Easter House, an Illinois, Not-For-Profit Corporation v. Thomas Felder, Florence McGuire and Joan Satoloe

con- pre-existing cost-plus permitted, Illinois, HOUSE, situation, purchaser EASTER tract. such not-for-profit corporation, in its any decrease is insulated Plaintiff-Appellee, pass on attempting to as a sales result overcharge, its customer because quantity fixed buying a committed FELDER, Florence McGuire Thomas of the price. The effect regardless Satoloe, and Joan essentially determined overcharge is Defendants-Appellants. inter- advance, reference to the without No. 86-2164. compli- demand that supply and action of general in the cates the determination Appeals, Court of States United case. Circuit. Seventh 735-36, at 2069-70. at Argued Nov. 1987. no opinion concedes court’s This July 1988. Decided sales because residential lost doubt CILCO of the and because higher price, Ante, p. was one. overcharge if there from Hanover Shoe It

896. follows injury falls some that when Brick

Illinois purchaser because direct

on the does.

overcharge, it all rejecting considering proposed

After have said “As Court we

exceptions, the 735-36,

noted, at 2069- supra at [97 dis implicitly itself

2070], Hanover Shoe exceptions to its

couraged the creation defenses, ad we pass-on barring

rule indi scope exemption to the narrow

here there.” by our

cated decision 97 S.Ct. at Brick,

As I read Illinois it to the discretion did not leave

Court exceptions to create new lower courts range fall within some

for situations which defined exceptions approximation court And that is what this

by the Court. respect to doing with

appears to be customers. the residential

claims of also, F.Supp. 456 and 645

See

F.Supp. 107. Atty. Ioppolo, Office A. Thomas defendants-appel- Ill., for

Gen., Chicago, lants. Foran, &Wiss Figliulo, R.

James Ill., plaintiff-appellee. Schultz, Chicago, CUMMINGS, Before CUDAHY I.

KANNE, Judges. Circuit Easter House claims that its

was taken without due of law CUDAHY, Judge. Circuit through conspiracies. two distinct plan by was a first the DCFS defendants action, Defendants in this section 1983 Smith, and Millicent Easter House’s former Department employees of the Illinois Director, strip Executive (“DCFS”), Family ap- Children and Services operate license to a “child welfare peal judgment jury from a entered on a agency” in Illinois and to establish a new sepa- verdict. The found that in two agency with an almost identical name un- employees rate instances these acted under der control. Smith’s The second was House, deprive to color of state law Easter alleged plot by two of the three DCFS Chicago-based adoption agency, prop- defendants to drive Easter House out of erty process without due of law. On the by harassing business continuing, count, jury during first the found that late investigations unwarranted opera- of its early employees 1974 and the DCFS tions. The essential surrounding facts Smith, conspired with Millicent a former episodes these two sepa- will be described employee, deprive Easter House to Easter rately. operating expe- House of its license and to licensing agency, dite the of Smith’s new A. Adoption named Agency, Easter House The first that Easter House (“Easter II”), Inc. House with the intention jury proceeded described to the on two transferring Easter House’s business to simultaneously. fronts While DCFS was count, Smith. On the second jury delaying the renewal of Easter House’s found that employees two of the state license, it was assisting in the creation again deprived Easter House of of Easter House II. leading up Events to process during without due 1977 and 1978 delay of Easter House’s license renewal by conducting investigations unwarranted began in late November as the No- operations. of its expiration vember 30th of Easter House’s The trial court denied the defendants’ two-year approached. parties license The judgment motion for n.o.v. or a new trial. agree about most of the surrounding facts brought DCFS defendants then delay in the issuance of Easter House’s (Millicent appeal. Smith, private license, the sole though they disagree new sharply remaining defendant in the action about the inferences that a could rea- trial, time of the appeal.) sonably did not draw from those events. Joan Sa- toloe, licensing representative argue (1) assigned Easter to House Chicago office, identify any prepared failed to DCFS’s interest of relicens- ing study which deprived which it recommended under color of renewal of Easter House’s law; (2) license for two-year section 1983 is not available to the period beginning December plaintiffs This adequate because state law reme- recommendation was then forwarded to provided due; dies all the that was DCFS’s main office in Springfield where (3) protected by qualified defendants are the licenses are issued. immunity because none of their actions clearly contemporaneous violated stan- 30,1974, December On while Satoloe was (4) process; dards of due the district court vacation, Smith met at Chicago DCFS’s conspiracy instructions; erred offices with Satoloe’s superior, immediate damages awarded on count I are exces- McGuire, Florence the licensing supervisor below, sive. For explained the reasons we for DCFS’s central According district. to affirm on count I liability as to and dam- testimony, Smith’s this was her second dis ages and reverse on count II on the cussion with concerning plans McGuire her grounds that investigation infringed no House, to leave Easter having the first protected property interest. point prior occurred at some to December resembling closely name to solved use incorpo preparing 17th as Smith Easter House’s During House’s and take Easter House II.1 for forms Easter ration removed all reported having according to a meeting, files. Smith 30th the December that she Satoloe files and indicated case McGuire the active memorandum files before the closed day, Smith described to remove planned later written disenchantment growing her Kurtz’s return. reasons to found plans her with Easter called meeting, McGuire After that she reported II. Smith request a de- Springfield office DCFS’s House because Easter to leave had decided re- mailing of Easter House’s in the lay Kurtz, House’s owner Seymour following day, De- theOn newed license. longstanding his had altered president, McGuire, 31st, wrote to Smith Sato- cember manage day-to-day delegating practice Felder, the Chief DCFS and Thomas loe play a more and started ment Smith Smith described district. central also stated Smith active role. meeting to Satoloe prior day’s into people new brought several House had importance stressed the Felder and Thomas rath answered Kurtz who operation char- House II’s rapid on Easter action she indicated that to her. Smith er than McGuire, In her letter application. ter prac inability halt by her was frustrated Riley, that Fran Easter indicated Smith that she found employees new the tices of worker, only trained social other House’s handling including careless objectionable, join House leave and had decided to Easter and tele adoption records of confidential also thanked II. Smith Easter House clients former of affluent phone solicitation withholding Easter House’s McGuire placements. the number to increase wrote to day, same Smith On that license. recounted memorandum McGuire’s at Easter position her resigning Kurtz that Easter House allegations vague House. agencies adoption foreign to connected he House’s situa- discussing told Smith Easter had After through which Kurtz McGuire, that decided make a million.” Felder “to with expected tion license should renewed House’s Easter memorandum, the Smith, according to office. On Springfield hold at the kept on Easter to leave she intended that indicated Kurtz to wrote January Felder some of immediately disclosed and House of Smith departures the informing that him minimize plan. To of her the details so- trained Riley, and agency, to the new opposition Kurtz’s agency out of workers, put had the cial Kurtz. plan her from had concealed Smith licensing stan- compliance with DCFS’s sister, Pacita her arranged for She had wished if Easter House dards and that and Haire, sign the charter have to reattain operations would resume vacation year-end for Kurtz’s had waited li- for a reapply standards and minimum her leav- that move. To ensure make her he trial, testified that Felder cense.2 At of the rewards deprive her not ing would House’s license of Easter renewal long withheld her based on felt entitled which she 8(1) Illi- of the section authority of House, had re- under Smith at Easter tenure chronology argument the that with defendants’ McGuire dispute Smith that 1. Defendants testimony this on decisively II at Smith’s refutes discussed formation meeting. fact, a reasonable December 30th think any point. before we that time however, testified, inconsistency that she had likely Smith find this Millicent that would be incorporator as the list her sister veracity decided after McGuire of the chronolo- on cast more doubt naming discouraged her her from veracity of Smith’s admission gy than Acknowledging capacity. that in this husband against interest. signed December the form on had her sister 17th, first that her conversation conceded Smith Reg- question, licensing DCFS standard in 2. before sometime occurred McGuire agen- (1970), required child welfare ulation 5.10 16, 1986). (June The de- Tr. at 1350-51 date. employee Master with a one at least cies to have pre- chronology, point DCFS’s out that fendants pared supervi- years of degree two Social Work legal possibility of May after work. sory experience in social clear, no men- makes repercussions had become agree meeting. We do earlier tion of this nois Child Care Act of 1969. 1969 Ill.Laws senting prospective clients and one from a (current version at Ill.Rev.Stat. ch. social worker interested in applying for the 2218(1) para. (1986)). provision This position autho- that Smith had left. Both callers rized DCFS to refuse to renew the license were told that Easter license; had no agency of an “consistently prospective job applicant fail[ed] was further prescribed maintain publish- standards informed DCFS was in ed Department.” Felder reviewing conceded pro- House’s “entire during cross-examination, however, gram.” during period, Also Felder suspension was inconsistent with the Judge Comerford, wrote to then the Chief Illinois Child Act and with Depart- Care Judge adoptions County, Cook regulations ment’s and enforcement man- notified him that Easter House was no ual, which set steps forth various longer that the licensed to make adoption place- Department bring would take to a licensee ments.

