Willow Way, LLC v. Village of Lyons, Illinois

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 22-1775
WILLOW WAY, LLC,
Plaintiff-Appellant,
v.
VILLAGE OF LYONS, ILLINOIS,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:20-CV-03046 — Edmond E. Chang, Judge.
____________________
ARGUED SEPTEMBER 12, 2023 — DECIDED OCTOBER 5, 2023
____________________
Before EASTERBROOK, HAMILTON, and PRYOR, Circuit
Judges.
EASTERBROOK, Circuit Judge. Willow Way purchased a par-
cel of land in the Village of Lyons. The house on this land
needed repairs, and bids for the work exceeded $100,000. Ren-
ovations began in 2017 but soon halted. After several years
had passed, and the house remained empty, the Village pro-
posed to tear it down as a nuisance. The Village published

-- 1 of 5 --

2 No. 22-1775
notice, posted notices on the house, and mailed notice to Wil-
low Way, which concedes having actual knowledge of the im-
pending demolition. But it did not do anything in response
until the week scheduled for the razing, when its lawyer pro-
posed a meeting with the Village’s Building Director. By then
it was too late. Willow Way did not try to build a new house,
and the parcel was sold at auction to satisfy the Village’s lien
for demolition expenses.
In this suit under 42 U.S.C. §1983, Willow Way contends
that the demolition is a taking without compensation and vi-
olates principles of substantive due process. The district judge
thought otherwise and granted summary judgment for the
Village. 2022 U.S. Dist. LEXIS 59919 (N.D. Ill. Mar. 31, 2022). As
the judge observed, the demolition of a dilapidated structure
that constitutes a public nuisance is not problematic under the
Due Process Clause and does not require compensation. See,
e.g., Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2079 (2021);
Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1022–23
(1992). (Willow Way has not pursued whatever claim under
the Fourth Amendment it might have had. See Soldal v. Cook
County, 506 U.S. 56 (1992).) The protection that the federal
Constitution offers to property owners is notice and an oppor-
tunity for a hearing at which the structure’s condition can be
ascertained based on factual presentations.
The Village gave such a notice to Willow Way, which did
not ask for a hearing. State law in Illinois offers plenty of op-
portunity to property owners, see 65 ILCS 5/11-31-1(e), and
McKenzie v. Chicago, 118 F.3d 552 (7th Cir. 1997), holds that
these procedures are constitutionally adequate. McKenzie
noted that someone who wants to stop a demolition has only
to file suit in state court, which automatically blocks action

-- 2 of 5 --

No. 22-1775 3
until the judge decides whether the building meets the statu-
tory criteria for being razed. 118 F.3d at 554. Willow Way did
not take this step and cannot complain about the conse-
quences of its inaction. No more need be said about Willow
Way’s federal claims.
Willow Way’s complaint includes an inverse-condemna-
tion claim under Illinois law. After granting summary judg-
ment on the federal claims, the district court relinquished
supplemental jurisdiction so that Willow Way could pursue
its state-law claim in state court. 28 U.S.C. §1367(c)(3). Willow
Way protests, contending that the district court has jurisdic-
tion under 28 U.S.C. §1332 based on diversity of citizenship
and therefore must adjudicate the state-law claim.
The district court’s decision is understandable. Although
Willow Way’s complaint cites §1332, it does not explain Wil-
low Way’s citizenship (which for a limited liability company
depends on the citizenship of its members) or state that the
amount in controversy exceeds $75,000. When members of the
court pointed this out at oral argument, counsel for Willow
Way replied that, because jurisdiction had not been contested
in the district court, it is no longer an issue in the case. Counsel
seems to have been ignorant of the rule that “[j]urisdictional
requirements cannot be waived or forfeited, must be raised by
courts sua sponte, and … do not allow for equitable excep-
tions.” Boechler, P.C. v. CIR, 142 S. Ct. 1493, 1497 (2022).
At oral argument, we drew counsel’s amention to 28 U.S.C.
§1653, which reads: “Defective allegations of jurisdiction may
be amended, upon terms, in the trial or appellate courts.” We
invited Willow Way to propose an amended complaint with
the necessary allegations. It tendered such a complaint, which
is as deficient as the original.

-- 3 of 5 --

4 No. 22-1775
The sole jurisdictional allegation in the proposed
amended complaint reads: “Jurisdiction rests with this Court
pursuant to 28 U.S.C. §§1331, 1332(a), 1343 and 1367.” Not one
word about Willow Way’s citizenship (or that of the Village)
nor any allegation about the amount in controversy. Else-
where the complaint avers that Willow Way’s sole member is
Stonecrest Realty Management, LLC, whose sole member is
Jon O. Freeman, a citizen of California. The Village is a citizen
of Illinois, see Moor v. Alameda County, 411 U.S. 693 (1973),
though the complaint does not allege this. Paragraph 5 of the
proposed amended complaint alleges that Willow Way
bought the parcel in July 2016 for $111,350, and ¶52 alleges
that it was sold at auction on March 23, 2021, for $25,446.90.
The difference between these prices is roughly $86,000, which
Willow Way believes meets the $75,000 jurisdictional mini-
mum.
The problem with this submission is that a change in price
over five years differs from injury caused by demolition of the
house. The structure was razed in February 2020, about four
years after Willow Way bought the parcel and about a year
before it was sold. The Village is not liable for a change in the
market price of real estate or a decline in the value of a house
while it was standing empty. Cf. Dura Pharmaceuticals, Inc. v.
Broudo, 544 U.S. 336 (2005) (distinguishing transaction causa-
tion from loss causation). The question is whether the demoli-
tion caused loss exceeding $75,000.
Members of the panel made this clear at oral argument,
and our order calling for supplemental filings directs the par-
ties to “pay particular amention to the value of the parcel im-
mediately before and after the demolition.” Yet Willow Way’s
supplemental filing and proposed amended complaint do not

-- 4 of 5 --

No. 22-1775 5
pay the slightest amention to the before-and-after valuation.
Complaints need not be accompanied by expert reports, but
their jurisdictional allegations must at least address the right
question. Willow Way’s do not. The district court therefore
was not required to decide the inverse-condemnation claim.
AFFIRMED

-- 5 of 5 --