Opinion ID: 4416843
Heading Depth: 3
Heading Rank: 2

Heading: The Contracts Clause Claims Against NWCDS

Text: and Tyco The Contracts Clause claims against NWCDS and Tyco are a different story. The Companies cannot state a Contracts Clause claim against these two entities, which, in contrast to Schaumburg, are not alleged to have passed the Ordinance or issued the Notice. Unlike most constitutional deprivations, there is just one way to violate the Contracts Clause: legislative action. See Gary Jet Ctr., Inc. v. AFCO AvPORTS Mgmt. LLC, 863 F.3d 718, 723 (7th Cir. 2017); Khan v. Gallitano, 180 F.3d 829, 832 (7th Cir. 1999); see also Nowicki v. Ullsvik, 69 F.3d 1320, 1325 (7th Cir. 1995) (the Clause “is directed against legislative action only”) (quoting Barrows v. Jackson, 346 U.S. 249, 260 (1953)). Contracts Clause liability therefore presupposes legislative power. See Underwood, 779 F.3d at 464; E & E Hauling, Inc. v. Forest Pres. Dist. of DuPage Cty., Ill., 613 F.2d 675, 678 (7th Cir. 1980). But nothing alleged suggests that either NWCDS, an intergovern‐ mental cooperation, or Tyco, a private company, have such power, let alone that they themselves passed the Ordinance or issued the Notice. The Companies believe that NWCDS can be subject to the Contracts Clause because Schaumburg, which does act as a legislative body, is a “member” of NWCDS. The point still re‐ mains: the complaint does not allege that NWCDS is “respon‐ sible” for Schaumburg’s ordinances and notices. Underwood, 779 F.3d at 464. 14 No. 18‐3316 That is equally true for Tyco. There is also another prob‐ lem with respect to the claim against Tyco. The Companies think Tyco can be held liable under the Contracts Clause for its supposed work in helping to get the Ordinance passed and the Notice issued. This theory runs headlong into the First Amendment and, more specifically, the Noerr‐Pennington doc‐ trine. See United Mine Workers v. Pennington, 381 U.S. 657, 670 (1965); E. R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961). Under the Noerr‐Pennington doctrine, in‐ dividuals and corporations have the First Amendment right to petition lawmakers for favorable legislation (so long as their efforts are not a sham or fraudulent). Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 556 (2014); City of Columbia v. Omni Outdoor Advert., Inc., 499 U.S. 365, 379–83 (1991); California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510 (1972); see also New W., L.P. v. City of Joliet, 491 F.3d 717, 722 (7th Cir. 2007) (“Noerr‐Pennington has been ex‐ tended beyond the antitrust laws, where it originated, and is today understood as an application of the first amendment’s speech and petitioning clauses.”). That is, at most, all Tyco is alleged to have done—press Schaumburg to pass an Ordi‐ nance that would favor it. The Alarm Companies nevertheless believe that they can state a Contracts Clause claim against NWCDS and Tyco through a “conspiracy theory” under 42 U.S.C. § 1983. Even assuming that the complaint adequately pleads a conspiracy (which we discuss below), the Companies’ position mistakes the scope of a § 1983 suit with liability under the Contracts Clause. Section 1983, under which the Companies bring their con‐ stitutional claims, provides a right of action for constitutional No. 18‐3316 15 deprivations that occur “under color of” state law.2 Thus pri‐ vate actors, like Tyco, cannot usually be sued under § 1983. Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 49–50 (1999). The “conspiracy theory,” or the “joint participation doctrine,” provides an exception: if a private actor conspires with a state actor to deprive someone’s constitutional rights, the private actor may be subject to a § 1983 suit. E.g., Spiegel v. McClintic, 916 F.3d 611, 616 (7th Cir. 2019) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 152 (1970)); see also, e.g., L.P. v. Marian Cath‐ olic High Sch., 852 F.3d 690, 696 (7th Cir. 2017) (explaining that there must be a “nexus between” private action and state ac‐ tion); Listecki v. Official Comm. of Unsecured Creditors, 780 F.3d 731, 738 (7th Cir. 2015) (discussing the “various tests to use when deciding whether someone is a governmental actor”). But that is all the exception does. It potentially offers a way to bring nongovernment actors into the case under § 1983. It does not expand what the Contracts Clause prohibits. The “conspiracy theory,” therefore, may fix a § 1983 prob‐ lem for the Companies’ claim against Tyco, but it does noth‐ ing to resolve the larger Contracts Clause problem—that en‐ tities not alleged to have taken legislative action cannot be li‐ able under the Clause. The district court was correct to dis‐ miss the Contracts Clause claims against NWCDS and Tyco. 2 We assume that a Contracts Clause claim may be brought under § 1983, a question that neither the parties nor our caselaw addresses. But we note, as have others, that there is “considerable debate” over the ques‐ tion. Kaminski v. Coulter, 865 F.3d 339, 345 (6th Cir. 2017) (holding that a Contracts Clause claim cannot be brought under § 1983); Crosby v. City of Gastonia, 635 F.3d 634, 641 (4th Cir. 2011) (same); but see S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885 (9th Cir. 2003) (per curiam) (holding the opposite). 16 No. 18‐3316