into compliance with minimum standards Within four weeks of receiving DCFS’s revoking before refusing to renew a letters, Kurtz obtained his renewed license. license.3 4th, On February two weeks after he had days letter, Two sending after the first Director, hired a new Executive Kurtz met Felder, on the attorney, advice of a DCFS with Felder to discuss information that wrote a informing second letter to Kurtz Kurtz had obtained about Smith’s op- new him January that the 6th (see letter had been eration infra) and relicensing incorrect and that Easter House would Easter House. At meeting, Kurtz days receipt have ten hearing second waived the that had been offered request letter hearing before January DCFS’s 8th letter after Felder as- refusal to would renew become final. Feld- sured him that proper absence staff er was request advised to extend this for a was the barrier to the issuance of hearing because the Illinois Child Care Act Easter thereafter, House’s license. Soon of 1969 allowed licensees ten to re- days approved Satoloe visited Easter House and quest hearing Depart- to contest the the Executive new Director’s credentials. proposed ment’s 19, revocation or February refusal On Easter House re- not, renew a license. The second did letter ceived its operate renewed license to as a however, provide offer to the assistance child agency during welfare period the required by Department’s regulations from through December November and enforcement manual. 1975. Kurtz did not receive the first second or While acting DCFS was on Easter

letters from January until application license, DCFS House’s to renew its it because Millicent Smith had directed the acting was ap- on charter and license Post Office to Easter plications forward mail House’s for Easter House II. The char- 22nd, to Easter January II. On House ter sought by Easter II was essen- House requesting Kurtz hearing wrote DCFS tially a certificate of incorporation. Child charges. and a written statement however, Dur- agencies, welfare unlike ordinary ing period between the decision corporations, to with- subjected were to charter response, hold renewal Kurtz’s and DCFS studies DCFS addition the usual inquiries received two about the processing by status of Department the Illinois House, Easter lawyer repre- one from a State. Charter studies for child welfare 7(c) Act, 3. facility Section of the Child Care Ill.Rev.Stat. such shall be revoked or not renewed." 2217(c) (1986), para. ch. stated that DCFS Section 15 of DCFS's enforcement manual also applicants "shall offer consultation ... and licensees in to assist emphasized cooperative to avoid efforts revok- meeting maintaining and mini- ing suspending or licenses. It indicated that requirements.” 5.02(11) mum Section the De- should licenses not be revoked renewals partment's regulations stated: ef- "Reasonable withheld until state officials had met with the Department forts shall be to assist made inadequacies provided licensee to discuss and facility a licensed child care to meet minimum days ten to fourteen for the correction of viola- If, efforts, facility standards. after such tions. standards, applicable fails to meet license (3) had public, Smith mislead ty could testimony, Felder’s according to agencies, House, she Easter and files from taken agencies that new ensure intended were child adopted place attempted had Tr. at interest. public serve would they still were couple who believed awith 1986). charter DCFS’s (June Easter before working with Easter House determine, among other sought to studies a child to act as II licensed House was serve a would agency things, whether agency. welfare form- people need and whether public license, A reputable. agency were ing the these were steps of factors The first two agency that the above, certified as noted efforts insignificant. Smith’s relatively stan- minimum with DCFS’s telephone conformed ser- respect to the mail issuing initial for procedures appears dards. effect: practical little had vice from significantly differ did not mail ever licenses House’s that none of Easter delayed license renewals. (although it was procedures Smith delivered to time) Easter reaching Kurtz for a from application II’s charter House Easter inter- was never telephone service Department Illinois to the submitted acknowledged rupted. The for- December on of State pub- that concerned had been on Janu- Chicago office DCFS’s warded to similarity of by the confused lic would be listed application The charter ary agen- and Kurtz’s for Smith’s the names complete Haire, sister Smith’s Pacita McGuire, all testi- and Smith Felder cies. incorpo- field, as the adoption in the novice attempted, had the defendants fied that Gibson, Chicago attor- Truman rator and success, dissuade Smith without and Chairman the President ney, as reason. House’s name this using Easter House Easter January Board. On however, was, approved II House its license II submitted part of Secretary of State by the Illinois Chicago office forwarded DCFS. testified Felder chartering process. license a charter and recommendation in- had department legal DCFS’s February II on issued lacked authori- agency that the formed him 6, 1975. or license based a charter ty to block evidence trial, produced At notifying The letter type confusion. II’s of Easter House approval DCFS’s approved had been license her Smith had been application license charter and not Department could indicated that showed plaintiff The irregular. extremely none- ground, on this but the license block conduct knew of defendants that the DCFS Easter use of Smith theless warned minimum, doubt on that, cast aat by Smith legal give to action II rise House could produced plaintiff The fitness. her House. Easter stud- and license that the charter evidence files of Easter House’s removal Smith’s with in accordance not conducted were ies matter, since serious a more represented procedures. normal manage its to House was unable Easter was application agency IPs House arrange Easter for some other cases, While or to great of its learned pending renewal manage its cases pending, to direct files from their these license, both the information Smith deal about without her complaints Kurtz and from to and In her letters with her contained. interactions that she trial, claimed Smith By testimony the time Kurtz. lodged by confi- ap- preserve the the files to recommended of had taken Chicago office DCFS to take and not the records applications, dentiality IPs of Easter House proval infer- contrary A had business. Easter House’s Smith knew the defendants however, drawn, mail be House’s could Easter ence divert attempted to that, in to McGuire address, (2) representation her new Smith’s calls to telephone and Smith summary, McGuire’s (though the words time some insisted for had she Kurtz with her end association reconsidering) intended to on indications some go down “allow to would not way that in a to confusingly similar using a name experience years eleven the drain warnings that similari- despite put building up and hard work she had into Smith’s license. The letter does not men- trial, At Felder stated Easter House.” apparently represented tion that Smith her- profes- had believed Smith’s DCFS agent self as an of Easter House to the confidentiality and sions concern about adoptive parents biological mother position that the return of the took the initially that she denied the incident to strictly a matter records was between timing Felder. The of Felder’s to the letter Kurtz and Smith. Attorney State’s also undercuts its useful- ness the defendants: it was sent The most serious factor that DCFS over- March more than six after weeks approving looked in Smith’s was Felder attempted first learned of the place- attempt place adoptive her a child with ment, days but ten after Felder and parents before she was On Feb- licensed. superior his in Springfield letters received ruary Kurtz told that he Felder attorney from an inquiring on Kurtz’s be- spoken couple applied had with a half as to DCFS’s response intended adoption prior Easter House for an Smith’s actions. departure. couple, who had Smith’s thought they dealing were still with Easter also heard evidence that DCFS House, baby had received the from Smith aspects fabricated certain of the charter $3,000. given Smith check for When investigation prepared the license they attempted to contact Smith later at study approving application. Smith’s after they spoke with Kurtz in- The study reports charter included inter- stead. When Felder confronted Smith with Haire, views with Pacita who was listed as information, initially she Kurtz’s denied incorporator, Gibson, and Truman matter, any knowledge but called attorney who assisted Smith with the incor- back fifteen minutes later to admit that she poration and who was listed as Presi- placement. had made the Because the dent of However, during II. placement invalid, legally was payment on trial, Haire and both Gibson denied the check stopped proceed- and a court having been interviewed DCFS offi- ing arranged legalize adoption. cials.4 The study undated; license appear The defendants have con- text, however, refers to a March episode sidered this as relevant to Smith’s letter from the head of DCFS to Secre- adoption fitness to run an agency. Three State, tary indicating pre- that it was days illegal placement after this came to pared at forty-one days least after the Chi- light, adoption had legal- before been cago office’s recommendation been had ized, Chicago DCFS office recom- Springfield. sent to Springfield mended that Smith’s charter approved. point license Defendants B. brought out that Felder Smith’s action to pertains The second count the attention of Attorney. the State’s DCFS’s in- vestigation of reporting matter, operations Felder’s letter Easter the House’s how- ever, during downplay seems to and 1976 1977. Easter incident. It House showed placement describes unlawful that Felder and vaguely McGuire conducted apparent as “an violation of an intensive investigation the Child Care of Easter House Act”; “primary beginning it identifies the in late informant” 1976 with McGuire’s re- as employer, Smith’s former suggesting view of application Easter House’s to re- allegation that may inaccurate; Later, new its it in early license. de- adoption that the subsequent- stresses was dispatched fendants investigator Ho- Tom ly legalized court; by and it mentions ward to a thorough undertake more review. that subsequently approve DCFS saw fit to pretext Howard investigation conducted a testimony and Haire's Gibson’s doubt agency cast on role in the new or that she had invested veracity applica- money of the charter and agency. (June 9, license in the Tr. at 741-45 1986). tions themselves as well as on review signature DCFS’s Gibson denied that the on the process. Specifically, Haire denied that she had license next to his name inwas fact expressed willingness ever a his. Id. at 751-52. an take active (1982). The court im- district posed as a L.Ed.2d investigator another in which untimely rejected the motion as mediately also undertook he parent; prospective later, just one filed. Two weeks week be- files Easter House’s of thorough review date, trial this court fore the scheduled Easter on House’s emphasis particular with rejection court’s of the the district affirmed foundations. foreign dealings Kurtz’s summary judgment motion. Easter House he occasions that on three Howard testified (7th Cir.1986). Leahy, 792 F.2d We v. the defendants results to negative reported stressed, however, that we were re- opinion that offered his right asserted jecting the defendants’ (June Tr. legally. at operating by filing a on the merits last avoid trial occasion, he was in- 1986). each On summary judgment motion. Our minute to find evi- his efforts to redouble structed any prejudice expressly disclaimed decision wrongdoing. of dence immunity “any defense [defend- judgment have to on merits.” II. ants] at 904. Id. court four this has been before This case Early history. twelve-year during its

