and plaintiff agree that if this court dismisses Count III, then it should relinquish jurisdiction
over Counts | and Il.

B. Count II: Federal Due Process Claim'

A plaintiff is not deprived of property without due process of law if a predeprivation
hearing is impracticable and the state provides an adequate postdeprivation remedy. Hudson v.
Palmer, 468 U.S. 517, 533 (1984). A predeprivation hearing is impracticable when the
deprivation of property results from “random or unauthorized” conduct of a state or local
official, rather than as a result of an existing state policy or rule. The rationale is that “when
deprivations of property are effected through random and unauthorized conduct of a state
employee, predeprivation procedures are simply ‘impracticable’ since the state cannot know
when such deprivations will occur.”” Gable v. City of Chicago, 296 F.3d 531, 539 (7th Cir.
2002) (quoting Hudson, 468 U.S. at 533). The Seventh Circuit has explained:

Section 1983 must be preserved to remedy only those deprivations which actually
occur without adequate due process of law, such as those which result from a
state’s conscious decision to ignore the protections guaranteed by the
Constitution. It should not be employed to remedy deprivations which occur at
the hands of a state employee who is acting in direct contravention of the state’s
established policies and procedures which have been designed to guarantee the
very protections which the employee now has chosen to ignore. Such a limitation
upon § 1983 maintains the delicate balance between the state and federal judicial
systems, leaving the former to remedy individual torts and the latter to address
property deprivations which occur without adequate due process protection.

‘Count III of plaintiff's second amended complaint alleges that “Kevin’s was deprived
of property, to wit, income pursuant to the Hines contract, without due process of law.” (Second
Am. Compl. at 25.) Although plaintiff does not indicate whether it is bringing a claim for
violations of his procedural due process rights or his substantive due process rights, the court
assumes from the language of the complaint that this is a procedural due process claim and
analyzes it as such.


Accordingly, the court grants defendants’ motion to dismiss with prejudice Count III of
plaintiff's second amended complaint. See, e.g., Manos, 162 F. Supp. 2d at 991 (dismissing with
prejudice Fourteenth Amendment Due Process claim because Illinois provided an adequate
postdeprivation remedy). Accord Neptune Fireworks Co., 1995 WL 311395, at *14. Because
the court finds that plaintiff has failed to state a claim under § 1983, it need not decide whether
plaintiff has established the existence of a property right protectable by the United States
Constitution.*

cC. Counts Land If: State Law Claims

Still pending are (1) Count I, a claim for tortious interference under Illinois law, and (2)
Count II, a claim for abuse of governmental power under Illinois law. This court has jurisdiction
over plaintiff's state law claims pursuant to 28 U.S.C. § 1367(a).

Although § 1367(a) authorizes federal courts to exercise supplemental jurisdiction over
state law claims, this does not mean that federal court must exercise jurisdiction in all cases. See
City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 172 (1997). Rather, supplemental

jurisdiction is “a doctrine of discretion, not of plaintiff's right...” /d. Although there are “unusual

‘To the extent Count III alleges a substantive due process claim, the claim would still fail
because, as the Seventh Circuit recently stated, “[iJn order to prevail on a substantive due process
claim involving a deprivation of a property interest, a plaintiff must ‘show either the inadequacy
of state law remedies or an independent constitutional violation.’” Gable, 296 F.3d at 541 (citing
Doherty v. City of Chicago, 75 F.3d 318, 326 (7th Cir. 1996)). See also Porter v. DiBlasio, 93
F.3d 301, 310 (7th Cir. 1996) (“In order to state a viable substantive due process claim, in
addition to alleging that the decision was arbitrary and irrational, the plaintiff must also show
cither a separate constitutional violation or the inadequacy of state law remedies.’”) (citations
omitted). As discussed herein, plaintiff does not allege the inadequacy of state law remedies.
Further, plaintiff fails to allege that the City violated some other substantive constitutional right
other than a violation of due process. Therefore, plaintiff’s substantive due process claim would
fail.


