwin (The Mayor of Northlake), and he assured the
Plaintiffs that the City had no intention of interfering with their
business.” (Pls,’ Resp., p. 11.) In rebuttal, defendants raise
the procedural argument that because plaintiffs’ assertion is not
contained in the complaint, and raised for the first time in its
response brief, it should be disregarded under the rule that “the
complaint may not be amended by the briefs in opposition to a

motion to dismiss.” Car Carriers, Inc. v. Ford Motor Co., 745 F.2d

1101, 1107 (7th Cir. 1984). The rule, while alive and well, is
inapt. Plaintiffs are not amending. Instead, they are merely
responding to a statute of limitations argument, an affirmative
defense which need not be pre-emptively responded to in a
complaint. See Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920,
64 L.Ed.2d 572 (1980).

Plaintiffs’ second proffer, however, fails for a different


-8-
the Fifth and Fourteenth Amendments’ equal protection and due
process clauses (Counts XVIII and XIX), and constitutes “special
legislation” in violation of the Fourteenth Amendment’s equal
protection and due process clauses (Counts XX and XXI). All
claims, except the “unequal taxation” charge, are pled in two
counts, with the first seeking a declaratory judgment and the
second, an injunction (the “unequal taxation” claim seeks only
declaratory relief). Defendants now move to dismiss the complaint
in its entirety pursuant to Rule 12(b) (6).‘
STANDARD OF _ REVIEW
In ruling on a motion to dismiss under Rule 12(b) (6), the
Court must assume the truth of all facts alleged in the pleadings,
construe all allegations liberally, and view them in the light most
favorable to the plaintiff. See Hickey v. O’Banhon, 287 F.3d 656
657-58 (7th Cir. 2002). Dismissal is properly granted only if it
is clear that no set of facts which the plaintiff could prove
consistent with the pleadings would entitle the plaintiff to

relief. See id. at 657. In other words, if it is possible to

‘Before proceeding ahead, we note (only incidentally, in
light of our ruling) that plaintiffs’ equal protection and due
process claims, to the extent they seek relief under the Fifth
Amendment, are misplaced. That Amendment does guarantee due
process and equal protection rights, but only against
encroachment by federal officials. See Bolling v. Sharpe, 347
U.S. 497, 499, 74 S.Ct. 693, 98 L.Ed. 884 (1954). Because this
suit alleges constitutional deprivations by state officials,
relief should have been sought solely under the Fourteenth
Amendment.



03-0692.031-TCM December 29, 2003

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ENTERTAINMENT, INC. d/b/a ALL
STARS and MICHAEL MICHALS,

Plaintiffs,

v.
No. 03 C 0692
CITY OF NORTHLAKE, an Illinois
Municipal Corporation, and JEFFREY
SHERWIN, Mayor of Northlake, in
his Official and Individual
Capacities,

Defendants.

JUDGMENT ORDER
For the reasons explained in this court’s memorandum
opinion of this date, judgment on the pleadings is hereby entered
in favor of defendants CITY OF NORTHLAKE and JEFFREY SHERWIN, and
against plaintiffs ENTERTAINMENT INC. d/b/a ALL STARS and MICHAEL

MICHALS.

DATE: December 29, 2003

PR ULhy

kA

Johfi F.] Grady, United States District ge ~

ENTER:



_ >

Minute Order Form (06/97)

United States District Court, Northern District of IMinois

Mamet assigned tae John F. Grady Stn ie Ot

CASE NUMBER 03 C 692 _ DATE 12/29/2003
CASE Entertainment, Inc., et al vs. City of Northlake, et al
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

Fed.R.Civ.P. 12(c) is entered in favor of defendants and against plaintiffs.

(ii)

[For further detail see order attached to the original minute order.)

MOTION:

DOCKET ENTRY:

ql) o Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) Oo Answer brief to motion due___. Reply to answer briefdue____-

(4) Oo Ruling/Hearingon__ssetfor_— saat

(5) Oo Status hearing[held/continued to] [set for/re-set for]on__——ssetfor at

(6) oO Pretrial conference[held/continued to] [set for/re-set for]on__ set for at.

