John Robert Blakey, United States District Judge.
Plaintiffs, Dixon O'Brien, John Cook, the International Union of Operating Engineers, Local 150, AFL-CIO ("Local 150"), and the Chicago Regional Council of Carpenters, United Brotherhood of Carpenters and Joiners of America ("Carpenters") (collectively "the Unions"), have sued Defendants the Village of Lincolnshire and the Illinois Municipal League ("IML"). In their Third Amended Complaint (TAC) Plaintiffs bring five claims against Defendants, asserting that Defendants violated: (1) their First Amendment free speech and freedom of association rights through 42 U.S.C. § 1983 (Counts I and II, respectively); (2) the equal protection clause through 42 U.S.C. § 1983 (Count III); and (3) Illinois statutory law by engaging in ultra vires activity (Counts IV and V). [40].
Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), Defendants have jointly moved, for the first time, to dismiss all these claims as well as Plaintiffs' related requests for declaratory and injunctive relief. [50]. For the following reasons, this Court grants Defendants' motion.
Under both Rules 12(b)(1) and 12(b)(6), this Court must construe the TAC [40] in the light most favorable to Plaintiffs, accept as true all well-pleaded facts, and draw reasonable inferences in their favor. Yeftich v. Navistar, Inc., 722 F.3d 911, 915 (7th Cir. 2013); Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). Statements of law, however, need not be accepted as true. Id. Rule 12(b)(6) limits this Court's consideration to "allegations set forth in the complaint itself, documents
To survive Defendants' motion under Rule 12(b)(6), the TAC must "state a claim to the relief that is plausible on its face." Yeftich, 722 F.3d at 915. 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." Id.
Turning to Rule 12(b)(1), there are two types of Rule 12(b)(1) challenges— factual and facial—and they have a "critical difference." Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009). When a defendant argues that "the plaintiff's complaints, even if true, were purportedly insufficient to establish injury-in-fact," the challenge is a facial one. Id. at 443-44. Facial challenges "require only that the court look to the complaint and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction." Id. at 443. Factual challenges, however, lie where "the complaint is formally sufficient, but the contention is that there is in fact no subject matter jurisdiction." Id. at 444 (internal quotations omitted). Courts may look beyond the complaint only when a defendant brings a factual attack against jurisdiction. Id.
Here, while Defendants articulate the legal standard for raising a factual question concerning jurisdiction, [51] at 2, they argue that the TAC's allegations, "when taken as true ... do not support federal standing." Id. at 5. Defendants allege no external facts to call this Court's jurisdiction into question. See generally [51]; Apex, 572 F.3d at 444. Thus, Defendants bring a facial 12(b)(1) challenge, which requires this Court to look only to the complaint to determine if Plaintiffs have sufficiently alleged a basis for subject matter jurisdiction. Apex, 572 F.3d at 443.
The following facts come from Plaintiffs' TAC. [40]. Plaintiffs O'Brien and Cook reside in Lincolnshire and pay a variety of municipal taxes to the Village, including property taxes and sales taxes. Id. ¶¶ 7, 8.
The Village Board of Trustees and Mayor comprise the corporate authority for Lincolnshire—six Trustees and the Mayor sit on the Village Board. Id. ¶ 14. Under Illinois law, the "corporate authority of each municipality may provide for joining the municipality in membership in the Illinois Municipal League." Id. ¶ 15; 65 ILCS § 5/1-8-1. Illinois law describes the IML as "an unincorporated, nonprofit, nonpolitical association of Illinois cities, villages and incorporated towns" and states that each municipality "may provide for the payment of annual membership dues and fees" to the IML. Id.
The IML contains over 1,000 Illinois municipalities as members. [40] ¶ 20. It collects dues from each of its member municipalities and charges dues payments based upon each municipality's population. Id. ¶ 21; [40-1] at 3. Lincolnshire pays its dues and other fees to the IML from its general tax revenue. [40] ¶¶ 23-24. Specifically, Plaintiffs allege that Lincolnshire pays dues and other fees to the IML out of its General Fund, the revenue of which comes from a variety of taxes, including utilities taxes, sales taxes, and income taxes. Id. ¶¶ 25-26. Between January 1, 2013, and February 12, 2018, Plaintiffs claim Lincolnshire paid the IML at least $ 5,051.00 in dues and fees. Id. ¶ 27.
