Alpha School Bus Co., Inc. v. Wagner

910 N.E.2d 1134, 391 Ill. App. 3d 722
CourtAppellate Court of Illinois
DecidedMay 15, 2009
Docket1-06-3427
StatusPublished
Cited by135 cases

This text of 910 N.E.2d 1134 (Alpha School Bus Co., Inc. v. Wagner) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alpha School Bus Co., Inc. v. Wagner, 910 N.E.2d 1134, 391 Ill. App. 3d 722 (Ill. Ct. App. 2009).

Opinion

PRESIDING JUSTICE O’MALLEY

delivered the opinion of the court:

On May 9, 2006, plaintiffs Alpha School Bus Company, Inc. (Alpha), and Cook-Illinois Corp. (Cook-Illinois), filed a third amended complaint against Michael W. Wagner, Barbara Ann Hackel, Southwest Transit, Inc. (Southwest), Southwest Transit Leasing, LLC (Southwest Leasing), Leroy Meister, Chicago Bear Bones Leasing, Inc. (Chicago Bear Bones), Sunrise Southwest, LLC (Sunrise Southwest), and Sunrise Transportation, Inc. (Sunrise Transportation), 1 alleging, inter alia, violations of the Illinois Antitrust Act (the Antitrust Act) (740 ILCS 10/1 et seq. (West 2006)) and the Illinois Trade Secrets Act (the Trade Secrets Act) (765 ILCS 1065/1 et seq. (West 2006)). Defendants filed a combined motion to dismiss under sections 2 — 615 and 2 — 619 of the Code of Civil Procedure (the Code) (735 ILCS 5/2 — 615, 2 — 619 (West 2006)). The trial court granted the section 2 — 615 motion and dismissed the cause with prejudice. On appeal, plaintiffs contend the trial court erred in (i) holding that the Antitrust Act and the Trade Secrets Act preempt plaintiffs’ other claims; (ii) dismissing plaintiffs’ claims for a permanent injunction and for trade secret misappropriation 2 ; (iii) dismissing Cook-Illinois as a party; (iv) dismissing plaintiffs’ claims regarding two allegedly lost contracts that plaintiffs’ “sister corporations” bid on; and (v) dismissing their third amended complaint with prejudice. For the following reasons, we affirm in part, reverse in part, and remand for further proceedings.

I. BACKGROUND

A. General Facts

Alpha, a wholly owned subsidiary of Cook-Illinois, has provided special education school bus transportation services for the Chicago Board of Education of Chicago Public Schools (CPS), Community High School District 218 (District 218), and the Southwest Cook County Cooperative Association for Special Education (SWCCCASE). Wagner was an officer of Alpha from 1986 through April 13, 2003. Meister was a “managing employee” of Alpha from June 1989 through May 23, 2003. Hackel was the owner of Southwest, and Wagner owned Southwest Leasing. According to defendants, Southwest leased its rolling stock from Southwest Leasing.

B. Prior Procedural History

Plaintiffs originally filed this cause of action against defendants in the federal district court in the summer of 2003, alleging violations of state and federal antitrust laws, civil conspiracy, violation of Illinois trade secret laws, tortious interference with business opportunity, breach of fiduciary duty, racketeering, and fraudulent transfer of assets. See Alpha School Bus Co. v. Wagner, No. 03 C 5009, slip op. at 2 (N.D. Ill. June 17, 2004). The federal district court subsequently granted defendants’ motions to dismiss, holding that plaintiffs failed to state a claim either of “bid-rigging” under the Sherman Act (15 U.S.C. §1 et seq. (2000)) or of mail and wire fraud in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) (18 U.S.C. §§1961 through 1968 (2000)). Alpha School Bus Co. v. Wagner, No. 03 C 5009, slip op. at 8 (N.D. Ill. June 17, 2004). The district court then dismissed the remaining state law claims for lack of jurisdiction. Alpha School Bus Co. v. Wagner, No. 03 C 5009, slip op. at 8 (N.D. Ill. June 17, 2004).

On June 21, 2004, plaintiffs filed an eight-count complaint against the Southwest defendants, Meister, Chicago Bear Bones, and the Sunrise defendants. Plaintiffs’ complaint included counts for antitrust violations, civil conspiracy, misappropriation of trade secrets, tortious interference with prospective business opportunity, breach of fiduciary duty, permanent injunctive relief, fraudulent transfers, and successor liability. The Southwest and Sunrise defendants moved to dismiss the complaint pursuant to sections 2 — 619 and 2 — 615 of the Code. The trial court denied the section 2 — 619 motion to dismiss, granted the section 2 — 615 motion without prejudice regarding all but the breach of fiduciary duty claim, and allowed plaintiffs leave to replead.

Plaintiffs then filed their first amended complaint, which incorporated the original complaint for purposes of appeal. The first amended complaint included the same counts as the original complaint and added a count for tortious interference with contract or, in the alternative, intentional interference with prospective economic advantage. Attached to the complaint was a signed stipulation and order for the federal cause of action.

The Southwest defendants filed a motion to dismiss pursuant to section 2 — 619, which the trial court granted in part, dismissing Cook-Illinois as a party and striking allegations regarding the CPS and District 218 contracts. The trial court also granted Alpha 28 days to amend its complaint.

C. The Second Amended Complaint

Alpha filed its second amended complaint on November 23, 2005, including previously dismissed allegations regarding Cook-Illinois and Sunrise Transportation solely for appeal purposes. Count I of the second amended complaint also alleged antitrust violations, but was substantially similar to the antitrust count in the first amended complaint. Specifically, plaintiffs alleged that the Southwest defendants, Meister, and Chicago Bear Bones either in conspiracy or by contract acted to restrain trade regarding the SWCCCASE contract. Plaintiffs claimed that Wagner and Meister prepared the SWCCCASE contract bids for both Alpha, their employer, and Southwest, Alpha’s competitor. Plaintiffs claimed that Wagner and Meister intended to make Alpha’s bid higher than Southwest’s so that Southwest would win the SWCCCASE contract and then overbill SWCCCASE. Plaintiffs also claimed that, in addition to “rigging the SWCCCASE bid,” the Southwest defendants, Meister, and Chicago Bear Bones conspired to reduce competition by putting Alpha out of business. Plaintiffs supported this additional claim by: (1) referring the trial court to its allegations regarding the civil conspiracy count (count II) and the misappropriation of trade secrets count (count III); and (2) alleging that defendants sabotaged Alpha’s reputation and operations, “ convert [ed] its trade secrets,” fraudulently induced its “employees, drivers and mechanics to terminate their employment” with Alpha, and converted Alpha’s assets. Finally, plaintiffs claimed that, prior to a federal injunction hearing in September 2004, the Southwest defendants transferred Southwest and Southwest Leasing’s business and assets to Sunrise Southwest in order to prevent the plaintiffs from recovering their “customers, business, employees and property and to profit and benefit” the Southwest defendants. Plaintiffs then asserted that, “as a result of the forgoing bid-rigging and over-billing scheme[,] prices were artificially increased and competition was reduced and restrained.”

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Cite This Page — Counsel Stack

Bluebook (online)
910 N.E.2d 1134, 391 Ill. App. 3d 722, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alpha-school-bus-co-inc-v-wagner-illappct-2009.