Hon. Tanya Walton Pratt of the Southern District of Indiana, 

sitting by designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 10-3361

CHICAGO UNITED INDUSTRIES, LTD., et al., 

Plaintiffs-Appellants,

v.

CITY OF CHICAGO, et al.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 C 5011—Robert M. Dow, Jr., Judge.

ARGUED NOVEMBER 29, 2011—DECIDED JANUARY 24, 2012

Before POSNER and KANNE, Circuit Judges, and

PRATT, District Judge.



POSNER, Circuit Judge. This suit, now in its seventh

year, pits Chicago United Industries (which the parties

call CUI) and its principals (George Loera and Nick

Massarella) against the City of Chicago and two of its
2 No. 10-3361

employees (Mary Dempsey and Louis Langone, whom

we need not discuss separately from the City). CUI

charges the City with a number of constitutional violations and also, by invoking the supplemental jurisdiction of the district court, with breaches of contract under

Illinois law. After an interlocutory appeal to this court,

decided in Chicago United Industries, Ltd. v. City of

Chicago, 445 F.3d 940 (7th Cir. 2006), and a number of

amendments to the complaint, and other preliminaries,

the case finally reached a point at which the defendants

could move for summary judgment, which was granted,

precipitating this appeal.

CUI sells a variety of products, and has annual sales

that vary between about $10 million and $20 million.

It purports to be a wholesaler, though there are (or at

least were) suspicions that it’s really a broker—an intermediary between the wholesalers and the City of Chicago

or other purchasers from wholesalers. “ ‘Broker’ means

a person or entity that fills orders by purchasing or receiving supplies from a third party supplier rather than

out of its own existing inventory and provides no substantial service other than acting as a conduit between

his or her supplier and his or her customer.” Chi. Municipal Code § 2-92-420(c).

The City had certified CUI as an MBE—a minorityowned business enterprise; Loera, the 51 percent owner,

is Hispanic. Minority-owned and women-owned business enterprises receive favored treatment by the

City; for example, they alone can bid on certain contracts with the City called “target market” contracts. Chi.
No. 10-3361 3

Municipal Code §§ 2-92-460(a), (d); City of Chicago Department of Procurement Services, “Your Business

I s C e rt i f i e d — N o w Wh a t ? ” p . 5 , ww w .

cityofchicago.org/content/dam/city/depts/dps/Outreach/

YourBusinessIsCertifiedNowWhat.pdf (visited Dec. 7,

2011). The City is virtually CUI’s only customer. But

early in 2005 the City began to suspect that CUI really

was a broker rather than a wholesaler, which if true

would make it ineligible to bid for contracts as an MBE

because as a broker it would be helping wholesalers

who are not MBEs circumvent the City’s affirmativeaction policy. Office of the Inspector General, City of

Chicago, “Review of the Minority and WomenOwned Business Enterprise Program” 2-9, 31-32

(May 2010), www.chicagoinspectorgeneral.org/wp-content/

uploads/2011/03/Report_MWBE-ProgramReview.pdf

(visited Dec. 20, 2011). The policy goal is to promote

minority-owned wholesalers rather than to enable

minority brokers to scrape a broker’s premium off contracts of non-MBE wholesalers. See RJB Properties, Inc. v.

Board of Education, 468 F.3d 1005, 1007 (7th Cir. 2006). CUI

had at the time only six employees, and though it claims

to have had a warehouse, which a broker would not

have had, it is hard to see how it could operate a warehouse with so few employees, given the heterogeneous

mixture of products—signs, stainless steel, helix light

poles, air conditioners, steel cages, sewer bricks, catch

basin frames, manhole covers, de-icing chemicals, dog

food, laser speed detectors, and more—that it supplies

to the City. Maybe it has a small warehouse, from which

it distributes some of the products that it sells the City,

while acting as a broker for most of its contracts.
4 No. 10-3361

Brokers not only may not bid for wholesale contracts,

but also may not, by serving as subcontractors to wholesalers, be certified as MBEs. Chicago Municipal Code §§ 2-

92-420(c), -480, -540(a). And so the City notified CUI that

it was considering revoking its certification, though it

never completed its investigation and the company

retains the certification to this day.

