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Walker v. City of East Chicago

United States District Court, N.D. Indiana, Hammond Division

September 29, 2017

LASHAWNDA WALKER, individually and as next friend of her children, D.W., a minor, M.H., a minor, Z.H., a minor and M.W., a minor; KIMBERLY HUNTER, individually and as next friend of her child, M.C., a minor; AMOS WILLIAMS; ROBIN CLINTON, individually and as next friend of her children, J.S. Jr., a minor, J.C., a minor, and A.S., a minor; MARK STENSON; LATASHA EDWARDS, individually and as next friend of her child, B.H., a minor, and DIONNE HENDERSON, individually and as next friend of her children, C.B., a minor, and A.H., a minor, Plaintiffs,
CITY OF EAST CHICAGO; ANTHONY COPELAND, individually and in his official capacity as Mayor of the City of East Chicago; BP PRODUCTS NORTH AMERICA INC.; E I DU PONT DE NEMOURS and COMPANY; and ATLANTIC RICHFIELD COMPANY, Defendants.



         Plaintiffs, former residents of the West Calumet Public Housing Complex (“the Complex”), bring these claims under Indiana law and 42 U.S.C. § 1983 stemming from their exposure to lead and arsenic contamination at the site of the Complex. Defendants, Mayor Anthony Copeland and the City of East Chicago (collectively, “the City Defendants, ” or “the Mayor” and “the City”) have filed a motion to dismiss. (DE # 39.)[1]Defendants Atlantic Richfield Company and BP Products North America Inc. (collectively, “ARCO”) have filed a motion to dismiss. (DE # 60.) Defendant E. I. du Pont de Nemours and Company (“DuPont”) has filed a motion to dismiss. (DE # 63.) Also pending are motions for judicial notice filed by ARCO (DE # 62) and DuPont (DE # 65) and the City Defendants' Rule 12(f) motion to strike portions of plaintiffs' response to their motion to dismiss (DE # 55).

         I. BACKGROUND

         At the time of filing the complaint, the individual plaintiffs had been residents of the Complex for between 3 and 11 years. (Id.) The Complex is located within the USS Lead Superfund Site where the ground is “highly contaminated with lead and arsenic.” (DE # 36-1.) The site is currently the subject of a Consent Decree in the cause of United States v. Atlantic Richfield Company, et al., No 2:14-CV-312-PPS-PRC (“the Cleanup Action”).

         Plaintiffs' amended complaint states that DuPont and ARCO “entered into an agreement with the EPA[2] and IDEM[3] for a $26 million cleanup of lead and arsenic contamination in East Chicago.” (DE # 36 at ¶ 25.) Plaintiffs contend that the parties to this agreement “failed to provide notice to the [p]laintiffs or the general public regarding the agreement . . . or the underlying circumstances which detrimentally affected the property, health and lives of the [p]laintiffs.” (Id.) They allege that the combined actions of the defendants exposed them to “extremely high levels of lead, arsenic and other potentially harmful contaminants.” (Id. at ¶ 26.)

         They further contend that DuPont and ARCO (“the Corporate Defendants”) are responsible for depositing the pollutants on the site of the Complex (Id. at ¶ 36), and that all of the defendants wrongfully concealed the facts of the contamination from plaintiffs, causing further injury (Id. at ¶ 35). Plaintiffs allege that Mayor Copeland's wrongful acts “were a manifestation of the City of East Chicago's own wrongful acts, ” namely, policies and customs supporting the “deliberate concealment of dangers affecting the [p]laintiffs.” (Id. ¶¶ 27-28)

         As a result of all defendants' actions, plaintiffs allege that they have suffered past, present, and future personal injuries including: “various health problems, weight loss, shortened life expectancy, miscarriage, physical pain and suffering, mental anguish, medical expenses, medical monitoring expenses, wage loss, brain and developmental injuries, cognitive deficits, lost earning capacity, aggravation and exacerbation of pre-existing conditions and contract damages.” (Id. at ¶ 14.)

