Dunnet Bay Construction Co v. Hannig

Filing 57

OPINION by U.S. Magistrate Judge Byron Cudmore: Plaintiff Dunnet Bay Construction Company's Motion to Compel Production by Taxpayers for Quinn 51 is DENIED. See written order. (LB, ilcd)

E-FILED

Wednesday, 09 November, 2011 04:32:07 PM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS, SPRINGFIELD DIVISION
DUNNET BAY
CONSTRUCTION COMPANY,
Plaintiff,
v.
GARY HANNIG, in his official
capacity as Secretary of
Transportation for the Illinois
Department of Transportation, and the
ILLINOIS DEPARTMENT
OF TRANSPORTATION,
Defendants.

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No. 10-CV-3051

OPINION
BYRON G. CUDMORE, U.S. MAGISTRATE JUDGE:
This matter comes before the Court on Plaintiff Dunnet Bay
Construction Company’s (Dunnet Bay) Motion to Compel Production by
Taxpayers for Quinn (d/e 51) (Motion). For the reasons set forth below, the
Motion is DENIED.
BACKGROUND
On December 4, 2009, the Defendant Illinois Department of
Transportation (hereinafter Department or IDOT) issued an invitation for
bids on Contract No. 60157 for repair work on the Eisenhower Expressway
(Project). The announcement stated that the bids would be let on January

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15, 2010. Second Amended Complaint (d/e 19) (Complaint), ¶ 31. The
Project was federally funded. The Department also published the "IDOT
For Bid List of Bidders" (List of Bidders) which listed the general contractors
that would be expected to bid on the Project. The Department erroneously
omitted Dunnet Bay from the List of Bidders. Complaint, ¶ 39.
Pursuant to federal regulations, the bid specifications set a goal
(DBE Goal) of the percentage of work going to contractors and
subcontractors that fit the federal criteria for Disadvantaged Business
Enterprises (DBE). DBEs are businesses controlled by socially and
economically disadvantaged individuals. See 49 C.F.R. §§ 26.5, 26.67;
Northern Contracting, Inc. v. Illinois, 473 F.3d 715, 715 (7th Cir. 2007).
Dunnet Bay did not fit the definition of a DBE. Dunnet Bay, thus, had to
secure DBE subcontractors to meet the DBE Goal.
Dunnet Bay alleges that the DBE Goal for the Project was 8 percent
originally, but was changed to 22 percent. Dunnet Bay alleges that the
increase to 22 percent was arbitrary and capricious and was not done in
compliance with federal regulations. Complaint, ¶¶ 32-36.
Dunnet Bay submitted the low bid on the Project in the amount of
$10,548,873.98. Dunnet Bay alleges that it made a good faith effort, but
could not meet the 22 percent DBE Goal. Id. ¶ 39. The Department

