Caperton v. Virginia Department of Transportation, 684 F. App'x 322

Plaintiffs/appellants: Fred T. Caperton, III, Thirty Three, Inc., and Appearance Landscaping & Maintenance, Inc. challenged a VDOT finding that Thirty Three was a “non‑responsible” bidder.
Plaintiffs sought to amend their complaint after judgment; the district court denied leave to amend on grounds of futility.
Plaintiffs alleged reputational injury from the VDOT non‑responsibility finding and hypothesized that other state agencies or private clients might rely on that finding to deny them contracts.
Plaintiffs did not allege they had actually applied for or been denied any government contract (or lost private work) because of the VDOT finding.
On appeal, the Fourth Circuit reviewed the denial for futility under the motion‑to‑dismiss standard and assumed, for purposes of the motion, that plaintiffs had a cognizable liberty interest.
The Fourth Circuit affirmed, concluding the proposed amended complaint failed to plausibly allege a deprivation of legal status or marketability sufficient for a procedural due process claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether proposed amendment plausibly states a procedural due process claim based on reputational injury	VDOT’s non‑responsibility finding injures reputation and could be used by state agencies/private clients to deny future contracts, so amendment should be allowed	Finding is speculative; plaintiffs have not shown any state action that altered legal status or any actual denial of contracts	Denied: allegations were speculative and lacked facts showing altered legal status or inability to obtain work
Whether plaintiffs needed to allege actual exclusion/denial of government contracts to state a claim	Plaintiffs argued such a showing was not required (raised only briefly and not below)	Defendants and district court treated the requirement as applicable	Forfeited on appeal: plaintiffs failed to preserve this argument in district court, so appellate review waived
Whether reputational injury alone, without denial of opportunity, suffices for due process	Plaintiffs contended reputational harm plus potential agency reliance is enough	Court required evidence of formal exclusion or substantial preclusion from career/market	Held: reputational injury must be accompanied by state action that alters legal status or renders skills unmarketable
Whether court should grant oral argument	Plaintiffs implied argument would aid resolution	Court determined record and filings were sufficient	Denied: oral argument dispensed with as unnecessary

Laber v. Harvey, 438 F.3d 404 (en banc 2006) (abuse‑of‑discretion review for denial of leave to amend)
United States ex rel. Ahumada v. NISH, 756 F.3d 268 (4th Cir. 2014) (futility review uses motion‑to‑dismiss standard)
Kensington Volunteer Fire Dep’t v. Montgomery Cty., 684 F.3d 462 (4th Cir. 2012) (accept factual allegations and draw reasonable inferences for futility review)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely speculative)
Shirvinski v. U.S. Coast Guard, 673 F.3d 308 (4th Cir. 2012) (reputational‑injury due process claim requires state action that alters legal status or marketability)
Sciolino v. City of Newport News, 480 F.3d 642 (4th Cir. 2007) (discussion of liberty interests in reputational harm contexts)
A Helping Hand, LLC v. Balt. Cty., 515 F.3d 356 (4th Cir. 2008) (issues not raised below are forfeited on appeal)