IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

STONE RIVER LODGE, LLC; )

TAYCAN HOLDINGS LLC; T&S )

DEVELOPMENTS, LLC; BARBARA )

TOMCZAK; CHRISTOPHER FLOOD; )

ALAN GOLDFARB; TYLER )

TOMCZAK; BEATRIZ VALLE; FAYE )

DAVIS; and STEVEN DAVIS, )

)

Plaintiffs, )

)

vs. ) Case No. 20 C 3590

)

VILLAGE OF NORTH UTICA; DAVID )

STEWART; and RODNEY DAMRON, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge:

Stone River Lodge, LLC and the nine other plaintiffs in this case all own vacation 

villas and cabins in the Village of North Utica, which is near Starved Rock State Park. 

They contend that ordinances adopted by the Village inappropriately restrict their right 

to rent their property to others and violate their federal constitutional rights in various 

ways. They have sued to enjoin enforcement of the ordinances and for damages. The 

defendants—the Village, its president, and its chief of police—have moved to dismiss 

the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to a claim. In 

considering the defendants' motion, the Court takes the complaint's factual allegations 

as true and draws reasonable inferences in the plaintiffs' favor. See, e.g., O'Boyle v. 

Real Time Resolutions, Inc., 910 F.3d 338, 342 (7th Cir. 2018).

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Facts

In 2004, Grand Bear Lodge, LLC purchased land near North Utica to develop a 

hotel. North Utica annexed the land. According to the plaintiff, the annexation 

agreements between the village and the property owner granted special use zoning 

classification for the development of a hotel and a number of buildings that each would 

include multiple vacation villas. The villas were to be individually owned. The village 

ordinances approving the annexation agreements incorporated "declarations of 

covenants." The covenants provided, among other things, that no owner would be 

prohibited from renting his or her unit and that this right (among others) would run with 

the land and would inure to subsequent owners. 

The plaintiffs allege that until 2020, they were able to rent out their units on their 

own, "without any mandates from the Village." Compl. ¶ 41. In February 2020, 

however, the village adopted an ordinance regulating short term rentals of villas. The 

plaintiffs contend that the ordinance barred villa owners from renting out their units 

unless the owner agreed to rent the unit through the Grand Bear Lodge hotel. This, the 

plaintiffs allege, resulted from the insistence of the hotel's new owner that it could not 

operate profitably unless the owners of the villas participated in a "rental pool" through 

which the villas would be rented through the hotel. 

The plaintiffs have attached a copy of the ordinance, Ordinance No. 2020-1, to 

their complaint. See Compl., Ex. 10. On its face, the ordinance is not targeted at the 

plaintiffs' villas. Rather, it makes it unlawful for anyone in the village to operate a 

"vacation rental unit" without a current, valid license from the village. The term 

"vacation rental unit" is defined as a dwelling unit or portion thereof offered for rent for a 

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period of less than thirty days, not including hotels, motels, lodging houses, boarding 

houses, or bed-and-breakfast establishments that are licensed under other provisions of 

the North Utica Village Code. The ordinance also establishes standards and 

procedures for application and issuance of licenses. 

The plaintiffs allege, however, that they have not been allowed to obtain licenses 

for rental of their villas. They attach to the complaint a March 30, 2020 letter from the 

village clerk to a villa owner stating that the village

provides for only one Hotel License issued to Grand Bear Lodge & Resort 

P.U.D., and per Village Ordinance 2020-01, private rentals of the Villas 

and Cabins located throughout the P.U.D. are not Licensed nor permitted. 

. . . Property owners that would like to rent out their property for overnight 

and short-term rental accommodations are required to utilize the rental 

pool provided directly by Grand Bear Lodge & Resort. 

Compl., Ex. 12.

According to the complaint, the village's chief of police issued two citations for 

violation of the ordinance in early March 2020. Id. ¶ 76. The plaintiffs also allege that 

on two occasions before the filing of the present suit in June 2020—the dates are not 

stated—the chief of police "approached an Owner's Unit, rang the bell and stated 'I'm 

just curious if you're renting this for the weekend' or words to that effect." Id. ¶ 77. 