times III. private litigation, in the count, which House’s second This motion con dismiss. filed motion investiga- damages DCFS’s seeks Easter House court that the district vinced tions, relatively discussion. requires little private defend that the had failed show it first and confine the dispose We will of state “under color law.” had acted ants more diffi- analysis to remainder of our East therefore court dismissed The district count. by the first raised cult issues private de against charges er House’s approach a claim under to state Following for failure Court’s fendants court re Taylor, section 1983. This U.S.C. Parratt (1981), order which held we focus unpublished in an 68 L.Ed.2d versed S.Ct. “(1) allegations questions: contained two essential initially on complaint complained of was one of Easter the conduct count whether acting of action under under color adequate claim by person out an made committed law; House v. State this conduct law. Easter whether color of state of state Family privileges or Illinois, Dep’t rights, person Children deprived Cir.1978). (7th Servs., secured Constitution immunities 535, 101 at States.” Id. laws the United dismissed Later, was twice the case Guss, 775 F.2d 1913; Greco plaintiffs grounds court the district Cir.1985). (7th Felder 161, 164 claim. On prosecute their failed to had must, they concede, they McGuire occasions, unpub- court issued both law when acting color under were reversing the dismissal and lished order House. investigated Easter proceedings. East- remanding for further Illinois, though, F.2d 938 that East- argue, do er House State Defendants any Cir.1981); v. State constitu- identified has not er House Cir.1984). infring- Illinois, interest that tionally protected investigation or shown by the ed second reversal After this court’s district cognizable harm. any incurred prosecute, par- for failure dismissal position and defendants’ judge rejected the discovery prepared for completed ties (he an instruc- claim sent the three than May less On trial. tion that for the scheduled the date before weeks right House has constitutional Easter trial, filed a beginning with- operate business liberty to asserting summary judgment for motion by offi- State harassment unfounded out protected Easter they were cials .... qualified damage claims House’s House’s due Easter find that you If in set forth Harlow immunity doctrine violated, but that rights were 2727, process 800, 73 102 S.Ct. 457 U.S. Fitzgerald, 910 injury resulting Cir.1987) suffered no actual from 1193 (affirming jury verdict — violation, you then plaintiff), denied, should award -, cert. damages nominal in 451, 108 98 L.Ed.2d 392

amount of one dollar. McGee, an liquor Arkansas store owner alleged that officials of the Tennessee con 17, 1986). (June Tr. at 1590-91 We think trol board had away driven his customers refusing that the in district court erred through conspicuous surveillance tech grant in giving the directed verdict and this niques photographing that included and fol instruction.5 lowing premises. them around on his See Easter House has not any identified Village Shorewood, also Reed v. 704 support purported right for its 943, (7th Cir.1983) (“harassment F.2d “to be free from unfounded harassment” employees relentless, of customers and right implicates or indicated whether this prosecutions” baseless could constitute liberty interest. The claim deprivation of property). Easter House’s seems, essense, in to be one of malicious allegations clearly are distinguishable. However, prosecution. showing of mali injury suggested by concrete even case, prosecution—or, cious inas Easter House's evidence on the second investigation— malicious administrative count is the cost of answering ques does not make out a claim under section personnel tions of DCFS making files plaintiff, being addition to available to them. These costs do not rise target improperly of an motivated investi to the level deprivation of a constitutional gation, “subjected depri must be ... to a property. Reichenberger See v. Pritch vation magnitude.” constitutional ard, (7th Cir.1981) 660 F.2d (“legal Hanrahan, Hampton expended by fees plaintiffs rev’d, the ad (7th Cir.1979), part on other proceedings ministrative qualify cannot grounds, injury constitutional showing absent a see Cameo Convales deprivation of magnitude”). constitutional Center, Senn, cent Inc. v. (7th Cir.1984), denied, cert. (1985).6 83 L.Ed.2d 775 IV. alone, prosecution, standing “[MJalicious allegations concerning insufficient to state a claim for relief under the use of licensing authority DCFS’s Burnham, Section 1983.” Antonelli v. transfer its to Smith raise more (N.D.Ill.1984); F.Supp. see difficult again issues. We follow the two- also Guardianship Grove School v. & Ad part injury Parratt, test outlined in consid- Comm’n, vocacy F.Supp. ering first whether the actions of which (N.D.Ill.1986) (investigation by regu complains were taken under latory authority does not violate constitu color of state law and second whether merely tion because it discredit views deprived these actions Easter House of administrator). of school constitutionally protected property inter- investigation by Unwarranted li process. ests without due officials, censing conducted in a manner discourage calculated to customers or inter A. business, fere with a licensee’s has been held property right. to violate a See Easter House claims to have suf Hester, McGee v. F.2d Cir. fered losses due to actions undertaken 1983); Hester, McGee 815 F.2d both Smith and the DCFS defendants. The 4,May causing 5. This court’s 1978 order reinstated to Easter House’s claim. is the acts ”[I]t complaint count one of Easter House’s but did damage plaintiff give liability to the rise to validity not address the of count two. That damages, Hostrop not the itself.” order therefore has no relevance here. 515, College v. Board Junior Dist. No. of (7th Cir.1975). 569 conspired 6. The claim that defendants to con- investigation nothing duct an unwarranted adds

911 152, Adickes, 398 at (citing U.S. 90 applications 186-87 handled DCFS Dennis, 1605). II in a at which involved al- and House S.Ct. Easter Easter of II. private parties Easter House had bribed a legations calculated benefit that way files, and plain- enjoin production House’s oil judge removed Easter Smith lease, to take recently in an effort its name mineral re- used tiff’s taken 914, The actions Glover, of its clients. in Tower v. 467 U.S. business affirmed Felder, process- (1984). McGuire Satoloe 2820, De- 81 L.Ed.2d 758 104 S.Ct. upon actions ing applications public defenders in Tower fendants were —the appeal on have focused parties both háve held not normal duties been whose of state under color clearly taken —were color of state law.” actions “under involve by vir- possessed power, “Misuse law. these defendants were held that Tower only possible law and made of state tue to suit under section nevertheless amenable is clothed with wrongdoer because they had allegations that 1983 on based ‘un law, action taken authority of state prosecutors judge and a conspired v. law.” United States of state der color wrongful conviction. plaintiff's secure 1031, 326, 299, 61 Classic, S.Ct. 313 U.S. 2824; 920, 104 at Id. at S.Ct. (1941),quoted in Mon 1043, 85 L.Ed. 1368 Local Chicago Union Hudson v. Teachers 473, 167, 184,81 S.Ct. Pape, 365 U.S. roe v. Cir.1984) 1187, 1, 1191 No. v. Adickes 482, 492 see 5 L.Ed.2d (union of state law when it acts under color 144, 152, 90 Co., 398 U.S. Kress & S.H. public employer to violate combines with (1970).7 1598, 1605, 26 L.Ed.2d S.Ct. rights), affd, employees’ first amendment 1066, believe, 292,106 89 L.Ed.2d although neither S.Ct.

alsoWe cases, find appeal, (1986).8 we point Based on these addresses side under color in furtherance taken Smith actions were actions undertaken Smith’s to con jury critically instructed on the conspiracy that relied state law. of a files, use of powers removal of as offi- sider Smith’s of their abuse defendants’ appropriation of state, House’s name under actions taken were cers possible depriva clients state law. color of of state law. property under color tions part were deprivations these Because B. and there conspiratorial plan alleged four identified against instructions support to the lend verdict

