The Seventh Circuit Court of Appeals just ruled on a question Chicago drivers have been asking for years: can the city really take your car, sell it, and keep every penny? Two plaintiffs thought the answer had to be no. The court had other ideas.
Chicago Takes Drivers Through Boot Camp
Chicago uses what the court calls a “graduated forfeiture scheme” to deal with people who treat parking tickets like junk mail. After a ticket, you can pay in full, get on an installment plan, or contest it. If you do nothing and rack up three final determinations of liability (or two that are over a year old), every vehicle registered to you becomes eligible for immobilization, a.k.a., booting.
The City then sends a notice of impending immobilization, and you get 21 days to pay or request a hearing. If you let that window close and your car gets the dreaded boot, you have 24 hours to pay, get on a payment plan, join a relief program, or ask for more time before towing and impoundment kick in.
Once the car is towed, the clock resets: the City sends another notice, and you have 21 days to pay fees, claim the car, or request an extension. You can also ask for an administrative hearing to argue that the immobilization or tow was erroneous. If you still do nothing, the City can sell or dispose of the car – and that’s not an empty threat. The City will often sell unclaimed vehicles to its contractor, United Road Towing (URT), at scrap value.
Two Tickets to Tow Town
Chi-towners Ryan O’Donnell and Michael Gore did not just get tickets; they went through the entire progression and still did not pay. In 2018 and 2021, respectively, Chicago disposed of their vehicles under this scheme (one sold at scrap to URT, one turned over to a lienholder). But the City did not compensate them or credit the proceeds against their ticket debts.
O’Donnell and Gore decided to take the matter to court, and filed a putative class action against Chicago and URT. They alleged violations of the U.S. Constitution, state constitution, U.S. Supreme Court precedent, and state law. The district court dismissed everything for failure to state a claim, and last week, the Seventh Circuit reviewed de novo and affirmed. We’ll go through the main claims and why they were dismissed one by one.
Takings Claim Runs Out of Gas
The plaintiffs’ main argument was that Chicago’s forfeiture scheme is an unconstitutional “taking” under the Fifth Amendment and Illinois constitution. If the City can sell or scrap your car and keep the proceeds, they argued, that sure looks like the government taking private property without just compensation. But because they’d brought a facial challenge, they had to show that the mere existence of § 9‑100‑120 is a taking in virtually all its applications.
That high bar doomed them: the court said that as long as the ordinance functions as a law‑enforcement penalty, the Takings Clause simply does not apply. The court leaned on its recent decision in Hadley v. City of South Bend, which said that law enforcement forfeitures are a “classic example” of police power and typically do not trigger the Takings Clause. Immobilizing, towing, impounding, and disposing of vehicles under § 9‑100‑120 is meant to force chronic non‑payers to “internalize the consequences of their behavior” and deter future violations—not to raise money in a way that counts as a taking.
Revenue Roadblock
The plaintiffs tried to steer around the police‑power framing by arguing that, in reality, the ordinance is just a glorified debt‑collection device that punishes people who cannot afford to pay. They pointed to an earlier case, In re Fulton, where the Seventh Circuit had described Chicago’s scheme as more about “revenue collection” than police power in the bankruptcy context.
Nice try, said the panel. Fulton was a bankruptcy case, not a takings case, and it never held that the scheme is only about collecting money. The court quoted a previous case for the idea that it is “a feature, not a bug, that § 9-100-120 both raises money and improves compliance with traffic laws.”
Tyler Hits a Red Light
The plaintiffs’ most creative move was to invoke the Supreme Court’s 2023 decision in Tyler v. Hennepin County, where the Court held that the government cannot keep surplus equity beyond what a taxpayer owes in a property‑tax foreclosure. If Tyler says you can’t take more from a taxpayer than they owe, why can Chicago keep all the proceeds from selling a car and not even credit the ticket debt?
Because, said the panel, Tyler is about the tax power, not the police power. Taxes and law enforcement come with different constitutional rules. When the government is enforcing traffic laws through punitive forfeiture, the Tyler “no extra equity” principle does not apply.
Unjust Enrichment or Just Unfortunate?
Finally, O’Donnell and Goree raised an unjust enrichment claim under Illinois law, arguing that Chicago and URT were unfairly profiting from their misfortune. Under Illinois precedent, unjust enrichment requires that the defendant has unjustly retained a benefit at the plaintiff’s expense in a way that violates “justice, equity, and good conscience.”
But the courts held that there was nothing unjust (legally speaking) about what happened here. Chicago lawfully impounded and disposed of their vehicles under § 9‑100‑120, and URT acquired cars at scrap value within that lawful framework. Because the underlying forfeiture was valid, neither the City nor URT “unjustly” retained a benefit. In other words, the scheme might feel brutal when your car is the one on the tow truck, but harsh does not equal unlawful.
Court Says: Proceed with Caution
The Seventh Circuit therefore affirmed across the board, leaving Chicago’s boot‑tow‑sell machine fully operational—and giving drivers a very concrete reason to treat those little orange envelopes like more than windshield décor.
What does this mean for the rest of the country who doesn’t live in the Windy City? Chicago is hardly the only city that boots, tows, and impounds for unpaid tickets. Many large jurisdictions use similar tools: tickets, payment plans, hearings, and, eventually, towing. These other cities and counties are revisiting their forfeiture and property‑collection systems in light of recent Supreme Court decisions (like Tyler) criticizing government overreach in seizing and keeping people’s property value.
Chi City is a standout case study in how far that model can go. Now, the Seventh Circuit has blessed this architecture as a valid use of police power rather than an unconstitutional taking. This gives not only Chicago but all municipalities in the Seventh Circuit more judicial cover to support their forfeiture and debt‑collection practices.
Related Resources:
- Can I Sue a Towing Company? (FindLaw’s Learn About the Law)
- Traffic Ticket Laws (FindLaw’s Learn About the Law)
- The Taking of Property for Public Use (FindLaw’s Learn About the Law)