Later, citations seeking $750 fines were issued to villa owners for days on which neither 

the chief of police or other village employees visited the units cited. Id. In addition, the 

plaintiffs allege, during the first few weekends of June 2020, the owner of the hotel set 

up barriers that prevented the plaintiffs from freely entering and exiting their property.

The plaintiffs include twelve claims in their complaint. Count 1 is a claim under 

42 U.S.C. § 1983 for violation of the Fourteenth Amendment's Equal Protection Clause. 

Count 2 is a claim under section 1983 for violation of the Fourteenth Amendment's Due 

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Process Clause. Count 4 is a claim under section 1983 for violation of the Fourth 

Amendment. Count 6 is a claim for violation of the Sherman Antitrust Act. Count 11 is 

a claim seeking a declaratory judgment based on the just-mentioned federal 

constitutional provisions, as well as parallel state constitutional provisions. The 

remaining claims are state-law claims. Count 3 is a claim for violation of the Illinois 

Constitution's equal protection and due process provisions. Count 6 is based on the 

Illinois Antitrust Act. Counts 8, 9, and 10 are claims of equitable estoppel, promissory 

estoppel, and for specific performance. And count 12 is a claim for mandamus seeking 

a declaration that the village ordinance is void.

The defendants have moved to dismiss all of the plaintiffs' claims for failure to 

state a claim under Federal Rule of Civil Procedure 12(b)(6). 

Discussion

To overcome a motion to dismiss under Rule 12(b)(6) motion, a plaintiff must 

allege facts sufficient "to state a claim to relief that is plausible on its face." Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007). "[W]ell-pleaded facts" are accepted "as 

true and [the Court] draw[s] all reasonable inferences in the [plaintiffs'] favor." Shipley v. 

Chi. Bd. of Election Comm'rs, 947 F.3d 1056, 1060–61 (7th Cir. 2020). "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." 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In this decision, the Court will focus on the 

plaintiffs' federal claims. 

1. Federal due process claim

The Court begins with count 2, the plaintiffs' claim for violation of the Fourteenth 

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Amendment's Due Process Clause. The plaintiffs allege that the adoption of the 

ordinance impaired their ability to rent their villas and thus violated their due process 

rights. See Compl. ¶ 111. They also allege that the ordinance impairs the value of their 

property and that it does not promote the health, safety, or welfare of the public. See id. 

¶ 113. The plaintiffs also contend that the ordinance allows the village to suspend or 

revoke a license without adequate procedural protections, see Compl. ¶ 112, but 

because there is no allegation in the complaint that any of the plaintiffs have been given 

a license, let alone had one revoked or suspended, they have suffered no injury from 

this aspect of the ordinance.

It is not entirely clear whether the plaintiffs are asserting a procedural due 

process claim or a substantive due process claim regarding the ordinance, so the Court 

will deal with both possibilities. To state a claim for a violation of procedural due 

process, a plaintiff must plausibly allege that it was deprived by the government of a 

liberty or property interest and that there were "insufficient procedural protections 

surrounding that deprivation." See, e.g., Cannici v. Village of Melrose Park, 885 F.3d 

476, 479 (7th Cir. 2018) (internal quotation marks omitted).

The Court assumes for purposes of discussion that the covenants, via the

annexation ordinance, establish a legitimate claim by the plaintiffs of entitlement to rent 

out their property and that this is a property right protected by the Due Process Clause. 

This, the Court notes, is far from clear. Nothing in the covenants entitled the plaintiffs to 

be forever free from regulation. Indeed, the annexation agreements specifically 

provided that the village retained the right to enact zoning changes. And the ordinance 

in question almost certainly qualifies as a zoning change within the meaning of the

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annexation agreements, even if it does not include the term "zoning" in its title or text. 