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rejected Dunnet Bay's bid as non-responsive because of the failure to meet
the DBE Goal. Id. ¶ 42.
Dunnet Bay asked for reconsideration because it alleges that it had
made a good faith effort. The applicable regulations stated that the
Department would issue a waiver of the DBE Goal requirement if the
bidding contractor made a good faith effort to meet the DBE Goal set for the
particular project. Id. ¶¶ 13, 19.
Dunnet Bay alleges that the Department instituted an unwritten policy
not to issue waivers regardless of whether contractors made good faith
efforts to meet a DBE goal (No Waiver Policy). On January 6, 2010, the
Department's District 8 EEO officer announced at an informational meeting
for general contractors that the Department would no longer grant waivers
with respect to DBE contract goals. Id. ¶ 24. Defendant Hannig personally
told Dunnet Bay's President Tod Faerber that he was under pressure not to
give out waivers. Hannig further told Faerber that Darryl Harris, the Illinois
Director of Diversity Enhancement, called the Secretary every day to tell
him not to give out any waivers. Id. ¶ 47. Dunnet Bay alleges that the No
Waiver Policy effectively turned the DBE Goal into an unlawful quota.
Id. ¶ 51.
The Department's Chief of Staff Bill Grunloh conducted the
reconsideration hearing. The Department denied reconsideration. Hannig
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sustained the decision. Dunnet Bay alleges that the Department denied
reconsideration because of the No Waiver Policy. Id. ¶¶ 44, 49-50.
The Department, however, decided to re-let the bids for the Project
because Dunnet Bay was left off the List of Bidders. Id. ¶¶ 48, 51. This
time, however, Dunnet Bay was the third lowest bidder. Id. ¶ 53. The
Complaint alleges that Department is preparing to go forward with the
lowest bid. Id. ¶ 54; see Opinion entered March 26, 2010 (d/e 15), at 6
(evidence submitted in connection with motion for a temporary restraining
order indicated that the Department intended to enter into a contract on
April 5, 2010, with the lowest bidder, Albin Carlson & Co).
Based on these allegations, Dunnet Bay brings claims under
42 U.S.C. §§ 1981 and 1983 against Hannig in his official capacity for
injunctive relief (Counts I and II); claims against the Department under
Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, for injunctive
relief and damages (Counts IV and V); and a state law claim against the
Department under the Illinois Civil Rights Act of 2003, 740 ILCS 23/5, for
damages (Count VI).1
On February 8, 2011, Dunnet Bay served Respondent Taxpayers for
Quinn (Taxpayers) with a Subpoena to Produce Documents (Subpoena).

1

Count III of the Complaint was dismissed as duplicative of Count II. Opinion
entered October 6, 2010 (d/e 30), at 2.
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Taxpayers is Illinois Governor Patrick Quinn’s political campaign committee.
The Subpoena commanded the production of the following documents:
DOCUMENTS, OBJECTS AND TANGIBLE THINGS REQUESTED
1.
All documents reflecting, referring or relating to any
analysis of the advantages or disadvantages to Governor
Quinn’s candidacy for governor of potential or actual changes in
the policies or administration of IDOT’s DBE program.
2.
All documents reflecting, referring or relating to any
communications sent by the Committee to any person,
association or organization urging support for Governor Quinn’s
candidacy for governor based upon any one of the following:
A.

Changes in the policies or administration of
IDOT’s DBE program;

B.

The implementation of a no waiver policy with
respect to IDOT’s DBE program;

C.

The implementation of a no waiver policy with
respect to any state minority or female
contracting program;

D.

The increased opportunities for minorities to
contract with the state; or

E.

The increase in minority contracting with the
state.

3.
All documents reflecting, referring or relating to the
role, participation or assignment of Darryl Harris with respect to
Governor Quinn’s campaign for governor.
4.
All documents reflecting, referring or relating to the
article that appeared in the January 2010 edition of the Capital
City Courier magazine entitled: “Darryl Harris: Dealing
Minority-Owned Businesses In!”

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5.
All documents reflecting, referring or relating to
IDOT’s DBE program or the administration of that program.
6.
All documents reflecting, referring or relating to the
DBE goals for any or all IDOT projects.
7.
All documents reflecting, referring or relating to any
communications between anyone in Governor Quinn’s office
and the political committee, Taxpayers for Quinn, concerning
any of the following subject matters:
A.

IDOT’s administration of the DBE program.

B.

The proposed or actual DBE goals for any
IDOT project or contract.

C.

The IDOT projects proposed in 2009 or 2010
involving the resurfacing of I-290 between
Austin Avenue and I-355.

D.

A proposed or actual no waiver policy
implemented or to be implemented at IDOT
with respect to contractor’s requests for
adjustment to, or to be excused from meeting,
IDOT’s DBE goals.

E.

A proposed or actual no waiver policy
implemented or to be implemented at any state
agency other than IDOT with respect to goals
for minority or female contracting programs.

F.

The activities of Darryl Harris.

G.

The article that appeared in the January 2010
edition of the Capital City Courier magazine
entitled: “Darryl Harris: Dealing Minorities In.”

H.

IDOT DBE goals for any or all projects.

I.

This Lawsuit.