{7) Oo Trial[set for/re-set for] on at

(8) o [Bench/Jury trial] [Hearing] held/continuedto__—_at

(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
QFRCP4(m) O Local Rule 41.1 OCFRCP41(a\(1) OO FRCP41(a){2).

do) [Other docket entry] Defendants’ motions to dismiss the complaint pursuant to Fed.

R.Civ.P. 12(b)(6) are denied because that Rule is inapplicable. Instead, judgment on the pleadings pursuant to

‘No notices required, advised in open court. Document
No notices required. = me often Number
x | Notices mailed by judge's staff. DEC 3 0 2003

‘Notified counsel by telephone. du docteked
Docketing to mail notices.
Mail AO 450 form. dockaing D is v
Copy to judge/magistrate judge. ui

courtroom Ck ig 62 330 €u date mailed notice

scons _

Seeetatl ring dp



-1l-

Thus, plaintiffs’ injury occurred in August 2000.°
Of course, as plaintiffs point out, that is not the end of
it - under the discovery rule, we must also consider when
plaintiffs became aware of their injury. An exception to general
accrual principles, the discovery rule is read into state statutes
of limitation in federal question cases, and “postpones the
beginning of the limitations period of a federal claim from the

date the party is injured to the date when the party discovers or

should have discovered the injury, exercising reasonable
diligence.” Cathedral of Joy, 22 F.3d at 717. For section 1983

claims, then, the discovery rule will delay accrual, if at all,

until “the plaintiff knows or should have known that his

‘Plaintiffs also allege injury from Sherwin’s
“recommendation” of an amortization ordinance, conduct which may
have occurred as late as August or September 2002. However, it
is by now axiomatic that a constitutional challenge to an
ordinance which does not yet exist, even if anticipated, does not
raise a present case or controversy under Article III of the
Constitution. See Los Angeles v. Lyons, 461 U.S. 95, 101, 103
S.Ct. 1660, 75 L.Ed.2d 675 (1983); Tobin v. Illinois State Bd. of
Elections, 268 F.3d 517, 527 (7th Cir. 2001). Thus, because the
allegation based on the “recommended” ordinance is not ripe for
review, it cannot support an actionable injury in 2002, nor can
it somehow extend plaintiffs’ concrete injury sustained in August
2000.

On a related note, even if plaintiffs had alleged some lag
time (they do not) between All Stars’ subjection to Northlake’s
laws and Northlake’s enforcement of those laws against All Stars,
their injury would still be fixed at the time that the allegedly
adverse governmental decision was made, in August 2000, and not
at some later time when the effects (here, reduced revenues from
earlier closing hours and thwarted expansion plans) of that
decision were felt. See Cathedral of Joy, 22 F.3d 713, 719; see

also Delaware State College v. Ricks, 449 U.S. 250, 258, 101
S.Ct. 498, 66 L.Ed.2d 431 (1980).



-10-

2000, when plaintiffs received notice of the annexation. Under
either proposed accrual date, plaintiffs’ January 30, 2003
complaint would be untimely by at least five months. Plaintiffs
counter that their claims did not accrue until at least September
2002, when Michals read the Northlake newspaper article containing
Sherwin’s stated intent to shut down All Stars. If plaintiffs are
correct, then their claims are timely.

Federal law governs the accrual of section 1983 claims.
See Wilson v. Giesen, 956 F.2d 738, 740 (7th Cir. 1992). And under
federal law, “a claim accrues when all its elements have come into
existence.” Cathedral of Joy v. Vill. of Hazel Crest, 22 F.3d 713,
717 «(7th Cir. 1994). More specific to this case, since “every
constitutional tort actionable under § 1983 is treated as a
personal injury, . ... the claim [accrues] when the injury is
inflicted.” Diaz v. Shallbetter, 984 F.2d 850, 855 (7th Cir.
1993).

Here, plaintiffs’ injury occurred when All Stars’ property
was annexed, in August 2000, because it was then that plaintiffs
became subject to Northlake’s more stringent zoning and liquor
license ordinances. Plaintiffs allege no subsequent events that
changed the terms of the annexation or the newly-applicable
ordinances, or their applicability to plaintiffs. Put another way,
if the challenged ordinances and annexations are unconstitutional

now, then they were just as unconstitutional in August 2000.


