McDonough Associates, Incorpor v. Ann Schneider
2013 U.S. App. LEXIS 14338
| 7th Cir. | 2013Background
- McDonough Associates sought federal relief against Illinois IDOT for alleged past contract breaches threatening bankruptcy.
- IDOT used prior approval letters to authorize additional work up to $50,000 before a supplemental agreement, which was not executed.
- Illinois Procurement Code requires signed contracts with specific signatures; unsigned supplemental agreements are not valid debts.
- District court issued a TRO forcing state officials to sign and process supplemental agreements, enabling payments to McDonough.
- McDonough claimed the district court’s relief protected federal due process rights; the district court treated it as Ex parte Young relief against the state.
- TRO paid McDonough about $1.3 million before appellate review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ex parte Young applies to bar Eleventh Amendment monetary relief | McDonough seeks prospective relief for ongoing federal-law violation | Defendants argue relief is retroactive monetary damages | No; relief is retroactive monetary payment barred by Eleventh Amendment |
| Whether the relief is permissible under Ex parte Young as ancillary to ongoing compliance | Relief is a prospective mandate to continue normal business | Relief would require direct payment from state treasury | Not permissible; payments are primary, not ancillary, to future compliance |
| Whether the TRO is moot after expiration but still reviewable given potential continuing effects | mootness not applicable due to ongoing implications | mootness would end review | TRO vacated; case remanded for further proceedings |
Key Cases Cited
- Ex parte Young, 209 U.S. 123 (1908) (exception allowing prospective relief against state officials to comply with federal law)
- Edelman v. Jordan, 415 U.S. 651 (1974) (retroactive monetary relief barred; injunction may be prospective)
- Chisholm v. Georgia, 2 U.S. (2 Dall.) 419 (1793) (early challenge to sovereign immunity; led to Eleventh Amendment)
- Milliken v. Bradley, 433 U.S. 267 (1977) (distinguishes ancillary fiscal effects from direct monetary relief)
- Verizon Md., Inc. v. Public Serv. Comm’n of Md., 535 U.S. 635 (2002) (straightforward inquiry: ongoing federal-law violation with prospective relief)
- Virginia Office for Protection & Advocacy v. Stewart, 131 S. Ct. 1632 (2011) (cannot direct state to pay for past obligations; payments not permissible)