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Motion, Exhibit A, Subpoena, Rider to Taxpayers for Quinn Subpoena,
at 4-6.
Taxpayers agreed to produce communications between Taxpayers
and the Office of Governor and communications between Taxpayers and
the Department, but objected to internal Taxpayers documents. Taxpayers
claimed that internal documents were privileged under the First
Amendment. Dunnet Bay and Taxpayers attempted to resolve the dispute,
but could not. Dunnet Bay has filed this Motion to compel Taxpayers to
produce the subpoenaed documents.
ANALYSIS
The supporters of Taxpayers have First Amendment rights to freedom
of association to join together to support their candidate for Governor,
[T]he right of association is a “basic constitutional freedom,” that
is “closely allied to freedom of speech and a right which, like
free speech, lies at the foundation of a free society.” In view of
the fundamental nature of the right to associate, governmental
“action which may have the effect of curtailing the freedom to
associate is subject to the closest scrutiny.”
Buckley v. Valeo, 424 U.S. 1, 25 (1976) (quoting Shelton v. Tucker, 364
U.S. 479, 486 (1960) and National Ass’n for Advancement of Colored
People (NAACP) v. State of Alabama ex rel. Patterson, 357 U.S. 449, 46061 (1958) (internal citations omitted). Thus, this Court’s power to command
the production of information may not be used to violate those First

