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LLC v. Village of Broadview

United States Court of Appeals, Seventh Circuit

June 29, 2018

Chicago Joe's Tea Room, LLC and Pervis Conway, Plaintiffs-Appellants,
v.
Village of Broadview, et al., Defendants-Appellees.

          Argued September 8, 2017

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 07-CV-2680 - John Z. Lee, Judge.

          Before Manion, Kanne, and Hamilton, Circuit Judges.

          Hamilton, Circuit Judge.

         For the last eleven years, the parties to this appeal have litigated a land contract that never closed and a strip club that never opened. Yet this appeal is still an interlocutory one. We conclude that the claim for injunctive relief that gives us appellate jurisdiction is actually moot, and we affirm its dismissal. Along the way to that conclusion, we address a tangled record of transactions that seem designed to conceal the real parties in interest and their substantive deals, and we decide issues of appellate jurisdiction, standing, and the law of the case.

         I. Factual and Procedural Background

         Plaintiff Chicago Joe's Tea Room, LLC, was formed to operate not a tea room but a strip club, in a small, near-west suburb of Chicago that does not want one. The paper trail of legal entities, abandoned transactions, and apparently illusory obligations in this case makes for a dense record. We sketch the essential facts at the outset and provide more detail in discussing specific issues.

         The story begins in 2006 when plaintiff Pervis Conway contracted to sell land in the Village of Broadview to David Donahue. Donahue has never been a party to this lawsuit. Donahue assigned the land contract to Chicago Joe's Tea Room, LLC. Joseph Inovskis (who also has never been a party to this lawsuit) was Chicago Joe's sole manager. He applied for the special-use permit needed to operate a strip club on the property. Broadview denied the application in 2007. The land sale agreed to in the contract between Conway and Chicago Joe's Tea Room, LLC, has never closed, and the planned club, Chicago Joe's Tea Room, has never opened.

         Chicago Joe's Tea Room, LLC and Conway (collectively, "Chicago Joe's") filed this suit in 2007 alleging that Broadview violated the First Amendment. Chicago Joe's sought: (1) a declaration that certain Broadview ordinances are unconstitutional, (2) "such further relief pursuant to 28 U.S.C. § 2202 as this Court may deem appropriate, including requiring issuance of any necessary licenses or permits for Plaintiff CHICAGO JOE'S and CONWAY to use its property in the manner it seeks," (3) an injunction blocking Broadview from enforcing its ordinances, and (4) damages and attorney fees.

         Under Broadview's zoning ordinance, Chicago Joe's needed to apply for and be granted a special-use permit to operate a strip club there. Broadview also categorized strip clubs as "adult businesses" and used a separate adult-use zoning ordinance to regulate their placement. Broadview amended its ordinances multiple times during the lawsuit, so the district court has faced a moving target. One of those amendments led the district judge presiding over the first round of summary judgment, Judge Gottschall, to conclude that Broadview's amendment to its adult-use setback ordinance was "aimed solely at Chicago Joe's." Chicago Joe's Tea Room, LLC v. Village of Broadview (Chicago Joe's I), No. 07 C 2680, 2008 WL 4287002, at *6 (N.D. Ill. Sept. 11, 2008).

         After the case was transferred from Judge Gottschall to Judge Lee in 2012, the parties litigated a third round of summary judgment motions. Broadview also moved for reconsideration of Judge Gottschall's ruling from the first round of summary judgment and incorporated by reference its arguments on that motion into its motion for summary judgment. Judge Lee granted the motion to reconsider and granted Broadview's motion for summary judgment on Chicago Joe's declaratory judgment and injunction claims, but denied Broadview's motion for summary judgment on the damages claim. Chicago Joe's Tea Room, LLC v. Village of Broadview (Chicago Joe's II), No. 07-cv-2680, 2016 WL 1270398, at *9 (N.D. Ill. Mar. 31, 2016). Chicago Joe's has appealed that order but limited its arguments on appeal to the denials of injunctive relief.

          II. Analysis

         This appeal presents a series of issues. We begin with appellate jurisdiction, which we have. We then move to the district court's subject-matter jurisdiction over the claims over which we have appellate jurisdiction, and we examine both standing and mootness. We conclude by considering the application of the law-of-the-case doctrine.

         The decisive issue of mootness turns on the limits of the vested-rights doctrine of Illinois law and a recently amended state statute that prevents Chicago Joe's from operating a strip club anywhere in Broadview. The Illinois vested-rights doctrine can be used to recognize property rights to use property in established or planned ways even when state or local law changes to prohibit those uses. Under the doctrine, though, a property owner's claims must be based on a timely assertion of a right to use the property in a way that is actually allowed by law. See City of Elgin v. All Nations Worship Ctr., 860 N.E.2d 853, 856-57 ( Ill. App. 2006). The vested-rights doctrine cannot help plaintiffs here because the undisputed facts show that at every stage of the process through the district court's decision, Chicago Joe's has proposed to use the property in a way prohibited by then-current local law. And since 2007, Chicago Joe's has been proposing to use the property in a way prohibited by an Illinois statute, yet without challenging that statute.

         A. Appellate Jurisdiction

         We have jurisdiction over this interlocutory appeal because the district court's order granted summary judgment for Broadview on all of Chicago Joe's equitable claims. With a few key exceptions, federal courts of appeal can review only final judgments, but 28 U.S.C. § 1292(a)(1) permits an interlocutory appeal of an order refusing an injunction. We construe the statute narrowly, as a limited exception. E.g., Albert v. TransUnion Corp., 346 F.3d 734, 737 (7th Cir. 2003) ("Therefore, we approach the § 1292(a)(1) exception 'somewhat gingerly lest a floodgate be opened' that would deluge the appellate courts with piecemeal litigation."), quoting Gardner v. Westinghouse Broadcasting Co., 437 U.S. 478, 481-82 (1978). In Albert, we said that ...


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