That aside, there is no violation of procedural due process arising from the 

village's adoption of the ordinance. The adoption of the ordinance was a legislative act 

of general applicability, not a judicial or quasi-judicial act. It has been clear for over a 

century that in such situations, "the legislative determination provides all the process 

that is due." Logan v. Zimmerman Brush Co., 455 U.S. 422, 433 (1982) (citing BiMetallic Inv. Co. of State Bd. of Equalization, 239 U.S. 441, 445-46 (1915)). This is so, 

as Bi-Metallic makes clear, even if the legislative enactment impacts an individual's 

property rights. As the Supreme Court stated in that case:

When a rule of conduct applies to more than a few people, it is 

impracticable that everyone should have a direct voice in its adoption. 

The Constitution does not require all public acts to be done in town 

meeting or an assembly of the whole. General statutes within the state 

power are passed that affect the person or property of individuals, 

sometimes to the point of ruin, without given them a chance to be heard. 

Their rights are protected in the only way that they can be in a complex 

society, by their power, immediate or remote, over those who make the 

rule.

Bi-Metallic, 239 U.S. at 445. 

In their brief in opposition—though not in their complaint—the plaintiffs also 

appear to contend that their procedural due process rights were violated in connection 

with their applications for licenses because they "were denied outright and they were 

told that the only way they could rent is through the rental pool agreement." Resp. to 

Mot. to Dismiss. at 12. There is no violation of procedural due process here. The 

process due in a zoning case—and the licensing requirement is, or is closely akin to a 

zoning regulation—"is minimal and normally must be pursued in state courts." 

Muscarello v. Ogle Cty. Bd. of Comm'rs, 610 F.3d 416, 423 (7th Cir. 2010). Plaintiffs do 

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not contend, nor could they, that they lack a state-court remedy for any denial of a rental

license.

To state a substantive due process claim, the plaintiffs must plausibly allege that 

the ordinance is not rationally related to a legitimate governmental interest or is 

arbitrary. See, e.g., Lee v. City of Chicago, 330 F.3d 456, 461 (7th Cir. 2003); see 

generally County of Sacramento v. Lewis, 523 U.S. 833, 846 (1998). The plaintiffs' 

argument regarding this claim includes no citation of authority and is so cursory that, in 

the Court's view, it has been forfeited. See, e.g., Oneida Nation v. Village of Hobart, 

968 F.3d 664, 689 (7th Cir. 2020). 

Even if this were not the case, there is nothing arbitrary about an ordinance that 

regulates short-term rentals of property—in this case, to require a license. See, e.g., 

Nguyen v. City of Buena Park, No. 8:20-cv-00348, 2020 WL 5991616, at *6 (C.D. Cal. 

Aug. 18, 2020). When an economic or business regulation is at issue, a court's review 

involves determining whether there is a rational basis for the regulation. See, e.g., 

Minerva Dairy, Inc. v. Harsdorf, 905 F.3d 1047, 1053 (7th Cir. 2018). This does not 

require a detailed factual inquiry but only the finding of "a reasonably conceivable state 

of facts that could provide a rational basis" for the regulation. Id. (internal quotation 

marks omitted). In this case, the ordinance itself includes a legitimate state interest for 

its adoption: it says the village adopted the regulation based on the belief that "vacation 

rental units possess certain specific concerns that can cause negative impact on 

surrounding properties and the Village as a whole, such as life-safety concerns, quality

of neighborhood and related life concerns, security concerns, fire safety concerns, and 

tax revenue concerns." Compl., Ex. 10, Ord. No. 2020-01, preamble. And the terms of 

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the ordinance are rationally related to this interest. The ordinance imposes a licensing 

requirement; prohibits rental for less than a 24-hour period; bars service of food or 

beverages to guests; requires the availability of off-street parking; sets an occupancy 

limit for any given unit; and requires posting of applicable rules and regulations 

(including noise, trash disposal, and the like). 

In short, the ordinance represents a legitimate exercise of the village's police 

power, and it is readily apparent that its requirements are rationally related to the 

village's stated interest. For these reasons, the plaintiffs have no viable substantive due 

process claim under the U.S. Constitution regarding the village's adoption of the 

ordinance. The plaintiffs' complaints regarding the manner in which licenses have been 

issued or denied sounds in equal protection, not due process, and will be addressed 

later in this decision.