Accepting the allegations in the complaint as true, the court finds that the defendants’
alleged actions are “random and unauthorized.” First, defendants’ conduct was “random,” not
“predictable,” under the first part of this test because, although Thomas, as mayor, exercises a
certain degree of discretion in her position, this discretionary authority certainly does not extend
to interference with private contracts to which the City is not a party. Her conduct, though
possibly causing a deprivation of property, is not “predictable” from the point of view of the
state, and could not have been prevented through the implementation of additional
predeprivation procedural safeguards. See Easter House, 910 F.2d at 1400-01 (determining
whether conduct is “predictable” from the point of view of the state). Second, Thomas’s alleged
actions were “unauthorized” rather than “authorized” because, “although the alleged deprivation
did arguably occur at the hands of a ‘high ranking official,’ it is clear that it was not the result
of that official’s ‘abuse of... broadly delegated, uncircumscribed power to effect the deprivation
at issue.”” Laster House, 910 F.2d at 1402. Therefore, the court finds that defendants’ conduct
was “random and unauthorized.” It follows, then, that plaintiff was entitled only to
postdeprivation remedies, and the court next must decide whether meaningful postdeprivation
remedies exist under state law. See Easter House, 910 F.2d at 1405 (stating that once a
defendant’s conduct is characterized as “random and unauthorized” the court must decide
whether meaningful postdeprivation remedies exist under state law).

2. Adequacy of postdeprivation remedies

The Supreme Court has found that the availability of a common-law tort suit constitutes
an adequate postdeprivation remedy. Gable, 296 F.3d at 540 (citing Hudson, 468 U.S. at 534-

35). In so doing, the Court rejected the plaintiffs contention that a tort suit was not an adequate

6


Easter House v. Felder, 910 F.2d 1387, 1404-05 (7th Cir. 1990) (emphasis in original). In cases
involving “random or unauthorized” conduct a plaintiff must either (1) avail itself of available
state law remedies, or (2) demonstrate that those state law remedies are inadequate. Hudson, 468
U.S. at 539. Ifan adequate remedy exists, there has been no deprivation of due process. /d. See
Hamlin v. Vaudenberg, 95 F.3d 580, 583 (7th Cir. 1996) (stating that to sufficiently allege a
violation of procedural due process under § 1983, a plaintiff must challenge the fundamental
fairness of state procedures in the complaint).

First the court must determine if the alleged deprivation of property here resulted from
“random or unauthorized” conduct of a state or local official. Second, if the court determines
that the conduct was “random and unauthorized,” then it must examine the adequacy of
postdeprivation remedies.

1. “Random and unauthorized” conduct

To determine whether postdeprivation remedies alone satisfy due process, the court first
must determine whether the state actor’s conduct is “random and unauthorized,” as opposed to
“predictable and authorized.” Easter House, 910 F.2d at 1400. Whether a defendant’s conduct

s “random and unauthorized” is a question of law appropriate for resolution in a motion to
dismiss. Hamlin, 95 F.3d at 584 n.2 (citing cases). The court must apply a two-part test to
determine whether the state actor’s conduct is considered “random and unauthorized” or
“predictable and authorized”: first, the court must determine whether the official exercises a
certain degree of discretion in his or her position; and second, the court must determine the

extent to which the state official’s discretion is “uncitcumscribed.” Jd.


“under Ulinois law, an injured party may bring an action if a third party interferes with the
injured party’s contractual relationships or if it ‘tortiously interferes’ with the injured party’s
‘prospective economic advantage.” /d. “Illinois courts have also stated that the right to do
business constitutes ‘property,’ ... [t]hus, a business may bring an action for the tort of malicious
and wrongful impairment of property if it is based upon a civil wrong.” /d. Also, here, Count
I of plaintiff's second amended complaint alleges tortious interference with contract under
Illinois law, and Count II alleges abuse of governmental power under [Illinois law. All these
potential causes of action, among others, adequately afford plaintiff “meaningful post-
deprivation remedies” sufficient to provide the requisite due process protection.” Therefore, the
court finds that adequate state remedies exist to correct any injuries which may have resulted
from the defendants’ conduct. Any actions for injuries must be brought in the state forum. See,
e.g., Weinstein, 811 F.2d at 1096 (assuming that the due process clause applies to efforts by the
state to eliminate entitlement established by private contracts, but stating that “the ‘due process’
of which the fourteenth amendment speaks is a suit under state law.”).

In sum, because defendants’ conduct was “random and unauthorized” and because Illinois
provides plaintiff with an adequate postdeprivation remedy, the court finds that plaintiff has

failed to state a claim for deprivation of due process under the Fourteenth Amendment.

*Plaintiff may have more state law remedies other than those causes of action listed
herein. However, the court “need not discuss every possible theory of recovery to find that
available remedies are adequate to provide meaningful postdeprivation relief.” Easter House,
910 F.2d at 1405.14. Likewise, this court is not suggesting that plaintiffnecessarily is entitled
to recovery under any of these theories. Also, the court finds no merit in plaintiff's unsupported
argument that state remedies are inadequate because defendants filed a motion to dismiss
plaintiff's complaint in state court for failure to plead sufficient facts in accordance with Illinois
fact-pleading requirements.