fore jury could find briefly that the defendants, discuss we will forms DCFS deprived of without under color had as actions taken been their status of law. law. state license; (2) agency (1) Its child welfare 24, 101 449 U.S. Sparks, Dennis In expectant files related Records (1980), the Su- 66 L.Ed.2d 185 S.Ct. care, and files records under its mothers persons, “[pjrivate held that preme Court prospective applicants relating to ..., are officials engaged with state jointly records and and ... parents, adoptive purposes color’ of law acting ‘under organizations in- relating to various files 27-28, at actions.” Id. private when decision pur- responsible for a qualifies action for state as amendment 7. Conduct provided quali- power has or coercive poses has exercised of the fourteenth law,” al- encouragement, of state overt “under color either significant as conduct fies though such ac- that some Court has indicated covert, be deemed to must in law the choice law color taken under tions constitute 102 S.Ct. at Id. at of the State.” be that Oil Lugar v. Edmondson state action. Hart, added); (emphasis Kufalk Co., & n. (N.D.Ill.1985); see also F.Supp. 1184-85 (1982). L.Ed.2d 482 & n. (N.D. F.Supp. Shelley, 661 Baltz Ill.1987) ("encouragement test of or coercion” appear to be attributa- would also acts Smith’s approach inter of Tower Blum and approach under the the state defendants ble to conclusion preted routes as alternative Yaretsky, Blum v. taken assisting under color of police acted Blum, psychiatrist law). normally held státe can be that "a State held Court adoption may expired in field ... Easter House’s volved license on Novem- adop- 31, 1974; in need of be for babies yet a source ber there is no indication that tion; (3) expectations Reasonable that Easter House any aspect curtailed of its applicants prospective Easter House’s operations prior departure to Smith’s at the may adoptive parents ... a child [obtain] any end of December. Nor is there indica- Easter House or have ... a home from tion that op- DCFS considered this interim House; by Easter study [conducted] eration improper. practice sup- This to the exclusive use of legal right The ported, authorized, if explicitly by even not in the name Easter House connection 9(b) Act, section of the Child Care agency in Illinois. adoption with an agencies operate allowed to continue to 17, 1986). (June Tr. at 1582-83 pending judicial review of a DCFS decision deny to revoke or renewal of a license parties’ argu and oral briefs unless an “directing DCFS issued order exclusively appeal ments on have focused operation facility that the of the terminate in property interest immediately.” (current Ill. Laws 106 Property, pur renewal of its license. 23, para. 2219(b) version at Ill.Rev.Stat. ch. poses the due clause of the (1986)). amendment, legitimate agencies opera- If could fourteenth is “a continue entitlement”; tions claim of it is “defined even after an administrative determi- existing understandings relicensed, rules or that stem nation that should not independent from an source such as state would have require been unreasonable to Roth, 408 Regents law.” Board U.S. operation them to cease while adminis- 577, 92 33 L.Ed.2d trative pending. determination was statutory regu Given the January 6th letter from Felder to latory authority limitations on DCFS’s interpreted Easter House could be as an deny to child license renewals welfare operations order that Easter House cease (cur agencies 1969 Ill. Laws 105-06 —see 9(b). under section That letter informed 23, paras. ch. rent version at Ill.Rev.Stat. agency operate that before it could (1986)) plainly 2218-2219 —Easter again, it reapplication would have “to make property had a interest in the renewal of its licensing for license and to meet standards Village license. See Reed v. Shore agency.” interpre- for a child welfare This (7th Cir.1983); wood, 704 F.2d supported tation is January DCFS’s 359, (N.D.Ill. F.Supp. Joyce, Mirshak v. Judge 10th letter to advising Comerford 1987); Barchi, Barry him longer that Easter House was no li- 64 n. 2649 n. & prospec- censed and its statements to the (1979) (horse trainer’s license job applicant prospective adop- tive and the suspended which can be or terminated parents inquired tive who about Easter “only upon proof contingencies” of certain House’s status. interest). is a The restoration of within six Defendants, however, Easter House’s license weeks of contest this read- request that it be withheld does not ing January They point of the 6th letter. that a undermine assertion out that Easter House did receive the implicated; the interest was duration of the (due January letter until 21st to Smith’s deprivation protected of a interest af mail), interference with Easter House’s adequacy process, fect the but it January when it also received the 8th letter change does not the nature of the interest allowing days request hearing it ten Reed, F.2d at at stake. before the denial of its for re- House, newal would final. Easter become question The more difficult here is fact, initially requested hearing, a formal deprived whether Easter House was ever though request it abandoned this when property by being prevented oper- Felder indicated that the license would be ating. Agencies applications with renewal not, Department had in- pending apparently, did need to have a issued as soon as the operate. approved agency’s current license hand order to terviewed and new conversion, see, e.g., In tort of law letter common January 8th worker.9 social 259-61, Thebus, 91 Ill. Ill.2d having re- as re be viewed therefore could 623, 625-26, N.E.2d 1260-61 operating to interim House Dec. Easter stored statute, that, the conversion under elements of (1985) (describing status status —a holding a for- by penalties for claim), by criminal could revoke as well as DCFS to adverse reaching a hearing, decision theft, para. 16-1 mal ch. Ill.Rev.Stat. issuing an order either right Easter House to its name exclusive House’s Easter opera- termination requiring immediate 2 of cod protected by section Illinois’ was affirming obtaining a court order or tions Deceptive Trade the Uniform ification of determination. its Act, deceptive it a makes which Practices “likelihood of practice to cause a trade proper judge the trial that We find misunderstanding as to af or of confusion that, the circum the ly instructed filiation, association with connection or li House’s here, Easter described stances ch. by Ill.Rev.Stat. another.” certification interest. Al property represented cense 312(3) (1986); Ill.Rev. para. entitled legally was though (1986).10 proper para. 22 ch. Stat. placements studies and conduct home by conspiracy, infringed the ty rights with another Smith (once replaced had it therefore, to Easter not limited were by sec required as worker qualified social li of its interest in the renewal the regulations), House’s 5.10(D) DCFS tion communi defendants, by their cense. revealed and interest Judge Comerford

