Case: 1:18-cv-04289 Document #: 44 Filed: 09/27/19 Page 1 of 8 PageID #:533

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

VILLAGE OF SKOKIE, et al., )

)
Plaintiffs, )
)
v. )
)
CITY OF EVANSTON, et. al., ) 18 C 4289
)
Defendants. ) Judge Charles P. Kocoras

ORDER

Before the Court is Defendants’ motion to dismiss Plaintiffs’ amended complaint

under Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court

will grant the motion.

STATEMENT

For purposes of this motion, the Court accepts as true the following facts from

the amended complaint. Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). All

reasonable inferences are drawn in Plaintiffs’ favor. Tamayo v. Blagojevich, 526 F.3d

1074, 1081 (7th Cir. 2008).

Plaintiffs in this case are the Village of Skokie (“Skokie”), an Illinois municipal

corporation; and Elaine Jacobson, Paul Pitalis, Robert Quane, and the Georgia Nut

Company, residents of Skokie (collectively, “Skokie residents”). Defendants are the

City of Evanston (“Evanston”), an Illinois municipal corporation; Stephen Hagerty,

Evanston’s Mayor; and several Aldermen including Judy Fiske, Peter Braithwaite,
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Melissa Wynne, Donald Wilson, Robin Rue Simmons, Thomas Suffredin, Eleanor

Revelle, Ann Rainey, and Cicely Fleming (collectively, “Evanston Elected Officials”).

The case arises from a dispute between Skokie and Evanston over Lake Michigan

water rates. Evanston draws water from Lake Michigan, treats it, and then sells it to its

residents and other local municipalities, including Skokie, Arlington Heights, Buffalo

Grove, Des Plaines, Mount Prospect, Wheeling, Morton Grove, and Niles. Illinois law

requires Evanston to sell Lake Michigan water at a price no higher than the one charged

to customers within its limits through meters for similarly large quantities. 70 ILCS

2605/26.

Skokie has purchased its water from Evanston since 1944. In 1963, Skokie and

Evanston negotiated a 30-year wholesale water-supply contract. After that contract

expired in June of 1993, Skokie and Evanston entered into a new wholesale water-

supply contract that expired in February 2017. At that point, Skokie and Evanston

entered into a series of extensions, including an obligation by Evanston to assure the

health, safety, and maintenance of Skokie’s water supply.

Around the same time, Evanston began negotiating private water-supply

contracts with Niles and Morton Grove. Although any agreement Evanston reached

with Niles and Morton Grove would require water to flow through new pipes in Skokie

streets, Evanston refused to allow Skokie to participate in those negotiations. It also

refused to negotiate an agreement with Skokie until the other negotiations finished.

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When Skokie and Evanston finally started negotiating in the Spring of 2017,

members of Evanston’s negotiating team—allegedly at the behest of Evanston Elected

Officials—claimed that Evanston planned to get back revenue it perceived to have lost

through favorable wholesale water rates provided to Skokie in prior agreements.

During the April 2017 municipal elections, various candidates and elected officials in

Evanston stated their intention to compel Skokie to pay significantly more for Lake

Michigan water. Plaintiffs allege such rates were intended for discriminatory purposes

unrelated to and outside the scope of such officials’ governmental duties and authority.

Plaintiffs further allege that the proposed use, methods of delivery within

Evanston, and relative water quantities purchased by Niles, Morton Grove, and other

municipalities are like Skokie’s. Skokie also offered to switch to a dump-and-pump

water delivery system like the one that Morton Grove and Niles planned to use. Such

a system would send water to an independent treatment and pumping plant owned by

Skokie and located within its borders.

But despite the alleged similarities between Skokie, Morton Grove and Niles,

Evanston passed a Punitive Rate Ordinance (“the Ordinance”) in September 2017 that

charged Skokie $2.06 per 1,000 gallons. This rate is allegedly a $0.53 cent increase

from a rate Evanston offered to Skokie during the May 10, 2017 negotiation session.

In contrast, Plaintiffs allege that Evanston charges Niles and Morton Grove $0.78 cents

per 1,000 gallons of water and charges the other municipalities $0.67 cents per 1,000

gallons.

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Plaintiffs allege that the Ordinance is, therefore, “oppressive, arbitrary,

discriminatory, contrary to Illinois law and violat[es their] substantive due-process

rights.” Plaintiffs further allege that Evanston adopted the Ordinance without notice

and a meaningful opportunity for Skokie and its residents to be heard. Finally,

Plaintiffs allege that the water rate set by the Ordinance causes Plaintiffs to be treated

differently from other similarly situated municipalities and their residents.

At the heart of this dispute lies the Illinois Metropolitan Water Reclamation

District Act (“the Act”), 70 ILCS § 2605/26, which regulates the rate at which

lake-adjacent municipalities may sell water to nearby non-lake-adjacent municipalities.

Where the municipalities disagree on the water rate, the Act requires that the Circuit

Court of Cook County determine a reasonable rate “provided that the right of any

municipal corporation … to obtain water … at the existing metered rate for like

consumers within corporate limits of [lake-adjacent] city … shall remain unimpaired.”

Id. (emphasis added).

