Background
Joliet Avionics, Inc., a fixed-base operator (FBO) at the Aurora Municipal Airport, sued the City of Aurora, the airport’s sponsor. Joliet claimed the City gave a competing FBO, Carver Aero, a more favorable lease and unfairly excused it from complying with certain airport policies. Specifically, Joliet alleged that Carver’s lease included years of waived ground rent and that the City did not enforce its “Minimum Standards” policy requiring Carver to build an above-ground fuel farm and carry specific insurance.
Joliet’s own 2007 lease with the City, which involved financing for its own fuel farm construction, had been amended in 2015 after Joliet fell behind on payments. Believing it was treated unfairly compared to Carver, Joliet filed a lawsuit alleging a “class-of-one” equal protection violation and breach of contract. The U.S. District Court for the Northern District of Illinois granted summary judgment to the City on both claims, and Joliet appealed.
The Court’s Holding
The Seventh Circuit affirmed the district court’s decision in favor of the City of Aurora. The court first addressed the equal protection claim, holding that a “class-of-one” theory is a “poor fit” for disputes involving government contracting. Extending the Supreme Court’s reasoning in Engquist v. Oregon Dep’t of Agriculture, which limited such claims in the public employment context, the court found that negotiating commercial leases involves discretionary, subjective, and individualized decision-making. The court reasoned that the Constitution does not require a city to offer identical contracts to all tenants and that making apples-to-apples comparisons of complex commercial leases is nearly impossible. Allowing such claims would improperly turn routine contractual disputes into federal constitutional cases.
On the breach of contract claim, the court rejected Joliet’s argument that the City’s Minimum Standards policy and federal grant assurances were implicitly incorporated into its lease. The court explained that under Illinois law, the “implied incorporation doctrine” applies to existing statutes and laws, not to a contractual agreement like a grant assurance between the City and the FAA. Furthermore, the policy language Joliet cited—stating the City’s “intent and duty” to promote free enterprise and protect tenants from unfair competition—was deemed too vague and aspirational to create a legally binding and enforceable obligation. Therefore, the City’s failure to strictly enforce the policy against a competitor did not amount to a breach of its contract with Joliet.
Key Takeaways
- A “class-of-one” equal protection claim is generally not an available legal theory for challenging a government entity’s discretionary decisions in the context of commercial contracting.
- Negotiating lease terms and deciding how to respond to a counter-party’s performance are inherently individualized decisions that do not lend themselves to the kind of “similarly situated” analysis required for a class-of-one claim.
- Vague, aspirational statements in a municipal policy and contractual obligations between a government body and a third party (like federal grant assurances) are not automatically incorporated as enforceable terms into a private contract with that government body under Illinois’s implied incorporation doctrine.
Why It Matters
This decision reinforces the principle that not every perceived unfairness in government action rises to the level of a constitutional violation. By closing the door to “class-of-one” claims in the government contracting arena, the court shields public entities from federal litigation over their routine, discretionary commercial activities. The ruling preserves a government’s flexibility to act as a commercial landlord and negotiate unique agreements based on varying circumstances, without fear that every contractual difference could be challenged in court by a competitor.
For attorneys representing either municipalities or those who contract with them, this case clarifies the significant hurdle in claiming constitutional harm based on disparate contractual terms. It prevents competitors from effectively becoming third-party enforcers of each other’s contracts and keeps complex commercial disputes out of the federal constitutional domain.