Travelers Property Casualty Company of America v. Metropolitan Water Reclamation District of Greater Chicago

CourtDistrict Court, N.D. Illinois
DecidedFebruary 24, 2025
Docket1:23-cv-02558
StatusUnknown

This text of Travelers Property Casualty Company of America v. Metropolitan Water Reclamation District of Greater Chicago (Travelers Property Casualty Company of America v. Metropolitan Water Reclamation District of Greater Chicago) 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
Travelers Property Casualty Company of America v. Metropolitan Water Reclamation District of Greater Chicago, (N.D. Ill. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA,

Plaintiff, Case No. 23-cv-02558

v. Judge Mary M. Rowland

METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO, CITY OF CHICAGO,

Defendants.

MEMORANDUM OPINION AND ORDER Plaintiff Travelers Property Casualty Company of America brings suit against Defendant City of Chicago and Defendant Metropolitan Water Reclamation District of Greater Chicago alleging takings claims under the United States Constitution and the Illinois Constitution, as well as state law claims. For the reasons stated herein, Defendants’ Motions to Dismiss [49] [54] are granted in part and denied in part. I. Background The following factual allegations taken from the operative complaint [40]1 are accepted as true for the purposes of the motion to dismiss. See Lax v. Mayorkas, 20 F.4th 1178, 1181 (7th Cir. 2021).

1 Travelers attempts to plead additional facts in its responses to Defendants’ motions to dismiss. See e.g., [55], [56]. To the extent those facts are not contained in the operative complaint, the Court will not consider them. See Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436, 448 (7th Cir. 2011) (it In the late 1800’s, Chicago’s sewage was dumped into the Chicago River which then flowed into Lake Michigan, the source of Chicago’s drinking water. [40] at ¶ 11. In 1900, the construction of the Chicago Sanitary and Ship Canal reversed the

natural flow of the Chicago River, thereby allowing Chicago’s sewage to flow towards the Des Plaines, Illinois, and Mississippi Rivers and away from Lake Michigan. Id. at ¶¶ 12-14. Defendant City of Chicago (the “City”) owns and maintains a combined stormwater and wastewater sewer system and has authority over activities related to stormwater and sewage management. Id. at ¶¶ 4-5, 15. Defendant Metropolitan

Water Reclamation District of Greater Chicago (the “District”) has authority to plan, manage, and control activities relating to stormwater management in Cook County. Id. at ¶ 10. The City and the District are individually and/or jointly responsible for the design and operations of the sewer system servicing Chicago, including Lower Wacker Drive and properties on South Wacker Drive. Id. at ¶ 16. The City and the District also individually or jointly control locks, gates, and other water control devices along the Chicago Area Waterway System, including the Chicago River. Id.

at ¶ 75. The Willis Tower, originally known as the Sears Tower, is a historical high- rise building located on South Wacker Drive in Chicago, Illinois that is owned and operated by BRE 312 Owner LLC (“Owner”). Id. at ¶¶ 1-2. Plaintiff Travelers

is an “axiomatic rule that a plaintiff may not amend his complaint in his response brief”). Property Casualty Company of America (“Travelers”), a property casualty affiliate of the Travelers Indemnity Company, provided a builders-risk insurance policy to Owner for construction remodeling being done at Willis Tower. Id. at ¶ 3.

On May 17, 2020, the Chicagoland area experienced a significant rainfall event. Id. at ¶ 45. On May 17 and 18, 2020, water back flowed through drains and catch basins along Lower Wacker Drive and inundated the Willis Tower with over a million gallons of non-potable water. Id. at ¶¶ 22, 89. The flooding at Willis Tower resulted in property damage, damage and delay to ongoing construction projects, and damages related to operations totaling more than $26 million. Id. at ¶¶ 23, 65.

Pursuant to the insurance policy it had issued to Owner, Travelers paid Owner for the property damage and other expenses, thereby becoming subrogated to the rights of Owner for the amount Travelers paid. Id. at ¶¶ 25-27, 66. Travelers alleges that the City and District have known for more than 14 years that Chicago’s sewer and stormwater system is undersized and susceptible to being overwhelmed by rainfall which would result in water and waste intrusion onto private property. Id. at ¶ 19. Travelers alleges that the City and the District knew or

should have known that Chicago’s stormwater and sewage management systems were inadequate and would result in damage to private property like the Willis Tower during rainfall events. Id. at ¶¶ 58-62. Travelers also alleges that the City and District were aware that downstream locks and gates would need to be opened to lower water levels and prevent water and waste intrusion into private property, but they failed to do so in time. Id. at ¶¶ 39-41. Travelers brings twelve claims against Defendants, alleging that both the City and the District violated the Takings Clause of the Illinois Constitution (Counts I and IV), the damages provision of the Takings Clause of the Illinois Constitution (Counts

II and V), and the Takings Clause of the United States Constitution (Counts III and VI). Travelers also brings common law negligence claims (Counts VII and VIII), breach of statutory duty claims (Counts IX and X), and negligent failure to remedy known dangerous condition claims (Counts XI and XII) against both the City and the District. The City and the District each moved to dismiss Travelers’ complaint for

failure to state a claim. [49]; [54]. II. Standard “To survive a motion to dismiss under Rule 12(b)(6), the complaint must provide enough factual information to state a claim to relief that is plausible on its face and raise a right to relief above the speculative level.” Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quoting Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014)); see also Fed. R. Civ. P. 8(a)(2)

(requiring a complaint to contain a “short and plain statement of the claim showing that the pleader is entitled to relief”). A court deciding a Rule 12(b)(6) motion “construe[s] the complaint in the light most favorable to the plaintiff, accept[s] all well-pleaded facts as true, and draw[s] all reasonable inferences in the plaintiff’s favor.” Lax, 20 F.4th at 1181. However, the court need not accept as true “statements of law or unsupported conclusory factual allegations.” Id. (quoting Bilek v. Fed. Ins. Co., 8 F.4th 581, 586 (7th Cir. 2021)). “While detailed factual allegations are not necessary to survive a motion to dismiss, [the standard] does require ‘more than mere labels and conclusions or a formulaic recitation of the elements of a cause of action to

be considered adequate.’” Sevugan v. Direct Energy Servs., LLC, 931 F.3d 610, 614 (7th Cir. 2019) (quoting Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016)). Dismissal for failure to state a claim is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007). Deciding the plausibility of the claim is “a context-specific task that requires the reviewing court to draw on its judicial

experience and common sense.” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). III. Analysis A.

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Travelers Property Casualty Company of America v. Metropolitan Water Reclamation District of Greater Chicago, Counsel Stack Legal Research, https://law.counselstack.com/opinion/travelers-property-casualty-company-of-america-v-metropolitan-water-ilnd-2025.