Linda Construction Inc., et al v. City of Chicago et al

Filing 185

MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 3/31/2017:Mailed notice(wp, )

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

LINDA CONSTRUCTION INC.,
Plaintiff,
v.
ALLIED WASTE INDUSTRIES,
ALLIED WASTE NORTH AMERICA,
ALLIED WASTE TRANSPORTATION,
REPUBLIC SERVICES, INC.,
REPUBLIC SERVICES
PROCUREMENT, CITY OF CHICAGO,
CPO JAMIE L. RHEE, NATIONAL
CASUALTY COMPANY, RT
SPECIALISTS, INC., SENG LLC,
and KENNETH SENG,

Case No. 15 C 8714
Judge Harry D. Leinenweber

Defendants.

MEMORANDUM OPINION AND ORDER
Before the Court are four Motions to Dismiss [ECF Nos. 153,
156, 161, and 163].

For the reasons stated herein, the Court

grants the Motions found at ECF Nos. 153, 156, and 163.

The

remaining Motion [ECF No. 161] is granted in part and denied in
part.

The

Defendants

Court
with

dismisses

Counts

prejudice.

I

Count

through

VI,

as

V

against

narrowed

all

below,

survives.
I.
The

following

facts

BACKGROUND
are

taken

from

Plaintiff’s

Third

Amended Complaint (the “TAC”) and the documents attached to or

referenced in that Complaint that are critical to it.

See,

Geinosky v. City of Chi., 675 F.3d 743, 745 n.1 (7th Cir. 2012).
The Court accepts as true all well-pleaded factual allegations
in the TAC, but where an attached exhibit and the TAC conflict,
the

exhibit

controls.

See,

Forrest

v.

Universal

Sav.

Bank,

F.A., 507 F.3d 540, 542 (7th Cir. 2007).
Plaintiff Linda Construction, Inc. (“LCI”) is a garbagehauling business whose owners are African-American.
3.

TAC, ¶¶ 2-

The company is certified as a Minority Business Enterprise

(“MBE”) by the City of Chicago. Id. ¶¶ 2, 5.

This designation

gives LCI certain advantages when it comes to contracts with the
City, which generally requires that a percentage of the work it
contracts

out

be

done

by

MBEs

and

WBEs

(Women

Business

Enterprises). Id. ¶ 16.
In

November

Defendant

2009,

Republic

LCI

Services

entered

into

Procurement,

an

agreement

with

Inc.

(“RSPI”).

The

parties signed an agreement called the “Master Transportation
Services

Agreement,”

or

“Transport

Agreement.”

Under

the

agreement, LCI was to send its trucks to locations known as
transfer stations and from there pick up garbage and haul it to
landfills.
Transport

See, ECF No. 137 (“Transport Agreement”) at 3.
Agreement

imposed

certain

conditions

on

LCI

The
and

allowed RSPI to terminate the contract if LCI failed to abide by
them. Id. at 4-5.
- 2 -

Around the same time that RSPI committed to the Transport
Agreement, Republic Services, Inc. (“Republic”) submitted a bid
for a waste hauling contract with the City of Chicago.
¶¶ 19-20.
between

(LCI
RSPI

is

mum

and

as

to

Republic.

the

nature

of

the

The

Court

makes

assumption that they are corporate affiliates.)

TAC

relationship
do

with

the

Republic made

the bid through a wholly-owned subsidiary that is one of the
Allied entities sued in this litigation.

Plaintiff sues three

such Allied entities – Allied Waste Industries, Allied Waste
North

America,

and

Allied

Waste

Transportation

(collectively,

“Allied”) – and refers to the Allied corporations and Republic
as Defendant Republic/Allied.

TAC ¶ 9.

The litigation was to come years later, however.

In 2009,

LCI was one of the companies Allied listed in its bid as a MBE
that

would

work

as

garbage. TAC ¶ 26.

a

subcontractor

to

transport

the

City’s

The inclusion of such subcontractors helped

to satisfy the City’s requirement that a fixed percentage of the
contract be performed by MBEs.

ECF No. 149, Ex. C at 42.

Allied had run into trouble with the City of Chicago over
its MBE/WBE participation in the past.

In early 2012, Allied

settled a claim with the City over violations that it committed
in the period before 2010.

The Office of Inspector General

(“OIG”) released a statement reporting the settlement.

As is

detailed by the OIG, Allied had participated in a “pass through”
- 3 -

scheme in which the company “arranged for the work purportedly
done by the certified MWBE haulers to be done by non-certified
hauling firms.” ECF No. 149, Ex. E at 1.
Allied;

the

MWBE

firms,

which

were

The OIG excoriated

“willing

participants

in

Allied’s scheme,” “essentially selling their certification” for
a cut of the contract’s price; and the City of Chicago for its
poor administration of the program. Id. at 1-2.
time,

the

stepped

OIG

“applaud[ed]

forward,

disclosing

Republic
possible

for

At the same

having

violations

voluntarily

and

reforming

the operation,” something the company presumably did after it
bought Allied. Id. at 2.

The OIG concluded its report by making

recommendations to the City on how to improve its MWBE program.
See, id. at 2-4.
of

inserting

authorized

For example, the OIG recommended that instead
the

by

law

highest
in

each

MWBE-participation
contract,

the

percentages

City

should

set

realistic goals based on “how much MWBE capacity actually exists
in those areas.” Id. at 2.
In any case, Allied won the bid it entered.
and

the

City

of

Chicago

then

signed

a

The company

contract,

the

“Main

Contract,” giving Allied $24 million worth of work over a threeyear period beginning on March 19, 2010.

ECF No. 149, Ex. C

(the

Summary

Sheet.

document

that

“Main

Contract

was

Contract”),
a

Contract

hundred-page-plus

laid

The
out

Main
the

responsibilities and obligations of the Contractor (Allied) and
- 4 -

the

City,

(“CPO”).

as

represented

by

its

Chief

Procurement

Officer

Defendant Jamie Rhee (“CPO Rhee”) occupied the CPO

position throughout the relevant period.
The

Main

Contract

subcontractors and the CPO.

made

“The

Chief

Procurement

references

both

to

the

For example, Section 2.21 stated:

Officer

may,

whenever

he

have

[sic]

reason to believe that the Contractor has neglected or failed to
pay any subcontractors, workmen or employees for work performed
. . ., order and direct that no future vouchers and estimates be
issued and no further payments be made upon the contract until
said

Chief

Procurement

subcontractors,
paid. . . .”

workmen

Officer
and

has

been

employees

satisfied
have

that

been

such
fully

Main Contract at 13.