Plaintiffs’ amended complaint sets forth 14 counts: Counts VII through XII are

brought against Evanston Elected Officials, while the remaining counts are brought

against the City of Evanston. Counts XIII and XIV allege that the City of Evanston

violated 70 ILCS § 2605/26 and a common-law duty to charge reasonable rates. The

remaining counts allege violations of substantive due process, procedural due process,

and equal protection rights under the Due Process and Equal Protection Clauses of the

Fifth and Fourteenth Amendments and 42 U.S.C. §§ 1983 and 1988. Plaintiffs seek

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both declaratory relief and damages. Defendants move to dismiss Plaintiffs’ amended

complaint for failure to state a claim.

LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) “tests the

sufficiency of the complaint, not the merits of the case.” McReynolds v. Merrill Lynch

& Co., 694 F.3d 873, 878 (7th Cir. 2012). The allegations in the complaint must set

forth a “short and plain statement of the claim showing that the pleader is entitled to

relief.” Fed. R. Civ. P. 8(a)(2). Plaintiffs need not provide detailed factual allegations

but must provide enough factual support to raise their right to relief above a speculative

level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

A claim must be facially plausible, meaning that the pleadings must “allow…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). The claim must be described

“in sufficient detail to give the defendant ‘fair notice of what the…claim is and the

grounds upon which it rests.’” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773,

776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). “Threadbare recitals of the

elements of a cause of action, supported by mere conclusory statements,” are

insufficient to withstand a 12(b)(6) motion to dismiss. Iqbal, 556 U.S. at 678.

Defendants challenge Skokie’s standing to assert its claims in federal court

arguing that Skokie does not allege an injury-in-fact. Because standing is a

jurisdictional issue that courts must address as a threshold matter, Steel Co. v. Citizens

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for a Better Env’t, 523 U.S. 83, 102 (1998) (standing to sue is a threshold jurisdictional

question), the Court first turns to this issue.

I. Standing

To establish standing to sue in a federal court, a plaintiff must allege that they

suffered an injury-in-fact, that is fairly traceable to the challenged conduct of the

defendant, and such injury is likely redressable by a favorable judicial decision.

Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). To adequately allege an injury-

in-fact, a plaintiff must allege that he or she suffered “an invasion of a legally protected

interest” that is “concrete and particularized” and “actual or imminent, not conjectural

or hypothetical.” Spokeo, 136 S. Ct. at 1548. For an injury to be “particularized,” it

“must affect the plaintiff in a personal and individual way.” Id. A “concrete” injury

must be “de facto”; that is, it must actually exist. Id.

Plaintiffs allege that Evanston violated their constitutional rights under federal

and Illinois law by passing the Ordinance, which increased the rate at which Skokie

buys Lake Michigan water from Evanston. Evanston argues that this alleged injury is

conjectural because Skokie has yet to pay the increased rate, and the rate that Skokie

will ultimately pay has yet to be determined by the Circuit Court of Cook County, see

70 ILCS § 2605/26. As a result, Evanston contends Skokie has not been injured and,

depending on the Circuit Court’s determination, may never be injured. The Court

agrees with Evanston.

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Skokie fails to allege a concrete injury because no allegation states that it has

already paid the increased water rates set by the Ordinance. The state law at issue here

suggests that Skokie may continue to pay the current metered rate for like consumers

until the Circuit Court of Cook County determines that Evanston’s new rate is valid.

70 ILCS § 2605/26. The Court also takes judicial notice of Evanston’s state court

complaint alleging that Skokie is not paying the increased water rate of $2.00 per 1,000

gallons. City of Evanston v. Village of Skokie, No. 2017-CH-12966 at ¶¶ 43-52 (Ill. Cir.

Ct., 2017) (Am. Comp. Jan. 2018). In effect, Skokie has been paying the same water

rate allegedly paid by Morton Grove, i.e., $0.78 cents per 1,000 gallons.

Thus, until Skokie actually pays an increased water rate set forth by the

Ordinance, its alleged injury is neither actual nor imminent. Indeed, the Circuit Court

of Cook County may determine Evanston’s rate is invalid, thereby curing Skokie’s

injury. See Spokeo, 136 S. Ct. at 1548 (finding a ‘concrete’ injury must actually exist).

This same reasoning extends to Skokie residents as well. Plaintiffs, therefore, have

failed to allege a concrete injury-in-fact and lack standing to assert their claims in

federal court at this time. As such, Counts I through XII are dismissed.

II. State Law Claims

Because the Court dismissed Plaintiffs’ federal claims, only their state-law

claims remain. According to 28 U.S.C. § 1367(a), federal courts have supplemental

jurisdiction over claims that arise out of the “same case or controversy” as a claim over

which the court has original jurisdiction. A district court “may decline to exercise

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supplemental jurisdiction over pendent state-law claims if the court has dismissed all

claims over which it has original jurisdiction.” Wright v. Associated Ins. Companies,

Inc., 29 F.3d 1244, 1250–51 (7th Cir. 1994) (internal quotation marks omitted), citing

28 U.S.C. § 1367(c)(3). The Seventh Circuit has adopted the general rule that “when

all federal claims are dismissed before trial, the district court should relinquish

jurisdiction over pendent state-law claims rather than resolving them on the merits.” Id.

at 1251. Having dismissed Plaintiffs’ federal claims, the Court declines to exercise

jurisdiction over the remaining state-law claims.

CONCLUSION

For the reasons mentioned above, the Court grants the Defendants’ motion to

dismiss. It is so ordered.

Dated: 09/27/2019 ________________________________

Charles P. Kocoras
United States District Judge