O R D E R
The Village of Westchester, Illinois, declined to grant a liquor license to Anna's Café Place LLC, for a business that Anna's Café intended to purchase. Anna's Café sued the village and two of its former presidents, claiming that their inaction violated the Café's due process and equal protection rights under the Fourteenth Amendment. The district court dismissed its suit under Fed. R. Civ. P. 12(b)(6). We now affirm the district court's judgment.
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with FED. R. APP. P. 32.1
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I. Background∗ Anna's Café is located in Westchester, Illinois, and its general manager is Michael Manzo. Manzo has taken part in local politics for over 25 years. According to Manzo, members of local governments have singled him out for persecution in retaliation for his political involvement.
In 2020, Anna's Café was one of two businesses in Westchester to hold a Class I-1 liquor license. Class I-1 licenses are only granted to premises licensed to provide video gaming. Once an I-1 license is granted, it is valid until December 31 of the year for which it is issued. Thereafter, it must be renewed annually, or else it will expire and then be rescinded. The only other business in Westchester that held an I-1 license was Christopher's Speakeasy LLC.
In late 2020, Christopher's Speakeasy wanted to turn its management over to Anna's Café. Manzo and the proprietor of Christopher's Speakeasy orally agreed that Anna's Café should either purchase Christopher's Speakeasy or take over its operation as new management. On behalf of Anna's Café, Manzo contacted Westchester's Economic Development Director, Melissa Headley, about the potential transaction. Headley told Manzo that instead of purchasing Christopher's Speakeasy and renewing its existing I-1 license, Anna's Café should file a new I-1 license application for that location. Anna's Café did so in November of 2020, seeking an I-1 license for its forthcoming "Anna's Mannheim" location.
That application went nowhere. The existing license belonging to Christopher's Speakeasy expired at the end of December. The Westchester Board discussed Anna's Café's application in January of 2021 but took no action. In February, Anna's Café's attorney addressed the Board about its "delay and due process violation of not deciding Plaintiff's Anna's Mannheim application." In March, Westchester president Paul Gattuso told Manzo that the Board had decided not to grant the application because certain board members wanted to punish Manzo. In April, Headley told Manzo that ∗ At the motion to dismiss stage, the court takes all well-pleaded allegations as true and views them in the light most favorable to the plaintiff. See Indep. Tr. Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 934 (7th Cir. 2012). We therefore recite here the pertinent "factual allegations of the operative complaint without vouching for their truth." Nelson v. City of Chicago, 992 F.3d 599, 602 (7th Cir. 2021).
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Anna's Café needed to modify its application to exclude gaming to avoid rejection. No action has been taken on the application since then.
Anna's Café filed this Section 1983 action against Westchester, Gattuso, and Westchester's subsequent president, Frank Perry, in June of 2021. The district court dismissed its First Amended Complaint but allowed Anna's Café to amend its complaint again. Anna's Café filed its Second Amended Complaint in November of 2024. The district court dismissed that complaint as well, this time with prejudice, for failure to state a claim.
II. Discussion
A. As a threshold matter, the defendants argue that Anna's Café lacked standing to bring its claim. But that contention is meritless. According to the complaint, Anna's Café would have purchased Christopher's Speakeasy and operated it for five years now if not for the defendants' delay in handling the license application. That is a
"classic pocketbook injury" that could, in theory, be redressed through this suit. Tyler v. Hennepin County, 598 U.S. 631, 636 (2023). Thus at the very least, Anna's Café has standing to seek monetary damages flowing from Westchester's delay in processing its liquor license application. Defendants' arguments to the contrary—that Anna's Café lacked standing because its suit focuses on the denial of a liquor license to another business—simply confuse standing with the merits. See, e.g., Booker-El v. Superintendent, Ind. State Prison, 668 F.3d 896, 899 (7th Cir. 2012) (argument that plaintiff lacked standing because "he has no property interest" in the sought-after funds "conflates standing with the merits of the case").
B. Anna's Café claims that the defendants' handling of the liquor license application violated the Due Process Clause of the Fourteenth Amendment. "To state a claim for a procedural due process violation, a plaintiff must demonstrate (1) a cognizable property interest; (2) a deprivation of that property interest; and (3) a denial of due process." Manistee Apartments, LLC v. City of Chicago, 844 F.3d 630, 633 (7th Cir. 2016). We review the district court's dismissal on this ground de novo. 145 Fisk, LLC v. Nicklas, 986 F.3d 759, 765-66 (7th Cir. 2021).
The complaint in this case fails at the first step, because Anna's Café has not identified a cognizable property interest of which it was deprived. First, Anna's Café alleges that it had a property interest in its application for a license. A property right in a public benefit like a liquor license only arises if a person has "a legitimate claim of entitlement to it." Bell v. City of Country Club Hills, 841 F.3d 713, 717 (7th Cir. 2016)
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(quoting Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)). Anna's Café would thus need to show that Westchester's discretion in granting the license was "clearly limited such that [Anna's Café] cannot be denied the interest unless specific conditions are met." Booker-El, 668 F.3d at 900 (quoting Brown v. City of Michigan City, 462 F.3d 720, 729 (7th Cir. 2006)). But Anna's Café cannot make such a showing because Westchester reserves discretion to grant new liquor licenses only "by action of the corporate authorities of the Village of Westchester." Westchester, Ill., Mun. Code § 5.36.130(a) (2019). Under Westchester's ordinances, therefore, a mere application for a liquor license does not vest a property right in the applicant.