In its latest Complaint, LCI also highlights Section 5.9 of
the Main Contract.

Section 5.9 governs Arbitration.

It reads:

In the event a contractor has not complied with the
contractual MBEs/WBEs percentage in its Schedule D,
underutilization
of
MBEs/WBEs
shall
entitle
the
affected MBE/WBE to recover from the contractor
damages suffered by such entity as a result of being
underutilized; provided, however, that this provision
shall not apply to the extent such utilization occurs
pursuant to a waiver or substitution approved by the
City.
The Ordinance and contracts subject thereto
provide that any disputes between the contractor and
such affected MBEs/WBEs regarding damages shall be
resolved by binding arbitration. . . . This provision
is intended [to] the benefit of any MBE/WBE affected
by underutilization and grants such entity specific
third party beneficiary rights.
Main Contract at 49.
- 5 -

Before the contract between Allied and the City even took
effect, however, RSPI and LCI began to have problems under their
Transport Agreement.

On March 18, 2010, RSPI sent LCI a notice

letter, apprising LCI of its breach of the Transport Agreement.
See, ECF No. 149, Ex. A at 1.

Although RSPI then attempted to

terminate its agreement with LCI, see, id., the parties appear
to have worked out their differences afterwards.

In July 2010,

RSPI and LCI amended their Transport Agreement to extend the
contract term through August 16, 2015. Id. at 2.

The amended

Transport Agreement also included an exclusivity clause in favor
of LCI.

Id. § 1(b) at 2.

However, more than a year before the contract extension was
to expire, RSPI terminated its agreement with LCI.

On April 7,

2014, RSPI sent LCI a termination letter effective immediately.
See, ECF

No.

149,

Ex.

L.

In

its

letter,

RSPI

cited

three

independent grounds for terminating the contract, all of which
LCI disputes.

See, ECF No. 149, Ex. H.

These included the

contentions that LCI had not paid its union contributions, that
LCI

had

subcontracted

work

to

another

trucking

unit

without

obtaining consent from RSPI, and that LCI had become insolvent.
Id. at 1-3.

On this last point, RSPI cited the statement of

Jessie McGee, one of LCI’s owners.

According to RSPI, “Mr.

McGee

was

stated

that

Linda

Construction

financial obligations.” Id. at 3.
- 6 -

unable

to

meet

its

“Furthermore,” said RSPI, “on

March 30, 2014 Republic received the enclosed inquiry from Ken
Seng of Seng, LLC, one of Linda Construction’s creditors, which
provides

further

According

to

evidence

Mr.

of

Linda

Seng,

Linda

Construction’s

Construction

insolvency.

currently

has

an

unpaid debt to him of around $80,000.00. . . .

In his email,

Mr.

repossess

Seng

stated

that

.

.

.

Seng,

LLC

will

the

equipment by April 15, 2014.” Id.
In

October

2015,

LCI

filed

this

lawsuit,

naming

RSPI,

Republic, Allied, the City of Chicago, CPO Rhee, Ken Seng, Seng,
LLC (collectively “Seng”), and others as Defendants.

Many of

these other Defendants have been dismissed in the year and a
half since the suit was filed, but two remain:
Inc.

and

National

Casualty

Company

RT Specialists,

(collectively

“NCC”).

(Again, LCI does not say what the relationship is between RT
Specialists and National Casualty Company.

Instead, it makes

identical allegations, sometimes naming RT Specialists as the
alleged

perpetrator

Company.

and

sometimes

naming

National

Casualty

Since treating the two entities as fungible does not

change the substance of this Opinion, the Court proceeds as if
RT

Specialists

defendant.)
2014,

NCC

Missouri,
deposit.

and

National

Casualty

Company

were

one

LCI alleges that NCC was its insurer, but that in
failed

raised

to

obtain

LCI’s

insurance

premiums,

TAC ¶¶ 66-68.
- 7 -

and

for

LCI

wrongly

to

operate

retained

in

LCI’s

LCI

asserts

various

causes

of

action

against

RSPI,

Republic, Allied, the City of Chicago, CPO Rhee, Seng, and NCC
(collectively

“the

Defendants”).

The

nub

of

the

company’s

grievances is that the Defendants discriminated against it on
account of it being owned by African Americans.
37, 46-59, 66, 69.

See, TAC ¶¶ 36-

LCI alleges that the Defendants engaged in

racial discrimination by taking various adverse actions – either
individually or as part of a conspiracy – against LCI that were
not taken against “white-owned contracts.”
(“Defendant
Republic,

Rhee’s

Kenneth

collusion
Seng,

Seng

See, TAC ¶¶ 50-52

with

Defendants

LLC,

NCC

and

Republic/Allied,

RT

Specialists

to

discriminate against LCI was based on racial animus against LCI
because

LCI’s

According
pretext

to

for

owners
LCI,

RSPI

are

these
to

African

Americans.”),

discriminatory

terminate

its

actions

contract

57,

66,

69.

provided

the

with

LCI.

LCI

alleges that but for the Defendants’ unlawful actions motivated
by racial animus, LCI would have “graduated” from a three-year
mentoring
obligated

effort
to

give

that
it

Republic/Allied

and

thus

qualified

was
to

contractually

bid

as

a

prime

contractor for the City’s next contract.
On these facts, LCI prays for over $20 million in damages.
II.

PROCEDURAL HISTORY

This is not the first time that the Court has been asked to
dismiss

LCI’s

Complaint.

Twice
- 8 -

before

have

the

Defendants

briefed their 12(b)(6) motions, and twice before has the Court
found it appropriate to dismiss the Complaint in its entirety.
Unfortunately for the Defendants, this appears to be a case of
“if you first succeed, still you must try and try again.”

LCI,

after one change of counsel, a withdrawal and reappearance of
substitute
and

counsel,

seventeen

two

months

dismissals,

of

trying

to

three

amended

complaints,

state

a

upon

claim

which

relief can be granted, brings in its TAC causes of action which
rest on allegations that have been rejected as conclusory.

The

reasons for the previous dismissals thus continue to be relevant
for disposition of the current Motions, and the Court covers its
prior rulings in some detail.
The Court probed and found wanting LCI’s original Complaint
in March of 2016.

See, ECF No. 64 at 25-26.

Among the claims

dismissed in that ruling were a 42 U.S.C. § 1983 claim brought
against the City of Chicago and CPO Rhee, a 42 U.S.C. § 1985(3)
conspiracy claim brought against all the Defendants, and a claim
for

breach

of

the

Main

Contract

made

against

the

City

and

Republic/Allied. Id. at 14-22.
The § 1983 and § 1985 claims against the City of Chicago
were dismissed because LCI did not adequately plead that its
civil rights were violated by a City’s custom or policy.

