Blackout Sealcoating, Inc. et al v. Chicago Transit Authority et al

Filing 64

MEMORANDUM Opinion and Order Signed by the Honorable Elaine E. Bucklo on 9/21/2012. Mailed notice (jdh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

)
)
)
)
)
)
Plaintiffs,
)
)
v.
)
)
TERRY PETERSON, Chairman of the
)
Board of Chicago Transit Authority,
)
FORREST CLAYPOOL, President of the
)
Chicago Transit Authority, ALEJANDRO
)
SILVA, Chairman of Committee on
)
Finance, Audit, and Budget, MARINA
)
POPOVIC, Vice-President of hte
)
Chicago Transit Authority, and the
)
CHICAGO TRANSIT AUTHORITY, an
)
Illinois municipal corporation,
)
)
Defendants.
)
BLACKOUT
Illinois
KOLINEK,
KOLINEK,

SEALCOATING, INC., an
corporation, KIMBERLY
an individual, and PAUL
an individual11

No. 12 C 4369

MEMORANDUM OPINION AND ORDER
Plaintiffs

Kimberly

and

Paul

Kolinek

are

the

owners

of

plaintiff Blackout Sealcoating, Inc., a company engaged in the
business of asphalt and other construction work.
Amended

Complaint

(“FAC”),

plaintiffs

claim

In their First
that

defendants

deprived them, without due process of law, of their constitutional
occupational liberty interest by debarring them from doing business
with defendant Chicago Transit Authority (“CTA”) for a period of
one year.

Now before me is defendants’ motion to dismiss the FAC,

which I grant for the reasons that follow.

I.
According to the complaint, the Kolineks own and operate
Blackout, which has been a successful contractor since 1997, and
which performed asphalt, concrete, and equipment leasing work for
the CTA from approximately 2007, when it was awarded two contracts
for this type of work (“CTA contract 552” and “CTA contract 343,”)
until May of 2012.

Plaintiffs allege that despite Blackout’s

ongoing satisfactory performance of these contracts, the CTA sent
Blackout a Notice of Intent to Debar in September of 2010, then
sent an Amended Notice of Intent to Debar in March of 2011.
Plaintiffs responded to both of these letters in writing. On May 8,
2012, defendants decided to debar plaintiffs and the following day
sent them a letter informing them of that decision.1
Plaintiffs’ debarment was subsequently posted on the CTA’s
website, and Blackout’s contracts with the CTA terminated. On June
5,

2012,

plaintiffs

filed

the

instant

action,

claiming

that

defendants deprived them of their occupational liberty--that is,
their right to pursue their chosen occupation--in violation of the
due process clause of the Fourteenth Amendment.

Plaintiffs seek

both damages and injunctive relief.

1

The FAC includes allegations relating to the substance of
these notices, plaintiffs’ responses to them, and the debarment
proceedings.
I need not address these allegations, however,
because their relevance is to the adequacy of the process
plaintiffs were allegedly afforded-–an issue I do not reach in view
of my threshold conclusion that the FAC does not articulate the
deprivation of plaintiffs’ asserted constitutional right.
2

II.
A motion to dismiss tests the sufficiency of a complaint, not
its merits. Gibson v. Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990).
I accept all well-pleaded factual allegations as true, and I
consider the facts in the light most favorable to the plaintiff.
Id.

Nevertheless, to survive a motion under Rule 12(b)(6), a

complaint must present sufficient facts “to raise a reasonable
expectation that discovery will reveal evidence” to support the
plaintiff’s claims.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556

(2007). “Threadbare recitals of the elements of a cause of action,
supported

by

mere

conclusory

statements”

will

not

suffice.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
A procedural due process claim mandates a two-part analysis.
Pugel v. Board of Trustees of University of Illinois, 378 F.3d 659,
662 (7th Cir. 2004).

I must first determine whether plaintiffs

have adequately alleged the deprivation of a liberty interest. See
id. If they have, I must proceed to examine whether the process
they allege was adequate.

Id.

Plaintiffs do not survive the first hurdle.

For the sake of

economy, I address only a few of the complaint’s many flaws.

To

begin with, the factual material in the FAC cannot reasonably be
read to situate plaintiffs’ claims within the narrow class of cases
in which state action so thoroughly extinguishes an individual’s

3

ability to pursue his or her chosen career as to threaten that
person’s liberty interest in pursuing an occupation.
The Fourteenth Amendment protects the right of individuals “to
engage in any of the common occupations of life.” Board of Regents
of State Colleges v. Roth, 408 U.S. 564, 572 (1972).
Constitution’s

guarantee

of

what

“occupational liberty,” is narrow.

has

come

to

be

But the
known

as

D’Acquisto v. Washington, 640

F. Supp. 594, 608-09 (N.D. Ill. 1986) (“[t]he liberty interest in
pursuing an occupation is defined narrowly.”) It does not guarantee
the right to a specific job, Wroblewski v. City of Washburn, 965
F.2d 452, 455 (7th Cir. 1992), nor even does it protect against
conduct

that

“causes

opportunities.”
Cir. 2008).

serious

impairment

of

future

employment

McMahon v. Kindlarski, 512 F.3d 983, 988 (7th.

