Vugo, Inc. v. City of Chicago

273 F. Supp. 3d 910
CourtDistrict Court, N.D. Illinois
DecidedAugust 9, 2017
DocketNo. 17 C 864
StatusPublished
Cited by1 cases

This text of 273 F. Supp. 3d 910 (Vugo, Inc. v. City of 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
Vugo, Inc. v. City of Chicago, 273 F. Supp. 3d 910 (N.D. Ill. 2017).

Opinion

Memorandum Opinion and Order

Elaine E, Bucklo, United States District Judge

•In this action, plaintiffs and plaintiff-intervenor (to whom I collectively refer as “plaintiffs” unless otherwise specified)1 challenge the constitutionality of a City of Chicago ordinance prohibiting commercial advertising on the interior or exterior of “transportation network vehicles,” i.e., vehicles driven by independent contractors for companies such as Uber and Lyft. Before me is the City’s motion to dismiss both complaints—which in all ways relevant to the instant motion assert identical claims—for lack of subject matter jurisdiction and failure to state an actionable claim. For the reasons' that follow, Í deny the motion.

I.

The complaints allege the following facts, which I take as true for present purposes. In May of 2014, the City pas'sed an ordinance regulating “transportation network providers,” “transportation network vehicles,” and “transportation network drivers.” (These are the entities, vehicles, and providers of a service commonly known as'“ridesharing,” the best-known of which, as noted above, are oper[912]*912ated by- the companies Uber and Lyft. See Ill. Transp. Trade Ass’n v. City of Chicago, 839 F.3d 594, 595 (7th Cir. 2016)). The ordinance provides that “[c]ommereial advertisements shall not be displayed on the exterior or in the interi- or of a transportation network vehicle.” Chi. Mun. Code § 9-115-130. Plaintiffs allege that this restriction violates their rights under the First and Fourteenth Amendments of the federal constitution and equivalent provisions of the Illinois constitution.

Vugo is a technology company that “operates a software-only mobile media network that allows ridesharing drivers to display advertising and other media (such as news and entertainment) in their vehicles.” Am. Cmplt. at ¶ 16. To use Vugo, rideshare drivers download the Vugo “app” onto their personal tablets, then mount the tablets on a headrest of them front seats, facing the rear passengers. Id. at ¶ 20. Passengers can interact with the Vugo app during their ride, and the app displays ads based on route-specific and other individualized data. Id. at ¶¶ 22-23. Vugo earns advertising revenue for displaying the ads, a portion of which it pays to its drivers who use the app. Id. at ¶ 24.

Vugo alleges that the ordinance prevents it from operating its platform in Chicago, and the driver plaintiffs allege that it prevents them from displaying revenue-generating commercial advertisements on or in their vehicles. One driver— plaintiff, Patricia Page, alleges that after the ordinance took effect, she was ticketed for violating the commercial advertising ban because the vehicle she used as a transportation network vehicle displayed exterior advertising for her face-painting business. Am. Cmplt. at ¶ 40. All plaintiffs complain that the advertising ban violates their right to free speech and violates equal protection guarantees because drivers of taxis and ordinary passenger vehicles are not prohibited from displaying commercial advertisements.

II.

A. Plaintiffs’ Free Speech Claims

The City asserts two bases for dismissing plaintiffs’ claims under the First Amendment and Section 4 of the Illinois Constitution. First, it argues that none of the plaintiffs has standing to challenge the ordinance’s ban on interior advertising, and that only plaintiff Page has standing to challenge the exterior ad ban. Second, it argues that plaintiffs have not stated an actionable constitutional claim under either the First or the Fourteenth Amendment.

The City’s standing argument focuses on prudential standing—a concept not derived from Article Ill’s case-or-controversy requirement and “similar to the requirement of Federal Rule of Civil Procedure 17 that every action must be prosecuted in the name of the real party in interest.” G & S Holdings LLC v. Continental Cas. Co., 697 F.3d 534, 541 (7th Cir. 2012). Prudential standing principles ensure that litigants assert their own rights, not those of a third party. Id. Although the City frames its argument in jurisdictional terms and seeks dismissal on that basis pursuant to Rule 12(b)(1), prudential standing is not a jurisdictional requirement. See id. at 540 (objections to prudential standing can be waived if not preserved; court may raise lack of prudential standing sua sponte but is not required to do so). See also Sec’y of State of Md. v. Joseph H. Munson Co., Inc., 467 U.S. 947, 956 n. 5, 104 S.Ct. 2839, 81 L.Ed.2d 786 (1984) (“prudential limitations add to the constitutional minima” required for federal jurisdiction under Article III); Singleton v. Wulff, 428 U.S. 106, 113, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976) (prudential considerations counsel caution by federal courts [913]*913“before resolving a controversy, even one within their constitutional power to resolve”)- The City does not challenge, nor do I perceive any basis for' questioning, plaintiffs’ Article III standing. Accordingly) my jurisdiction is secure regardless of whether the City’s prudential standing argument has substantive merit. As explained below, it does not.

The City posits that because none of the plaintiffs (except for Page) alleges a desire “to communicate about products or services that they themselves offer for sale,” or “creates or seeks to display its own advertising content,” none has a protected First Amendment interest in the commercial speech the ordinance prohibits. In the City’s view, plaintiffs’ interest (again with the exception of Page) is purely an economic one1-the desire to earn advertising revenue—that the First Amendment does not protect. Accordingly, the City argues, the only First Amendment interests potentially implicated by the ordinance belong to' the advertisers and cannot be vindicated in a suit brought by plaintiffs.

' The City relies heavily on The Pitt News v. Fisher, 215 F.3d 354, 366 (3d Cir. 2000), but neither that case nor the City’s remaining authorities support its position. In Pitt News, the Third Circuit held that a student newspaper lacked prudential standing to challenge, on behalf of its former advertisers, a state statute imposing criminal sanctions on businesses that advertised alcoholic beverages in school-published media. But the court concluded that the paper’s alleged loss of advertising revenue as a result of the statute’s enforcement amounted to a sufficient' injury-in-fact to trigger Article III standing and proceeded to the merits of the newspaper’s own First Amendment claim. So while the Pitt News court’s lengthy discussion of prudential standing principles, including its analysis of seminal cases such as Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972), Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973), Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 100 S.Ct.

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Bluebook (online)
273 F. Supp. 3d 910, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vugo-inc-v-city-of-chicago-ilnd-2017.