ECF

No.

that

the

ratified,

the

64

at

allegations

15-16.
that

The

“the

Court

City

specifically

acquiesced
- 9 -

in,

found
or

misbehavior of the other Defendants and CPO Rhee” did not amount
to a municipal policy because such conduct was not a practice
“so permanent and well settled as to constitute a custom or
usage with the force of law.”

Id. (citing Moore v. Bd. of Educ.

of City of Chicago, 300 F.Supp.2d 641, 645 (N.D. Ill. 2004))
(internal quotation marks omitted).
The Court dismissed the same claims brought against CPO
Rhee on the additional ground that LCI failed to allege that CPO
Rhee’s

actions

were

“allegations

as

general

conclusory”

and

to

motivated
CPO

by

Rhee’s
and

race.

It

found

discriminatory

as

such,

that

motive

“d[id]

not

the

[were]

raise

a

plausible claim of intentional discrimination on the basis of
race.”

ECF No. 64 at 17.

The § 1985(3) civil conspiracy claim asserted against the
other Defendants failed for the same reason.

ECF No. 64 at 20.

As the Court noted, “Plaintiffs’ allegations in the body of the
Complaint that they were ‘treated differently than white owned
contractors,’

.

.

.

are

conclusory

at

best.”

Id.

Such

conclusions did not suffice to sustain a cause of action, and
the Court pointed out to LCI that it needed to “allege facts
[to] show[] . . . racial animus on the part of the City or the
other Defendants.”

Id. (emphasis in original).

In addition,

LCI did not make out the elements of a conspiracy since it did
not plead any facts tending to show that a “meeting of the minds
- 10 -

occurred between the City and the various Defendants to deprive
Plaintiffs of their constitutional rights.”

Id. at 19-20.

LCI’s contract claim fared even worse.

While the Court

gave LCI leave to amend its Complaint as to the other causes of
action, it dismissed the contract claim with prejudice because
LCI was “not a party to Contract No. 21472 [i.e., the Main
Contract], which is between Allied and the City.”
21-22.
could

ECF No. 64 at

Moreover, LCI and its owners have not alleged “(nor
they

in

beneficiaries”

good

of

the

faith)
Main

that

they

Contract.

Id.

are

third-party

(citing

Cronimet

Holdings, Inc. v. Keywell Metals, LLC, 73 F.Supp.3d 907, 917
(N.D. Ill. 2014)).
Presumably

due

to

the

dismissal

with

prejudice,

LCI

abandoned the contract claim in its First Amended Complaint.
The company hung on to the civil rights causes of action, and
the Court again looked to find factual allegations to support
them.

It looked in vain.

Accordingly, the Court dismissed the

§ 1983 and § 1985(3) claims for a second time.
the

same

reasons

that

it

did

five

months

It did so for
before:

LCI’s

Complaint contained no facts from which the Court could infer a
municipal

policy,

racial

animus,

or

a

meeting

of

the

minds.

See, ECF No. 131 at 7-12.

The Court further dismissed the

§ 1981

that

claim

on

the

ground

LCI

failed

to

support

its

allegations of race discrimination with any factual pleading.
- 11 -

Id. at 5-7.

The Court concluded that LCI appeared to allege

nothing

more

than

alleged

conduct

race.” Id. 6.

that

towards

“because
them

they

was

are

black,

indisputably

Defendants’

due

to

their

“But saying it is so does not make it so.” Id.

Throughout

its

opinion

dismissing

LCI’s

First

Amended

Complaint, the Court exhorted LCI to provide factual support for
its claims. ECF No. 131 at 7-8.

The Court more than once warned

LCI that failure “to amend the Complaint and provide factual
support . . . will result in dismissal with prejudice.” Id.
LCI

responded

to

the

Court’s

warnings

deadline for amending the Complaint.
at 3:19-20.

by

missing

the

See, ECF No. 155, Ex. A

The Court excused this irregularity when LCI’s new

counsel appeared and explained that his secretary had died.
at 4:22-5:6.

Id.

Counsel then attempted to have the Court stay the

litigation in favor of arbitration.

See, ECF No. 158, Ex. A.

The Court denied the request on account of the fact that LCI
waived its arbitration rights by bringing a breach of contract
claim. Id. at 14:10-15.

LCI then sought leave to amend its

Complaint for a third time “to allow us to add back in the
breach

of

contract

actions

because

the

only

reason

[LCI]

voluntarily dismiss[ed] [them] is we thought we were going to
proceed

under

arbitration.”

Id.

at

14:20-23.

The

Court

permitted LCI to file a Motion for Leave to Amend the Complaint.
Id.

at

15:8-9,

16:4,

17:4-18:10.
- 12 -

After

some

more

misunderstanding on LCI’s part as to what it has to do at this
point, see, Tr. Mot. Hr’g Oct 11, 2016, LCI filed its TAC.
As

will

be

seen,

the

deficiencies

in

LCI’s

previous

complaints remain in the TAC.
III.

ANALYSIS

LCI’s latest pleading is a six-count complaint.

Counts I,

II (brought against the City and CPO Rhee only), and III are
civil rights claims brought under 42 U.S.C. §§ 1981, 1983, and
1985(3),

respectively.

contract claims.

The

remaining

counts

are

breach

of

Counts IV and V are premised on the Main

Agreement and are asserted against the two signatories to that
contract, the City of Chicago (Count IV) and Republic/Allied
(Count V).
and

is

Count VI alleges a breach of the Transport Agreement

brought

against

LCI’s

counterparty

to

the

agreement,

RSPI.
Common elements underlie these claims.
III

Counts I, II, and

require

things,

LCI

to

plead,

among

other

that

the

Defendants were motivated by race when they acted to injure the
company.

Count IV and V require LCI to have the right to sue

under the Main Contract.

The Court first examines these common

elements before turning to Count VI.

- 13 -

A.

Counts I, II, and III Must Be Dismissed for
Lack of Adequate Pleading of Racial Animus

As the Court stated in its prior opinions, to carry the
burden to plead a 42 U.S.C. §§ 1981, 1983, or 1985 claim, LCI
must allege that the Defendants discriminated against it because
its owners are African Americans.

See, ECF No. 64 at 14-22, ECF

No. 131 at 5-11; see also, Morris v. Office Max, 89 F.3d 411,
413-14 (7th Cir. 1996) (listing an intention to discriminate on
the basis of race as one of the elements of a § 1981 action);
Sherwin Manor Nursing Ctr. v. McAuliffe, 37 F.3d 1216, 1220 (7th
Cir.