Minute Order Form (06/97)

G

United States District Court, Northern District of [linois

' f Assigned J i siti if Ott
Y peeetawine ee | ames H. Ales Sn Sage fae
VU) CASE NUMBER 02 C 3947 DATE August 27, 2002
CASE Kevin's Towing, Inc. vs, Bette Thomas and City of North Chicago
TITLE

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

MOTION:

DOCKET ENTRY:

qd) im} Filed motion of [ use listing in “Motion” box above.]

(2) ao Brief in support of motion due __

3) a Answer brief to motion due___. Reply to answer brief due_

(4) a Ruling/Hearing on______set for___at

(5) o Status hearing[held/continued to] {set for/re-set for]on_set for___at

(6) a Pretrial conference[held/continued to] {set for/re-set for]on___setfor__—sat__—s.

(©) Qo Trial{set for/re-set for]on__at

(8) Oo [Bench/Jury trial] [Hearing] held/continued toa

(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) COLocalRule 41.1 COFRCP41(a)(1) CI FRCP41(a)(2).

(10) i {Other docket entry} Enter Memorandum Opinion and Order. The court grants defendants’

motion to dismiss plaintiffs second amended complaint [3-1]. The court dismisses Count III with
prejudice. The court dismisses Counts I and II without prejudice to be refiled in state court.

(11) a [For further detail see order on reverse side of the original minute order.]

No notices required, advised in open court Document .

Number.

0 notices required,
Ne q number of notices

Notices maiied by judge’s staff.

Notified counsel by telephone.

Y | Docketing to mail notices.
| Mail AO 450 form.

Copy to judge/magistrate judge.

dase mailed notice
courtroom se note

cw deputy’s
initials

contrat Clerk's Office



convenience, fairness, and comity are not served by this court’s retention of jurisdiction. See
Int'l Coll. of Surgeons, 522 U.S. at 172 (outlining factors).

First, judicial economy is not served by this court’s retention of jurisdiction. At this
point, the burden of the state law claims would be the same for a federal as for a state court, and
there would be no substantial duplication of effort ifthe state law claims were tried in state court.
See Wright v. Associated Ins. Cos., 29 F.3d 1244, 1251 (7th Cir. 1994) (holding that the district
court should have relinquished jurisdiction over state law claims when the federal claims were
dismissed and there was very little federal judicial investment in state law claims).

Second, convenience is not served by this court’s retention of jurisdiction. The state law
claims are not patently frivolous, nor is it absolutely clear to this court how the supplemental
state law claims will be decided. See Van Harken y. City of Chicago, 103 F.3d 1346, 1354 (7th
Cir. 1997) (reaffirming the “no braincr” exception to the general rule that federal courts should
relinquish jurisdiction of state law claims); Brazinski v. Amoco Petroleum Additives Co., 6 F.3d
1176, 1182 (7th Cir. 1993) (holding that retention of a state law claim is appropriate when the
correct disposition of the claim is “so clear as a matter of state law that it could be determined
without further trial proceedings and without entanglement with any difficult issues of state law

Finally, fairness and comity are not served by this court’s retention of jurisdiction, Under
§ 1367(d), the period of limitations for any claim asserted under subsection (a) “shall be tolled
while the claim is pending and for a period of 30 days after it is dismissed unless State law
provides for a longer tolling period.” 28 U.S.C. § 1367(d). Thus, dismissal of the state law

claims on jurisdictional grounds will not preclude plaintiff from pursuing this matter in state

II


cases in which the balance of factors to be considered under the [supplemental] jurisdiction
doctrine ~ judicial economy, convenience, fairness and comity — will point to federal decision
of the state-law claims on the merits,” the district judge is given broad power in determining
whether such circumstances apply, and thus, whether it is appropriate to retain jurisdiction over
the state law claims. Kennedy v. Schoenberg, Fisher & Newman, Ltd., 140 F.3d 716, 727-28
(7th Cir. 1998). The district court’s discretion to relinquish supplemental jurisdiction is “almost
unreviewable,” especially when all federal claims have been dropped from the case before trial
and only state law claims remain. /d. “At that point, respect for the state’s interest in applying
its own law, along with the state court’s greater expertise in applying state law, become
paramount concerns.” /d. In fact, “it is the well-established law of this circuit that the usual
practice is to dismiss without prejudice state supplemental claims whenever all federal claims
have been dismissed prior to trial.” Groce v. Eli Lilly & Co., 193 F.3d 496, 501 (7th Cir. 1999)