Plaintiffs allege that although Illinois law describes the IML as a "nonprofit, nonpolitical association," the IML has engaged in targeted lobbying and "other political activities," including making political contributions, that exceed its statutorily authorized purpose. 65 ILCS § 5/1-8-1; [40] ¶¶ 29-36. For example, Plaintiffs allege that the IML advertises its lobbying efforts, as well as its annual "Lobby Day" in Springfield. Id. ¶ 29; [40-2]. Plaintiffs also point to an e-mail that the IML sent in March 2015 as evidence of impermissible political activities; in the e-mail, the IML allegedly urged Illinois units of government to support Illinois Governor Bruce Rauner's "Turnaround Agenda" by adopting local ordinances that would legalize local "right-to-work" zones. [40] ¶¶ 30-33. Specifically, Plaintiffs allege that the IML acknowledged its correspondence with the Governor's office with these words:
Id. ¶ 32. Lincolnshire remains the only local government unit in the state to adopt such a "right-to-work" zone. Id. ¶ 34; see also Intern. Union of Operating Eng'rs Local 399 v. Lincolnshire, 905 F.3d 995 (7th Cir. 2018) (striking Lincolnshire's right-to-work ordinance).
Because O'Brien and Cook pay taxes as residents of Lincolnshire, a portion of their tax money goes to Lincolnshire's IML membership dues. [40] ¶ 37. Both O'Brien and Cook object to the use of their tax money to fund the IML's alleged lobbying and political activities, which they assert run "directly against their economic interests and political beliefs." Id. ¶ 38. In January of 2018, O'Brien sent a letter to Lincolnshire Mayor Elizabeth Brandt formally requesting a refund of his portion of tax money that funded any lobbying or other political activities, "including but not limited
Defendants seek dismissal under Rule 12(b)(1) for lack of Article III standing and under Rule 12(b)(6) for failure to state a claim. Because standing is jurisdictional, this Court must consider that issue before reaching the merits. Ortiz v. Fibreboard Corp., 527 U.S. 815, 831, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999); Hinrichs v. Speaker of House of Representatives of Ind. Gen. Assembly, 506 F.3d 584, 590 (7th Cir. 2007); Halperin v. Intern. Web Servs., LLC, 70 F.Supp.3d 893, 897 (N.D. Ill. 2014).
Article III of the Constitution limits "federal judicial power to certain `cases' and `controversies.'" Silha v. ACT, Inc., 807 F.3d 169, 172-73 (7th Cir. 2015) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 559-60, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). To establish Article III standing in this case, a plaintiff must show that: "(1) it has suffered an `injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Silha, 807 F.3d at 173 (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000)); Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130. The party invoking federal jurisdiction bears the burden of establishing the elements of Article III standing. Lujan, 504 U.S. at 561, 112 S.Ct. 2130.
Here, the parties dispute only whether Plaintiffs have alleged an "injury in fact" sufficient to establish Article III standing.
Plaintiffs allege standing based upon their status as resident, municipal taxpayers. See [40] ¶¶ 10, 12.
342 U.S. at 434, 72 S.Ct. 394 (quoting Frothingham v. Mellon, decided with Massachusetts v. Mellon, 262 U.S. 447, 486, 43 S.Ct. 597, 67 S.Ct. 1078 (1923)); [51] at 3. Thus, Defendants argue that like federal and state taxpayers, Plaintiffs must show they have sustained a direct injury, rather than an injury that affects all Village residents. [51] at 3. This argument fails for several reasons.