cations that public, of the believed members ed C. operat from prohibited was House Easter techni remained the license ing. Even if argue Illinois that Defendants value, right to valid, practical cally its adequate post- House afforded Easter law public opposition legal and without operate any deprivations it for remedies deprivation Reed, gone. See regulators, was from Taylor, under Parratt and that suffered at 949. 527, 101 68 L.Ed.2d pro remedies postdeprivation (1981), these right to files Easter House’s do that was due. We all the vide name, although use of exclusive remedies post-deprivation believe not much appeal, are parties on ignored deprivations cure law can inter under property recognized as easily more conspiracy by a brought about Illinois House’s law. Easter rooted in ests largely in a officials involving high-level was its files and use of possession right office transfer regional of the autonomous recognition by Illinois’ protected they not be 10. should untimely Defendants maintain 9. Kurtz’s under hearing request records or theft of the for the held accountable Act, days provided ten the Child Care because “Easter House” the name the misuse of registered postmark of the "dating from were authorized they did not believe (current version mail.” 1969 Ill.Laws license charter or approval of Smith’s withhold (1986)). para. Section ch. Ill.Rev.Stat. alleged instanc- of these application on basis by however, pro- 5.02(B) regulations, DCFS her former toward wrongdoing Smith es of making receipt, Kurtz’s days ten vided 11, 1986) (testi- (June See Tr. at 996 employer. timely. discrepancy is aca- appear request This concerning stolen mony Felder of Thomas was clear- as DCFS in this case inasmuch demic 16, 1986) (June (deposition files); atTr. request January 22nd ly prepared to honor DCFS, Leahy, Mary testimony Director Lee request on hearing Kurtz revoked until overlooking similari- concerning reasons for Moreover, does February 4th. concerning names). defend- ty evidence This care- operating because argue ceased not whether relates ants’ motivations persuaded it that violated, the statute attention to ful rights but were January 18th. became final nonrenewal were attributable whether the violations (Such argument be sustainable would not de- DCFS conspiracy Smith and the between 5.02(C) below, required jury’s find- regulation any event As we discuss since fendants. sup- amply by registered notify ing letter existed licensees DCFS pages 920- elapsed See hearing ported had the evidence. requesting a the time infra facilities.) treating them as unlicensed before satisfy process. licensee to another. We not the demands of due property of one argu- 435-37, 1157-59; reject defendants’ Parratt therefore Id. at S.Ct. at Tucker, ment. also Bennett v. 827 F.2d 63 (section Cir.1987) plaintiff 1983 available to sought Parratt, prisoner in a dam- which asserting process right due to notice and hobby a kit lost ages 1983for under section opportunity an for review when administra- prison through negligence of low-level claim). agency tive terminates officials, process may sat- held that due in remedies by postdeprivation isfied The circumstances of this case do not court, deprivation if the resulted “a closely correspond to either the Parratt- by act a state and unauthorized random Logan. Hudson line or to The defendants’ 541, 101 at 1916.11 employee.” Id. at transgres- actions were not unforeseeable Later, the Court extended Parratt’s hold- all, (Felder, sions of low-levelofficials after ing deprivations to intentional that are ran- Department’s was head of the Of- Central perspective dom and unauthorized from the authority fice with to revoke or refuse to Palmer, 468 U.S. of the state. Hudson v. agencies), renew licenses of child welfare (1984). 517, 104 S.Ct. 82 L.Ed.2d 393 negligent prison guards like the acts of the found that the state could not Hudson in steps Parratt. Neither were taken practically provide predeprivation proce- regular systematically under a routine that prison guard prevent dures to from delib- deprived property claimants of without erately destroying property an inmate’s in predeprivation hearing, pro- like the claims prison policies and that state violation of presented cess attacked in are Logan. We tort remedies therefore satisfied the de- agreement involving instead three process. mands of due licensee, regulatory officials and a to use fully has not Court elabo- authority licensing agency of a state pre- rated the “random unauthorized” private transfer from one citizen requisite Parratt. Lo- to another. Co., 455 gan v. Zimmerman Brush compelling We find reasons for distin 1148, 1158, 71 L.Ed.2d guishing this case from Parratt Hud however, (1982), provides one illustra- post-depriva son. These cases held that deprivation tion of a threat that cannot be tion remedies under state law could avert classed as random and unauthorized and potential process only if violation hence cannot be reconciled with the de- deprivation resulted from un “random and through process mands of due state tort 12 In authorized acts.” Tavarez v. O’Mal Logan employment filed an dis- remedies. (7th Cir.1987), 826 F.2d 671 ley, this court crimination claim that was nullified recognized reading that a broad of Parratt “random” combined effect of bureaucratic remedy would eliminate section 1983 as a 120-day statutory delay and a for deadline virtually any property deprivation, Although administrative action. the state’s generally since state tort remedies are “random,” delay Logan’s in case was Lo- Finding available for losses. gan deprived of his interest a deter- “unpalatable,” result we indicated that mination on the merits of his claim interpreted light operation process- Parratt must be of the established claims 675; deprivation “limiting principles.” various at ing system. Because the Id. authorized, against Clayton, state tort law Town remedies Wilson Civil (7th Cir.1988). allegedly discriminating employer did 839 F.2d One holding negligent property dep- lapse) 11. Parratt's choice of which claims it allowed to but process (in violate the due rivations could clause procedures "authorized” that established al- Williams, been overruled. See Daniels v. has 474 U.S. lapsed lowed for the random nullification of 330-31, 662, 664-65, claims) demonstrates that both characteristics present property deprivation must be for a scope within the of Parratt. See Wilson v. fall Logan, inapplicable 12. held Parratt Clayton, Civil Town (in deprivations that were “random” the sense Cir.1988). rhyme that there was no or reason to the State's regulatory Parratt, defendants’ misuse limitations source of potential not, view, in our process does establish Tavarez, is the this court discussed and unau- at issue was random the conduct act.” unauthorized “random phrase concludes, officials thorized. As Tavarez narrowly to be read language could This providing constitu- responsible are who prede- “a in which only to situations refer escape tionally adequate “cannot because remedy is infeasible privation simply by ex- liability section 1983 under hearing grant ... authorized officials scope authority.” of their ceeding the deprivation before are unaware F.2d “any loss refer broadly to occurs” that there is authori some We are aware some of established not a result that ‘is ” reading of Par- extremely for an broad Tavarez, ty at 826 F.2d procedure.’ state quite odds think would be at ratt which we 541, Parratt, 101 451 U.S. at (quoting 677 by See with the direction set Tavarez. 1916). at S.Ct. (5th Walker, F.2d 1170 Holloway v. 790 attempt defini need to a do We not Cir.) (Parratt conspiracy be applied to unau of “random and interpretation tive private par judges court state tween this case. We purposes of for thorized” property), plaintiffs of cert. deprive ties to is at least narrow phrase only that the hold 984, 571, denied, 479 U.S. 107 93 S.Ct. by high-lev conspiracy a enough to exclude Communica L.Ed.2d National 576 to licensing process use the el officials Michigan Pub. Serv. Sys., Inc. v. tion to an one licensee property from transfer Cir.) 370, (6th Comm’n, F.2d 372-73 789 “ viola process of due the class other from least to all section (Parratt at ‘extend[s] reme by state law can be cured tions that pro claiming procedural a 1983 cases ” firmly in points,us think Tavarez dies. We not interest’ injury cess Kelman, v. Bretz See also this direction. of complained acts withstanding that the {Parratt, Cir.1985) 1026, (9th F.2d 1031 773 (quoting conspiratorial) or intentional were Cir.1983), predeprivation for touchstone “in Walton, (6th which 721 F.2d 1062 Vicory v. such feasibility providing process denied, is the rt. ce inapplicable denied, where (1984)), process, simply is 83 67 479 L.Ed.2d cert. inextricable from deprivation alleged 93 L.Ed.2d S.Ct. however, believe, by fol process (1986).13 of the which alleged corruption We adopting banc); are (en and Bretz we lowing Tavarez ordinarily provide.”) could state clear of bound steers n. 4 a course which Mackey, v. Merritt this court of Parratt expansion less In Cir.1987) (same); (9th Acorn Ponds “unpalatable” Tavarez.14 deemed Hills, 623 Village North corporated con (E.D.N.Y.1985) (alleged F.Supp. 688 V. inspectors closer involving building spiracy if their Parratt). contend even The absence Defendants than Logan proper- House of deprive Easter actions for did authorization statutory regulatory conspiracy Center, that the were to find Even we if Appellants Cameo Convalescent cite 13. be- random and unauthorized Cir.1986), here constituted Percy, F.2d 108 Inc. v. Parratt, not clear it is ambit of havior within application of Parratt to authority for the postdeprivation remedies House's that Easter Cameo, however, deprivation dealt with case. House, as for adequate. For were random ... was show[ed] that "the evidence through "[sleeking Logan, redress plaintiff in Id. clerical mistake.” due to a and unauthorized lengthy and probably] be a tort suit [would see Cameo Convalescent Center at 111. But Senn, 421-22, Logan, U.S. at process," speculative Cir.1984) (plain- F.2d 1150-51; complicated jury on instruction entitled to tiffs liability extensive immunities arid the “limited concluded, theory). in this case under Illinois to tort suits public officials evidentiary support, injuries that the ample Moreover, Tavarez, at 676. law.” complains were caused claim protections that law error, by a scheme but deliberate inadvertent protect its have invoked should regulatory authority. Cam- to misuse the state's injunctive See only relief. provided name there- Parratt and Hudson 312(3) (1986); eo 's id. para. ch. Ill.Rev.Stat. 121‘A bearing here. has no fore para. ch. ty process, without due were entitled tablished statutory or rights constitutional qualified immunity as a matter of of which person law. a reasonable would have Harlow, survey general We first some will known.” 457 U.S. at principles controlling qualified S.Ct. at immunity 2738.15 applying before them to the defendants’ By adopting objective an standard the claim. sought Court to reduce the burdens section placed government actions