         On November 16, 2016, plaintiffs filed a second amended complaint, bringing ten counts against defendants. Count I is a claim brought under § 1983 for violation of plaintiffs' substantive due process rights on a theory of state-created danger (Id. at ¶¶ 38-53); Count II is a § 1983 claim for violations of the Fourteenth Amendment's Equal Protection Clause and Privileges and Immunities Clause (Id. at ¶¶ 54-61); Count III is another substantive due process claim alleging a violation of plaintiffs' right to bodily integrity (Id. at ¶¶ 62-74); Count IV is a procedural due process claim for the deprivation of a contractually-created property right (Id. at ¶¶ 75-81); Count V is a conspiracy claim (Id. at ¶¶ 82-85); Count VI is a personal injury claim against the Corporate Defendants (Id. at ¶¶ 86-95); Count VII is a claim for breach of contract and implied warranty against the City Defendants (Id. at ¶¶ 96-105); Count VIII is a claim for fraudulent misrepresentation against the City Defendants (Id. at ¶¶ 106-114); Count IX is a trespass claim against all defendants (Id. at ¶¶ 115-121); Count X is a negligence claim against all defendants (Id. at 122-131).


         Defendants have moved to dismiss plaintiffs' claims under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. A judge reviewing a complaint under a Rule 12(b)(6) standard must construe it in the light most favorable to the non-moving party, accept well-pleaded facts as true, and draw all inferences in the non-movant's favor. Erickson v. Pardus , 551 U.S. 89, 93 (2007); Reger Dev., LLC v. Nat'l City Bank, 595 F.3d 759, 763 (7th Cir. 2010). Under the liberal notice-pleading requirements of the Federal Rules of Civil Procedure, the complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). To satisfy Rule 8(a), “the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Erickson, 551 U.S. at 93 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

         “While the federal pleading standard is quite forgiving, . . . the complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ray v. City of Chicago, 629 F.3d 660, 662-63 (7th Cir. 2011); Twombly, 550 U.S. at 555, 570. A plaintiff must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). To meet this standard, a complaint does not need detailed factual allegations, but it must go beyond providing “labels and conclusions” and “be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citing Sanjuan v. Am. Bd. of Psychiatry & Neurology, 40 F.3d 247, 251 (7th Cir. 1994) among other authorities). As the Seventh Circuit recently explained, a complaint must give “enough details about the subject-matter of the case to present a story that holds together.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010).

         However, plaintiffs do not need to plead facts that establish each element of a cause of action and, “[a]t this stage the plaintiff receives the benefit of imagination, so long as the hypotheses are consistent with the complaint.” Sanjuan, 40 F.3d at 251. Even if the truth of the facts alleged appears doubtful, and recovery remote or unlikely, the court cannot dismiss a complaint for failure to state a claim if, when the facts pleaded are taken as true, a plaintiff has “nudged their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 555, 570.


         A. Plaintiffs' § 1983 Claims

         Counts I-IV of the complaint bring claims under 42 U.S.C. § 1983. Plaintiffs bring these claims against all defendants. The court will first evaluate these claims as to the Corporate Defendants before turning to the City Defendants.

         i. § 1983 Claims Against the Corporate Defendants

         To state a claim under § 1983, a plaintiff must allege (1) a deprivation of a right secured by the Constitution or laws of the United States (2) by a person acting under color of state law. Windle v. City of Marion, Ind., 321 F.3d 658, 661 (7th Cir. 2003). When bringing a § 1983 claim against a defendant who is not a government official or employee, a plaintiff must raise sufficient allegations that the private entity acted under color of state law. Rodriguez v. Plymouth Ambulance Serv., 577 F.3d 816, 822 (7th Cir. 2009). “At its most basic level, the state action doctrine requires that a court find such a ‘close nexus between the State and the challenged action' that the challenged action ‘may be fairly treated as that of the State itself.'” Id. at 823 (quoting Jackson v. Metro Edison Co., 419 U.S. 345, 351 (1974)).

         ARCO and DuPont each contend that plaintiffs' complaint fails to state a § 1983 claim against them because it does not sufficiently allege that they were acting under color of state law. (DE ## 61 at 3-6, 64 at 8-9.) In response, plaintiffs argue that the Corporate Defendants were state actors by virtue of the Consent Decree that settled claims brought against them in the Cleanup Action. (DE ## 70 at 5-6, 71 at 5-6.) In particular, plaintiffs argue that the settlement in the Cleanup Action afforded the Corporate Defendants with a release from liability for certain state and federal claims in exchange for $26 million dollars of funding for the cleanup effort. (Id.) Thus, they argue, the Consent Decree provided the Corporate Defendants with protection from liability, and this protection incentivized the Corporate Defendants in remaining silent about the health hazards for residents of the Complex. (Id.)