First, Defendants' argument would require this Court to part with the well-settled principle that "the interest of a taxpayer of a municipality in the application of its moneys is direct and immediate and the remedy by injunction to prevent their misuse is not inappropriate." Hinrichs, 506 F.3d at 592 (quoting Frothingham, 262 U.S. at 486-87, 43 S.Ct. 597). The interest of "federal taxpayers with respect to the federal treasury [is] `very different' from that of a municipal taxpayer challenging an allegedly illegal use of municipal funds." TinleySparks, Inc. v. Vill. of Tinley Park, 181 F.Supp.3d 548 (N.D. Ill. 2015) (quoting Hinrichs, 506 F.3d at 591-92); see also DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 349, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) ("The Frothingham Court noted with approval the standing of municipal residents to enjoin the `illegal use of the moneys of a municipal corporation,' relying on `the peculiar relation of the corporate taxpayer to the corporation' to distinguish such a case from the general bar on taxpayer suits.") (quoting Frothingham, 262 U.S. at 487, 43 S.Ct. 597).
Defendants argue that Doremus trumps the Court's decision in Frothingham and "applies with equal force to Plaintiffs' standing in this Court against the Village," [51] at 4. But the passage Defendants cite in Doremus described federal and state taxpayer standing, rather than municipal standing. See, e.g., Hein v. Freedom from Religion Found., Inc., 551 U.S. 587, 600-01, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007) (explaining that in Doremus, the Court "rejected a state taxpayer's claim of standing to challenge a state law authorizing public school teachers to read from the Bible") (emphasis added); DaimlerChrysler Corp., 547 U.S. at 345, 126 S.Ct. 1854 (2006) ("The foregoing rationale for rejecting federal taxpayer standing applies with undiminished force to state taxpayers. We indicated as much in Doremus"); Smith v. Jefferson Cnty. Bd. of Sch. Comm'rs, 641 F.3d 197 (6th Cir. 2011) (finding plaintiffs met the injury element of standing as municipal taxpayers because the Court, in Doremus, "did not lay down any rules about municipal-taxpayer suits, and has repeatedly construed Doremus as a state-taxpayer case."); United States v. City of New York, 972 F.2d 464, 471 (2d Cir. 1992) (noting that Doremus involved state taxpayers and finding nothing in that case "to convince us that Frothingham's view of municipal taxpayer standing is not still good law") (citing Frothingham v. Mellon, decided with Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 S.Ct. 1078 (1923)).
Moreover, the Seventh Circuit has explicitly ruled that "municipal taxpayer challenges to municipal actions ... are not subject to the same stringent standing requirements as state and federal taxpayers seeking to challenge state and federal actions, respectively." Hinrichs, 506 F.3d at 600 n.9. Defendants argue that this statement is "dicta" and "not supported precedent, based upon Doremus." [54] at 3. But, as discussed above, this language clearly
Finally, the Seventh Circuit has clarified what municipal taxpayers must allege to establish Article III standing. In doing so, the Seventh Circuit did cite Doremus, but solely for the principle that "municipal taxpayers have standing to bring claims against municipalities only when they bring `a good-faith pocketbook action.'" Clay v. Fort Wayne Cmty. Sch., 76 F.3d 873, 879 (7th Cir. 1996) (citing Doremus, 342 U.S. at 434, 72 S.Ct. 394). And in explaining what it meant by "a good-faith pocketbook action," the Seventh Circuit clarified that "municipal taxpayers have standing when they object to a disbursement of funds occasioned solely by the alleged unconstitutional conduct." Clay, 76 F.3d at 879. In other words, municipal taxpayer status "does not confer standing absent some allegation by the plaintiffs of an illegal use of tax revenues." Id. Here, Plaintiffs have met this showing of standing by alleging that Defendants unconstitutionally spent their municipal tax revenues. See generally [40]. Therefore, Plaintiffs have alleged an injury-in-fact sufficient to establish Article III standing.