-7-

On January 30, 2003, plaintiffs filed a twenty-three count

42 U.S.C. § 1983 complaint against Northlake and Sherwin alleging
myriad constitutional violations: Northlake’s legislative “scheme”
encroaches on All Stars’ First Amendment rights of free speech
(Counts I and II), constitutes an unconstitutional prior restraint
on All Stars’ exercise of free speech, also in violation of the
First Amendment (Counts IX and X), violates the Fifth and
Fourteenth Amendments’ equal protection clauses (Counts III and
IV), as well as those Amendments’ substantive (Counts V and VI) and
procedural (Counts VII and VIII) due process requirements;
Northlake’s granting Norkol and Inland more favorable tax treatment
than that offered All Stars constitutes “unequal taxation” in
violation of the Fifth and Fourteenth Amendments’ equal protection
and due process clauses (Count XI); Northlake’s adult use
ordinance, on its face, is both arbitrary and capricious (Counts
XII and XIII) and void for vagueness (Counts XXII and XXIII) in
violation of the Fourteenth Amendment’s due process clause and, as
applied, denies plaintiffs’ substantive and procedural due process
rights under that clause (Counts XIV and XV); Northlake’s enactment
of the All Stars annexation ordinance was ultra vires, and the
ordinance violates plaintiffs’ Fourteenth Amendment equal
protection and due process rights (Counts XVI and XVII); and
finally, Northlake’s enactment of the I-3 ordinance was ultra

vires, the ordinance is arbitrary and capricious in violation of


-21-
N.E.2d 801, 809 (2d Dist. 2001), rev’d on other grounds, 795 N.E.2d
281 (2003). Plaintiffs’ complaint alleges contiguity, thus Graf is
way off the mark. Plainly, there is no authority for plaintiffs’
position that the applicable statute of limitations somehow
vanishes when an annexation is attacked as void under section 1983.

In the end, we return to the inescapable fact that
ultimately dooms plaintiffs’ claims - they had in their possession
on August 25, 2000 sufficient facts to put them on notice that
their rights may have been adversely affected such as to warrant
further investigation into whether they were entitled to redress.
Under such circumstances, the court will not extend defendants
risk of litigation until plaintiffs decide to avail themselves of
that opportunity. Accordingly, because all of plaintiffs’ claims
accrued in August 2000, they are now time-barred under the two-year
statute of limitations applicable to section 1983 claims arising in
Illinois.

Since the statute of limitations arguments dispose of the
complaint in its entirety, we do not reach defendants’ other
arguments. Yet one housekeeping matter remains. Although
defendants moved to dismiss (and plaintiffs responded) pursuant to
Rule 12(b) (6), because our decision rests only on statute of
limitations grounds, we really do not have a Rule 12(b) (6) issue.
Pleading the statute of limitations is an affirmative defense, and

as such, may be waived (or forfeited if not pled by defendants) .


-3-

Next, in January 2000, Northlake began annexing property in
unincorporated Cook County that stood between its own borders and
the property underlying All Stars. First, on January 3, Northlake
adopted an ordinance which authorized Sherwin and the Northlake
City Clerk to execute an annexation agreement between Northlake and
Norkol, Inc. The ensuing annexation agreement provided Norkol with
rebates on the various taxes it would owe Northlake. That same
month, Northlake enacted an ordinance forcibly annexing the
property underlying Inland Paperboard and Packaging, Inc. Inland
initially resisted the annex, but the dispute was eventually
settled, with Inland receiving a tax incentive package similar to
that given Norkol. The annexation of the Norkol and Inland
properties brought Northlake’s borders into contiguity with All
Stars’ property line.