A. by allowing officials many of these claims to be dismissed at an early stage. delineating quali- the contours of the Court underscored its concern about these defense, immunity fied Court in Mitchell burdens Forsyth, sought rights citizens, has balance (1985), 86 L.Ed.2d 411 damages whom “an action for which held that a district court’s denial of a offer the realistic avenue for vindica- qualified immunity summary defense on tion guarantees,” against of constitutional judgment constituted appealable “final society involving public costs offi- decision” under 28 U.S.C. section 1291. cials in litigation. unwarranted See Har- Without an right immediate of appeal, the low Fitzgerald, v. 800, 814, 457 U.S. 102 reasoned, Court a district court’s erroneous 2727, 2736, (1982). S.Ct. 396 L.Ed.2d rejection qualified of a immunity claim Harlow, Prior to the availability quali- public could deprive officials of Harlow’s immunity fied depended objec- both on the protection against the burdens of unwar tive challenged reasonableness con- , litigation. ranted 472 U.S. at Mitchell subjective duct good the faith of the 526-27, 2815-16; 105 S.Ct. at official. See Wood v. Strick- defendant Smith, Whitt v. (7th 832 F.2d land, 308, 322, 992, 1001, 420 U.S. 95 S.Ct. Cir.1987). (1975). Harlow, however, L.Ed.2d 214 the Wood supplanted approach with an al- parties dispute The the applicabili exclusively standard, most objective ty of objective Harlow’s standard to a case permits against dismissal of suits govern- in which the defense was unsuccessful summary ment officials on judgment if qualified to efforts invoke immunity pri- “their conduct clearly does not violate es- or to trial.16 We need not decide this issue however, open possibility, left 15. jective Harlow the matters must therefore be that the addi subjective good that might, an official's (once faith outweighed tional costs are trial is a the circumstances," “extraordinary conclusion) under foregone immunize deterring the value of that violated behavior a clear compensating plaintiffs rule law. 457 officials and in cases U.S. at 102 S.Ct. at 2738. where defendants knew their were un actions note, moreover, lawful. We purely that the justifica- Easter House asserts that Harlow's objective Harlow applied standard has been fol excluding subjective tion for qualified immunity factors from the lowing trials on the merits apply test does not to de- Court Malley Briggs, and this circuit. See properly required present fendants who are to 335, 345-46, 1092, 1098, 106 S.Ct. 89 L.Ed. on the County defense merits. See McElveen v. (1986) (applying 2d 271 Harlow standard to William, Prince 725 F.2d 957-58 of Cir.1984). qualified immunity defense raised in directed argument There is some force case); plaintiffs verdict after motion close of required ignore that courts should not be Allphin, Benson v. 786 F.2d & n. 272-76 subjective bad evidence faith if defendants (7th Cir.) (objective applied standard when im qualified immunity have failed to establish a munity raised judgment first in motion for not summary judgment especially defense on if withstanding verdict), denied, — cert. 479 U.S. availability appeal of immediate under 93 L.Ed.2d 109 Mitchell reduces the chances of error at this Scherer, 183, 191, Davis However, stage. officials, the interests of (quali 82 L.Ed.2d 139 avoiding public, inquiries subjective into immunity depends fied upon "objec defense entirely disappear goes intent do not a case once conduct; tive reasonableness" of official “[n]o trial; prospect that the court will consider issue"); other circumstances are relevant to the subjective evaluating qualified factors when Fairman, Azeez immunity motion at the Cir.1986) (same). decisions, conclusion of the evi- however, These dence also make it expensive, more expressly intru- have not addressed the rationales consuming sive and time gives defend section considering subjective McElveen intent argument 1983 case. The reintroducing sub- at trial. Walker, (7th Cir.1977) here, however, judge’s because the district immunity (officials defense qualified hide behind a claim rejection of the “cannot justified to the first count was respect particular predicate question factual East- purely objective test. even under the appeared has never in haec verba in a allegation that the defendants er House’s opinion”), denied, reported cert. conspired transfer control with Smith to process licensing stat- Easter House via the prior decided Cases conduct for deprivation of Easter House’s ed a clear qualified seeks which defendant immuni process of law. The property without due ty legality closely assess analo rely not judge therefore did need district identical, though necessarily gous, acts concerning the or inferences on evidence provide or omissions sometimes a measure reject subjective defendants’ beliefs See, clearly applicable standards. e.g., qualified immunity claim. their Abel, 824 F.2d at 1533. objec- applying Harlow’s results depend critically on whether tive test B. general specific rule at is stated in issue We turn now defendants’ claim general proposition terms. their during actions government officials violate the constitu- protected by qualified immunity were be they deprive citizens of tion when they reasonably have cause could believed process well known without due affording were pro Easter House due uncontroversial; specific procedural problem Here cess. we encounter a protections required by characterization, factual distinct often particular in a situation are clause just problem factual characterization dis re- open dispute. to Court Defendants, ignoring jury’s cently following guidance on cussed. provided the finding conspired right at in a 1983 that with Smith to framing the issue section clients, suit: transfer Easter name and II, to focus narrow goodwill Easter right must suffi- The contours be They argue their ly on own overt acts. a reasonable official ciently clear that actions, none of their viewed as isolat doing is that understand that what he would events, say clearly right. This is to ed violated Easter House’s violates that protected by right process. If the issue were that an official action due narrow, very action qualified immunity actually unless the defendants would be 1974, In question previously immunity. in has been held un- qualified entitled lawful; light say process it is to that in the due varied—as but the demands of preexisting now—according law unlawfulness must situation-spe to a they do apparent. government be in balancing of interests cific — private making against decision efficient U.S.-, 107 Creighton, Anderson v. avoiding depriva in erroneous interests (ci- 3034, 3039, 97 L.Ed.2d 523 S.Ct. 254, 397 U.S. Goldberg Kelly, v. tions. omitted); Mitchell, at tation 472 U.S. 1011, 1017-18, 262-63, 90 25 L.Ed.2d 528, This has at 2816. court 105 S.Ct. & 287 Restaurant Work problem on several occa- addressed this Cafeteria 367 McElroy, Union Local U.S. ers Miller, F.2d Compare sions. Abel v. 824 473 895, 886, 6 L.Ed.2d 81 S.Ct. (7th Cir.1987) (“the rights asserted (1960). held This court has must tailored the factual circumstanc- be balancing re of interests is “whenever a alleged in oc- es violations existing caselaw quired, facts curred”) Fairman, F.2d Azeez correspond to the contested Cir.1986) (“The closely must must right official is sub the defendant poten- action before sufficiently particularized put be Harlow.” Ben liability under ... ject conduct tial defendants on notice their son, 276.17 unlawful.”) 786 F.2d at with Little v. probably is principles case law argues in there were two clear 17. Easter House The Hobson think, however, the “New We do not that defend- tions of Left.” separated ants’ actions can be from the FBI court held that officials could not jury placed in them. The context which qualified immunity. invoke participated the defendants found that authority may Whatever the Government licensing pro- in a to misuse group engaged have to interfere with a to transfer Easter House’s cess order activity, in unlawful and however it It is well to Smith. established permitted impede rights or deter lawful actions take on a otherwise by-product lawful association as a of le- different character when undertaken it is never “ actions, gitimate Government ‘a combination of two or connection with permissible impede or deter lawful persons acting in concert to commit more rights/political organization, expres- civil act, an unlawful or to commit a lawful act ” protest pur- sion or with no other direct Hampton v. Han means.’ unlawful pose objective and no other immediate rahan, 600 F.2d (7th Cir.1979) (quoting Rotermund v. United States than to counter the influence of the tar- Corp., Steel get Cir. association. part grounds, rev’d in on other 1973)), Weeks, Simpson Id. 27;18 100 S.Ct. 64 L.Ed.2d 670 (8th Cir.1978) (conspir Wilson, Hobson v. F.2d acy claim does not create interest denied, (D.C.Cir.1984), cert. existed, previously where none but can (1985), plain 85 L.Ed.2d 142 acts), change interpretation given overt alleged conspiracy by tiffs that a FBI offi denied, cert. deprived them of their cials had first (1979).19 rights speech, amendment to freedom of We believe that similar considerations de- assembly through and association domestic qualified feat defendants’ counterintelligence operations immunity claims aimed at among subverting cooperation various fac- leeway this case. Whatever the due preempted particularized balancing brought proscription of inter- 18. Hobson was under the clearly right prede- ests and established its to a against conspiracies deny equal protection (1) privation hearing: requirement prede- a the laws contained in the first clause of 42 privation hearings provided be wherever feasi- 1985(3). provision U.S.C. This § does not re- (2) requirement ble and a that states adhere to law, quire action under color of state but does procedures. proposi- their own Neither of these require evidence of racial or class-based ani- (or is) tions was as clear as Easter House con- 719, Rutledge, mus. See Kush v. 26, 725- first, Goldberg Kelly, see v. tends. On the stated: "It is which 1483, 1487-88, L.Ed.2d 75 413 true, course, govern- of that some (1983). analysis qualified immunity of may administratively mental benefits be termi- officials, however, government governed by is affording recipient pre-ter- nated without a progeny, Harlow whether the claim 263, evidentiary hearing.” mination 397 U.S. at 1985(3) Hobson, arises under or under 1983. 1018; O'Malley, 90 S.Ct. at see also v. Tavarez 737 F.2d at 24. 671, (7th Cir.1987) (“[W]e 826 F.2d 676 have predeprivation hearing declined to hold that a always required is feasible, appeals 19. The courts of for the Ninth and Dis- pointing if out that the Supreme always qual- trict of Columbia Court has not insisted on a Circuits have confronted hearing second, predeprivation es.”). immunity in such circumstanc- ified defenses in other in contexts Scherer, see v. On Davis plaintiffs prove which must unconstitutional may quali- which held that officials still claim prevail. motive to Both have determined that immunity fied even if have violated a clear require issues of unconstitutional motive devia- regulation important statute or that advances an purely objective approach quali- tion from a protects right. interest a or constitutional 468 immunity. Municipal fied See v. Gutierrez 195, 3019; Shango U.S. at 104 S.Ct. at v. Court, 1031, (9th Cir.1988) 1049-51 Jurich, 1091, (7th Cir.1982) 1097-98 (intentional race); discrimination based on ("Although liberty property the existence of a or Martin v. District Columbia Metro. Police of may interest be ascertained reference to state 1425, (D.C.Cir.) (mali- Dep’t, F.2d 812 law, identified, once such an interest is the task prosecution), part cious decision vacated in defining procedural protections of banc, rehearing scheduled en 817 F.2d 144 wholly attach to that interest is a matter of (D.C.Cir.), decision to rehear en banc rev'd and law_ procedur- federal constitutional [S]tate panel opinion reinstated sub nom. Bartlett ex rel. protections process al due.”). cannot define what Bowen, (D.C.Cir.1987). Neuman v. 824 F.2d 1240 positions, partisan ent may have defend- one clause afforded the other process judicial, necessarily license or to delay Easter House’s involves lack of due ants subjecting process without her issue Smith’s license of law the trial of defendants scrutiny, charged him.”).20 normal of applications to the level with crimes before More- to use over, permit quite apart it did not defendants any question of di- licensing process in furtherance of a gain, or rect indirect do not we think that one licensee’s business scheme to transfer any reasonable official could have believed Authoritative caselaw to another licensee. process, that the law of due as it stood adjudica- long guaranteed impartial has 1974, permitted licensing late decisions involving litigation protected liberty tor in be engaged conspir- made officials See, e.g., interests. Aetna acy to transfer from one licensee Life 820, Lavoie, 813, v. U.S. Ins. Co. to another. (1986); 1584, 89 L.Ed.2d 823 S.Ct. endorsing proposition Monroeville, Village U.S. Ward of conspiracy sig claim the legal affect 57, 60-61, 83-84, 34 L.Ed.2d acts, nificance of officials’ overt we do not (1972); Ohio, Tumey v. offering plaintiffs believe that we are 71 L.Ed. 749 S.Ct. means frustrating Court’s Sparks, Dennis efforts to reduce the social costs merit- (owners L.Ed.2d 185 S.Ct. against less government claims officials. violating rights production oil liable for true, Conspiracy allegations, it is unavoid rights neighboring leaseholder ably questions raise motive and intent. enjoin state by conspiring judge Thus, plaintiffs allege govern when leases). production from mineral More- participated conspiracy ment officials in a over, guarantee the extension use legal pursue otherwise actions to re- adjudications administrative is neither a aims, illegal availability summary development. nor a See cent tentative Gib- unavoidably depend will dismissal on Berryhill, 411 U.S. son inquiry subjective kind of into factors There sought to minimize. Harlow no that the evidence This tension between Harlow’s aim anticipated any in this case direct financial objective quali establish an standard for though gain conspiracy, from the co-con- centrality immunity fied and the of motiva financial spirator Smith’s stake obvi- conspiracy tion to claims would trou think, however, We not that this ous. do bling important limits if it were for two clarity significantly from the detracts This has rec claims. circuit process right. mayor plaintiff’s due danger litigants’ adducing ognized the of imposed traffic fines in did not who Ward allegations conspiracy in order unfounded monetary need to have a direct interest to summary judgment against to block weak in disqualified, only an interest be plead Plaintiffs must therefore claims. Re town’s finances. See also In Murchi con specific tending facts to show that a 133, 136-39, 623, son, 75 S.Ct. 349 U.S. spiracy summary judg existed survive 625-26, (1955) (due process 99 L.Ed. 942 motion; eonclusory allegations will ment permit judge who serves one- will See, e.g., Rodgers not suffice. v. Lincoln grand jury to hear of defendant man trial Inc., 194, (7th Serv., F.2d Towing perjury grand jury); of accused before Tu Cir.1985); 534, (“A Marketplace Restau Moore mey, 273 at at rant, Inc., 1336, (7th Cir. in 754 F.2d perforce situation an official occu 1985); Patchett, F.2d seriously pies practically two inconsist- Goldschmidt 820, Ins., pecu- 475 U.S. at S.Ct. at 1584. not made Aetna 20. While the Court has Life finding agree- jury’s niary necessary of an of a of We believe that the interest a element claim process, and Smith misuse ment in violation of due it has stated between bias bias, licensing plainly distinguishes kinship, authority personal DCFS’s that "matters of interest, judg- gen- in this case from the matters of policy, of would seem issue remoteness appearances erally legislative that the Court discretion.” ment and fairness be matters 441; legislature Tumey. Tumey, at see left to the 273 U.S. 47 S.Ct. Hobson, (7th Cir.1982); conspiracy. the law of criminal A criminal pleading (imposing conspiracy, according defendants, strict 737 F.2d at 29-31 to the of “unconsti requirements allegations compel can be found to exist based on less addition, motive”)- we note tutional ling wrongdoing by conspir evidence does conspiracy allegation not dis that a conspiracy. ators than can a civil Defend identify right pense with the need authority purported ants cite no for the 1983 authorizes re was violated. Section Moreover, distinction. most of the district clearly to violate a covery conspiracy conspiracy court’s instructions were taken conspiracy for the right, not established virtually verbatim from two decisions Hostrop College v. Board Jr. itself. involving conspira this court civil cases 515, 523 F.2d Dist. No. Cir. rights protected by cies to violate section 1975). “ Supreme- adopted has Court Compare City 1983.21 Bell v. Milwau approach immunity ques- ‘functional’ kee, (7th Cir.1984) 746 F.2d 1255-57 than those that have been decid tions other Hanrahan, Hampton statutory or by express ed constitutional 1979) 620-21 Tr. Cir. at 1585-88 enactment,” approach under which an (June 17, 1986).22 We conclude that “[ojfficials exemption per who seek instructions, conspiracy considered “as a showing liability sonal have the burden of whole, manner, avoiding a common sense exemption justified by over that such an fastidiousness, inquiring whether the [and] public policy.” riding considerations of message conveyed correct to the — U.S. -, White, 108 S.Ct. Forrester v. well,” reasonably were more than ade (1988). In view of 98 L.Ed.2d 555 quate. Ass’n, v. American Medical Wilk claims, conspiracy the checks on unfounded (7th Cir.1983), cert. we do not that the Court’s function believe denied, approach support an extension of al can (1984). preclude Harlow to consideration of a well assessing pleaded conspiracy claim when Defendants also contend that the government have violated whether officials conspiracy finding sup lacked sufficient plaintiffs’ rights. port presented in the evidence at trial and denying the district court erred in VI. judg their motions for directed verdict and jury’s notwithstanding Defendants attack the deter ment the verdict on this they conspired point. mination that with Smith to A district court’s denial of a direct deprive judgment on two ed verdict or n.o.v. will be over First, evidence, if fronts. contend the district turned taken as a judge light based his instruction on whole and viewed in the most favor- exception particular regulatory 21. Defendants take to one dence that sanctions were misused to appear passage of the instructions that did not deprive regulated entity protected property Hampton judge in conspirator or Bell. stated that a denied, interest), cert. implicated by actions as could 83 L.Ed.2d 775 street, “walking facially innocent as across the automobile, driving using or the tele- defendants, presumably 22. The who are aware (June 1986). phone.” Tr. at De- 1587-88 suits, Hampton that and Bell were civil argue “effectively fendants that this instruction distinguish have intended to between section finding jury” foreclosed the from that Smith subject conspiracies that could also the argument ignores acted alone. This the district liability conspirators to criminal and section judge’s requirement repeated the references to provide conspiracies that do not a basis for "meeting conspirators reach a of the position prosecution. This un- criminal too is objectives conspiracy. as to the of the minds” by Hampton supported our cases. Neither nor regulatory authority When officials misuse pursuit possible criminality the of the Bell comments on rights conspiracy protect- of a to violate Moreover, conspirators' Cameo Conva- actions. by ed section their actions are no more Center, applies Hamp- lescent the protected scrutiny facially than are the alleged conspiracy to an ton standard private conspirators. innocent actions of See Senn, Center, unlikely give seems at least as to rise to criminal Cameo Convalescent Inc. v. (7th Cir.1984) (plaintiffs alleged by liability F.2d enti- as the actions Easter House. conspiracy tled to a instruction based on evi- Easter House esti- to the nonmoving party, leads to the able gross on its mated the effect revenues jury could reasonable that no conclusion calculating difference between its actu- E.g., Craw nonmoving party. hold for the revenues it would have al revenues and Edmonson, F.2d 479 Cir. ford lin- if had followed a outset obtained its business recited 1985). evidence growth path through from 1974 1978— ear easily meets this standard. this decision evidence, believed, path House claims its revenues if Easter House’s for the defendants, have had it not been learning after of would followed showed that gross fell conspiracy. Actual revenues taking leave Easter House plan to Smith’s $216,000. service, projections of these dis short files, telephone mail and figure by standards, House then reduced this regulatory Easter statutory regarded thirty percent, its estimate of variable guide internal their own requirements and li costs that the additional business would delay to Easter House’s in order lines entailed, lost net in to obtain revenues public who have of the Members cense. $150,000 approximately amount given were Easter House quired about —the jury awarded. agency’s stand of the negative assessment II’s House Simultaneously, Easter ing. court argue Defendants district given applications license were charter and plaintiff permitting go erred in despite favorable consideration rapid and damage on jury gross on claim based wrongdoing of serious abundant evidence argument unsupported revenues. This study referred The charter by Smith. record; ignores plaintiff’s by the having people who denied interviews with gross reve- thirty percent adjustment study pre license been contacted. judge’s nues and the district instruction the de one month after pared over well damages compensatory approval their transmitted fendants gross revenue “the loss of should include Springfield. revenue, net expenses, certain minus [or] would have tending realized which present evidence House] did [Easter Defendants wrongful conduct of defend- They for the claim. but to undermine 17, 1986). (June Tr. ants.” their toward attempted explain actions prod- as and Easter II objection seems real Defendants’ unrelated, on faith good judgments ucts of approach over House’s to be that Easter applications. agencies’ the merits the award damages and that stated actual they had evidence that They also adduced objection, excessive. This was therefore wrongdoing prevent Smith’s attempted sufficiency of Easter goes to the that it within believed insofar have damages, should on House’s evidence whole, authority to do so. Taken as their trial, jury. At de presented to the been compel- however, this evidence was so cursory only a attack fendants mounted jury to any reasonable ling as to force methodology presented Easter House’s conspiracy claim. reject Easter cor will not estimates. We no alternative judg- directed verdict and The motions for defendants’ omissions now for the rect properly were denied. ment n.o.v. Empire Gas at trial. See miscalculations Co., F.2d Bakeries Corp. v. American VII. Cir.1988). Defendants have 1333, 1342 into the put evidence simply failed to argument final concerns Defendants’ satisfy the “severe” which would $150,000 compensatory record jury’s award damages are to claims applicable the 1974-1975 test the effects of damages for Chester, City excessive. Webb At See Easter House’s business. conspiracy on Cir.1987); (7th 824, 836 Joan 813 F.2d the con- trial, argued 771 F.2d Chicago, City its busi- interference with spiracy’s direct of Cir.1985); v. Mid-Conti Patton and ness, along public with the confusion Inc., caused, Sys., depressed nent misconceptions that damages “so Cir.1988) (assessing whether years House’s revenues proof Court, in to the of harm The in excessive relation Hudson v. Palm- er, aside”). 104 S.Ct. 82 L.Ed.2d should be set We verdict (1984), held that a random and unau- reject attack on the therefore defendants’ deprivation thorized intentional damages assessed on count amount of the by a employee state does not constitute a one. procedural requirements