Plaintiffs base their First Amendment claims upon the Supreme Court's recent decision in Janus v. AFSCME Council 31, ___ U.S. ___, 138 S.Ct. 2448, 201 L.Ed.2d 924 (2018). In Janus, the Court held that under the compelled-subsidy doctrine, an Illinois statute authorizing public-sector unions to assess "agency fees" violated nonmembers' free speech rights by compelling them to subsidize private speech with which they disagreed. 138 S.Ct. at 2486. Here, Plaintiffs allege that under the compelled-subsidy doctrine, Defendants similarly compel Plaintiffs to subsidize the speech of a private entity—the IML—with which they disagree. [40] ¶ 49. In response, Defendants argue that both the Village and the IML engage in government speech, which remains protected from First Amendment scrutiny under the government speech doctrine. [51] at 5-7. Defendants thus distinguish Janus, arguing that the plaintiff there was compelled to pay an agency fee to a private entity, rather than taxes to a public body. Id. at 8. For the reasons explained below, this Court agrees with Defendants and finds that Lincolnshire and the IML engage in government speech not subject to First Amendment scrutiny. Thus, the compelled-subsidy doctrine does not apply.
The Supreme Court has sustained First Amendment challenges in "compelled-subsidy" cases, in which the government requires individuals to subsidize private messages with which they disagree. See, e.g., Janus, 138 S.Ct. 2448; United States v. United Foods, 533 U.S. 405, 121 S.Ct. 2334, 150 L.Ed.2d 438 (2001) (sustaining a compelled-subsidy challenge to an assessment, the only purpose of which was to fund mushroom advertising); Keller v. State Bar of Cal., 496 U.S. 1, 110 S.Ct. 2228, 110 L.Ed.2d 1 (1990) (sustaining a compelled-subsidy challenge to state bar membership dues used to finance certain ideological and political activities that were not prescribed by law or developed under official government supervision).
The Court, however, has emphasized that compelled "support of government —even those programs of government one does not approve—is of course perfectly constitutional, as every taxpayer must attest." Johanns v. Livestock Mktg. Ass'n, 544 U.S. 550, 559, 125 S.Ct. 2055, 161 L.Ed.2d 896 (2005). In other words, the government speech doctrine provides
This case thus turns upon whether Plaintiffs' claims challenge private or government speech. Plaintiffs argue that the IML is a private, third-party entity engaging in private speech. [53] at 7 ("[T]he speech to which Plaintiffs object is not government speech, but rather the speech of the IML, a private party."). Defendants argue that the IML is a public body engaging in government speech. [51] at 7-8.
The government speech doctrine is a relatively new, still-evolving doctrine. Justice Souter, for example, has described it as "still at an adolescent stage of imprecision." Griswold v. Driscoll, 616 F.3d 53, 59 n.6 (1st Cir. 2010). And while few cases have addressed the distinction between private associations and government for purposes of the government speech doctrine, a 2013 case involving "the intriguing question of whether municipalities in the state of Maine may band together and spend taxpayer dollars to help defeat taxpayer initiatives" persuades this Court that the IML constitutes a government entity for the purposes of the government speech doctrine. Adams v. Me. Mun. Ass'n, No. 1:10-cv-00258-JAW, 2013 WL 9246553, at *1 (D. Me. Feb. 14, 2013).
In Adams, the Maine district court concluded that the government speech doctrine applied to a municipal association (MAA) because the association's speech "was effectively controlled by the government," per the Supreme Court's decision in Johanns. Id. at *23; Johanns, 544 U.S. at 562, 125 S.Ct. 2055 (finding the fact that the government set the "overall message to be communicated" and approved "every word" weighed heavily in favor of government speech). Specifically, the court found that the following facts justified applying the government speech doctrine to the MAA: (1) the association was comprised of state municipalities; (2) nearly 100 percent of the state's municipalities were municipal members; and (3) the association's executive committee was comprised exclusively of municipal members, as was its legislative policy committee. Adams, 2013 WL 9246553, at *5. And while the Adams plaintiffs argued that the association could not be considered the instrumentality or agent of its members because not all of its members agreed with its policy positions, the court found this argument unpersuasive, because each member was "entitled to influence the association's policies through internal governance structures, and each member implicitly consent[ed] to be represented by the association simply by joining it." Id. at *22. Moreover, "any municipality that wished to "terminate its membership in MMA based on a policy disagreement or for any other reason [was] free to do so."" Id.