Indeed, Anna's Café has not even shown that Westchester could have granted its application. Westchester may only issue a liquor license to a person who "beneficially own[s] the premises for which a license is sought" or has "a lease thereon for the full period for which the license is to be issued." Id. § 5.36.060(a)(14). In other words, an applicant for a liquor license needs to show that it either owns or leases the real estate where it will be serving liquor. Anna's Café has not alleged that it did. In addition, Westchester's liquor commissioner may not grant a liquor license to a "person who is not a beneficial owner of the business to be operated by the licensee." Id. § 5.36.060(a)(16) (emphasis added). Anna's Café does not allege that it was a beneficial owner of Christopher's Speakeasy at the time it filed its application or at any time thereafter. As a result, Anna's Café has not shown that it had a property interest in its application for a liquor license at Anna's Mannheim. Just the opposite, its allegations indicate that it had no valid claim to such a license.
Second, Anna's Café alleges it had a property interest in Christopher's Speakeasy's then-existing liquor license. An existing Illinois liquor license can indeed be property for the purpose of the Fourteenth Amendment, and that property right can extend to an application for renewal of an existing license in certain situations. See Brunson v. Murray, 843 F.3d 698, 709-10 (7th Cir. 2016). Anna's Café, however, has not adequately alleged that it shared in Christopher's Speakeasy's property interest, either by ownership, by transfer, or otherwise. Anna's Café admits that it never purchased Christopher's Speakeasy. And Christopher's Speakeasy could not have transferred direct ownership of its I-1 license to Anna's Café, because Westchester's ordinances prohibit such transfers. Westchester, Ill., Mun. Code § 5.36.150(a) (2019) ("A license … shall not … be alienable or transferable, voluntarily or involuntarily…."). Anna's Café may have thought its liquor license application was effectively an application to renew Christopher's Speakeasy's license, but only the licensee can renew a liquor license. Id. § 5.36.150(b).
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Because Christopher's Speakeasy never filed a renewal application, its license expired on December 31, 2020. See id. § 5.36.070. That nonrenewal also meant that Christopher's Speakeasy's liquor license was "rescinded," and that Westchester
"automatically reduced" the total number of I-1 liquor licenses to just one—the one owned by Anna's Café itself, at its original location. Id. § 5.36.130(b). At no point during the life of Christopher's Speakeasy's liquor license did Anna's Café allegedly have a property interest in it.
Finally, Anna's Café attempts to rescue its due process theory by arguing that the defendants are estopped from defending this case by "relying on the November 2020 filing for a new I-1 license by Anna's, because that filing … was done at the express direction of a Village official," Headley. But Anna's Café bears the burden to show a protected property right; defendants need not show the absence of one. Anna's Café has failed to carry that burden. An estoppel argument like this one cannot create a property right where none exists. The Café failed to state a claim for deprivation of due process, and its suit was properly dismissed as to that theory of liability. C. Anna's Café also contends that the defendants' handling of the liquor license application violated the Equal Protection Clause of the Fourteenth Amendment. The Café alleges a "class-of-one equal protection" violation, which requires a showing that (1) the plaintiff has "been intentionally treated differently from others similarly situated," and (2) "there is no rational basis for the difference in treatment." Ind. Land Tr. #3082 v. Hammond Redev. Comm'n, 107 F.4th 693, 697-98 (7th Cir. 2024); see also Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000) (establishing this two-factor test). We review dismissal on this ground de novo as well. 145 Fisk, 986 F.3d at 765-66. We need only address the rational-basis factor today. To state a claim under a class-of-one equal protection theory, the plaintiff must "negative any reasonably conceivable state of facts that could provide a rational basis" for the defendant's conduct. Id. at 772 (quoting Bd. of Trs. of Univ. of Ala. v. Garrett, 531 U.S. 356, 367 (2001)). If the court can identify a conceivable rational basis for the defendant's actions, that is enough; "it does not need to be the actual basis for defendant's actions." Chi. Studio Rental, Inc. v. Ill. Dep't of Com., 940 F.3d 971, 980 (7th Cir. 2019). The equal protection theory here fails because conceivable rational bases exist for the decisions of Westchester and its former presidents. As the district court held, one possible rational basis was that "at the time Anna's Café applied for the I-1 license, all such licenses permitted by the local ordinance were already assigned." Another possible basis could be that Anna's Café never owned or leased the premises on which
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Christopher's Speakeasy was located, which is a prerequisite to obtaining a liquor license. Westchester, Ill., Mun. Code § 5.36.060(a)(14) (2019). And as the district judge observed, even if the defendants were wrong in their interpretation of these local ordinances, "the uncertainty surrounding the application is at least a plausible rational motive for the Village's failure to act upon the application."
Anna's Café resists this conclusion, arguing that its allegations of personal animus directed at Manzo should suffice to state a claim notwithstanding the rational- basis requirement. But under long-established precedent, evidence of animus cannot keep a class-of-one equal protection claim alive after a court identifies a rational basis. Even if Westchester or its former presidents "had an ulterior motive, the finding of a rational basis is 'the end of the matter—animus or no.'" 145 Fisk, 986 F.3d at 773 (quoting Fares Pawn, LLC v. Ind. Dep't of Fin. Insts., 755 F.3d 839, 845 (7th Cir. 2014)). The district court thus properly found the Café's equal protection theory deficient as well. The judgment of the district court is therefore AFFIRMED.
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