1994)

plaintiff

(“To
must

state
allege

an

equal

that

protection

a

state

claim,

actor

a

§ 1983

purposefully

discriminated against him because of his identification with a
particular

(presumably

historically

disadvantaged)

group.”);

Rodgers v. Lincoln Towing Serv., Inc., 771 F.2d 194, 203 (7th
Cir. 1985) (“A successful Section 1985(3) claim requires the
plaintiff to establish some racial, or perhaps otherwise classbased,

invidiously

conspirators’
Moreover,

such

action.”)

discriminatory
(internal

“[a]llegations

of

animus

quotation
race

behind
marks

discrimination

supported by material facts, not mere conclusions.”

the

omitted).
must

be

See, ECF

No. 64 at 6 (citing Jafree v. Barber, 689 F.2d 640, 643 (7th
Cir. 1982)).

Yet despite having been instructed thusly, LCI

again leans on the same allegations that were twice found to be

- 14 -

conclusory and insufficient to support an inference of racial
animus.
Against NCC, the TAC continues to have nothing to say but
that NCC failed to obtain insurance coverage necessary for LCI’s
trucks

to

operate

in

retained its deposit.

Missouri,

raised

LCI’s

premiums,

and

While LCI alleges that NCC does not do

these things to “white-owned contracts,” it has pleaded no facts
to support the allegation.

LCI makes no effort to identify,

even in a general manner, any such white-owned businesses.

Nor

does it allege that NCC was aware that LCI was owned by nonwhites.

See, Pourghoraishi v. Flying J, Inc., 449 F.3d 751, 757

(7th Cir. 2006) (“[T]he defendants could not have discriminated
against Pourghoraishi on the basis of race if they were unaware
of his race. . . .”).
LCI attempts to supplement the allegations it makes against
NCC in its response to NCC’s Motion to Dismiss.

This is plainly

inappropriate, as the Court suspects LCI’s experienced counsel
knows.

Thomason v. Nachtrieb, 888 F.2d 1202, 1205 (7th Cir.

1989) (“It is a basic principle that the complaint may not be
amended

by

the

dismiss. . . .”).

briefs

in

opposition

to

a

motion

to

In any case, the hastily added allegations

are speculative and conclusory.

They bring no support to LCI’s

case.

- 15 -

Against Seng, LCI contends that as there is “no plausible
reason” for Seng to email Republic/Allied, the email itself must
be racially motivated.

The text of the email, however, refutes

the contention that Seng did not have a legitimate reason to
email

Republic/Allied.

Seng’s

email,

consisting

of

seven

sentences in total, reads in part, “Jesse [LCI’s owner] tells me
that, Republic, is not paying him timely, that you owe him over
$700,000. . . . Please let me know if this is true, and what can
be

done

to

help.”

ECF

No.

181-1.

Even

when

it

draws

all

reasonable inferences in favor of LCI, the Court cannot see how
such an email rules out every “plausible reason” for Seng to
have contacted Republic/Allied, thus leaving only race as the
motivation for the communication.

LCI’s process-of-elimination

argument to arrive at racial animus falls flat.
Likewise, the allegations made against CPO Rhee, the City
of Chicago, Republic/Allied, and RSPI amount to nothing more
than

the

bald

and

hackneyed

assertion

that

the

Defendants

treated “LCI differently as compared to white-owned companies.”
See, TAC ¶¶ 37, 39, 46, 50-52, 48, 57, 66.

Strangely enough,

LCI attempts to shift the burden onto the Defendants, asserting
that

if

“they

were

not

discriminatory,

the

Defendants

would

certainly contend that such was [sic] conduct was done to nonMBEs also.” ECF No. 175 at 10.

LCI then faults the Defendants

for not making the contending protests to LCI’s satisfaction.
- 16 -

Id.

But the burden to plead the necessary elements of its own

claims rests squarely on LCI.
999

F.Supp.

1145,

1152

See, e.g., Payne v. Abbott Labs.,

(N.D.

Ill.

1998)

(Leinenweber,

J.)

(stating that the plaintiffs “must plead the elements of the
prima facie case of discrimination”).
Insofar

as

LCI’s

allegations

are

mere

repetitions

or

cosmetic variants of the conclusory allegations found in the
previous Complaints, the Court incorporates its stated reasons
for

rejecting

them.

See,

ECF

No.

64

at

14-17,

18-21

(“Plaintiffs fail to allege facts showing any kind of racial
animus

on

the

part

of

the

City

or

the

other

Defendants.”)

(emphasis in original); ECF No. 131 at 5-12 (“Plaintiffs do not
allege

any

facts

to

bolster

the

repeated

conclusion

that

Defendants acted with racial animus.”) (emphasis in original).
To the extent that LCI makes any new allegation in the TAC,
it is the reliance the company now puts on the OIG reports.
While

it

is

true

that

the

OIG

documented

problems

with

the

MBE/WBE program, these problems do not show that any of the
Defendants in this case harbor racial animosity.
that

the

OIG

addressed

involved

the

City

of

The problems
Chicago’s

poor

administration of the program, which allowed MBE companies to
sell their certifications to City contractors like Allied.

The

MBEs did no work themselves but still got paid for being MBEcertified.

This “pass through” scheme benefited Allied and the
- 17 -

MBEs at the expense of the City of Chicago, its taxpayers (who
footed the bill), and other MBEs that would have done the work,
assuming that such MBEs existed.

(The OIG obliquely expressed

its doubt on the availability of such MBEs by recommending that
the

City

demand

less

MBE

participation

than

the

statutory

maximum and instead work to ascertain “how much MWBE capacity
actually exists in those areas.”

ECF No. 149, Ex. E at 2.)

Whites and blacks thus show up on both sides of the ledger, as
those who (wrongly) benefited from the scheme and those who paid
for

it.

The

pass

through

scheme

is

discreditable,

because it discriminated against racial minorities.

but

not

As such,

the scheme – and the OIG’s condemnation of it – offer no support
for

LCI’s

allegations

that

the

Defendants

in

this

case

discriminated against it on account of race.
In

sum,

LCI

has

once

again

failed

to

plead

Defendants acted with the requisite racial animus.

that

the

The Court

thus dismisses Counts I, II, and III of its Complaint.
B. Counts I, II, and III Must also be
Dismissed for Other, Independent Reasons
Dismissal of Counts I and II as asserted against the City
of Chicago is also appropriate because LCI has not alleged any
municipal policy that deprived it of its constitutional rights.
Likewise,

Count

III

must

be

dismissed

- 18 -

because

LCI

has

not

averred any facts tending to show that the Defendants entered a
conspiracy.
1.