2. Fourth Amendment claim

In count 4 of their complaint, the plaintiffs challenge the village ordinance's 

provision stating that every vacation rental unit "shall be subject to inspection" by the 

village's police department, zoning enforcement officer, and fire protection district, as 

well as the LaSalle County Health Department. The ordinance also requires vacation 

rental unit operators to maintain a register of guests and to make this "freely accessible" 

to the village. The plaintiffs contend that these provisions run afoul of the Fourth 

Amendment because they do not require probable cause or reasonable suspicion prior 

to an inspection. 

The Court agrees with the defendants that the plaintiffs' allegations are 

insufficient to establish their standing to challenge these provisions. Standing requires 

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an actual, concrete injury, traceable to the defendant, that would be redressed by a 

favorable outcome in the lawsuit. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 

555, 560-61 (1992). An allegation of a possible future injury is insufficient. See, e.g., 

Clapper v. Amnesty Int'l USA, 568 U.S. 398, 409 (2013). The complaint does not allege 

that the village has conducted any actual inspection of a short-term rental unit without a 

warrant or has demanded production of any rental logs. And the Court is unwilling to 

assume, in a vacuum, that village authorities would enter a dwelling without a warrant or

other legal process. Under the circumstances, the plaintiffs have experienced no actual 

or concrete injury from these provisions of the ordinance, and thus they lack standing to 

challenge them at this point.

Though the plaintiffs offer no real argument to the contrary in their response to 

the motion to dismiss—they simply state, in conclusory fashion and without support, that 

they have been injured, see Pls.' Resp. to Mot. to Dismiss at 17-18—their complaint 

does identify one point that merits discussion. Specifically, they allege that the police 

chief has come to the front door of villa units on two occasions to make inquiry. See 

Compl. ¶ 77. Assuming this is so, this activity does not run afoul of the Fourth 

Amendment. Under Florida v. Jardines, 569 U.S. 1 (2013), the area immediately 

surrounding and associated with a home—the "curtilage"—is considered part of the 

home itself for Fourth Amendment purposes. Id. at 7. A government official's uninvited 

physical intrusion into the curtilage may therefore implicate the Fourth Amendment. But 

the Court concluded in Jardines that there is an "implicit license" that "permits [a] visitor 

to approach the home by the front path, knock promptly, wait briefly to be received, and 

then (absent invitation to linger longer) leave." Id. at 8. "Thus, a police officer not 

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armed with a warrant may approach a home and knock, precisely because that is no 

more than any private citizen might do." Id. (internal quotation marks omitted). This is 

all the plaintiffs have alleged in their complaint: they contend that the police chief came 

to the front doors of one or more villas, knocked, and asked a few questions. There is 

no allegation in the complaint that the chief or any other village employee stayed within 

the curtilage of the property of any of the plaintiffs any longer than a brief period, and no 

allegation that they made an entry into any dwelling. 

For these reasons, the Court dismisses count 4 of the plaintiffs' complaint.

3. Federal equal protection claim

Count 1, the plaintiffs' Equal Protection Clause claim, appears to the Court to 

involve the short-term rental ordinance both on its face and as applied. On the face of 

the ordinance, there is no viable equal protection issue: it treats all short-term renters 

the same way. There is nothing in the ordinance itself that appears to treat the plaintiff 

villa owners differently.

1 And there is no plausible equal protection violation in "singling 

out" short-term rentals for licensing requirements. Specifically, the regulations imposed

by the ordinance upon owners of short-term rental property unquestionably are

rationally related to a legitimate state interest, as discussed in the Due Process Clause 

section of this decision. That is all the Equal Protection Clause requires when it comes 

to regulation of economic activity. See City of Cleburne v. Cleburne Living Ctr., 473 

 1 In particular, there is nothing in the ordinance that appears to provide additional or 

different requirements for short-term rentals by property owners in a "planned unit 

development," a term used by the defendants in their briefs on the motion to dismiss. If 

some term of the ordinance provides such an exception in a way that is not readily 

apparent from the face of the ordinance, one would have expected the parties to explain 

this—and they did not.

