Judge tosses garbage haulers' $24 million discrimination lawsuit vs Chicago, Allied Waste

By Jonathan Bilyk | Mar 25, 2016

A federal judge has tossed out a racial discrimination lawsuit brought by the African-American owners of a garbage hauling company, who had alleged Chicago city officials and representatives of two other waste haulers had conspired to lock their smaller, minority-owned rival out of the city’s waste hauling business, saying the small business owners had not offered nearly enough evidence to back their assertions that their lack of success at navigating the city bidding process had anything to do with their race.

On March 15, U.S. District Judge Harry D. Leinenweber ruled in Chicago federal court to dismiss the entire complaint brought by Jesse and Linda McGee, owners of Linda Construction Inc., against the city and the private defendants.

“Plaintiffs have failed to allege facts indicate that racial animus underlay defendants’ alleged conspiracy against LCI,” the judge wrote. “Although Linda and Jesse McGee are African American and LCI is an African American-owned business, plaintiffs make no further allegations to demonstrate that the alleged actions of the various defendants were motivated by race.

“Plaintiffs simply tack on the phrases ‘because of plaintiffs Linda and Jesse McGee’s race’ or ‘because of [plaintiffs’] race to each of their contentions … Plaintiffs fail to allege facts showing any kind of racial animus on the part of the city or the other defendants.”

The case, which landed in Chicago federal court in October 2015, centered on events which LCI alleged occurred during a purported three-year ‘probationary period,’ during which city officials evaluated LCI’s ability to haul the city’s solid waste to landfills. The complaint said LCI had landed the probationary contract in 2010, as part of a “joint venture” with Allied Waste, a subsidiary of Republic Services Inc. The complaint said the joint venture was needed to allow Allied to meet the city’s requirements mandating contracting with minority-owned business, and the McGees further alleged theirs was the only such minority-owned trash hauling business eligible for the venture.

According to the complaint, the contract had allegedly required Allied to “mentor” LCI and prepare it and its employees to handle the demands of the city’s waste hauling business. Should the probationary period end well, LCI would then be allowed to bid on a city waste hauling contract, after years of allegedly being refused, the complaint said.

However, the complaint alleged the defendants instead sought to sabotage LCI to prevent it from meeting the city’s requirements. And they alleged the actions amounted to racial discrimination.

LCI asked the court to award $24 million in compensatory damages, plus unspecified punitive damages, and to require the city allow LCI to bid for the contract.

LCI was represented by the Law Offices of Salem & Associates, of Palos Heights.

The judge, however, said the McGees’ complaint failed to pass legal muster for a number of reasons. He sided with the city and other defendants, who argued the McGees lacked standing under the law to bring the lawsuit at all, as they alleged the misdeeds were committed against their business and not them personally.

And he further noted the McGees chose not to participate in the bidding process they claimed they had been blocked from, which the judge said meant the McGees effectively “pleaded themselves out of court” on claims against the defendants of contractual interference.

The McGees, he said, had “never sought to enter into a contractual relationship with the city” and alleged they had “suffered only the possible loss of a future contractual opportunity, which is insufficient.”

But the judge most harshly treated the McGees’ conspiracy allegations, saying they presented nowhere near enough evidence to demonstrate the existence of a conspiracy to sabotage the McGees’ business or violate their constitutional rights to equal protection and due process, much less that it was driven by “racial animus.”

“Plaintiffs allege repeatedly that defendants intended to ‘ensure that LCI failed during its probationary period,’ and would do ‘whatever was possible to cause [LCI} to fail,’” the judge wrote.

“These allegations simply are insufficient to show that any meeting of the minds occurred between the city and the various defendants to deprive plaintiffs of their constitutional rights.”

The judge set aside a motion brought by some of the defendants for sanctions against the McGees’ lawyer, Maurice Salem, for filing the federal lawsuit, claiming this case was simply a rehash of similar claims brought in a similarly doomed lawsuit by LCI in Cook County court. But the judge indicated he may change his mind on considering that motion if the McGees decided to attempt to resurrect their case and the defendants satisfy some legal shortcomings in their motion for sanctions.

The judge gave the McGees until March 29 to amend their lawsuit to address the shortcomings the judge identified. After that, he said, he would dismiss the complaint with prejudice.

The private defendants in the case were represented by the firms of Reed Smith LLP, of Chicago, and the Hesik-Prybylo Law Offices, of Oak Park. The city of Chicago was represented by in-house counsel from its Department of Law.

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City of Chicago Hesik-Prybylo Reed Smith LLP Reed Smith LLP Republic Services

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