Here, as in Adams, the IML's speech is government speech. The IML exists as a statutorily authorized, unincorporated association comprised solely of elected officials acting on behalf of their
Plaintiffs argue that not all municipalities approve of every IML position, making it similar to a private association. [53] at 9. But, as the court in Adams emphasized, each municipal member implicitly consented to the IML's representation and can terminate its membership based upon a policy disagreement. Adams, 2013 WL 9246553, at *22. As in any large government entity or organization, the association does not need unanimity on any given policy position to effectively advocate on behalf of its members. Id.
Plaintiffs fail to plead private involvement in any of the IML's decisions. See generally [40]. The organization's actions were entirely within municipal officials' control. 65 ILCS § 5/1-8-1; [40-1] at 4-13. Thus, the IML is not analogous to a private entity subject to the compelled-subsidy doctrine, as in Janus, and the government speech doctrine applies.
This Court turns now to whether the specific speech at issue warrants an exception to the government speech doctrine. Plaintiffs argue that because the IML engaged in political speech, it exceeded its statutory authorization and therefore requires First Amendment scrutiny. [53] at 9. Specifically, Plaintiffs claim that "Lincolnshire's utilization of Plaintiffs' tax dollars to fund the IML's lobbying activities" is "not germane to a broader regulatory scheme," and thus it must be subject to the compelled-subsidy doctrine under Keller, which held that the State Bar of California could only "constitutionally fund activities germane to" its goals of "regulating the legal profession and improving the quality of legal services," 496 U.S. at 13-14, 110 S.Ct. 2228. Id. at 10, 110 S.Ct. 2228. Plaintiff's assertion of an exception to the government speech doctrine fails to withstand scrutiny.
After generally describing the IML as a "nonpolitical" "association," the Illinois statute explicitly provides that member municipalities (like most local government entities) "may provide and disseminate information and research services," and "may do all other acts for the purposes of improving" local government. 65 ILCS § 5/1-8-1; see also Ries v. City of Chicago, 242 Ill.2d 205, 215-216, 351 Ill.Dec. 135, 950 N.E.2d 631 (Ill. 2011) ("If [statutory] language is clear and unambiguous, we are not at liberty to depart from the language's plan meaning."). As such, the law permits the IML members to take public policy positions on, and disseminate information about, methods of improving local government (including here, portions of the Governor's legislative agenda, supposedly designed to improve local government).
In short, the operative complaint fails to allege unauthorized political speech for purposes of the compelled-subsidy doctrine. If the Village of Lincolnshire's residents disagree with its decision to join the IML based upon this activity, they can express this opinion at the ballot box, or limit the conduct of elected officials by law, regulation, or practice. See, e.g., Southworth, 529 U.S. at 235, 120 S.Ct. 1346 ("When the government speaks ... it is, in the end, accountable to the electorate and the political process for its advocacy.").
This Court finds the IML's speech exempt from first Amendment scrutiny as government speech, and thus dismisses with prejudice Plaintiffs' First Amendment free speech and concomitant association claim (Counts I and II).
In addition to their First Amendment theory, Plaintiffs bring an equal protection claim. Specifically, Plaintiffs allege that because "under existing federal law, union members are able to object to and opt out of paying union dues spent on political causes with which they disagree," Lincolnshire "denies Plaintiffs equal protection of the law by compelling them to support political activities with which they disagree while allowing others to refuse to do so." Id. ¶¶ 51-53. Plaintiffs' equal protection claim thus remains dependent upon this Court finding that Lincolnshire unconstitutionally compelled them to support political activities with which they disagreed. But because Plaintiffs First Amendment claims fail for the reasons discussed above, they failed to establish that they are not legally required to pay their municipal taxes to Lincolnshire. Therefore, Plaintiffs' equal protection claim must also be dismissed with prejudice.
The "general rule is that, when all federal-law claims are dismissed before trial," the pendent claims should be left to the state courts. Wright v. Associated Insurance Cos. Inc., 29 F.3d 1244, 1252 (7th Cir.
For the reasons explained above, this Court grants Defendants' joint motion to dismiss with prejudice. [50]. All dates and deadlines are stricken. Civil case terminated.