CHICAGO UNITED INDUSTRIES, LTD. v. City of Chicago

685 F. Supp. 2d 791, 2010 U.S. Dist. LEXIS 3148, 2010 WL 234994
CourtDistrict Court, N.D. Illinois
DecidedJanuary 15, 2010
DocketCase 05-cv-5011
StatusPublished
Cited by6 cases

This text of 685 F. Supp. 2d 791 (CHICAGO UNITED INDUSTRIES, LTD. v. City of Chicago) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CHICAGO UNITED INDUSTRIES, LTD. v. City of Chicago, 685 F. Supp. 2d 791, 2010 U.S. Dist. LEXIS 3148, 2010 WL 234994 (N.D. Ill. 2010).

Opinion

MEMORANDUM OPINION AND ORDER

ROBERT M. DOW, JR., District Judge.

This case arises out of a dispute between the City of Chicago and one of its contractors, Chicago United Industries, Ltd. (“CUI”). The nature of Plaintiffs’ claims has evolved significantly since the suit initially was filed in August of 2005. In the most recent iteration of the complaint — the Third Amended Complaint — CUI and its owners, Plaintiffs George Loera and Nick Massarella, assert six claims against the City of Chicago (the “City”), Mary Dempsey (“Dempsey”), and Louis Langone (“Langone”) 1 (collectively “Defendants”). The Court previously entered summary judgment in favor of Defendants on the individual plaintiffs’ claims in Counts I, II, and IV 2 , and denied Plaintiffs’ motion for reconsideration of that ruling. [203, 249]. Therefore Loera and Massarella are no *794 longer parties to this lawsuit. In addition, the Court dismissed Counts I and II. [109]. The remaining counts allege a procedural due process violation against the City and Dempsey (Count III), a First Amendment retaliation claim against all Defendants (Count IV), and breach of contract claims against the City (Count VI). The Third Amended Complaint also seeks injunctive relief (Count V). This matter is before the Court on Defendants’ motion for summary judgment [269] 3 For the reasons set forth below, Defendants’ motion for summary judgment [269] is granted. Having granted summary judgment on the merits of all of CUI’s remaining claims, Defendants Dempsey and Langone’s motion for summary judgment based on qualified immunity [274] is denied as moot.

I. Background

A. Factual Background

The Court takes the relevant facts primarily from the parties’ Local Rule (“L.R.”) 56.1 statements 4 : Defendants’ Statement of Facts (“Def. SOF”) [272], Plaintiffs Response to Defendant’s L.R. 56.1 Statement (“PI. Resp.”) [297], Plaintiffs Statement of Additional Facts (“PI. SOF”) [303], and Defendant’s Response to Plaintiffs Statement of Additional Facts (“Def. Resp.”) [311]. 5

*795 CUI has been doing business with the City of Chicago for more than 20 years as a supplier of various commodities. PI. Resp. ¶ 8. CUI is wholly owned by George Loera (“Loera”) and Nick Massarella (“Massarella”). PI. Resp. ¶ 1. Loera, who is Hispanic, is a 51% owner of CUI. Id. For approximately the past 20 years, CUI has been certified by the City as a minority-owned business enterprise (“MBE”). Id.

1. The City’s MBE/WBE Program

The City’s Department of Procurement Services (“DPS”), through its commissioner, the Chief Procurement Officer, is charged by state law and municipal ordinance with entering into, and administering, contracts on behalf of the City. Def. SOF ¶ 9. Defendant Mary Dempsey served as the Interim Chief Procurement Officer for the DPS from February 7, 2005 through August 31, 2005. Def. SOF ¶ 3. Barbara Lumpkin served as Chief Procurement Officer from September 16, 2005 to October 15, 2007. Def. SOF ¶ 21.

The DPS is also responsible for managing the City’s Minority-Owned Business Enterprise (“MBE”) and Women-Owned Business Enterprise (“WBE”) program. Id. The MBE/WBE program is designed to support minority and women-owned businesses by awarding such enterprises a certain percentage of City contracts. Def. SOF ¶ 25. Vendors become MBEs and WBEs by applying for certification with DPS’s Certification Unit. Def. SOF ¶ 26.

Once a vendor is certified as an MBE or WBE, it is eligible to bid on “Target Market” contracts, which are City contracts on which only MBEs and WBEs may bid. Def. SOF ¶ 29. To the extent practicable, all contracts of $10,000 or less are to be Target Market contracts. Def. SOF ¶ 30. For all City contracts valued at more than $100,000, the prime contractor is required to spend a certain percentage of the dollar value of the contract with MBE and WBE vendors. Def. SOF ¶ 31. The City’s Regulations Governing Certification of Minority and Women-Owned Businesses provide that MBE/WBE certification is limited to an applicant’s areas of specialty. See Def. SOF ¶ 32; Certification Regulations, § VIII.I, Def. Era., Vol. II, Ex. 18. DPS’s Compliance Unit is charged with reviewing contracts valued over $100,000 to make sure that they have the appropriate MBE and WBE level of participation and that those MBEs and WBEs are certified in the contract areas in which they are participating. Def. SOF ¶ 33.

If a prime contractor wants to replace the MBE subcontractor on its contract with another MBE, or if it desires a waiver of its initial MBE goals, it must follow the procedure set forth in the City’s Contract Monitoring & Compliance Procedures. PL SOF ¶ 120. The only DPS unit authorized to permit substitutions of MBE or WBE subcontractors by the prime contractor is the Contract Monitoring and Compliance Unit. Def. SOF ¶ 36.

Section 2-92-490(g) of the Chicago Municipal Code directs the contract compliance officer, in coordination with the chief procurement officer, to establish procedures that are consistent with the principles of due process of law for the decertification of MBEs and WBEs. Def. SOF ¶ 37. Pursuant to that directive, the DPS has issued decertification regulations, which require notice and a hearing prior to any decertification. Def. SOF ¶ 38.

In 2005, the City required all MBEs and WBEs to re-apply for certification. Def. *796 SOF ¶¶ 13, 153. While MBE and WBE vendors’ new applications were pending, they were issued courtesy letters, which continued their certification for a specified number of months. Def. SOF ¶ 154. After reapplying, CUI received its certification in November 2007. Def. SOF ¶ 153.

On March 3, 2005, Dempsey issued a memorandum to all vendors stating, among other things, that if a vendor is proposed for decertification or debarment, that vendor is permitted to continue performing on its existing contracts with the City until a decision is made by DPS on the proposed action. Def. SOF ¶¶39, 42. The March 3, 2005 memorandum also stated that, unless and until the Chief Procurement Officer makes a final decision on the proposed debarment or decertification, “the firm or individual is not precluded from bidding on any future contracts.” Def. SOF ¶ 41. In addition to vendors, the memorandum was sent to City of Chicago Commissioners and several City of Chicago sister agencies and entities. Def. SOF ¶ 42.

2. City Notifies CUI of Its Intent to Decertify CUI as an MBE and Its Intent to Debar CUI

On March 17, 2005, the City issued a Preliminary Notice of Intent to Decertify CUI as an MBE based on the allegation that CUI was operating as a broker. 6 Def. SOF ¶ 11. In April 2005, CUI submitted a written response to the notice of intent to decertify. Def. SOF at ¶ 12.

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Cite This Page — Counsel Stack

Bluebook (online)
685 F. Supp. 2d 791, 2010 U.S. Dist. LEXIS 3148, 2010 WL 234994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chicago-united-industries-ltd-v-city-of-chicago-ilnd-2010.