Then, in August 2000, Northlake passed an ordinance which
forcibly annexed the property underlying All Stars. Unlike Norkol,
and eventually Inland, All Stars was not offered a tax incentive
package. Indeed, plaintiffs were unaware of the annexation until
they received a letter from Sherwin, dated August 25, 2000,
welcoming All Stars to Northlake. The letter reads, in relevant
part:

Welcome to the City of Northlake. Oh
August 21, 2000 the City Council approved
the annexation ordinance which included
your property within the corporate limits

of the City. Among the benefits .. . are
police protection, licensing, and zoning



-14-

rather whether the ordinance itself can
be so justified.

Id. at 828-29 (citations omitted).
Thus, although plaintiffs may not have “discovered”

defendants’ motives until September 2002, that discovery, ipso
jure, adds nothing to their injury that had been ripe for
dab He

i
Pol Hpae
adjudication two years earlier. |!

Really, we have no discovery rule issue at all, because
there was nothing essential to discover - all of the facts
necessary for plaintiffs to proceed with their present complaint
were known to them, or within their immediate reach, as of August
25, 2000. Instead of a failure to discover the injury, it appears
that we have a failure to recognize that the injury might be
actionable. Yet where, as here, plaintiffs were aware of the facts
necessary to make a claim, a lack of comprehension of the legal
significance of those facts (or, perhaps more aptly, a lack of
diligence in seeking a lawyer’s opinion) will not delay the

running of the limitations clock.’

7This point was made by the Supreme Court in United States
yv. Kubrick:

We are unconvinced that for statute of
limitations purposes a plaintiff’s ignorance

of his legal rights and his ignorance of the
fact of his injury or its cause should receive
identical treatment. That he has been injured
in fact may be unknown or unknowable until the
injury manifests itself; and the facts about
causation may be in the control of the putative
defendant, unavailable to the plaintiff or at



-16-
unreasonable to require or even permit him to sue separately over
every incident of the defendant’s unlawful conduct.”). The
exception, however, does not apply to cases in which “the harm is
definite and discoverable, and nothing prevented the plaintiff from
coming forward to seek redress.” Wilson, 956 F.2d at 743.

This exception gets plaintiffs towtiere. Application of the
doctrine requires, in the first ingta ce, that a plaintiff's
complaint be timely as to at least one alleged unlawful act. See
Malhotra v. t & , 885 F.2d 1305, 1310 (7th Cir. 1989)
The doctrine will not resuscitate claims all of which are otherwise
time-barred; it merely provides a practical solution for a
plaintiff who, though filing part of his claim in a timely manner,
could not have been expected to file separate suits on all of his
prior claims. Here, plaintiffs must make some allegation of
actionable conduct (i.e., not just a recommended ordinance)
occurring after January 30, 2001, two years prior to the date of
their complaint. Plaintiffs have not (nor could they have)
satisfied this requirement.

Plaintiffs’ next two theories - equitable estoppel and
equitable tolling - add a new wrinkle to our analysis. Unlike the
discovery rule and continuing violation doctrines, which each
affect when the limitations period commences, equitable estoppel
and equitable tolling generally come into play only after a claim

has accrued, and suspend, or “toll,” the running of the limitations


-2-
exhibits, are taken as true for purposes of this motion.’ All
Stars describes itself as a “Gentleman’s Club, which provides adult
patrons with partially nude expressive or erotic dancing
performances, beverages and alcoholic beverages.” Michals is All
Stars’ president. Since 1995, All Stars has operated from a
21,000-plus square foot nightclub located on an approximately 4.9
acre site which it holds under a lease. All Stars had planned to
both remodel its nightclub and to develop an unimproved 2.5 acres
on the leased site for expansion.

Plaintiffs contend that Sherwin and other Northlake elected
officials developed and implemented a legislative “scheme” -
through rezoning, annexation and amortization - to regulate All
Stars out of business. As a first step, on February 9, 1998,
Northlake enacted three ordinances. The first ordinance created
and defined a new “I-3 Special Industrial District,” in which adult
uses, among others, were permitted (“the I-3 ordinance”). The
second ordinance converted a portion of then-existing “I-2 General
Industrial District” property to the new I-3 designation (“the I-2
ordinance”). A third ordinance defined adult uses and required
that such uses be restricted to the area designated as the I-3

district (“the adult use ordinance”).

