Chicago United Indus., Ltd. v. City of Chicago

739 F.Supp.2d 1043

CHICAGO UNITED INDUSTRIES, LTD., an Illinois corporation, George Loera, and Nick Massarella, Plaintiffs,

v.CITY OF CHICAGO, Mary Dempsey, and Louis Langone, Defendants.

Case No.: 05-cv-5011.

United States District Court,

N.D. Illinois,

Eastern Division.

Sept. 10, 2010.

Mark Anthony LaRose, Joseph A. Bosco, LaRose & Bosco, Ltd., Chicago, IL, Charisse S. Logarta, Latham & Watkins LLP, Washington, DC, for Plaintiffs.

Michael J. Dolesh, Anuj Vohra, Rachel Dana Powell, Thomas Forgue, City of Chicago, Department of Law, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

This matter is before the Court on Plaintiff Chicago United Industries, Ltd.'s ("CUI") motion to reconsider [323] the Court's Memorandum Opinion and Order [318] dated January 15, 2010, which granted Defendants' motion for summary judgment [269] and denied as moot Defendants Dempsey and Langone's motion for summary judgment based on qualified immunity [274].¹ For the following reasons, CUI's motion to reconsider [329] is denied.

I. Background

This case involves a now long-standing dispute between the City of Chicago and CUI, a City contractor. The relevant facts are set forth in detail in the Court's January 15, 2010 Memorandum Opinion and Order, 685 F.Supp.2d 791 (N.D.Ill.2010) ("the Opinion"), and will not be restated in their entirety here. In brief, the dispute dates back to March 17, 2005, when the City issued a Preliminary Notice of Intent to Decertify CUI as a minority-owned business enterprise ("MBE") based on the allegation that CUI was operating as a broker. Shortly thereafter, on March 31, 2005, the City issued a notice of intent to debar CUI from doing business with the City based on the allegation that CUI had submitted a false shipping ticket in connection with a delivery of aluminum sign blanks (unpainted traffic signs) to the City's Department of Transportation ("CDOT"). CUI contends that, since that time, the City essentially has systematically mistreated CUI (by, among other things, stopping or reducing orders on existing contracts with CUI, failing to award CUI new contracts when it was the lowest bidder, failing to extend existing CUI contracts, and refusing to communicate withCUI) in an effort to drive CUI out of business.

On August 24, 2005, the City debarred CUI and its owners from doing business with the City and terminated its existing contracts with CUI. CUI then filed this suit, seeking injunctive relief on the ground that the City had violated the due process clause of the Fourteenth Amendment by failing to give CUI a predeprivation hearing. Judge Shadur, the district court judge assigned to the case at that time, issued a temporary restraining order on August 31, 2005 enjoining the Defendants from enforcing the debarment and from canceling any of CUI's existing contracts with the City. Shortly thereafter, the City reinstated CUI's contracts with the City and rescinded the debarment order. However, according to CUI, the pattern of mistreatment (again including stopping or reducing orders on existing contracts with CUI, failing to award CUI new contracts when it was the lowest bidder, failing to extend contracts with CUI, and restricting communications with CUI) did not stop.

CUI characterizes the alleged mistreatment that occurred between April and August of 2005 as an effort by the City to deprive it of its MBE certification ( i.e., de facto decertification) in violation of CUI's due process rights. CUI characterizes the mistreatment that allegedly has continued since the August 2005 as retaliation in violation of the First Amendment for the filing of this suit.

