Mercatus Group LLC v. Lake Forest Hospital

528 F. Supp. 2d 797, 2007 U.S. Dist. LEXIS 84920, 2007 WL 4117607
CourtDistrict Court, N.D. Illinois
DecidedNovember 15, 2007
Docket07 C 2042
StatusPublished
Cited by1 cases

This text of 528 F. Supp. 2d 797 (Mercatus Group LLC v. Lake Forest Hospital) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mercatus Group LLC v. Lake Forest Hospital, 528 F. Supp. 2d 797, 2007 U.S. Dist. LEXIS 84920, 2007 WL 4117607 (N.D. Ill. 2007).

Opinion

MEMORANDUM AND ORDER

BLANCHE M. MANNING, District Judge.

Plaintiff Mercatus Group, LLC (“Merca-tus”) brings suit against defendants Lake Forest Hospital (“LFH”), Village of Lake Bluff (the “Village”), and individual defendants Michael Peters, David Barkhausen, and Rick Lesser, all of whom are trustees of the Village (the “Trustees”). The Village and the Trustees are referred to collectively as the ‘Village Defendants.” In its complaint, Mercatus alleges that LFH sought to monopolize the diagnostic medical imaging market in eastern Lake County, Illinois and exclude Mercatus from that market.

To that end, Mercatus has filed a complaint alleging the following nine counts: Count I (attempted monopolization under § 2 of the Sherman Act against LFH); Count II (conspiracy in restraint of trade under § 1 of the Sherman Act against LFH); Count III (substantive due process violation under 42 U.S.C. § 1983 against the Village and Trustees); Count IV (procedural due process violation under 42 U.S.C. § 1983 against the Village and Trustees); Count V (state law ultra vires action against the Village and Trustees); Count VI (equal protection violation under 42 U.S.C. § 1983 against the Village and Trustees); Count VII (tortious interference with prospective economic advantage against LFH); Count VIII (tortious interference with prospective economic advantage against LFH); and Count IX (claim for violation of vested rights against the Village).

Both LFH and the Village Defendants separately move to dismiss Mercatus’s complaint under Fed.R.Civ.P. 12(b)(6). For the reasons stated below, LFH’s motion to dismiss is granted in part and denied in part and the Village Defendants’ motion to dismiss is granted.

I. Facts

For purposes of this motion to dismiss, the court accepts as true the following well-pled allegations. Mercatus develops and runs “physician centers” that compete with hospitals like LFH in the delivery of diagnostic imaging services including nuclear imaging, CT scans, and MRI. In 2004, Mercatus began plans to build a physician center in Lake Bluff, Illinois (the “Mercatus Center”), approximately three miles away from LFH. According to Mer-catus, the new center would drive down prices for diagnostic imaging and increase access to health care.

Mercatus alleges that the property it sought to build on (which it refers to as the “Shepard Land” because the property already featured an automotive sales dealership on part of the property called Shepard Chevrolet) was zoned L-2 under Lake Bluff zoning ordinances, which allowed it automatically to be used for the medical office center it wanted to develop. Thus, Mercatus alleges that it merely was seeking site plan approval from the Village *801 Board, which it agrees it needed under Lake Bluff ordinances, 1 and that initially, the Village never raised the issue of Mer-catus needing a “special use” permit.

According to Mercatus, however, Trustee Lesser, a physician at LFH, told Mer-catus that he would not support the Mer-catus Center because of the potential harm to LFH. After Lesser and LFH voiced their opposition to the Center, “the Village informed Mercatus for the first time that it would need a ‘special use’ permit,” and that site plan approval was contingent on special use permission. Cmplt. at ¶36. The Shepard Land was already governed by a 1972 Special Use Permit (“Shepard SUP”), which was amended in 1972 and 1979 (the “Amendments”). Each of the Amendments, of which the court takes judicial notice as they are matters of public record, Anderson v. Simon, 217 F.3d 472, 474-75 (7th Cir.2000) (citation omitted), contained language indicating that approval of the Village Board was necessary for any future developments of the relevant portions of the Shepard Land. See Exh. 2 to Village Defendants’ Motion to Dismiss, 1976 Amendment (stating that “[n]o further developments of Lot 4 and 5 [the lots at issue] may be made without approval of the President and Board of Trustees of the Village of Lake Bluff’) and Exh. 3, 1979 Amendment (stating that “[n]o additional or further usage shall be made of said Lots 4 and 5 except as provided by the Board of Trustees of the Village of Lake Bluff.”).

In late 2006, Mercatus was initially granted permission by the Board to build the Center and its site plan for the construction of a medical office building was approved by the Village’s Architectural Board of Review (“ABR”). However, pri- or to final site plan approval by the Board, Mercatus alleges that the defendants intervened in the process to thwart competition in a variety of ways. Specifically, LFH allegedly misrepresented information to both public and private entities regarding Mercatus, the proposed center and the economic impact on LFH. Mercatus also alleges that LFH interfered with Merca-tus’s existing business relationships by, among other things, intimidating physicians who had agreed to work at the proposed center and causing them to back out of their commitments to Mercatus. As a result, Mercatus alleges that the Board denied upon reconsideration the “special use” permission it had granted. The Board then denied site plan approval based on the denial of the “special use” permission. 2

*802 With respect to the Village Defendants, Mercatus alleges that they participated in a scheme to deprive Mercatus of fair access to governmental process by their active participation in a sham proceeding. Specifically, Mercatus alleges that the Village Defendants manipulated approval for the Mercatus Center and subjected Merca-tus to an unnecessary and illegal hearing on whether Mercatus required a “special” or “developmental” 3 use permit to build in Lake Bluff for the purpose for which the land was already zoned, i.e., a medical office building.

In addition, Mercatus alleges that the Village Defendants denied Mercatus due process by meeting in secret in violation of the Illinois Open Meetings Act and through other procedural irregularities. In these secret meetings, the participants purportedly defined the criteria to which Mercatus would be subject and then having defined those criteria, denied Mercatus due process and did not allow Mercatus to be heard at the Village board meetings.

After the Board’s denial of the “special use” permit, the Village attorney stated during a January 2007 meeting regarding site plan approval that because the “use” permit was denied, site plan approval was effectively impossible to grant. Thus, the Board voted to draft a resolution that de *803 nied the Mercatus site plan because of the “special use” vote and, according to Merca-tus, without consideration of the requisite criteria in the Lake Bluff ordinance.

II. Analysis

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Mercatus Group, LLC v. Lake Forest Hospital
641 F.3d 834 (Seventh Circuit, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
528 F. Supp. 2d 797, 2007 U.S. Dist. LEXIS 84920, 2007 WL 4117607, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mercatus-group-llc-v-lake-forest-hospital-ilnd-2007.