'We may consider materials attached to the complaint without
converting defendants’ motions into summary judgment pleadings.

See Doe v. First Nat’l Bank of Chicago, 865 F.2d 864, 873 (7th
Cir. 1989).


03-0692.031-TCM December 29, 2003

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ENTERTAINMENT, INC. d/b/a ALL
STARS and MICHAEL MICHALS,

Plaintiffs,

v.
No. 03 C 0692
CITY OF NORTHLAKE, an Illinois
Municipal Corporation, and JEFFREY
SHERWIN, Mayor of Northlake, in
his Official and Individual

Capacities,

Defendants.

MEMORANDUM OPINION

Before the court are defendants’ motions to dismiss
pursuant to Federal Rule of Civil Procedure 12(b) (6). For the
reasons set forth below, defendants’ motions are denied.

BACKGROUND

Entertainment, Inc., a nightclub d/b/a All Stars (“All
Stars”), and its owner, Michael Michals (together, “plaintiffs”),
have brought this 42 U.S.C. § 1983 action against the City of
Northlake, Illinois (“Northlake”) and its mayor, Jeffrey Sherwin
(together, “defendants”), alleging that Northlake’s annexation of
All Stars’ property, and the resulting subjection of All Stars to
Northlake’s zoning and liquor license ordinances, violates
plaintiffs’ First, Fifth and Fourteenth Amendment rights.

The following facts, drawn from the complaint and attached

PEC 3 9 2099



-12-
constitutional rights were violated.” See Licari, 298 F.3d at 668
(citing Wilson, 956 F.2d at 740).

Our discussion here can be brief. Plaintiffs themselves
allege that, by August 25, 2000, they knew that their property had
been annexed and that their business had become subject to the laws
of Northlake. Further, the exercise of “reasonable diligence,” by
any measure, would have revealed to plaintiffs the specifics of
the Northlake ordinances, which were publicly available. It
appears, therefore, that the discovery rule only gets plaintiffs as
far as August 25, 2000.

Plaintiffs, however, contend that they still could not have
known of their claims until September 2002 because it was not until
then that they realized the challenged annexations and ordinances
were “all part of a premeditated scheme to put All Stars out of
business,” or put simply, that Northlake’s actions were “wrongfully
caused.” (Pls.’ Resp., p. 5.)

Plaintiffs’ position might have some merit if a culpable
state of mind was a necessary element to section 1983 claims
challenging the constitutionality of local government legislation.
Were that the case, then prior to their September 2002 “discovery,”
it is at least arguable that plaintiffs could not have been charged
with full knowledge of their injury. But it is clear that the
motives of a legislator, however wrongful, are of no moment to the

constitutionality of a legislative act. In United States v.



-15-

Beyond the discovery rule, plaintiffs advance four
additional theories as to why the statute of limitations has not
run on their claims. We address each in turn. First, plaintiffs
maintain that, under the “continuing violation doctrine,” their
claims accrued no earlier than September 2002. This doctrine, like
the discovery rule, is an exception to the general rules governing
accrual and allows a plaintiff to seek relief for otherwise time-
barred acts by linking them with an act that occurred within the
limitations period. See Selan_v. Kiley, 969 F.2d 560, 564 (7th
Cir, 1992). Under the doctrine, all claims will be deemed to have
accrued when the last act accrues. The rationale for this rule is
that in some cases, it is unreasonable to require a plaintiff to
sue separately for each act that is part and parcel of a

“continuing wrong.” See Heard v. Sheahan, 253 F.3d 316, 319 (7th

Cir. 2001) (“A violation is called ‘continuing,’ signifying that a
plaintiff can reach back to its beginning even if that beginning

lies outside its statutory limitations period, when it would be

least very difficult to obtain. The prospect
is not so bleak for a plaintiff in possession
of the critical facts that he has been hurt
and who has inflicted the injury. He is no
longer at the mercy of the latter. There are
others who can tell him if he has been
wronged, and he need only ask.

444 U.S. 111, 122, 100 S.Ct. 352, 62 L.Ed.2d 259 (1979).