violation of the the Due Process Clause of the Fourteenth VIII. meaningful Amendment if a post-depriva- and, troubling we presents This case tion remedy for the loss is available. Hud- hope, atypical picture of abuse of state explicitly son limits the use of intentional authority. picture The regulatory would torts as a basis for a 1983 claim if the § disturbing if we lent credence to be more action of the state tortfeasors was random repeated assertions that a the defendants’ and unauthorized. Hudson’s extension of victory discourage will for Easter House 1983 limitations followed the Court’s de- § regulators making the decisions that cision in Taylor, Parratt v. interest, jobs, public require. their and the 68 L.Ed.2d 420 in We see the result here much narrower perceives unpalat- To avoid what it anas and more beneficial terms. Easter House Parratt/Hudson, expansion able complaint adducing specific factual filed a (at majority 915) page holds that when allegations support in of its claim that state high-level conspire state officials to unlaw- conspired private officials had with a citi- fully procedures misuse established to de- deprive property. zen to it of its The dis- prive a citizen property rights of his —such properly rejected trict court defendants’ ar- action can never be “random and unautho- guments conspira- that the actions of the By sweeping questiona- rized.” such a tors violated no clear constitutional norm generalization, majority imposes ble plaintiffs and that the were restricted to unwarranted restriction on the Par- plain- their remedies under state law. The and, correspond- ratt/Hudson doctrine— jury, tiff then convinced the based on a ingly, scope broadens the 1983 in ac- § one-sided, compelling, entirely pre- if not against employees tions state founded on sentation of facts that the defendants had relating property. intentional torts conspired regula- indeed to use the state majority attempts The to circumvent the tory authority property. to take its The Parratt/Hudson limitation on 1983 ac- § allegations pleaded proved here are far by relying tions on the rationale of the legitimate removed from the exercise of opinion Kelman, Ninth in Circuit’s Bretz v. by responsible discretion state officials. (9th Cir.1985). 773 F.2d Bretz held judgment The of the district court is definition, conspiracy, by that a could not Affirmed in Part and in Part. Reversed purported be random and further to con-

