cure contained in paragraph C.40 of the Agreement.
At the end of February 1996, the Village president resigned and Defendant Kenneth Getty ("Getty") was appointed to serve as interim Village president until the Village's next scheduled election in April, 1997. On May 29, 1996, without any prior warning, Getty directed the Village's attorneys to notify Crown that the Village was terminating Crown's Agreement effective November 15, 1996. (A copy of the Village's termination letter of May 29, 1996 is attached as Exhibit B to the Complaint). According to the Village's attorneys, the Village "had determined" that Crown "had persistently failed to perform the work in accordance with the terms of its Agreement with the Village. Therefore, the Village will exercise its right under Section 40 to terminate the Agreement on November 15, 1996 and seeks bids for such service from other providers." (Comp. Ex. B). On June 25, 1996 the Village Council voted to ratify Getty's decision to terminate the Agreement effective November 15, 1996. Crown contends that it has satisfactorily performed under the Agreement and that its termination was unjustified. Crown filed the instant complaint alleging that Defendants breached the Agreement and violated Crown's right to procedural due process by denying it prior notice and hearing at which it could refute the Village's charges prior to the Village's decision to terminate the Agreement.
III. COUNT I FAILS TO STATE A CLAIM UNDER 42 U.S.C. § 1983
The issue presented is whether Crown's claim that Defendants' decision to terminate the Agreement without a prior opportunity for notice and hearing gives rise to a claim for deprivation of property without due process of law. Specifically, the question raised is whether " 42 U.S.C. § 1983 displaces the whole of the state law of public contracts into the federal courts through the characterization of a breach of such a contract as a deprivation of property without due process of law, even though most such disputes have nothing to do with civil rights as ordinarily understood." Eisen v. Eastman, 421 F.2d 560, 564-65 (2d Cir. 1969). The answer is no. Mid-American Waste Systems, Inc. v. City of Gary, Indiana, 49 F.3d 286 (7th Cir. 1995).
A violation of 42 U.S.C. § 1983 occurs when 1) the complained of conduct is committed by a person acting under color of state law; 2) these actions deprive Crown of constitutionally protected property interests; and 3) the alleged deprivation occurs without due process of law. Parratt v. Taylor, 451 U.S. 527, 535, 101 S. Ct. 1908, 1913, 68 L. Ed. 2d 420 (1981). "The Supreme Court has attempted to strike a balance between the competing interests of providing a remedy for injuries sustained in connection with violations of constitutional rights and avoiding the use of § 1983 as just another opportunity for parties to shop between state and federal forums." Easter House v. Felder, 910 F.2d 1387, 1404 (7th Cir. 1990). Keeping this balance in mind the court will discuss each element in turn.
A. Under color of state law
The parties agree that the termination of the Agreement was committed under color of state law.
B. Property Interest
In order to state a claim for violation of due process, Crown must show that it had a protectible property or liberty interest that was taken away by Defendants without a hearing.
Miller v. Henman, 804 F.2d 421 (7th Cir. 1986), cert. denied, 484 U.S. 844, 108 S. Ct. 136, 98 L. Ed. 2d 93 (1987). "The property interest must be more than a unilateral expectation -- it must be a legitimate claim of entitlement." Triad Associates, Inc. v. Chicago Housing Authority, 892 F.2d 583, 588 (7th Cir. 1989). Finally, "property interests ... are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law..." Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 2709, 33 L. Ed. 2d 548 (1972).
The state of the law concerning whether a contract creates a "property" interest sufficient to be protected under the due process clauses of the fifth and fourteenth amendments is ambiguous. (See Judge Easterbrook's discussion of this vexing topic in Mid-American Waste Systems, Inc. v. City of Gary, Indiana, 49 F.3d 286, 289-290 (7th Cir. 1995)). "Courts have resisted the implication that every government-contract case belongs in federal court. At least three circuits have held that only contracts creating a special status (employment, for example) count as 'property'. Other contracts -- these courts call them 'mere contracts' - do not create property and therefore must be enforced in state court." Id. at 289. The Seventh Circuit has adopted a broader test of property stating: "If a contract creates rights specific enough to be enforced in state court by awards of damages or specific performance, then it creates a legitimate claim of entitlement; and if it creates such a claim, it is 'property.'" Id. at 290. Under this formulation, Crown has a property interest if it is successful in demonstrating that the Village breached the Agreement. The Court does not find it necessary to further tackle this issue, because even if we assume that Crown has a "property" interest in the Agreement, its claim is not actionable because it has not been denied due process.
C. Due Process
This case turns on the question of whether Crown's right to litigate a breach of contract or other state court action in an Illinois state court constitutes due process or whether a prior hearing by the Village was necessary. Due process "is a flexible concept that varies with the particular situation." Zinermon v. Burch, 494 U.S. 113, 127, 110 S. Ct. 975, 984, 108 L. Ed. 2d 100 (1990). Courts must weigh several factors to determine what procedural protections the Constitution requires in a particular case. Id. Those factors include:
"the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail."