Walker et al v. East Chicago City of

Filing 97

OPINION AND ORDER: The Court GRANTS IN PART plaintiffs' motion to file a third amended complaint 88 , in a manner consistent with this order, within 14 days of the entry of this order. Signed by Senior Judge James T Moody on 5/8/2018. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
LASHAWNDA WALKER, individually and )
as next friend of her children, D.W., a minor, )
M.H., a minor, Z.H., a minor and M.W.,
)
a minor; KIMBERLY HUNTER, individually )
and as next friend of her child, M.C., a minor; )
AMOS WILLIAMS; ROBIN CLINTON,
)
individually and as next friend of her
)
children, J.S. Jr., a minor, J.C., a minor, and
)
A.S., a minor; MARK STENSON; LATASHA )
EDWARDS, individually and as next friend )
of her child, B.H., a minor, and DIONNE
)
HENDERSON, individually and as next
)
friend of her children, C.B., a minor, and
)
A.H., a minor,
)
)
Plaintiffs,
)
)
v.
)
)
BP PRODUCTS NORTH AMERICA INC.;
)
E I DU PONT DE NEMOURS and
)
COMPANY; and ATLANTIC RICHFIELD
)
COMPANY,
)
)
Defendants.
)

No. 2:16 CV 367

OPINION and ORDER
This matter is before the court on plaintiffs’ motion for leave to file a third
amended complaint. (DE # 88.) For the reasons identified below, plaintiffs’ motion is
granted in part and denied in part.

1

I.

BACKGROUND
Plaintiffs’ second amended complaint alleged ten counts against various

defendants, including BP Products North America, Inc. (“BP”), E I DuPont De Nemours
and Company (“DuPont”), and Atlantic Richfield Company (“ARCO”) (collectively
“defendants”) relating to plaintiffs’ exposure to toxins at the West Calumet Public
Housing Complex. (DE # 36.) This court granted ARCO’s motion to dismiss in its
entirety and granted portions of DuPont’s motion to dismiss. (DE # 83.) Specifically,
this court dismissed plaintiffs’ 42 U.S.C. § 1983 claims against ARCO and DuPont on the
basis that these defendants did not act under color of state law. (Id. at 9.)
Plaintiffs now seek leave to file a third amended complaint, in which they
reintroduce their Section 1983 claims against ARCO and DuPont and add additional
parties. (DE # 88.) Plaintiffs believe that this court erroneously dismissed their Section
1983 claims against ARCO and DuPont based on the court’s misunderstanding of their
claims against these defendants, and they seek to address these errors by amending
their complaint.1 (Id. at 1-2.)
ARCO and DuPont oppose the motion and argue that plaintiffs’ proposed
amended complaint does not add any additional facts that would permit the court to
find that defendants acted under color of law. Rather, plaintiffs continue to allege that

1

The court notes that a motion for leave to file an amended complaint is not the
proper procedural mechanism to correct factual errors a party believes to exist in a
court’s dismissal order. Nevertheless, the court will address the merits of plaintiffs’
argument as it is easily dispelled.
2

defendants were state actors because they entered into a consent decree with two
governmental agencies. Defendants argue that plaintiffs’ motion should be denied
because the court dismissed these claims with prejudice and amendment would be
futile.
II.

LEGAL STANDARD
Plaintiffs’ motion to file a third amended complaint is governed by Federal Rule

of Civil Procedure 15(a)(2). This rule states, “a party may amend its pleading only with
the opposing party’s written consent or the court’s leave. The court should freely give
leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). “[T]he decision to grant or deny
a motion to file an amended pleading is a matter purely within the sound discretion of
the district court.” Brunt v. Serv. Employees Int’l Union, 284 F.3d 715, 720 (7th Cir. 2002).
“‘Although the rule reflects a liberal attitude towards the amendment of pleadings,
courts in their sound discretion may deny a proposed amendment if the moving party
has unduly delayed in filing the motion, if the opposing party would suffer undue
prejudice, or if the pleading is futile.’” Soltys v. Costello, 520 F.3d 737, 743 (7th Cir. 2008)
(internal citation omitted). “There is no abuse of discretion where the district court
denies a motion for leave to amend when the proposed amendment would not cure the
deficiencies identified in the earlier complaint.” Bell v. City of Chicago, 694 F. App’x 408,
412 (7th Cir. 2017), reh’g and suggestion for reh’g en banc denied (Aug. 17, 2017). See also
Gonzalez-Koeneke v. West, 791 F.3d 801, 807 (7th Cir. 2015).

3

III.

ANALYSIS
A.

Plaintiffs’ Claims were Dismissed with Prejudice

DuPont and ARCO both oppose plaintiffs’ motion to amend on the basis that
plaintiffs are attempting to revive claims that were dismissed with prejudice. (DE # 92
at 2-3; DE # 94 at 4.) Defendants maintain that because this court did not provide
plaintiffs with an opportunity to replead their dismissed claims, the dismissal
constituted a dismissal with prejudice. Plaintiffs do not offer any substantive response
to this argument.
Rule 41(b) states, “[u]nless the dismissal order states otherwise, a dismissal
under this subdivision (b) and any dismissal not under this rule–except one for lack of
jurisdiction, improper venue, or failure to join a party under Rule 19–operates as an
adjudication on the merits.” Fed. R. Civ. P. 41. “When a case of which the court has
jurisdiction is dismissed because it fails to state a claim . . . the dismissal is a merits
determination and is therefore with prejudice.” El v. AmeriCredit Fin. Servs., Inc., 710
F.3d 748, 751 (7th Cir. 2013). See also St. John v. Cach, LLC, 822 F.3d 388, 392 (7th Cir.
2016) (dismissal of a case pursuant to Rule 12(b)(6) or 12(c) is a dismissal with
prejudice); Georgakis v. Illinois State Univ., 722 F.3d 1075, 1077 (7th Cir. 2013) (dismissal
of a case on the merits is a dismissal with prejudice unless the court grants the plaintiff
leave to replead).

4

This court’s dismissal of plaintiffs’ Section 1983 claims was made on the merits of
those claims. The court did not provide plaintiffs an opportunity to replead. Thus, the
dismissal of those claims was with prejudice.
B.

The Court’s Dismissal Order was not Predicated on Factual Error

Plaintiffs argue that this court misunderstood the allegations set forth in their
Second Amended Complaint, and that this misunderstanding led the court to
erroneously dismiss their Section 1983 claims against ARCO and DuPont. (DE # 88.)
Plaintiffs argue:
Factual errors caused a dismissal because the Plaintiffs complained of
[ARCO and DuPont] being negligent by prior ownership, that was not the
facts presented. Instead the facts before the court were that ARCO and
DuPont engaged in a cleanup and that ARCO and DuPont entered into a
clean up agreement. ARCO kept silent of the dangers known to exist.
ARCO and DuPont were motivated to keep silent because they would not
have to reimburse the medical costs of these African American tenants.
(Id. at 2.) This court did not misunderstand plaintiffs’ claims. In the dismissal order, this
court considered and rejected this basis for conferring Section 1983 liability upon ARCO
and DuPont, stating:
[P]laintiffs argue that the Corporate Defendants were state actors by
virtue of the Consent Decree that settled the claims brought against them
in the Cleanup Action. In particular, plaintiffs argue that the settlement in
the Cleanup Action afforded the Corporate Defendants with a release
from liability for certain state and federal claims in exchange for $26
million dollars of funding for the cleanup effort. Thus, they argue, the
Consent Decree provided the Corporate Defendants with protection from
liability and this protection incentivized the Corporate Defendants in
remaining silent about the health hazards for residents of the Complex.
(DE # 83 at 7 (internal citations omitted).)

5

In the dismissal order, this court found that plaintiffs failed to sufficiently plead
the existence of a close nexus between defendants and the Environmental Protection
Agency (“EPA”) and the Indiana Department of Environmental Management (“IDEM”)
– the other signatories of the Consent Decree – for two reasons. (Id. at 8-9.) First,
defendants’ conduct, the alleged contamination of the Site, occurred decades before the
parties entered into the Consent Decree. Second, the Consent Decree was a settlement of
an action brought by the government against the defendants regarding the
contamination of the Site. Thus, this court determined that the Consent Decree does not
reflect a joint effort between ARCO, DuPont, and the government to deprive the
plaintiffs of any of their constitutional rights. (Id.)
C.

Amendment is Futile

Plaintiffs’ proposed third amended complaint does not offer any new allegation
that would change this court’s original analysis, and therefore the proposed
amendment would be futile. Plaintiffs’ proposed amended complaint still has not
alleged facts from which the court could plausibly infer that defendants acted under
color of state law.
“For a private actor to act under color of state law he must have ‘had a ‘meeting
of the minds’ and thus reached an understanding’ with a state actor to deny plaintiffs a
constitutional right.” Wilson v. Warren Cty., Illinois, 830 F.3d 464, 468 (7th Cir. 2016)
(internal citation omitted). “[T]he state actor must share the private actor’s
unconstitutional goal in order for a state actor to be acting under color of state law. In

6

other words, ‘[a] private actor . . . cannot unilaterally convert a state actor’s legitimate
activity into an illegal act, conferring both constitutional accountability on itself and
liability on the state.” Id. (internal citation omitted).
While there is no definitive test to determine whether a defendant was a state
actor, the Seventh Circuit has identified numerous situations in which private conduct
may be said to have been conducted under color of state law. See Hallinan v. Fraternal
Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 815 (7th Cir. 2009). For example,
private action can become state action when: (i) “private actors conspire or are jointly
engaged with state actors to deprive a person of constitutional rights;” (ii) “where the
state compels the discriminatory action;” (iii) “when the state controls a nominally
private entity;” (iv) “when it is entwined with its management or control;” (v) “when
the state delegates a public function to a private entity;” or (vi) “when there is such a
close nexus between the state and the challenged action that seemingly private behavior
reasonably may be treated as that of the state itself.” Id.
As in their second amended complaint, plaintiffs’ proposed third amended
complaint is premised on their belief that ARCO and DuPont are state actors by virtue
of the Consent Decree. (DE # 88-1 at 10.) While plaintiffs added two new allegations
regarding defendants’ motive for entering into the Consent Decree, these allegations are

7

inherently contradictory and do nothing to address the deficiencies identified in this
court’s dismissal order.2
First, plaintiffs still have not set forth any factual allegations that would plausibly
suggest that DuPont, ARCO, the EPA, and the IDEM entered into the Consent Decree
for the purpose depriving plaintiffs of privately-funded medical care. The Consent
Decree was a settlement of a government action against defendants for environmental
contamination. Plaintiffs’ conclusion that the parties’ true intent in entering the
agreement was not to remedy the pollution, but to release defendants from liability to
plaintiffs is not plausible based on the facts in the proposed amended complaint.
“[W]here the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the
pleader is entitled to relief.’” Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009).
Moreover, the Seventh Circuit has found that a private entity is not deemed to be
a state actor merely because it entered into an agreement with the government that
limited a plaintiff’s right of recovery. In Tom Beu Xiong v. Fischer, 787 F.3d 389 (7th Cir.

2

Plaintiffs added the following allegations in their proposed third amended
complaint:
64.
The Settlement Amount was intended only for cleaning the ground.
65.

The Deal was wholly unrelated to the object of cleaning up of the
ground; instead the government and the corporate defendants
arbitrarily negotiated away the right of these African American
plaintiffs to seek medical care through the federal agency and have
that care paid for by ARCO and DuPont.
(Id. at 9.) These allegations are insufficient to establish that defendants acted under color
of state law by virtue of the Consent Decree.
8

2015), a former county employee sued his union pursuant to Section 1983. Id. at 392. He
argued that the county and the union conspired to minimize costs by limiting the right
of county employees to challenge adverse employment decisions through arbitration,
and that this conspiracy violated his right to due process. Id. at 398. The Seventh Circuit
found that the plaintiff’s Section 1983 claim against the union “must fail” for two
reasons. First, “[i]t is well established that ‘a bare allegation of a conspiracy between
private and state entities is insufficient to bring the private entity within the scope of §
1983.’” Id. (internal citation omitted). Second, although the collective bargaining
agreement “creates a grievance mechanism in which the County and the Union agree to
participate, this jointly negotiated procedure is not sufficient on its own to show a close
nexus between the Union and the state.” Id. The Court found that the plaintiff failed to
identify any facts demonstrating that the union acted under color of state law and thus
he could not proceed with his claim against the union. See also Hallinan v. Fraternal Order
of Police of Chicago Lodge No. 7, 570 F.3d 811 (7th Cir. 2009); Cunningham v. Southlake Ctr.
For Mental Health, Inc., 924 F.2d 106 (7th Cir. 1991).
Here, as in Tom Beu Xiong, plaintiffs cannot transform defendants into state
actors by way of a government agreement alone. The existence of the Consent Decree,
without more, is insufficient to establish a close nexus between defendants and the EPA
and IDEM. Plaintiffs have not set forth factual allegations that plausibly claim that
defendants and the government entered into the Consent Decree for the purpose of

9

violating plaintiffs’ rights. Thus, plaintiffs are denied leave to reintroduce their Section
1983 claims against defendants because amendment would be futile.
D.

Other Amendments

With the exception of the claims identified above, plaintiffs shall be permitted to
file their proposed third amended complaint. The proposed third amended complaint
provides additional factual allegations, names a new plaintiff and a new defendant, and
reinstates claims for punitive damages and injunctive relief.
DuPont opposes the reintroduction of plaintiffs’ claims for punitive damages and
injunctive relief. DuPont argues that this court’s earlier dismissal of these claims for
relief was a dismissal with prejudice. However, a prayer for relief is not a “claim”
subject to dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6), the rule under
which DuPont moved. Cf. Bontkowski v. Smith, 305 F.3d 757, 762 (7th Cir. 2002)
(“Although Rule 8(a)(3) of the civil rules requires that a complaint contain ‘a demand
for judgment for the relief the pleader seeks,’ the demand is not itself a part of the
plaintiff’s claim . . .”). Moreover, the court notes that under the federal rules, the court is
permitted to award any warranted relief regardless of what a plaintiff seeks in his
complaint. See Fed. R. Civ. P. 54(c) (“Every other final judgment [other than a default
judgment] should grant the relief to which each party is entitled, even if the party has
not demanded that relief in its pleadings.”). Thus, plaintiffs will be permitted to include
a request for punitive damages and injunctive relief in their prayer for relief in their
third amended complaint.

10

IV.

CONCLUSION
For these reasons, the court GRANTS IN PART plaintiffs’ motion to file a third

amended complaint (DE # 88), in a manner consistent with this order, within 14 days of
the entry of this order.
SO ORDERED.
Date: May 8, 2018
s/James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT

11