fine relatively depriva- Parratt minor KANNE, Judge, dissenting Circuit in property by tions low-level officials. part concurring part: in emphatically case rejected Bretz view,

In my Walker, Easter House is not entitled in Holloway Fifth Circuit (5th Cir.), denied, recovery depriva- under 1983 for the 790 F.2d 1170 cert. § operating tion of its license. The tortious U.S. 93 L.Ed.2d 576 employees underlying act of the state Schaper City Hunts deprivation ville, (5th Cir.1987). was both random meaningful post- and unauthorized—and Holloway reasoning court found the deprivation injunctive remedies unpersuasive. relief Ninth Circuit to be Like damages wise, were available state court. I unper find the rationale Bretz Therefore, there was no violation of the suasive and its here is unavail respectfully believe, does, Fourteenth I ing. majority Amendment and I do not as the majority’s opinion dissent from the affirm- that the definition of “random and unau ing verdict Count I. thorized” employees conduct is so

923 majority gives only brief mention to the conspiracy by a to “exclude narrow Holloway inadequacy post-deprivation As the assumed high-level officials.” remedy remedies. In footnote the of a stated: court “ ‘a state law suit is characterized as tort a conclusion that The Ninth Circuit’s process’ lengthy speculative ... com- random act is also be a conspiracy cannot by liability and plicated the ‘limited exten- point the of view of From unpersuasive. public officials to sive immunities of tort among employ- conspiracy state a ” (citations law.’ suits under Illinois omit- if the a random act indeed be ees can remedies, ted). regard specific With anticipate such or control cannot state comments that the defend- majority further in advance. See Hudson conduct only that Easter House [532], ants claimed could Palmer, 517 relief, (1984). sought citing injunctive Of have Ill.Rev. 82 121V2, 312(3)(1986); id. ch. course, ch. H conspiracy a is random Stat. (1986). conspirators of the but point of view conspir- than say no more this is to However, Illi I am unconvinced that the act, than a rather acy is an intentional provided courts not have mean nois could Ninth of the The effect negligent one. ingful post-deprivation remedies inten- holding to revive the Circuit’s majority’s footnote refer House. distinction, rejected tional/negligent act any meaningful ence seems to indicate Hudson, in form. in another remedy available to would 1172. F.2d at Holloway, 790 injunctive relief. have been limited Moreover, However, the fact that Illinois appears it to me law officials” “high-level more making one or involved meaningful avenue offered court, not, Holloway of the the view example, did House whole. For Ill.Rev. Par- change applicability 121V2, provides injunc- ch. Stat. state ad- limitations. When ratt/Hudson practice trade deceptive cases tive relief pro- provide due procedures ministrative injunctive relief “is in and states such by a are violated random cess but otherwise available addition to remedies a high-ranking act of even unauthorized under the com against the same conduct estab- employee, state “Parratt/Hudson of this and other statutes state.” mon law no federal constitutional lishes that added). provides a Illinois law (emphasis occurred.” Id. has process violation remedy against a employer with a former key solicits clients employee who former gained exploits benefits improperly fact, plainly us is the case before employment. prior Smith- his or her imposed by Par- limitation subject to the Smith, Ill.App.3d v.Co. Shrader abso- The record discloses ratt/Hudson. (1985). 1, 5-6, 483 N.E.2d 283 Ill.Dec. no indication that conduct lutely remedy to an Also, affords a Illinois law than represents any more employees relations are contractual whose individual random, act. single, and unauthorized at the hands of subjected to interference as to the conspiracy was random The act of Weaver, 145 Ill. party. third Williams solely employees and was limited agency’s 412, 417, 495 N.E.2d Ill.Dec. App.3d among the license of Easter to the Kessler, 134 Ill. Galinski agency. issued many other licenses 480 N.E.2d Ill.Dec. App.3d unauthorized since was also The act procedures. Under agency violated clearly reasonably facts, could not the state these with re- Illinois law My reading its em- wrongful conduct of anticipate public officials immunity of to the gard predeprivation appropriate no ployees and the characterization also is at odds fashioned. remedy could have been public offi- immunities “extensive majority. While by the expressed cials” and un- of the random Having disposed suits prohibits Ill.Rev.Stat. ch. bring limitation an effort authorized (unless they are Illinois against State ambit of I within the Count § brought expand in the Illinois Court of Claims—Ill. case would not the Parratt/Hud- ¶ 439.8), limitation, the Illinois Su merely represent Rev.Stat. ch. son but would preme employees held that state appropriate application Court has of that limitation granted immunity similar to that are not to 1983 actions based on intentional torts. § enjoyed by Nursing the state. Senn Park employees The tortious act state could Miller, 104 Ill.2d 83 Ill.Dec. Center v. anticipated not be or controlled advance. 609, 618, 470 N.E.2d 1029 committed, After the tortious act was East- Jones, 113 Ill.2d 100 Ill.Dec.

Smith er range meaningful House had a state (“An 497 N.E.2d remedies it. available to It was not denied against a action state official for conduct process. The Fourteenth Amendment capacity his official will withstand a motion applica- was not violated and 1983 is not § complaint sovereign im dismiss the here. foregoing ble For the I reasons munity grounds complaint alleges if the would reverse the decision' of the district violating that the official is ... a law of regard court with to Count I. acting beyond Illinois and thus his authori I concur the reversal of Count II on ty”)- grounds investigation infring- The characterization of Illinois state protected property ed no interest. “lengthy specula- court remedies as a process” bearing tive has no on the consti- adequacy post-deprivation of a

tutional (includ-

remedy. any court action Almost below)

ing capable 1983 action is §

being “lengthy specula- described as Moreover, process.”

tive the fact procedures do not afford relief identi- POLITTE, William J. sought cal to that under 1983 does not § Plaintiff-Appellant, procedures make those state constitutional- Parratt, ly inadequate. America, UNITED STATES of 1917; Hudson, 101 S.Ct. at atU.S. Defendant-Appellee. 104 S.Ct. at 3204. 87-2325, Nos. Finally, majority expresses 87-2332. a concern that the unrestricted of Parratt Appeals, United States Court of remedy would eliminate 1983 as a for § Seventh Circuit. virtually any property deprivation since generally Argued state tort remedies are available Feb. 1988. expressed court loss. This July Decided 1988. O’Malley, such reservations in Tavarez v. Rehearing Rehearing En Banc Cir.1987), 826 F.2d 671 and also in Aug. Denied Clayton, Wilson v. Civil Town (7th Cir.1988). However, corollary of the Parratt/Hudson doctrine should al- key

lay proper such fears. The is the

analysis of “random and unauthorized.” If employees acts of state are not random open

or are authorized the avenue is

pursuit alleging of claims under §

deprivation pro- without due

cess. presented

Based on the facts here and availability meaningful Illinois reme-

dies, analysis by I believe

majority A reversal in this defective.

Case Details

Case Name: Easter House, an Illinois, Not-For-Profit Corporation v. Thomas Felder, Florence McGuire and Joan Satoloe

Court Name: Court of Appeals for the Seventh Circuit

Date Published: Jul 8, 1988

Citation: 852 F.2d 901

Docket Number: 86-2164

Court Abbreviation: 7th Cir.