         Plaintiffs lean heavily on the Seventh Circuit's formulation of the state actor doctrine from a case that predates the Supreme Court's articulation of the “close nexus” standard in Jackson v. Metro Edison Co., 419 U.S. 345, 351 (1974). Plaintiffs argue that, because of the Consent Decree, the Corporate Defendants received “aid, comfort, or incentive” from the government such that they qualify as state actors under § 1983. (DE ## 70 at 5, 71 at 5 (quoting Lucas v. Wis. Elec. Power Co., 466 F.2d 654-56 (7th Cir. 1972).)

         Whether or not the Lucas articulation is still good law after Jackson, plaintiffs' claims stretch the state actor doctrine beyond its limits. Lucas itself stated that a private defendant acts under color of state law only if the government's support is “substantial, measured by either its contribution to the effectiveness of defendant's conduct, or perhaps by its defiance of conflicting national policy.” 466 F.2d at 656. None of the allegations in the amended complaint amount to “substantial support” providing “aid, comfort, or incentive.”

         To begin with, the alleged contamination of the site happened decades ago, long before the Consent Decree could even be contemplated, let alone counted upon as incentive or support. It is also worth pointing out that the release from liability in the Consent Decree was not a mere gratuity. Rather, the Consent Decree was the culmination of an action brought by the government against the Corporate Defendants and obligated the Corporate Defendants to pay at least $26 million towards the cleanup efforts. (DE # 36 at ¶ 25.) The fact that the settlement of that lawsuit included a release of certain claims does not thereby transform the Corporate Defendants into state actors. If that was the case, nearly any private entity that is prosecuted by the government and then subsequently enters into a settlement would similarly qualify as a state actor. Such an outcome would distort the state actor doctrine beyond recognition and the case law bears this out.

         In Lucas, the sole case provided in support of plaintiffs' claims, the Seventh Circuit held that a public utility provider was not a state actor even though the government had effectively granted it a monopoly over the provision of electricity. 466 F.2d at 656-58. The court remarked that the support derived therefrom was “at best, insignificant, ” and thus, the plaintiffs could not proceed on their claims under § 1983. Id. at 658. The alleged “aid, support and comfort” in this case - release from liability in exchange for over $26 million - falls well short of that provided in Lucas, and in neither case is there such a “close nexus” that the Corporate Defendants can be considered state actors for purposes of § 1983. See also Bus. Realty Inv. Co. v. Insituform Techs., Inc., 564 F. App'x 954, 956-57 (11th Cir. 2014) (holding that a private contractor hired by County to perform services pursuant to environmental consent decree was not a state actor). ARCO and DuPont's motions to dismiss are granted as to plaintiffs' § 1983 claims.

         ii.§ 1983 Claims Against the City Defendants

         The City Defendants have also moved to dismiss plaintiffs' claims under § 1983. The City Defendants attack the sufficiency of the allegations and also highlight the Mayor's lack of personal involvement in the alleged violations. (DE # 40 at 5-7.)

         Plaintiffs' § 1983 claims against the City are governed by the municipal liability standards set forth in Monell v. Dep't of Soc. Servs. of the City of New York, 436 U.S. 658 (1978). Under Monell, a local government may not be sued under § 1983 for an injury caused solely by its employees or agents. Id. at 694. Rather, “a plaintiff must show the existence of an “official policy” or other governmental custom that not only causes but is the “moving force” behind the deprivation of constitutional rights.” Teesdale v. City of Chicago, 690 F.3d 829, 834 (7th Cir. 2012) (citing Estate of Sims v. Cty. of Bureau, 506 F.3d 509, 514 (7th Cir. 2007)). Thus, the City can only be held liable where there is “(1) an express policy that causes a constitutional deprivation when enforced; (2) a widespread practice that is so permanent and well-settled that it constitutes a custom or practice; or (3) an allegation that the constitutional injury was caused by a person with final policymaking authority.” Teesdale, 690 F.3d at 834 (internal quotation marks and citation omitted).

         Plaintiffs' Monell claims fall under the third variety and they have identified Mayor Copeland as the individual who exercised final policymaking authority on behalf of the City on all matters relating to public housing. (DE # 49 at 5.) Furthermore, all of plaintiffs' claims for municipal liability appear to be premised on the idea that the East Chicago Housing Authority (the “ECHA”) is an agency of the City and that the Mayor exercises final policymaking authority over the ECHA. (See DE # 36 at ¶ 18 (“ECHA is an arm of the CITY OF EAST CHICAGO and carried out the policies and procedures of the City.”); DE # 49 at 2 (“The City for years continued to provide public housing to people including the [p]laintiffs, all the while representing that the City would provide safe housing.”); id. (“The City and its Mayor failed to maintain the public housing complex in a safe and livable manner and failed to warn its residents of the dangers, which were known.”).) The ECHA is not a party to this lawsuit.

         Plaintiffs' assumption regarding the ECHA is contrary to Indiana law. Pursuant to Ind. Code. § 36-7-18-14, Indiana Housing Authorities, like the ECHA, are municipal corporations and thus, “as ‘municipal corporations, ' housing authorities are legal entities separate from the City itself that may sue and be sued in their own name.” Brenston v. Dedelow, No. 2:03 CV 156, 2005 WL 2204870, at *5 (N.D. Ind. Sept. 7, 2005) (citing Indiana Attorney General Opinion, 1989 Ind. Op. Att'y Gen No.2 (Feb. 10, 1989) (stating that municipal corporations are not departments, boards, commissions or agencies of the City)). Thus, insofar as plaintiffs' injuries were caused by the policies and wrongful acts of the ECHA, the City Defendants are not subject to vicarious liability and cannot be held liable absent allegations of direct involvement. See Magee v. Hous. Auth. of S. Bend, No. 3:09 CV 337, 2010 WL 3000660, at *6 (N.D. Ind. July 28, 2010) (dismissing claims seeking to hold mayor “vicariously liable for wrongful conduct on the part of the [Housing Authority] because of his appointment and removal authority”). Thus in evaluating plaintiffs' § 1983 claims, it is necessary to parse out which allegations can be ascribed to the Mayor acting on behalf of the City and which allegations apply solely to the ECHA, which is not a party to this lawsuit.

         a. Substantive Due Process - State-Created Danger

         Plaintiffs' first § 1983 claim is for a violation of the Due Process Clause under the state-created danger doctrine. See DeShaney v. Winnebago Cty. Dept. of Soc. Serv., 489 U.S. 189 (1989). According to the Seventh Circuit, three principles govern the analysis of a state-created danger claim: (1) “in order for the Due Process Clause to impose upon a state the duty to protect its citizens, the state, by its affirmative acts, must create or increase a danger faced by an individual;” (2) “the failure on the part of the state to protect an individual from such a danger must be the proximate cause of the injury to the individual;” and (3) “because the right to protection against state-created dangers is derived from the substantive component of the Due Process Clause, the state's failure to protect the individual must shock the conscience.” King ex rel. King v. East St. Louis Sch. Dist. 189, 496 F.3d 812 at 817-818 (7th Cir. 2007).

         Plaintiffs argue that the “City promised to provide the [p]laintiffs with safe housing . . . [and] continued to rent to the [p]laintiffs over the course of many years, all the while knowing” of the dangers posed by the contamination. (DE # 49 at 4.) However, setting aside any actions of the ECHA, the amended complaint is entirely devoid of any allegations that the Mayor himself undertook any affirmative acts that created the danger and proximately caused plaintiffs' injuries.

         Plaintiffs' lease agreements, attached as exhibits to the complaint, are clearly between the individual plaintiffs and the ECHA - not the City and the Mayor. (See DE # 36-2.) Thus, any implied promise of safe housing or other aspects of the landlord-tenant relationship cannot be fairly attributed to the Mayor and the City. The only concrete allegation of the Mayor's involvement is based on a letter to residents of the Complex, notifying them of the contamination and advising residents that “it is in your best interest to temporarily relocate your household to safer conditions.” (DE # 36-1.) In this letter, the Mayor also indicates that he ordered the City Health Department to offer lead testing to the residents and their families. (Id.) Thus, the only allegations pertaining to the Mayor's direct involvement appear to be efforts to mitigate the health risks for residents of the Complex. Plaintiffs have failed make sufficient allegations that the Mayor and the City affirmatively created a danger and failed to protect the plaintiffs in a conscience-shocking manner. The City Defendants' motion to dismiss is granted as to Count I.

         b. Fourteenth Amendment Equal Protection and Privileges and Immunities Clauses

         Plaintiffs' second § 1983 claim against the City Defendants alleges violations of plaintiffs' rights under the Equal Protection and Privileges and Immunities Clauses of the Fourteenth Amendment. Plaintiffs allege that all of the defendants “acted in concert and by joint action” to violate plaintiffs' rights. (DE 36 at ¶ 55.) Plaintiffs allege that the residents of the Complex “predominately consist[ed] of African Americans and other minorities” and assert that “the City had no compelling interest for discriminating against and treating the [p]laintiffs differently because of their race.” (Id. at ¶¶ 57-58.)

         To succeed on an equal protection claim, plaintiffs must allege that the City's policies had a discriminatory effect and that defendants were motivated by a discriminatory purpose. Alston v. City of Madison, 853 F.3d 901, 906 (7th Cir. 2017) (citing Chavez v. Ill. State Police, 251 F.3d 612, 635-36 (7th Cir. 2001). “Discriminatory purpose means more than simple knowledge that a particular outcome is the likely consequence of an action; rather, discriminatory purpose requires a defendant to have selected ‘a particular course of action at least in part because of its adverse effects on a particular group.'” Alston, 853 f.3d at 907 (quoting Chavez, 251 F.3d at 645) (internal quotations omitted); McCleskey v. Kemp, 481 U.S. 279, 298 (1987). Defendants contend that the amended complaint does not contain any allegations that the City Defendants acted with discriminatory purpose. (DE # 40 at 13.)

         Plaintiffs do not directly respond to the City Defendants' arguments in favor of dismissal. Nor do they offer any case law in support of their Fourteenth Amendment claims. At most, plaintiffs make an oblique reference to their minority status in a section of their response brief addressing the Mayor's individual liability. There, they assert that “[t]he Mayor ordered that the [p]laintiffs (poor racial minorities) be removed from their homes, without compensation.” (DE # 49 at 6.) The court can find no such allegation in the amended complaint, and it is unclear if this statement is offered in support of their Fourteenth Amendment claim. Even so, this argument at best points towards discriminatory effect rather than discriminatory purpose. Alston, 853 F.3d at 908 (“True enough, [plaintiff's] statistics show disparate impact: . . . [y]et that does not lead to the inescapable conclusion that the defendants acted with discriminatory intent.”) The City Defendants' motion to dismiss is granted as to Count II.

         c. Substantive Due Process - Bodily Integrity

         The third § 1983 claim is for violations of plaintiffs' substantive due process right to bodily integrity. The right to “substantive due process is ‘very limited, '” Viehweg v. City of Mount Olive, 559 F. App'x 550. 552 (7th Cir. 2014) (quoting Tun v. Whitticker, 398 F.3d 899, 900 (7th Cir. 2005)) and the Due Process Clause “does not purport to supplant traditional tort law in laying down rules of conduct to regulate liability for injuries that attend living together in society.” Collins v. City of Harker Heights, Tex., 503 U.S. 115, 128 (1992) (internal citations omitted). “Furthermore, to survive a motion to dismiss a claim for deprivation of substantive due process, a plaintiff must allege facts tending to suggest that the government's action was arbitrary.” Naperville Smart Meter Awareness v. City of Naperville, 69 F.Supp.3d 830, 839 (N.D. Ill. 2014) (citing Jeffries v. Turkey Run Consol. Sch. Dist., 492 F.2d 1, 3-4 (7th Cir. 1974).

         Plaintiffs do not allege that the City Defendants directly contaminated their homes. At most, plaintiffs allege that City policy allowed for ECHA to build and operate public housing in an area with contaminated soil, thus increasing their risk of injury. However, such allegations of risk exposure do not state a claim for deprivation of the right to bodily integrity under the Fourteenth Amendment. See Naperville, 69 F.Supp.3d at 939 (collecting cases) (no claim for deprivation of bodily integrity against city that allegedly exposed residents to greater risk of injury from radio waves emitted by “smart” utility meters); Upsher v. Grosse Pointe Pub. Sch. Sys., 285 F.3d 448, 453-54 (6th Cir. 2002) (holding that public school employees lacked Fourteenth Amendment claim after being exposed to asbestos-contaminated materials, because school officials had not “engaged in arbitrary conduct intentionally designed to punish the [employees]”); Hood v. Suffolk City Sch. Bd. 469 F. App'x 154, 159 (4th Cir. 2012) (school employee's claims for deprivation of ...

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