Municipal Policy

To state a civil rights claim against a municipality like
the City of Chicago, LCI must alleged that the its rights were
violated by a municipal policy, as that term is understood post
Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 694 (1978).

See,

id. (“[I]t is when execution of a government’s policy or custom,
whether made by its lawmakers or by those whose edicts or acts
may fairly be said to represent official policy, inflicts the
injury that the government as an entity is responsible under
§ 1983.”); Looper Maint. Serv. v. City of Indianapolis, 197 F.3d
908,

913

(7th

Cir.

1999)

(“[A]s

in

his

Section

1983

claim,

[Plaintiff] Looper must show that the violation of his right to
make contracts protected by § 1981 was caused by a custom or
policy

within

the

meaning

of

Monell

(internal quotation marks omitted).
be

found

in

one

of

three

places:

and

subsequent

cases.”)

Such a municipal policy may
(1)

in

a

City’s

express

policy; (2) through a widespread practice that “is so permanent
and well settled” as to constitute a “custom or usage” with the
force of law; or (3) through the acts of a person with “final
policymaking authority.”

Baxter by Baxter v. Vigo County Sch.

Corp., 26 F.3d 728, 734 (7th Cir. 1994), superseded by statute
on other grounds.
- 19 -

LCI

does

not

allege

that

the

harm

to

its

federally

protected rights flowed from an express policy of the City.

Nor

could it given that “the City’s express policy on contracts not
only prohibits discrimination against minorities, but actually
requires the City to have a goal of granting contracts to MBEs.”
ECF No. 64 at 16; see generally, Municipal Code of Chicago § 292-420 et seq. (establishing a program that reserves certain
contract awards to MBEs and WBEs).
This leaves two avenues for LCI to pursue in trying to make
out a municipal policy:

a City’s implied policy in the form of

a widespread practice carrying the force of law and the act of a
final

policymaker.

LCI

grabs

for

both

options

in

its

TAC.

Unfortunately, the attempt is no more successful than it was
previously.

See, ECF No. 131 at 7 (“Like [in] the original

Complaint, . . . Plaintiffs
specificity

the

[have

existence

of

not]
a

pleaded

widespread

with

any

practice

of

discrimination against minority-owned businesses; and they fail
to plead factual support for their claim that CPO Rhee was a
person with final policymaking authority for the City.”).
LCI

has

not

supplemented

its

factual

pleadings

of

a

widespread practice of racial discrimination with anything more
than

the

OIG

reports.

But,

as

explained

previously,

the

problems documented in those reports do not suggest that the
City has a practice of discriminating against minorities.
- 20 -

As

such,

LCI’s

allegations

of

a

municipal

policy

again

lack

“factual support that a city policy does exist” and so “are
insufficient.”

Rodgers, 771 F.2d at 202.

LCI tries harder with its claim that CPO Rhee is a final
policymaker.

Recognizing that “the identity of a government’s

policymaker is a question of local law,” Auriemma v. Rice, 957
F.2d 397, 400 (7th Cir. 1992), LCI points to Municipal Code of
Chicago (“MCC”) § 2-92-490.

It is true that this section of the

MCC lays out the duties of a Chief Procurement Officer.

Yet, it

is difficult to understand how LCI could read the section and
think that CPO Rhee has final policymaking authority over the
actions that LCI alleged caused it harm.

Under MCC § 2-92-490,

the CPO is tasked with administering the MBE/WBE program and
carrying

out

certification

various
(e.g.,

activities
recruiting

associated
businesses

with
to

MBE/WBE

apply

for

certification, maintaining an electronic directory of certified
businesses, etc.).

None of these tasks suggest that CPO Rhee

has the authority to make policy.

MCC § 2-92-490 gives the CPO

no power to “establish rules,” “countermand the statutes,” or
“adopt[] rules for the conduct of government.”

See, Auriemma,

957 F.2d at 401 (listing these as the powers of a policymaker).
Instead, the code rather clearly indicates that the CPO is an
administrator of a program whose goals and policies are set by
statute.
- 21 -

LCI further alleges that the Main Contract shows that CPO
Rhee has policymaking power, as does a letter that the CPO wrote
in response to LCI’s inquiries.

However, LCI cites no authority

to support the proposition that a contract or a letter – as
opposed to local law – may establish a local government employee
as the final policymaker for the municipality.

Furthermore, the

contract provisions that LCI cites do not favor the theory that
CPO

Rhee

may

make

policy

binding

the

example, Section 2.21 of the contract.

City.

Consider,

for

As may be recalled, this

provision permits (but does not require) the CPO to stop payment
to

a

contractor

if

she

has

reason

to

subcontractor like LCI has not been paid.

believe

that

a

The provision does

not say that whether the CPO chooses to do so in any particular
instance
City.

then

becomes

a

rule

prescribing

the

conduct

of

the

It does not hint at any policymaking authority on the

part of the CPO.
The letter is even weaker evidence.

LCI emphasizes a line

from the letter which reads, “one of our top goals is making
sure that minority-and women-owned businesses can grow and find
a consistent, stable place in the market.” TAC ¶ 49.

This line

simply echoes the goals behind the City’s MBE/WBE policies as
set out in the municipal codes.

It and the rest of letter

utterly

Rhee

fail

to

show

that

CPO

authority.
- 22 -

has

any

policymaking

Because LCI has not adequately pleaded that a City’s policy
violated its federally protected rights, the § 1981 and § 1983
claims against the City must be dismissed.
2.

Conspiracy

The Court next examines the civil conspiracy claim under
§ 1985(3).

To

establish

a

prima

facie

case

of

such

a

conspiracy, LCI must plead specific material facts to show an
express or implied agreement among the Defendants to deprive it
of its constitutional rights.

See, Scherer v. Balkema, 840 F.2d

437, 442 (7th Cir. 1988); Jafree, 689 F.2d at 644.
agreement

occurs

when

the

Defendants

had

“a

meeting

Such an
of

the

minds” whereby they reached “an understanding to achieve the
conspiracy’s

objectives.”

See,

Hernandez

v.

Joliet

Police

Dep’t, 197 F.3d 256, 263 (7th Cir. 1999).
LCI’s allegations of facts supporting a conspiracy among
the Defendants can be summed up in four words:
other.
a

See, TAC ¶¶ 59-69.

long-standing

Defendant

they knew each

For example, LCI says that NCC “has

relationship

Republic/Allied.”

with

TAC

Defendant

¶ 67.

Republic

Likewise,

and/or

“Defendants

Republic/Allied and Defendants Seng were enough acquainted with
each

other

so

that

Seng

could

send

an

email

to

person, Todd Bruck of Defendant Republic/Allied.”
at 8.

a

specific

ECF No. 174

But simply because the Defendants know each other does

not give rise to the inference that they agreed to “obstruct LCI
- 23 -

operations

and

attempt

to

render

LCI

insolvent”

all

so

Republic/Allied could “eliminate the only qualified MBE to bid
for

the

City

garbage

hauling

contract.”

TAC

¶

59;

see,

Hernandez, 197 F.3d at 263-64 (finding no evidence to support an
inference of a conspiracy when there was “no evidence that [the
alleged

conspirators]

relationship”

and

had

“nothing

anything
in

this

more
record

than

a

explains

working
why

[one

defendant] would go out on a limb to prepare a false police
report at [the other defendant’s] behest”).
Besides these scattershot allegations as to the Defendants’
knowledge

of

each

other

and

the

conclusory

statement

that

Republic/Allied recruited the Defendants to break the law on its
behalf, all LCI can point to show agreement is what it considers
suspicious timing in the Defendants’ actions.

Specifically, LCI

asserts that “Defendants had no issues with Plaintiff for six
months while the bid was pending, but one week after Defendant
Republic/Allied
Defendant

was

awarded

million

Republic/Allied

Defendant

in

invoices,
Seng

the

fails

contract
to

Plaintiff’s

contacts

Defendant

that it is owed money by Plaintiff.”

pay

work

with

Plaintiff
is

the
for

questioned,

Republic/Allied

City,
$1.4
[and]

contending

See, e.g., ECF No. 175 at

11-12 (the same sentence is found verbatim in all four of LCI’s
responsive briefs to the Defendants’ motions to dismiss).

- 24 -

LCI’s assertion is simply not true.
not

take

place

within

a

week

of

All these events did

Republic/Allied

contract.

2010.

It allegedly failed to pay LCI the $1.4 million four
later,

sometime

in

won

2014.

the

contract

Likewise,

in

the

City’s

years

Republic/Allied

winning

Seng

March

emailed

Republic/Allied in 2014, and NCC appeared to have committed its
alleged wrongdoings in that year.

Although LCI did not specify

exact dates, the events in 2014 do not appear to have happened
within a week of each other either.

Finally, it is not true

that the Defendants had no issues with LCI “for six months while
the bid was pending.”

At least one of the Defendants, RSPI, had

enough “issues” with LCI to send it a notice letter of breach
four months after signing the Transport Agreement with LCI and
before the City’s contract was to begin.
In sum, even if suspicious timing were enough to raise an
inference of conspiracy, LCI has not aroused any such suspicion.
But see, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-57 (2007)
(stating that “[w]ithout more, parallel conduct does not suggest
conspiracy”); Adamski v. McGinnis, No. 13-CV-962-JPS, 2015 U.S.
Dist. LEXIS 40501, at *10 (E.D. Wis. Mar. 30, 2015) (applying
Twombly’s language to dismiss a § 1985 claim).

LCI’s § 1985(3)

conspiracy claim fails because, as with its previous Complaints,
LCI has not “offer[ed] a single fact to support the inference
that

the

City

or

CPO

Rhee

and
- 25 -

the

private-actor

Defendants

entered

into

[]

an

agreement”

rights.

to

violate

its

constitutional

ECF No. 131 at 9-10.

C. Counts IV and V must be Dismissed because LCI may
not bring a Breach of Contract Claim under the Main Contract
Having disposed of LCI’s civil rights claims, the Court
next turns its attention to the breach of contract causes of
action.

LCI’s breach of contract claims as alleged in Counts IV

and V of the TAC run into two obstacles:

(1) the claims were

previously dismissed with prejudice; and (2) LCI is not a thirdparty beneficiary to the contract under which it seeks to sue
(the Main Contract).

The Court is of the view that LCI has not

overcome either of these problems.
1.

Prior Dismissal with Prejudice

In its March 2016 order, the Court dismissed with prejudice
LCI’s claims against the City and Republic/Allied for breach of
the Main Contract.

ECF No. 64 at 21-22.

(While the Court

stated that the dismissal against Allied was without prejudice,
that

dismissal

Transport

in

Agreement.

permission
claims.

was

from

this

Id.

regards

to

breaches

at

22,

25.)

Court

(or

any

premised

LCI

has

other)

to

not

on

the

received

refile

these

See, Marlow v. Winston & Strawn, 19 F.3d 300, 306 (7th

Cir. 1994) (“[O]nce the order of dismissal [with prejudice] was
entered it had the same effect as an adjudication on the merits,
which could be altered only by filing a motion to reopen the

- 26 -

judgment pursuant to Rule 59, or doing as Marlow did and take an
appeal.”).

LCI contends that it is nonetheless entitled to file

Counts IV and V because, whereas before it sued as a direct
party to the Main Contract, it is now asserting standing to sue
as a third-party beneficiary.
The argument is unpersuasive.

The Court’s Order dismissing

the claims clearly stated that the Court considered both whether
LCI was a party to the Main Contract and whether it was a thirdparty beneficiary to that contract.

See, ECF No. 64 at 21.

The

Court found that LCI was neither and so dismissed its claims
with prejudice.

LCI should not be allowed to bring the same

claims now without court approval.
2.

Third-Party Beneficiary

Even if the Court were to reconsider the claims, still it
would find that LCI does not have standing to sue for alleged
breaches of the Main Contract.

Since LCI is not a signatory to

the Main Contract, it can enforce the contract only if “the
contract’s

original

parties

intentionally

contract for [its] direct benefit.”

entered

into

the

Martis v. Grinnell Mut.

Reinsurance Co., 388 Ill. App. 3d 1017, 1020 (2009); see also,
XL Disposal Corp. v. John Sexton Contractors Co., 168 Ill. 2d
355,

361

(1995).

But

as

the

Seventh

Circuit

has

remarked,

“Illinois has made it very difficult to prove intent to benefit
the third party.”

Quinn v. McGraw-Hill Cos., 168 F.3d 331, 334
- 27 -

(7th Cir. 1999).

This is because “there is a strong presumption

that parties to a contract intend that the contract’s provisions
apply to only them and not to third parties.”

155 Harbor Drive

Condo. Ass’n v. Harbor Point, Inc., 209 Ill. App. 3d 631, 647
(1991) (emphasis as added in 155 Harbor Drive) (quoting from
Ball Corp. v. Bohlin Building Corp., 187 Ill. App. 3d 175, 177
(1989)) (internal quotation marks omitted).

To overcome this

strong presumption, a nonparty like LCI must point to language
in

the

Main

Contract

and

“the

circumstances

surrounding

the

parties at the time of its execution” that together constitute
“practically

an

Republic/Allied
benefit.

express
entered

declaration”

into

that

that

contract

the

for

City

LCI’s

and

direct

See, id.; XL Disposal, 168 Ill. 2d at 361; Martis, 388

Ill. App. 3d at 1020.
The

strongest

evidence

LCI

has

of

this

declaration” is Section 5.1 of the Main Contract.
reads, in part:

“express

Section 5.1

“This provision is intended [to] the benefit of

any MBE/WBE affected by underutilization and grants such entity
specific
because

third
it

conferred

has
by

party

beneficiary

“specific

Section

5.1,

third
it

rights.”
party

may

sue

LCI

argues

beneficiary
to

enforce

that

rights”
all

as

other

provisions of the Main Contract.
This argument fails for two reasons.

First, Section 5.1

gives LCI the right to arbitrate an underutilization claim.
- 28 -

The

sentence immediately preceding the one just quoted stipulates
that,

“[t]he

Ordinance

and

contracts

subject

thereto

provide

that any disputes between the contractor and such affected [by
underutilization] MBEs/WBEs regarding damages shall be resolved
by binding arbitration.”

Thus, Section 5.1 has nothing to say

as to whether LCI may litigate its underutilization claim as a
third-party

beneficiary

to

the

Main

Contract.

Moreover,

Section 5.1’s careful language giving LCI the “specific third
party

beneficiary

suggests

that

rights”

LCI’s

to

rights

limited to just that claim.

as

complain
a

of

underutilization

third-party

beneficiary

are

In other words, it appears that LCI

has the “specific” right conferred by Section 5.1 to arbitrate a
particular claim but not the general right to enforce all of the
provisions of the Main Contract.
Because LCI has not convinced the Court that Section 5.1
alone

gives

it

third-party

beneficiary

considers the rest of the Main Contract.

status,

the

Court

That contract and the

circumstances surrounding its signing are similar to those found
in

ESG

Tech.

Servs.,

LLC

No. 1:09-cv-00030-TWP-TAB,
Ind. June 6, 2011).

v.
2011

Advantage
U.S.

Health

Dist.

sued,

like

Inc.,

59619

(S.D.

LEXIS

As in this case, the plaintiff in ESG was a

MBE owned by an African American. Id. at *2.
ESG

Sols.,

Republic/Allied,

had

The companies that

listed

ESG

as

a

MBE

subcontractor in their bid for a contract with the state of
- 29 -

Indiana. Id. at *3.

These defendant companies won the state

contract and so ESG’s name was included in the list of MBEs
participating in the contract. Id. at *5.
ESG

did

not

contract

with

the

subcontracting work. Id. at *8.

Ultimately, however,

defendants

to

perform

the

ESG then sued, asserting a

claim of breach of the contract between the defendants and the
state. Id. at *10.

At summary judgment, the issue was whether

ESG was an intended third-party beneficiary to the contract.
Judge Pratt determined that ESG was not such a beneficiary.
ESG, 2011 U.S. Dist. LEXIS 59619 at *20. ESG, like LCI in this
case, made much of the fact that its name was listed in the
contract with the state as a participating MBE.

However, the

judge reasoned that “[t]he fact that ESG is mentioned in the
contract . . . does not establish an intent to benefit ESG as a
third-party

beneficiary;

rather,

evidence of such an intent.”

naming

a

party

is

merely

Id. at *14; see also, E.B. Harper

& Co. v. Nortek, Inc., 104 F.3d 913, 920 n.4 (7th Cir. 1997)
(finding that a plaintiff is not a third-party beneficiary to a
contract

despite

being

mentioned

“incidentally

in

the

Stock

Purchase Agreement between Nortek and the Pozzis as the broker
involved

in

the

deal”);

Martis,

388

Ill.

App.

3d

at

1020

(stating that “[i]f a contract makes no mention of the plaintiff
or

the

class

to

which

he

belongs,

he

is

not

a

third-party

beneficiary of the contract” but not that if a contract does
- 30 -

make

such

a

mention,

beneficiary).

Judge

then
Pratt

the

plaintiff

found

that

automatically

rest

of

the

is

a

contract

militated against the conclusion that the parties intended to
benefit ESG.
As is relevant for our case, the judge found the following
instructive.

First, in a 22-page contract with 53 provisions,

ESG was named only in the provision that addressed MBE and WBE
participation.
*15.

ESG Tech. Servs., 2011 U.S. Dist. LEXIS 59619 at

Second, the contract allowed the defendants to swap out

the participating MBEs and WBEs provided that the defendants
obtain written approval from the state. Id. at *15-16.
other

provisions

to

the

contract

“detail[ed]

the

Third,

rights

and

obligations of the parties.” Id. at *16-17.
The

Court

finds

ESG

relevant

and

persuasive.

The

difference in procedural posture between this case and ESG does
not outweigh their similarities.

This is especially true given

that the evidence relied on in ESG was simply the terms of the
contract and that the reasoning from ESG has been adopted to
decide a motion to dismiss.

See, Bucher & Christian Consulting,

Inc. v. Novitex Enter. Sols., No. 1:15-cv-00010-TWP-MJD, 2015
U.S. Dist. LEXIS 118378, at *20-39 (S.D. Ind. May 22, 2015)
(recommending

dismissal

of

a

plaintiff’s

breach

of

contract

claim), adopting recommendation, 2015 U.S. Dist. LEXIS 117578,
at *3-4 (S.D. Ind. Sep. 3, 2015).
- 31 -

Many of the factors that swayed the ESG court to find that
the MBE plaintiff was not an intended third-party beneficiary
are present in this case.

The Main Contract is over a hundred

pages long, and LCI’s name is mentioned only in an insert to the
contract.

Moreover, the Main Contract permits Republic/Allied

to substitute MBE subcontractors if it gives notice to the City.
See, ECF No. 149, Ex. C at 48.

This indicates that the parties

did not intend to benefit a specific MBE such as LCI.

Finally,

the bulk of the Main Contract revolves around the rights and
responsibilities of the parties themselves, not LCI.

Overall,

the Main Contract is a document that is “perfectly reasonable”
for the parties to have entered on their own behalf.