The Opinion, which CUI asks the Court to reconsider, addressed Counts III, IV, V, and VI of CUI's six-count Third Amended Complaint. With respect to Count III, a procedural due process property interest claim against the City and Dempsey, the Court concluded that CUI has a constitutionally protected property interest in its MBE certification. However, the Court nevertheless granted summary judgment in favor of Defendants on Count III, finding that CUI failed to present sufficient evidence from which a reasonable jury could conclude that CUI had suffered a loss of that interest amounting to a constitutional deprivation. The Court granted summary judgment in favor of Defendants on Count IV, in which CUI alleged that Defendants retaliated against it for filing the instant lawsuit in violation of the First Amendment, on the ground that CUI had failed to establish a genuine issue of material fact as to causation ( i.e., whether its protected speech caused Defendants' adverse actions). In Count VI, CUI alleged that the City breached a number of its contracts with CUI by (1) stopping or reducing orders on contracts, (2) refusing to extend contracts despite regularly doing so in the past, and (3) failing to communicate with CUI. The Court concluded that Count VI could not survive summary judgment because: (1) CUI presented no evidence from which a reasonable jury could conclude that the City reduced or terminated its requirements in bad faith; (2) the parties' course of dealing with respect to extensions could not be used to imply a term requiring the City to extend its contracts because such a term would contradict the express terms of the contracts; and (3) the contracts did not require that the City maintain any particular level of communication with CUI. Finally, the Court granted summary judgment in favor of Defendants on Count V, concluding that there was no basis for awarding CUI injunctive relief because none of CUI's substantive claims had survived summary judgment.

II. Standard for a Motion to Reconsider

A court may alter or amend a judgment under Federal Rule of Civil Procedure 59(e) when the movant "clearly establish[es]" that "there is newly discovered evidence or there has been a manifesterror of law or fact." Harrington v. City of Chicago, 433 F.3d 542, 546 (7th Cir.2006). In regard to the "manifest error" prong, the Seventh Circuit has elaborated that a motion to reconsider is proper only when "the Court has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the Court by the parties, or has made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir.1990). Rule 59(e) "does not provide a vehicle for a party to undo its own procedural failures, and it certainly does not allow a party to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment." Bordelon v. Chicago School Reform Bd. of Trustees, 233 F.3d 524, 529 (7th Cir.2000). Because the standards for reconsideration are exacting, our court of appeals has stressed that issues appropriate for reconsideration "rarely arise and the motion to reconsider should be equally rare." Bank of Waunakee, 906 F.2d at 1191.

III. Analysis

A. Procedural Due Process Property Interest Claim

CUI maintains that, between April and August of 2005, the City and Dempsey deprived it of its constitutionally protected property interest in its MBE certification without due process of law, by, inter alia, stopping or reducing orders on existing contracts with CUI, failing to award CUI new contracts, failing to extend existing CUI contracts, and telling prime contractors that CUI was no longer certified as an MBE. To state a Fourteenth Amendment claim for the deprivation of a property interest without due process, a plaintiff must demonstrate that (1) he had a constitutionally protected property interest, (2) he suffered a loss of that interest amounting to a deprivation, and (3) the deprivation occurred without due process of law. Moss v. Martin, 473 F.3d 694 (7th Cir.2007). In the Opinion, the Court concluded that CUI established the first element—namely, that it had a protectable property interest in its MBE certification. However, the Court found that CUI failed to present sufficient evidence from which a reasonable jury could conclude that CUI had suffered a loss amounting to a deprivation because the evidence indicates that CUI's MBE certification retained significant value. In particular, the record evidence shows that CUI continued to serve as an MBE subcontractor on multiple contracts without issue, that CUI retained approximately 35 target market contracts, and that the City made $939,307.61 in expenditures on those contracts during the period of alleged de facto decertification. Having concluded that CUI failed to raise a genuine issue of material fact as to the deprivation element of its due process property interest claim, the Court did not consider whether CUI received all the process it was due.²

In its reconsideration motion, CUI argues that the Court applied the wrong legal standard is assessing the deprivation prong of its due process property interest claim. In particular, the Court held that CUI was required to present evidence from which a reasonable jury could conclude that its MBE certification was rendered valueless. According to CUI, the Court set the bar too high; a party neednot demonstrate that its protected property interest has been rendered valueless in order to establish a constitutional deprivation. Rather, CUI contends that it merely needs to demonstrate that Defendants' actions diminished the value of its MBE certification. In the alternative, CUI argues that even if the Court applied the correct standard, it erred by not construing the facts and drawing all reasonable inferences in the light most favorable to CUI.

1. Proper Standard for Determining Whether a Deprivation Occurred

In considering whether Defendants could be found to have deprived CUI of its property interest in its MBE certification, the Court looked to cases discussing the effective or de facto revocation of a certificate or license in which the holder has a protectable property interest....