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Amendment rights. NAACP, 357 U.S. at 460-62; see Grandbouche v.
Clancy, 825 F.2d 1463, 1466 (10th Cir. 1987) (First Amendment privilege
applies to discovery disputes between two private parties).
The First Amendment privilege from disclosure in discovery has been
extended to protect against the disclosure of the identity of members and
the content of internal communications between members, employees, and
agents of political campaigns. See Perry v. Schwarzenegger, 591 F.3d
1147, 1162-63 (9th Cir. 2010). The privilege protects the First Amendment
rights of individuals to associate with each other and to speak as a group.
The concern is that disclosure will inhibit the exercise of First Amendment
rights. Sometimes disclosure of the identity of the members of the
association will subject members to harassment and intimidation because
the association advocates a controversial view. E.g., NAACP, 357 U.S. at
462. Sometimes disclosing internal communications may inhibit supporters
and campaign staff from participating in advocacy activities and from
exchanging ideas freely and openly. See Perry, 591 F.3d at 1162-63;
Wyoming v. U.S. Dept. Of Agriculture, 208 F.R.D. 449, 454-55 (D.D.C.
2002) (disclosure of internal communications, “would have a potential ‘for
chilling the free exercise of political speech and association guarded by the
First Amendment.’” (quoting Federal Election Commission v. Machinists
Non-Partisan Political League, 655 F.2d 380, 388 (D.C. Cir. 1981)).
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The First Amendment privilege, however, is not absolute. The courts
have an interest in uncovering the truth and providing a resolution to the
parties. See Deitchman v. E.R. Squibb & Sons, Inc., 740 F.2d 556, 561
(7th Cir. 1984). Taxpayers must first make a prima facie showing that
compliance with the subpoena, “will result in (1) harassment, membership
withdrawal, or discouragement of new members, or (2) other consequences
which objectively suggest an impact on, or ‘chilling’ of, the members’
associational rights.” Perry, 591 F.3d at 1160 (quoting Brock v. Local 375,
Plumbers Intern. Union of America, AFL-CIO, 860 F.2d 346, 350 (9th Cir.
1988)); accord, In re Motor Fuel Temperature Sales Practices Litigation,
641 F.3d 470, 488 (10th Cir. 2011). If Taxpayers makes this showing, then
Dunnet Bay must show that the information is essential to its case and
could not be obtained by other means that would be less likely to
discourage such advocacy. United States v. Citizens State Bank, 612 F.2d
1091, 1094
(8th Cir. 1980).
Taxpayers submitted the declarations of Holly Copeland and Cheryl
Byers. Taxpayers for Quinn’s Response to Plaintiff’s Motion to Compel
Production of Documents (d/e 55) (Response), Exhibit A, Declaration of
Holley Copeland (Copeland Declaration), and Exhibit B, Declaration of
Cheryl Byers (Byers Declaration). Copeland was the Political Director of
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Taxpayers from September 2008 through February 2010, and Chief
Operating Officer of Taxpayers from March 2010 through August 2011.
Copeland Declaration, ¶1. Byers has been the Political Director of
Taxpayers since June 2011. Byers Declaration, ¶1.
Copeland states that, in her experience, internal communications in a
campaign must be free flowing and uninhibited to insure that diverse points
of view are considered. This flow of information and opinions would be
stifled if they were subject to disclosure. She states that she would not
have expressed herself freely if she knew that her statements would have
been disclosed. She states that she fears she would be the subject of
attacks on Internet blogs and other media. She states that during the
campaign she was subjected to harassing phone calls because of her
position in the campaign. She states that disclosure would subject her to
more such harassment. She further states that she intends to volunteer at
Taxpayers, but she will not offer her candid advice and opinions if those
statements would be subject to disclosure. She also states that, based on
her experience, she believes other staff and volunteers will not
communicate candidly if their statements are disclosed. Copeland
Declaration, ¶¶ 5-7.
Byers states internal communications within Taxpayers are
confidential, and as a result, Byers felt free to offer her opinions and
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thoughts on campaign strategy. If she knew that her statements would be
subject to disclosure, she would not have shared her thoughts freely. She
stated that she did not want her candid thoughts and opinions scrutinized by
others. She states that she would be subjected to personal attacks on
Internet blogs and other media by those holding opposing views. She
further states that staff and volunteers would not speak freely if they knew
that their communications would be subject to disclosure. Byers
Declaration, ¶¶ 4-8.
Such declarations are sufficient to make out a prima facie showing for
asserting the First Amendment privilege in this case. The Seventh Circuit
has not addressed the issue directly, but other Courts of Appeals have
found similar affidavits to be sufficient to make a prima facie showing. See
Perry, 591 F.3d at 1163; American Federation of Labor and Congress of
Indus. Organizations v. Federal Election Com’n, 333 F.3d 168, 177 (D.C.
Cir. 2003); Dole v. Service Employees Union, AFL-CIO, Local 280, 950
F.2d 1456, 1458-60 (9th Cir. 1991); see also United States v. Citizens State
Bank, 612 F.2d 1091, 1094 (8th Cir. 1980).
The Perry decision seems particularly applicable here. The Perry
decision also concerned efforts to discover the internal communications of a
political campaign committee. The campaign committee in Perry ran the
successful initiative campaign to amend the California constitution to
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provide that “only marriage between a man and a woman is valid or
recognized” in the state. Perry, 591 F.3d at 1152. The Perry Court found
declarations from staff members of the campaign similar to those submitted
here to be sufficient to make out a prima facie showing, in part, because of
the importance of protecting the First Amendment right to direct participation
in the political process though political campaigns,
Although the evidence presented by Proponents is lacking in
particularity, it is consistent with the self-evident conclusion that
important First Amendment interests are implicated by the
plaintiffs’ discovery request. The declaration creates a
reasonable inference that disclosure would have the practical
effects of discouraging political association and inhibiting
internal campaign communications that are essential to effective
association and expression.
Perry, 591 F.3d at 1163.
It is true that the underlying issue in Perry (to amend the state
constitution to only recognize marriage between a man and a woman) was
very controversial. It is also true that other cases that applied the First
Amendment privilege have sometimes involved controversial topics. E.g.,
Dole, 950 F.2d at 1459 (controversial political issues). Dunnet Bay,
however, also raises controversial allegations of racial discrimination and
the illegal use of quotas. The Taxpayers staff, volunteers, and other
supporters have the First Amendment right to associate with like-minded
individuals to articulate their views concerning these issues as part of their