This case is precisely the situation described in § 1367(c)(3). The only claim giving rise
to federal jurisdiction in the first instance was plaintiff's § 1983 claim, and the court dismissed
this claim, supra Sect. II.B. Because the § 1983 claim has been dismissed, federal jurisdiction
over the remaining state law claims is based entirely upon the supplemental jurisdiction statute
which provides that a district court “may decline to exercise supplemental jurisdiction” over a
supplemental state law claim if the court has dismissed all claims over which it has original
jurisdiction. 28 U.S.C. § 1367(c)(3). Therefore, it is within this court’s discretion to proceed
with plaintiffs state law claims or dismiss them. Here, both parties agree that if this court
dismisses Count III of plaintiff's second amended complaint, the court should relinquish

jurisdiction over Counts I and IL. Further, the court finds that the factors of judicial economy,

10


remedy because it would not ‘necessarily compensate him fully,’ and stated, “‘that [plaintiff]
might not be able to recover under these [common-law tort] remedies the full amount which he
might receive in a § 1983 action is not ... determinative of the adequacy of the state remedies.’””
/d. Following Hudson, the Seventh Circuit consistently has found that potential state tort actions
provide meaningful postdeprivation remedies sufficient to provide the requisite due process
protection. See, e.g., Gable, 296 F.3d at 540; Hamlin, 95 F.3d at 585; Easter House, 910 F.2d
at 1405; Weinstein v. Univ. of Ill., 811 F.2d 1091, 1096 (7th Cir. 1987); Guenther v. Holmgreen,
738 F.2d 879, 882 (7th Cir. 1984); Okoro v. Bohman, No. 94 C 6343, at *2 (N.D. IIL. Sept. 14,
2001); Manos v. Caira, 162 F. Supp. 2d 979, 991 (N.D. Ill. 2001); Neptune Fireworks Co. v.
Ahern, No. 89 C 5074, 1995 WL 311395, at *6 (N.D. Ill. May 18, 1995).

Here, plaintiff does not sufficiently allege a violation of procedural due process under §
1983, because it does not allege or argue, much less demonstrate, that it has availed itself of state
remedies or that the remedies provided by Illinois state law are inadequate. See Hamlin, 95 F.3d
at 583 (stating that a complaint does not state a valid § 1983 procedural due process claim “‘if
it docs not include a challenge to the fundamental fairness of the state procedures. If a
procedural duc process claim lacks a colorable objection to the validity of the State’s procedures,
no constitutional violation has been alleged.””) (quoting Doherty v. City of Chicago, 75 F.3d 318,
323 (7th Cir. 1996)). Moreover, the court finds that the availability of a common-law tort suit
constitutes an adequate postdeprivation remedy. The plaintiff may seek a wide variety of relief
in state court under numerous legal theories. For example, “Illinois law recognizes a tort action
which businesses may bring against parties which interfere with business relationships or their

right to conduct business generally.” Easter House, 910 F.2d at 1405 (citing cases). In addition,

7


County. On May 24, 2002, plaintiff filed a second amended complaint which added a federal
count. Count I of the second amended complaint is a claim for tortious interference with
contract under Ilinois law. Count II is a claim for abuse of governmental power under Illinois
law. Count III is a claim for federal due process pursuant to 42 U.S.C. § 1983 (“§ 1983”). On
June 17, 2002, defendants removed the action to federal court because plaintiff's § 1983 claim
arises under federal law. This court has jurisdiction over the § 1983 claim pursuant to 28 U.S.C.
§ 1331 and has supplemental jurisdiction over the remaining state law claims in Counts | and II
pursuant to 28 U.S.C. § 1367(a). Before the court is defendants’ motion to dismiss plaintiff's
second amended complaint under Rule12(b)(6).
Il. DISCUSSION

A. Standard for Deciding a Rule 12(b)(6) Motion to Dismiss

In ruling on a motion to dismiss under Rule 12(b)(6), the court must accept as true all
factual allegations contained in the complaint and draw all reasonable inferences in favor of the
plaintiff. Hickey v. O’Bannon, 287 F.3d 656, 657 (7th Cir. 2002). The purpose of a motion to
dismiss is not to decide the merits of the challenged claims but to test their sufficiency under the
law. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In deciding a motion to
dismiss, the court reads a complaint liberally, dismissing the complaint only if it appears beyond
doubt that the plaintiff can prove no set of facts in support of his claim that entitles him to relief.
Conley vy. Gibson, 355 U.S. 41, 45 (1957).