The City also believed that the company had shorted

it on a shipment of aluminum sign blanks, and on that

ground notified the company that it was considering

debarring it from dealing with the City altogether,

whether or not it remained an MBE.

Both notifications—of possible decertification and

possible debarment—were issued in March 2005, and for

the next five months the City drastically curtailed its

purchases from CUI. From an average of $1 million a

month they fell to about $190,000 a month, and during

this period the company sustained a net loss of more

than $600,000, which is the principal item of damages

that it seeks.

At the end of the five-month period the City formally

debarred the company from selling to the City for three

years. The company sued immediately, and promptly

sought and obtained a temporary restraining order and

as a result the debarment was in effect for only eight

days. The City soon abandoned its attempt to debar

the company, and in the decision cited earlier we dismissed the defendants’ appeal from the district court’s

order (which had ripened into a preliminary injunction,

and thus was appealable) as moot. From that point the
No. 10-3361 5

case proceeded as a suit for damages for losses sustained

by CUI during the five months of curtailed purchases

and the eight days of actual debarment.

We lead off with Loera’s and Massarella’s claims. We

can be brief because they are frivolous. (Actually the

entire case is pretty frivolous.) The two principals argue

that the eight-day debarment deprived them of their

occupational liberty—their right to pursue their chosen

occupation—in violation of the due process clause of

the Fourteenth Amendment. See, e.g., Board of Regents v.

Roth, 408 U.S. 564, 573-74 (1972); Townsend v. Vallas,

256 F.3d 661, 669-72 (7th Cir. 2001); Colaizzi v. Walker,

812 F.2d 304, 307 (7th Cir. 1987); Donato v. PlainviewOld Bethpage Central School Dist., 96 F.3d 623, 630-33 (2d

Cir. 1996). Even if, as the D.C. Circuit believes, barring a

government contractor from doing business with the

government, with the effect of destroying the contractor’s business because he neither has nor can

obtain any other customer, would be a deprivation of

occupational liberty (that is, even if a corporation can

have a profession, vocation, or calling), Trifax Corp. v.

District of Columbia, 314 F.3d 641, 643-45 (D.C. Cir. 2003);

Old Dominion Dairy Products, Inc. v. Secretary of Defense,

631 F.2d 953, 961-62 (D.C. Cir. 1980), an eight-day bar

that does not destroy the contractor’s business or even

permanently weaken it, but causes merely a temporary

loss, is not a deprivation of occupational liberty. “A

liberty interest is not implicated where the charges

merely result in reduced economic returns and

diminished prestige, but not permanent exclusion from or
6 No. 10-3361

protracted interruption of employment.” Munson v.

Friske, 754 F.2d 683, 693 (7th Cir. 1985). If a lawyer’s

principal client is a public agency, which gets angry

with him and as a result he loses money for five straight

months before the agency makes up with him, that is

not a de facto revocation of his license to practice law.

Anyway it isn’t CUI that’s bringing this claim, but

Loera and Massarella, and their employment by the

company was never interrupted. “One simply cannot

have been denied his liberty to pursue a particular occupation when he admittedly continues to hold a job—the

same job—in that very occupation.” Abcarian v. McDonald,

617 F.3d 931, 941-42 (7th Cir. 2010).

So much for Loera and Massarella. The company’s

principal argument is that the City deprived it of its

property without due process of law, the property consisting of its certification as a minority business enterprise. The City didn’t actually decertify the company,

but the argument is that by drastically reducing its purchases from it for five months the City effectively decertified it for that period, since during that time it

had a net loss.

The City argues that certification as a minority

business enterprise is not property within the meaning

of the word in the due process clause because it is too

contingent: it is merely an opportunity to sell to the

City rather than a right to do so. On this ground it distinguishes the liquor license that we held to be property

in Reed v. Village of Shorewood, 704 F.2d 943 (7th Cir.

1983). But all a liquor license is is a right to sell liquor; it

is not a guarantee that anyone will buy. What makes
No. 10-3361 7

it property is that it is a potentially valuable asset to

which the holder has a legal entitlement. Board of Regents

v. Roth, supra, 408 U.S. at 577. An MBE certification

is likewise a potentially valuable asset to which the

holder has a legal entitlement because it can be revoked

only for cause, and on that ground Baja Contractors, Inc. v.