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U.S. 432, 440 (1985); Smith v. City of Chicago, 457 F.3d 643, 650-51 (7th Cir. 2006).

The plaintiffs also allege that they have been singled out for less-favorable 

treatment with regard to the actual issuance of short-term rental licenses. It appears

that this claim is not based on the terms of the ordinance itself; rather, the claim is 

based on how licensing for short-term rentals has been carried out in practice. The 

plaintiffs say that they, as villa owners, have been precluded from obtaining licenses 

unless they agree to join a "rental pool" administered by the Grand Bear Lodge. See 

Compl., Exs. 12, 13. In other words, the plaintiffs say they are being treated differently 

from others in the village who may wish to rent out their property on a short-term basis.

As the Court has indicated, it does not appear that there is anything in Ordinance 

2020-1 that establishes such a distinction. The plaintiffs contend that this state of affairs 

resulted from pressure (for want of a better word) by the hotel owners, who may have 

believed their revenues were being hurt by villa owners renting out their property. The 

defendants seem to say that the differential treatment is justified by the fact that the 

villas are in a "planned unit development," but this explanation and what it means in 

determining the existence of a rational basis is not found in the complaint (or, for that 

matter, elsewhere in the record relating to the motion to dismiss) and thus is not 

appropriately considered on a Rule 12(b)(6) motion.

Based on the extremely thin record, the Court cannot say as a matter of law at 

this juncture that this claimed differential treatment is rationally related to a legitimate 

state interest. This claim—which the Court will refer to as the plaintiffs' as-applied equal 

protection claim—survives defendants' motion to dismiss, though the plaintiffs' equal 

protection claim based on the face of the ordinance does not.

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4. Federal antitrust claim

The plaintiffs' claim under the Sherman Act lacks merit, as the defendants argue. 

The Sherman Act does not apply to allegedly anticompetitive restraints imposed by a 

state "as an act of government," Parker v. Brown, 317 U.S. 341, 352 (1943), and this 

same immunity extends to actions by local governments like the village when they are

acting pursuant to authority conferred by a state. See City of Columbia v. Omni 

Outdoor Advertising, Inc., 499 U.S. 365, 371-72 (1991). A local governmental entity like 

the village is authorized by Illinois law to impose zoning and land use restrictions as 

appropriate for public health, safety, and welfare. See 65 ILCS 5/11-13-1. And such 

provisions necessarily "displace unfettered business freedom in a manner that regularly 

has the effect of preventing normal acts of competition." Omni Outdoor Advertising, 499 

U.S. at 373. The defendants are therefore entitled to Parker immunity on the plaintiffs' 

Sherman Act claim. Contrary to the plaintiffs' contention, the application of Parker 

immunity is a legal issue, not a factual issue.

5. State-law claims

The plaintiffs have also asserted a variety of state-law claims, most if not all of 

which turn on the specifics of the annexation agreements and related documents or on

the interpretation of state statutes. The Court is inclined to decline the exercise of 

supplemental jurisdiction over these claims and to require the parties to litigate them in 

state court, particularly given the dismissal of virtually all of the plaintiffs' federal claims. 

See 28 U.S.C. § 1367(c). The Court will address this point with the parties at the

upcoming status hearing.

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Conclusion

For the reasons stated above, the Court grants defendants' motion to dismiss in 

part [dkt. no. 19]. The Court dismisses count 1 in part (except for what the Court has 

called the plaintiffs' as-applied equal protection claim) and counts 2, 4, and 6 in their 

entirety for failure to state a claim upon which relief may be granted. The motion to 

dismiss is entered and continued as to the plaintiffs' remaining claims. The parties 

should be prepared to discuss at the upcoming status hearing whether the Court should 

continue to exercise supplemental jurisdiction over the plaintiffs' state-law claims.

Date: November 15, 2020

________________________________

MATTHEW F. KENNELLY

 United States District Judge

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