See,

Quinn, 168 F.3d at 334-35 (rejecting that a plaintiff may claim
third-party
contract

beneficiary
was

“a

status

when,

perfectly

among

other

reasonable

–

things,

perhaps

the
even

indispensable – contract for AHAC to have entered for its own
purposes”).
Insofar as the Main Contract reflects rules that the City
set down regarding MBE participation, those rules make LCI, one
MBE out of the class of many, an incidental beneficiary of the
contract.
contract.

Such

a

beneficiary

cannot

sue

to

See, Martis, 388 Ill. App. 3d at 1020.

enforce

the

LCI stands in

the same shoes as the physician in Martis who provided medical
services

to

an

injured

employee
- 32 -

covered

by

the

defendant

insurer.

Such

a

physician

benefitted

from

the

insurance

contract (he got paid by the insurance) but may not sue on it
because his benefit was only incidental.

See, id. at 1021-23.

As the Martis court stated, “medical providers are generally not
third party beneficiaries of insurance policies . . . [except]
when (1) the policy expressly identifies medical providers as
third party beneficiaries . . . or (2) the policy provides for
payment directly to medical providers.” Id. at 1022.
exception applies to LCI.

Neither

LCI is not expressly named as a

third-party beneficiary (no MBE is), and it receives no payment
directly from the City.

Like the medical provider then, LCI

benefits from the Main Contract but cannot sue on it.
To the extent that the contract lays out the requirements
on

subcontractors

indicates

that

responsibility

(MBEs

it
to

is

ensure

those requirements.

and
the

non-MBEs

alike),

contractor’s

that

the

its

language

(Republic/Allied’s)

subcontractors

comply

with

Such provisions do not suggest that the

City has any legally enforceable rights against non-signatory
subcontractors like LCI and so do not “bind” LCI and make it a
third-party beneficiary to the contract.

See, Barney v. Unity

Paving, 266 Ill. App. 3d 13, 19-23 (1994) (holding that the
plaintiff has not overcome the strong presumption against thirdparty beneficiaries when “the contract as a whole clearly shows
that the intent of the City . . . was solely to set forth the
- 33 -

parties’ respective responsibilities and to protect the City”)
(emphasis added).
For

these

reasons,

LCI

cannot

sustain

its

breach

of

contract claims under the Main Contract against either the City
or Republic/Allied.
D.

The Dismissals are with Prejudice.

The Court has twice dismissed LCI’s claims with leave to
amend and clear instructions to cure the persistent deficiencies
in its pleading.

LCI yet again fails to do so.

Accordingly,

the Court now does what it before warned LCI that it would do in
the face of such failures:

the Court dismisses Counts I through

V of the TAC with prejudice.

See, Airborne Beepers & Video,

Inc. v. AT&T Mobility LLC, 499 F.3d 663, 666-67 (7th Cir. 2007)
(“Where the plaintiff has repeatedly failed to remedy the same
deficiency, the district court did not abuse its discretion by
dismissing the claim with prejudice.”) (internal quotation and
alteration marks omitted).

LCI may not amend its pleadings in

the absence of a written motion explaining how it would cure the
defective allegations.

See, Jafree, 689 F.2d at 644-45; Looper,

197 F.3d at 914; Airborne, 499 F.3d at 666-68.
E. Count VI Survives Only to the Extent that LCI is Alleging
that RSPI Breached the Terms of the Transport Agreement
The Court arrives at the last cause of action.

Count VI of

the TAC alleges that RSPI breached the Transport Agreement.

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The

emphases

are

necessary

indiscriminately

mixes

because

in

allegations

pleading
of

Republic/Allied under the Main Contract.

this

breaches

claim,

by

LCI

Defendant

As may be remembered,

Republic/Allied is actually shorthand for four entities, none of
which is RSPI and none of which is a party to the Transport
Agreement.

To justify throwing in Republic/Allied to this cause

of action, LCI blandly asserts that “[a]ny misinterpretation of
the Defendants’ roles is purely the result of Movants’ doing.”
ECF No. 176 at 15.

The Court agrees that if a plaintiff’s own

“misinterpretation” and confusion were cognizable grounds to sue
somebody, then LCI’s case would have gone a lot better for it in
the year and a half since the case has been pending.

They are

not.
In

addition,

Contract.
Typically

the

Transport

Agreement

is

not

the

Main

These contracts are two legally distinct documents.
“documents

executed

at

the

same

time

by

the

same

parties concerning the same subject matter will be construed as
one.”

Home Sav. Assn., F.A. v. State Bank of Woodstock, 763

F.Supp.

292,

296-97

(N.D.

Ill.

1991)

(emphasis

in

original)

(citing Main Bank of Chicago v. Baker, 86 Ill. 2d 188, 201
(1981)).

The Transport Agreement and the Main Contract were

executed months apart, entered into by different parties, and
concerned different subject matters.

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There is no reason why the

two

contracts

should

be

treated

as

the

same

document

that

imposed cumulative obligations on RSPI.
What

does

impose

obligations

on

RSPI

are

the

contract

provisions found in the Transport Agreement and its amendments.
But these provisions do not include any duty to mentor LCI.

LCI

has made several factual allegations to support the charge that
RSPI (or was it Republic/Allied?) ought to have mentored LCI.
See, TAC ¶¶ 37, 38(O); ECF No. 149 Ex. B & Ex. Q.

However, no

such mentoring obligation was incorporated into the Transport
Agreement.

LCI

is

here

alleging

breaches

of

that

specific

agreement and so cannot rely on supposed duties not found in the
agreement.
For

the

allegations

above

from

reasons,

Count

VI

the

that

Court

do

not

strikes
concern

imposed on RSPI by the Transport Agreement.

all
an

of

the

obligation

What remains in

Count VI, which include the allegations that RSPI violated the
exclusivity
terminated

clause
the

of

the

contract,

Transport
may

Agreement

proceed.

LCI

and

has

wrongfully

sufficiently

pleaded a breach of the exclusivity clause by alleging that RSPI
“hired another hauler to do LCI’s work for which LCI had the
exclusive hauling contract per Section 1(b) of the July 19, 2010
Settlement Agreement [an amendment to the Transport Agreement].”
TAC ¶ 38(H).

Likewise, it has alleged wrongful termination by

disputing that it breached any of the three provisions in the
- 36 -

Transport

Agreement

that

RSPI

contract.

See, ECF No. 149 Ex. H.
IV.

relied

on

to

terminate

the

CONCLUSION

For the reasons stated herein, the Court rules as follows:
1.

Counts I through V of the Third Amended Complaint are

dismissed with prejudice; and
2.

The remaining Count VI, as limited to allegations of

RSPI’s breaches of the Transport Agreement, may proceed.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated: 3/31/2017

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