City of Chicago, 830 F.2d 667, 676-77 (7th Cir. 1987), holds

that it can be property within the meaning of the due

process clause. For “where state law gives people a

benefit and creates a system of nondiscretionary rules

governing revocation or renewal of that benefit, the

recipients have a secure and durable property right, a

legitimate claim of entitlement.” Cornelius v. LaCroix, 838

F.2d 207, 210-11 (7th Cir. 1988); see also Reed v. Village

of Shorewood, supra, 704 F.2d at 948 (“property is what

is securely and durably yours under state . . . law, as

distinct from what you hold subject to so many conditions as to make your interest meager, transitory, or

uncertain”).

Although CUI’s certification as an MBE was never

revoked, there would be de facto revocation, which is

treated the same under the due process clause, if the City

“destroyed the [certification’s] value.” Id. at 949; see also

Med Corp., Inc. v. City of Lima, 296 F.3d 404, 411-13 (6th

Cir. 2002); Westborough Mall, Inc. v. City of Cape Girardeau,

794 F.2d 330, 336-37 (8th Cir. 1986); cf. Parrett v. City of

Connersville, 737 F.2d 690, 693-95 (7th Cir. 1984) (constructive discharge of a public employee in violation of

the due process clause). But diminution is not destruction, and diminution is all the company has shown. It

continued to bid on City contracts, and won some,
8 No. 10-3361

while continuing to function as an MBE on its existing

contracts with the City. Throughout the five-month

period in question it sold $939,000 worth of goods to

the City, some under new contracts, some under

existing ones. True, it had nowhere near the same

success that it had had before and would have again,

and we can assume that the City’s hostility was the

reason it lost money during the five-month period. But

temporary losses are common in business, and do not

equate to destruction.

Furthermore, to curtail liberty in conformity with law

is not a denial of due process. Otherwise our jails and

prisons would be empty. CUI presented no evidence

that the City violated any terms of the company’s

MBE certification in curtailing purchases from the company while pursuing efforts to debar or decertify it.

The eventual abandonment of those efforts doesn’t show

that the City’s suspicions that the company was a broker

and had cheated it on sign blanks and therefore was

an unreliable contractual partner were groundless—that

it lacked as it were probable cause to curtail its

business with the company. Nor has the company

made any showing that the City was forbidden by statute

or ordinance or regulation or the terms of its contracts

or the language of the company’s MBE certification to

curtail its dealings with a supplier that it had probable

cause to believe was violating the law, while it investigated. So far as appears, the City’s provisional selfhelp remedy was as proper as detaining an arrested

person to await a preliminary hearing before a magistrate.
No. 10-3361 9

The company makes the further constitutional argument that the City retaliated against it for its filing this

lawsuit by continuing to reject its bids and by ignoring

complaints and inquiries by Loera and other employees

of CUI concerning the City’s treatment of the company.

The pleadings and other submissions in a lawsuit are

(with very rare exceptions) public, and if they articulate

issues of public concern, most obviously but not only

in “cause” litigation, they are within the scope of the

free speech clause (and sometimes the petition for

redress of grievances clause) of the First Amendment.

See, e.g., Connick v. Myers, 461 U.S. 138, 146-48 (1983);

Borough of Duryea v. Guarnieri, 131 S. Ct. 2488, 2493-98

(2011); Salas v. Wisconsin Dep’t of Corrections, 493 F.3d

913, 925 (7th Cir. 2007); Rendish v. City of Tacoma, 123

F.3d 1216, 1219-25 (9th Cir. 1997). CUI’s suit includes

allegations that the City is wasting the taxpayers’

money, which we’ll assume is enough to bring the case

within the protection of the First Amendment. See

Wainscott v. Henry, 315 F.3d 844, 849-50 (7th Cir. 2003);

Glatt v. Chicago Park District, 87 F.3d 190, 193 (7th Cir.

1996). But the actions of which CUI complains were

not retaliation but simply the continuation beyond the

initial five-month period of the cold-shoulder treatment that the City had given the company during that

period because of its suspicions.