Defendants argue that Count III should be dismissed because (1) plaintiff has failed to
establish the existence of a property right protectable by the United States Constitution, and (2)

plaintiff has state remedies available which foreclose a federal due process claim. Defendants

3


this conversation and at Thomas’s request, plaintiff agreed to release a pastor’s car from a
Waukegan storage lot. When plaintiff's employee arrived at the storage lot at about 12:15 a.m.
to release the car, approximately twenty-five to thirty people, including Thomas, were present
at the lot. At this time, Thomas requested the release of all the vehicles that had been towed,
aceused plaintiff of racketeering, and attempted to incite the crowd. Plaintiff released the
vehicles to the crowd members who were demanding their cars and waived the storage charges
on those vehicles. Then, at some point between June 30, 2001 and August 15, 2001, Thomas
used threats and intimidation to induce Hines to terminate its contract with plaintiff.

On July 2, 2001, Thomas spoke with plaintiffs president, Kevin DePerte (“DePerte”) and
told DePerte that he would lose his towing contract with Hines, that she would attack his
business in the local newsletter, and that she was meeting with the mayor of Waukegan and “was
not done with [plaintiff] yet.” (Second Am. Compl. at 13.)

On August 8, 2001, at the request of Hines’s attorney, DePerte signed a contract
amendment that prohibited plaintiff from towing cars during special events at Great Lakes unless
specifically requested to do so. The contract amendments were intended to appease concerns
the City expressed about plaintiff. Despite these amendments, on August 15, 2001, Hines
informed plaintiff that it was terminating their contract, effective August 22, 2001. Hines
terminated the contract because Thomas said it would be in its best interest to hire All-Star
Towing — a company owned by Thomas’s nephew — to do his towing in North Chicago. Hines
believed Thomas would retaliate if it continued its contractual relationship with plaintiff.

On September 14, 2001, plaintiff filed a two-count complaint against Thomas and the

City (collectively “defendants”), in the Circuit Court of the Nineteenth Judicial Circuit, Lake

2


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

EASTERN DIVISION
KEVIN’S TOWING, INC., )
)
Plaintiff, )
)
v. ) Case No. 02 C 3947

)

BETTE THOMAS and CITY OF ) Judge James H. Alesia
NORTH CHICAGO, a municipal )
corporation and body politic, )
)
Defendants. y

MEMORANDUM OPINION AND ORDER

Before the court is defendants’ motion to dismiss plaintiff's second amended complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”). For the following
reasons, the court grants defendants’ motion to dismiss. The court dismisses Count III with
prejudice and Counts I and I] without prejudice.

I, BACKGROUND

The following facts are taken from plaintiff's second amended complaint, and are
assumed to be true for the purposes of defendants’ motion to dismiss. From June 1998 through
August 22, 2001, plaintiff Kevin’s Towing, Inc. (“plaintiff”) towed illegally parked cars from
a parking lot at 22nd Avenue and Main Street in North Chicago, pursuant to a written agreement
with the lot’s owner, Edward Hines Lumber Company (“Hines”).

On June 30, 2001, shortly before midnight, plaintiff received a telephone call from

defendant, Bette Thomas (“Thomas”), mayor of the City of North Chicago (“the City”). During

J


court. Olde Discount, Inc. v. Parker, No. 97 C 5746, 1998 WL 901673, at *4 (N.D. Ill. Dec. 21,
1998). Further, no res judicata effect attaches to the claims the court dismisses for lack of
subject matter jurisdiction. /ollkie v. City of Chicago, No. 97 C 154, 1997 WL 527304, at *6
n.7 (N.D. Ill. Aug. 19, 1997).

In sum, judicial economy, convenience, fairness and comity do not compel this court to
retain jurisdiction over plaintiff's state law claims. This case belongs in state court. Therefore,
this court exercises its discretion in dismissing without prejudice plaintiff's supplemental state
law claims, Counts I and II. Plaintiff is free to file these claims in state court.

II. CONCLUSION

For the foregoing reasons, the court grants defendants’ motion to dismiss plaintiff's

second amended complaint. The court dismisses Count III with prejudice and Counts | and IL

without prejudice.

pate AUG 27 2002 bb n-2

James H. Alesia
United States District Judge