Opinion ID: 2539485
Heading Depth: 4
Heading Rank: 2

Heading: Cabinet's Demand for Payment from Prime Contractors

Text: TECO also argues that the Cabinet deprived it of a protected liberty interest when it requested that the prime contractors pay the back wages allegedly owed by TECO. Specifically, TECO argues that, by notifying the prime contractors that it had violated the prevailing wage law, the Cabinet harmed TECO's reputation and ability to conduct future business with the prime contractors. TECO maintains that these interests, taken together, constitute a protected interest for purposes of procedural due process. We disagree. Government injury to an individual's reputation, standing alone, is not a deprivation of liberty to which the protections of procedural due process apply. Paul v. Davis, 424 U.S. 693, 706, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976). In order to implicate the Due Process Clause, an individual must be deprived of his reputation and some other right or status previously recognized under the law. Id. at 712, 96 S.Ct. 1155. For example, in Wisconsin v. Constantineau, the Supreme Court held that an individual was entitled to due process when the state labeled her as an excessive drinker and prohibited her from purchasing alcohol. 400 U.S. 433, 435-36, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971). However, in Paul, the Supreme Court held that an individual was not entitled to due process where the government labeled him as an active shoplifter. 424 U.S. at 697, 712, 96 S.Ct. 1155. Although the government's action harmed the individual's reputation, the Supreme Court found that he had not been deprived of a protected interest because the government took no other action which altered the individual's legal status. Id. at 712, 96 S.Ct. 1155. The two-part requirement enunciated in Paul of harm to reputation plus harm to some other tangible interest has been described as the stigma plus test. See Siegert v. Gilley, 500 U.S. 226, 234, 111 S.Ct. 1789, 114 L.Ed.2d 277 (1991) (using the term to describe the Petitioner's argument). The purpose of the stigma plus test is to ensure that the due process clause does not become a font of tort law to be superimposed upon whatever systems may already be administered by the State. Paul, 424 U.S. at 701, 96 S.Ct. 1155. It prevents the conversion of] every defamation by a public official into a deprivation of liberty. Id. at 702, 96 S.Ct. 1155. Since its ruling in Paul, the Supreme Court has narrowed the types of deprivations which are sufficient to meet the plus element of the stigma plus test. Id. at 234, 111 S.Ct. 1789. Specifically, the Court held that the individual must suffer harm to reputation and an additional injury which is not merely a consequence of the harm to reputation. Id. In Siegert, the plaintiff's former government supervisor sent his new government employer a negative letter of reference. Id. at 228, 111 S.Ct. 1789. As a result of the former supervisor's statements, the plaintiff lost his job and was unable to obtain comparable employment. Id. at 228-29, 111 S.Ct. 1789. Subsequently, the plaintiff sued his former supervisor for violating his right to due process, alleging that the supervisor's actions met the stigma plus test because the supervisor harmed his reputation and his ability to obtain future employment. Id. at 229, 111 S.Ct. 1789. On review, the U.S. Supreme Court held that the impairment of the plaintiff's future employment prospects was insufficient to meet the plus element of the stigma plus test. Id. at 234, 111 S.Ct. 1789. The Court reasoned that this type of harm was merely an element of the damages resulting from the government's defamation: Most defamation plaintiffs attempt to show some sort of special damage and out-of-pocket loss which flows from the injury to their reputation. But so long as such damage flows from injury caused by the defendant to a plaintiff's reputation, it may be recoverable under state tort law but it is not recoverable in a Bivens [ [13] ] action. Id. Because the plaintiff failed to demonstrate a loss that was not simply a consequence of the government's disparaging statement, he failed to establish that he had been deprived of a protected interest under the stigma plus test. Id. As a result, the Court rejected his due process claim. Id. Applying the above-cited legal principles to the instant case, we cannot find that TECO has alleged sufficient injury to meet the plus element of the stigma plus test. TECO contends that by informing the prime contractors that it had violated the prevailing wage law, the Cabinet harmed its reputation and impaired its ability to conduct future business with the prime contractors. We agree that the Cabinet's statements to the prime contractors likely harmed TECO's reputation as a competent, law-abiding contractor. However, the additional harm alleged by TECO, the impairment of its future business opportunities, is nearly identical to the harm found to be insufficient in Siegert. As in Siegert, the additional harm cited by TECO is simply a consequence of the government's negative statements. The Cabinet impaired TECO's ability to conduct business with the prime contractors by impugning TECO's reputation. The Cabinet took no other action to alter TECO's legal status or inhibit it from conducting future business with the prime contractors. Thus, the additional damage claimed by TECO flowed directly from the injury to its reputation. Under Siegert, such damage is insufficient to establish the plus element of the stigma plus test. Because TECO cannot meet the stigma plus test, we find that it was not deprived of a liberty interest when the Cabinet sought payment from the prime contractors. TECO failed to establish that the Cabinet's actions under the prevailing wage law deprived it of a property or liberty interest that is protected by the Due Process Clause. [14] As a result, we affirm the Court of Appeals and hold that the prevailing wage law does not violate procedural due process.