Last, CUI claims under Illinois law that the City broke

contracts that it had made with the company. The decline

in purchases during the five-month period resulted not

only from the City’s turning down new bids by the com-
10 No. 10-3361

pany but also from its reducing its purchase orders

under requirements contracts that the City had made

with the company and from its refusing to renew some

contracts that expired during that period. CUI contends

that both the reduced orders and the refusals to

renew expired contracts were breaches of contract.

A requirements contract would be empty if the

purchaser could at will decide that he “required” less

from the seller. To avoid constituting a breach, therefore,

a change in requirements has to be in good faith—has to

be based for example on a reduction in demand for

the purchaser’s end product and therefore in the purchaser’s demand for the input purchased under the

requirements contract, rather than on the purchaser’s

regretting having made the contract. 810 ILCS 5/2-306(1);

Schawk, Inc. v. Donruss Trading Cards, Inc., 746 N.E.2d

18, 25 (Ill. App. 2001). But the seller has the burden

of proving that the purchaser acted in bad faith

in reducing his “requirements.” Zeidler v. A&W

Restaurants, Inc., 301 F.3d 572, 575 (7th Cir. 2002) (Illinois

law); Empire Gas Corp. v. American Bakeries Co., 840 F.2d

1333, 1341 (7th Cir. 1988) (ditto).

CUI’s most dramatic example of an alleged breach of

one of the requirements contracts is the City’s not buying

any dog food from the company during the fivemonth period. Surely, the company argues, the dogs

(police dogs) could not go without food for five

months—they would have been driven to roam in

packs, eating small children, or even each other; the

pathetic starved bodies of the weaker or more
No. 10-3361 11

fastidious dogs would have littered the Chicago sidewalks. None of this happened. Therefore the City must

have been getting the dog food from some other

supplier, in violation of the requirements contract.

This is conjecture, rather than actual evidence of

breach, and contrary conjectures can easily be proposed:

that the City had overbought dog food, and was

working off a swollen inventory; that it had reduced the

number of police dogs as an economy measure; that

the dog food that CUI had obtained from its suppliers lately was unpalatable. Only imagination limits

conjecture. In a case that had been dragging on for

years, the company had ample opportunity in pretrial

discovery to ascertain the actual reasons for the decline

in orders, and it either failed to avail itself of the opportunity or found no evidence to support its conjecture.

CUI does cite testimony of a City employee named

Wolfe that he was ordered not to do any business with

the company, period, which is some evidence that the

City was failing to obtain its requirements from the

company. But the testimony is weak and vague, the

key passage in it being that “from that time [the date of

the order not to do business with CUI], Wolfe does not

recall ordering anything from CUI, even on the valid

contracts that CUI had with the City” (emphasis added).

Should he have recalled it? Who knows? Wolfe’s

evidence was not enough to raise a triable issue.

In its reply brief CUI mentions for the first time an

alleged breach by the City of a contract to deliver sewer

bricks. The extended narrative in the district court to
12 No. 10-3361

which the brief refers the reader describes complicated

contractual maneuvering. The company refused to

deliver the bricks unless the City extended the contract

term and increased the contract price. A letter from the

responsible City official rejected that demand. CUI describes the official as having by that rejection “reneged

on her election to extend the contract,” yet also states

that in the interval between the “election” and the “reneging” “CUI did not have a legal contract . . . and was not

required to deliver.” After the “reneging,” the City

placed an emergency order with another supplier, and

the company argues that the processing of the order

took longer than if the City had ordered from it. Later,

it adds, the sewer-brick contract was twice rebid—and

CUI won the bid. The City says that it had placed the

emergency order with another supplier because CUI

was refusing to deliver, pending formal modification of

its original contract—CUI acknowledges this. We can’t

begin to figure out what was going on—or what the

breach of contract was.

CUI makes the further argument (again relying

mainly on testimony by Wolfe) that during the fivemonth period the City arbitrarily refused to extend its

contracts with the company when the contracts expired. The company argues that an unreasonable

refusal to extend a contract is a breach of contract.

Not so. The purpose of including an expiration date

in a contract is to allow a party to terminate its relationship with the other party without having to give

a reason.
No. 10-3361 13

This case has dragged on for far too long. It has no

possible merit. Let this be the last of it. The judgment

in favor of the defendants is

AFFIRMED.

1-24-12