733 F.3d 688
7th Cir.2013Background
- Blackout Sealcoating had two at-will CTA contracts terminated by CTA in 2012 via debarment.
- Debarment prevented contract work with the CTA; damages are unavailable for at-will contracts, and state-court review was not pursued.
- Blackout alleged deprivation of occupational liberty under §1983, invoking Constantineau-based theory that defamation can deprive liberty.
- District court dismissed, holding no cognizable occupational liberty since only one employer was affected and no broader impact alleged.
- On appeal, Blackout cited a later private-school bid to show potential prospects; two written responses were deemed sufficient process; issue of corporate occupational liberty discussed but not resolved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CTA debarment violated due process and deprived occupational liberty | Blackout asserts deprivation of liberty via defamation and due process. | Debarment is not a liberty/property deprivation; at-will contract lacks entitlement; due process satisfied with two notices. | No cognizable occupational liberty; dismissal affirmed. |
| Whether due process required a third hearing round beyond two written exchanges | Two rounds were insufficient; third round expected. | Two rounds plus opportunity to respond sufficed; no constitutional mandate for third round. | Two notices and responses satisfied due process. |
| Whether corporations have an occupational liberty interest | Court treats the issue as unsettled; does not resolve corporate occupational liberty here. |
Key Cases Cited
- Wisconsin v. Constantineau, 400 U.S. 433 (U.S. 1971) (defamation/liberty claims linked to public measures; notice and opportunity matter for due process)
- Paul v. Davis, 424 U.S. 693 (U.S. 1976) (defamation and liberty interests; limits of public announce[d] reputational harms)
- Board of Regents v. Roth, 408 U.S. 564 (U.S. 1972) (legitimate entitlement required for protected interest; at-will not entitlement)
- Goss v. Lopez, 419 U.S. 565 (U.S. 1975) (notice and hearing requirements for due process in educational context)
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (U.S. 1985) (due process requires notice and opportunity to respond before depriving a property/right)