Fed. Dist. Court in IL Dismisses Claims Arising from Denial of Special Use and Business License Request to Operate a Banquet Hall

This case arose form a decision by Calumet City to deny Plaintiff Shaneka Dyson a business license to operate a banquet hall. Dyson, along with two of her businesses, Jump N’ Jam Inflatables, Inc. (“JNJ”) and The Atrium Venue, Inc., filed suit against the City and several of its officials, alleging that the City’s handling of her license application violated her federal and state equal protection and due process rights, as well as constituted a taking without just compensation.

 
In Dyson’s Class-of-One Equal Protection claim, Dyson alleged that city officials led her into believing that she could operate a banquet hall, but then thwarted those plans by revealing that the property was not zoned for that use, and by denying her special use and business license requests after she had spent roughly $150,000 to get her new business up and running. Here, the record indicated that there was a rational basis for the denial of Dyson’s business license and special use applications, as Dyson’s proposed business did not meet the City’s existing zoning requirements. Moreover, Dyson had not established that the ZBA’s vote on her special use application was out of the ordinary, or plead sufficient facts to show if there was any animus against her. As to Dyson’s substantive due process claim, the court found that even had the City’s decision been irrational, Dyson’s substantive due process claim would have failed anyway since she failed to establish an independent constitutional violation or show the inadequacy of state remedies to redress the deprivation. Here, the court noted that Dyson could have asserted an equitable estoppel claim against the City to address her license and permit issues, or asserted a state-law tortious interference claim.

 

The court also rejected Dyson’s procedural due process claim as complaint failed to allege that Dyson lacked notice of the hearings in which her applications were discussed and decided. She also failed to allege that the hearings she attended did not provide an opportunity to be heard. Moreover, the court found that grievance Dyson had about her application being held in limbo was a matter of local law. Lastly, Dyson argued that it “is axiomatic that a government body violates due process when it fails to follow the process itself has codified in law.” However, the court held that a state or municipality’s failure to follow its own rules did not give rise to a federal due process violation.

 

Next, Dyson’s taking claim alleged that the defendants had denied two of Dyson’s proposed uses for the property: a banquet hall and a youth venue. These allegations, however, did not show that Dyson was unable to use the property for any economically beneficial purpose. Moreover, the court held that the complaint failed to identify how the property was actually zoned and what uses were permitted under its current classification.

 
Dyson v City of Calumet City, 2018 WL 509961 (ND IL 1/23/2018)