The Law School Authority

Chicago Bd. of Realtors, Inc. v. City of Chicago Case Brief

Summary of Chicago Bd. of Realtors, Inc. v. City of Chicago, U.S. Court of Appeals, 7th Circuit (1987)

Parties: A bunch of realtors suing the city over a new ordinance which expanded the duty of landlords.

Cause of action/remedy sought: The following is an equitable action for injunctive relief.

Procedural History: Lower courts denied the motion.  This court affirms.

Facts: Rights expanded for tenants, from interest on security deposits, to withholding rent equal to terms violated in a lease, same thing for minor repairs (recoupment), decreased late fees, and created a rebuttable presumption that a landlord who sought to evict a tenant after the tenant exercised rights conferred by the ordinance is retaliating against the tenant for the exercise of those rights.  Board sought to declare the ordinance unconstitutional.

Issue(s): Under IL property law, is the expansion of property rights (listed in facts) violative of any due process rights that landlords and landowners have in the constitution?

Holding: No.  Ordinance allowed to stand.

Court’s Rationale/Reasoning:  Proponents of a warranty of habitability say it will protect low-income renters.  Posner disagrees.  What we have here is disparate bargaining power where there is a great power for abuse.  How does he say this attempt to protect tenants might backfire?  He says LL will have fewer resources and so the properties will be kept in worse repair, and that available housing will shrink because the cost of housing will go up and so poor people will not have anywhere to live or live in worse places.

Chicago city council established a statute that created the implied warranty of habitability.  The board of realtors wanted to declare it unconstitutional.

Why didn’t they get the injunction? B/c they probably would not be able to succeed.

Rule: Law & economics school says the law follows the rule of economics.

Did court avoid issues?: No.

Dicta: Aside from affirming, this whole opinion is dicta, as it goes beyond the lower court’s decision.

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