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efforts to promote their candidate for office. See Perry, 591 F.3d at 1159
(“Effective advocacy of both public and private points of view, particularly
controversial ones, is undeniably enhanced by group association.” (quoting
NAACP, 357 U.S. at 460)). The declarations before the Court show that
disclosure of private internal communications among Taxpayers staff,
volunteers, and supporters would have a chilling effect on their rights by
discouraging them from communicating candidly. Taxpayers has made out
a prima facie showing to assert the First Amendment privilege.
Because Taxpayers has met its initial burden, Dunnet Bay must
demonstrate the information sought by the Subpoena is necessary to its
case and cannot be secured by other means that are less likely to affect
First Amendment rights. Perry, 591 F.3d at 1161. In weighing these
concerns, the Court must consider the relevance of the information sought,
the Plaintiffs’ need for the information, and the impact of disclosure on First
Amendment rights. See In re Heartland Institute, 2011 WL 1839482, at *3
(N.D. Ill. 2011). In this case, the information sought may be relevant to
show that Governor Quinn pressured or directed Hannig and the
Department to adopt the No Waiver Policy.
Dunnet Bay, however, has not shown that the relevant information
could not be obtained by other means that would be less likely to affect First
Amendment rights. The relevant evidence would show the alleged pressure
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on (or directions to) Hannig and the Department to implement the No
Waiver Policy. The evidence of pressure or direction would be found in the
communications made to Hannig and the Department. Taxpayers had
agreed to produce all responsive communications with the Department and
the Governor’s Office. Furthermore, the Complaint identifies several
individuals who allegedly have personal knowledge of the No Waiver Policy,
including Hannig, his Chief of Staff Grunloh, and Darryl Harris. Dunnet Bay
can depose all of these individuals to discover the relevant information.
Given the availability of the relevant information from these sources, Dunnet
Bay has not shown the requisite need to overcome the concerns of the
chilling effect of production on the First Amendment rights of the staff,
volunteers, and supporters of Taxpayers. The Court, therefore, sustains the
First Amendment objection of Taxpayers to the Subpoena. The Motion is
denied.
Dunnet Bay argues that Taxpayers failed to meet its initial burden to
invoke the First Amendment privilege. Dunnet Bay argues that Taxpayers
must present objective facts that the discovery will result in a chilling of the
proponent’s associational rights. Memorandum of Law in Support of
Dunnet Bay’s motion to Compel Taxpayers for Quinn, at 10. The Court
finds that Taxpayers has made a sufficient showing that the First
Amendment rights of its staff, volunteers, and other supporters are impaired
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by Dunnet Bay’s Subpoena. The fundamental issue is what will happen in
the future if documents are disclosed. Taxpayers must present evidence of
a reasonable probability of a chilling effect on the First Amendment rights of
its staff, volunteers, and supporters. Buckley, 424 U.S. at 74. Declarations
from staff setting forth the impact of disclosure on their future behavior are
sufficient to meet this burden. See e.g., Perry, 591 F.3d at 1163; Dole, 950
F.2d at 1458-60. In light of those cases, and the importance of protecting
the First Amendment rights non-parties such as the supporters, volunteers
and staff of Taxpayers, the Court finds that the evidence presented here is
sufficient to meet the initial burden to raise the privilege.
Dunnet Bay also argues that it has a compelling need for internal
campaign documents from Taxpayers. The Court disagrees. Taxpayers is
not a defendant, and Governor Quinn is not a defendant. The defendants
are Hannig and the Department. Hannig and the Department are alleged to
have implemented the illegal No Waiver Policy quota system. The relevant
inquiry is the influence of Governor Quinn and Taxpayers on Hannig and
the Department to allegedly implement this illegal policy. The
communications with Hannig and the Department, thus, are the primary
source of this information, not the Taxpayers’ internal documents.
Taxpayers will produce its responsive communications with the Department

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and the Office of the Governor. Dunnet Bay has not shown a compelling
need for Taxpayers privileged internal documents.
WHEREFORE, Plaintiff Dunnet Bay Construction Company’s Motion
to Compel Production by Taxpayers for Quinn (d/e 51) is DENIED.

ENTER:

November 9, 2011

s/ Byron G. Cudmore
BYRON G. CUDMORE
UNITED STATES MAGISTRATE JUDGE

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