Indeed, individual occupational liberty is threatened

only by conduct that calls into question an individual’s “‘good
name, reputation, honor or integrity’ in a way that ma[kes] it
‘virtually impossible’” to find employment in one’s chosen field.
Id.
Plaintiffs assert that their debarment “seriously threatens
their ability to engage in their chosen profession,” FAC at ¶ 5,
but the complaint does not substantiate this conclusory statement
with the kind of factual material that would raise their right to
relief “above the speculative level.” Twombly, 550 U.S. at 555
(2007).

Plaintiffs argue, in response to defendants’ motion, that

4

they “have been precluded from all government contracting.”

But

this is a far cry from what the complaint actually alleges.

The

only contracts plaintiffs claim to have lost as a result of their
debarment are CTA Contract 343 and CTA Contract 552.

Plaintiffs

do not allege that these contracts represented a substantial
portion of their overall business, nor do they allege (although
they do argue) that they are foreclosed from pursuing contracts
with other government agencies.

Plaintiffs make the sweeping

statement, again in opposition to defendants’ motion, that “[m]ost,
if

not

all

municipal

codes

and

governing

articles

require

government entities to hire only ‘responsible contractors.’” But
the complaint does not claim that any such code or article has ever
been applied to plaintiffs as a result of their debarment, nor does
it allege that plaintiffs have been prevented from bidding on or
obtaining any public contract for which plaintiffs were otherwise
qualified.
Nor, of course, do the referenced regulations have any bearing
on plaintiffs’ ability to pursue gainful work in the private
sector.

Nothing in the complaint suggests that plaintiffs lack

opportunities for pursuing their vocation through non-government
contracts, or even that plaintiffs’ business has traditionally been
focused on public-sector work.

“[A] court should not simply

assume, based on a plaintiff’s assertions, that a wide variety of
opportunities have been foreclosed.”

5

Townsend v. Vallas, 256 F.3d

661, 671 (7th Cir. 2001). For all that the complaint reveals,
plaintiffs have a robust private clientele, which they continue to
service successfully to this day.
In

short,

insufficient

to

the

factual

support

allegations

plaintiffs’

in

the

claim

that

complaint
they

are

became

“virtually unemployable” in their chosen field as a result of their
debarment.

Accordingly,

they

do

not

state

a

violation

of

plaintiffs’ constitutional liberty interest.
Even, however, if plaintiffs could, in good faith, amend their
complaint to cure the foregoing defects, their claim would be
doomed by a second problem: the complaint pleads no publication of
stigmatizing

information.

To

plead

their

claim

properly,

plaintiffs would have to allege that: “(1) [they were] stigmatized
by the defendant’s conduct; (2) the stigmatizing information was
publicly disclosed; and (3) [they] suffered a tangible loss of
other employment opportunities as a result of public disclosure.”
McMath v. City of Gary, 976 F.2d 1026, 1032 (7th Cir. 1992).

But

here, even if plaintiffs proved every factual allegation in their
complaint, they still would not have established the first two
elements of their claim.
The allegedly stigmatizing information plaintiffs assert is:
1) the statement, published on the CTA website, that plaintiffs
were debarred; and 2) the allegedly false underlying reasons for
the debarment, which plaintiffs claim “are contained in the CTA’s

6

files.”

FAC

stigmatizing

at

¶¶

because,

63,

69.

The

first

as

all

agree,

it

statement

cannot

is

“True

true.

be
but

stigmatizing statements that preclude further government employment
do not support” an occupational liberty claim.

Strasburger v.

Board of Educ., Harding County, 143 F.3d 351, 356 (7th Cir. 1998).
And the underlying reasons for the debarment, whatever their truth
or falsity, have not, as a matter of law, been publicly disclosed.
McMath, 976 F.2d at 1035 (“the publication requirement is not
satisfied with the mere existence of a ‘likelihood of public
disclosure.’ ...

Information kept within the department...may

indeed be a ‘ticking time bomb,’... but until the time bomb
explodes–i.e., until the information is disseminated–there is no
publication and no constitutional tort.”) (internal citations
omitted).

McMath thus forecloses plaintiffs’ argument that they

have satisfied the second element with allegations that the reasons
for their debarment are “contained in the CTA’s files.”

Indeed,

the only case plaintiffs cite for this proposition is D’Acquisito
v. Washington, 640 F. Supp. 594 (N.D. Ill. 1986), which preceded
the Seventh Circuit’s decision in McMath.
For the foregoing reasons, I conclude that plaintiffs have not
stated a violation of their liberty interest.

Accordingly, I need

not reach the issue of whether the process they were afforded with
respect to their debarment was due.
F.3d 983, 987-88 (7th Cir. 2008).

7

See McMahon v. Kinlarski, 512

III.
For the reasons discussed above, defendants’ motion to dismiss
the First Amended Complaint is granted.

ENTER ORDER:

________________________
Elaine E. Bucklo
United States District Judge
Dated: September 21, 2012

8