Appeal from the United States District Court for the Central District of Illinois, Rock Island Division. No. 91 C 4105 Michael M. Mihm, Chief Judge.
Before Posner, Chief Judge, and Cummings and Flaum, Circuit Judges.
The appellants, seeking monetary and injunctive relief pursuant to 42 U.S.C. sec. 1983, allege that the Illinois Department of Agriculture (the "Department") violated their due process rights in 1987 when it revoked Berwick Grain Company's grain dealer's and warehouse licenses and again in 1991 when it denied similar licenses to A Grain Company, Inc. ("AGC"), both of which are managed by David McCrery. The district court granted the defendants' motion for summary judgment. We affirm.
The events giving rise to this suit date from the fall of 1986 when Berwick applied to the Department for renewal of its grain dealer's and warehouse licenses. Berwick was experiencing financial difficulties due at least in part to the decision of its long-term lender, Exchange National Bank, to remove itself from the agricultural loan business. As a result, the Department notified Berwick that it was not in compliance with the Illinois Grain Dealers Act and Public Warehouse and Warehouse Receipts Act, which require licensees to maintain a current asset-to-liability ratio no less than one. A hearing to show cause why Berwick's application should not be denied was scheduled for November 13.
Thus began a series of hearings that were repeatedly continued to permit Berwick to get its affairs in order. At a hearing held on December 16, Berwick was granted a sixty-five-day extension of its licenses on certain conditions, among them that Berwick submit to inspection by Department examiners. The Department reserved the right to take any action it might deem appropriate in light of its audit, and McCrery was warned that Berwick's assets would be liquidated if it did not secure financing by the end of the sixty-five days. After the Department's audits revealed bookkeeping and grain quality problems, McCrery agreed to additional restrictions at a February 5, 1987 hearing. On March 9, citing inadequate financial ratios, grain quality shortages, and funds insufficient to guarantee payment to producers, the Department notified Berwick that the hearings had not "produced results satisfactory to the Department" and that the company's warehouse and dealer's licenses were suspended. At the subsequent show cause hearing, held March 19, McCrery and Berwick were granted yet another reprieve. On the basis of representations by McCrery's attorney, counsel in this action, that Berwick was about to secure new financing, the Department continued the suspension of Berwick's licenses for forty-five days, but reserved the right to call a revocation hearing on twenty-four hours' notice.
The financing did not materialize. One potential lender, United Agri Products Financial Services ("UAP"), had offered a revolving line of credit contingent on a successful audit of Berwick and "a satisfactory resolution of issues with . . . the Illinois Department of Agriculture." That offer was rescinded, however, after the Department refused to guarantee to UAP that Berwick's licenses would be approved and a UAP "preaudit" uncovered a host of problems with Berwick's operations. Consequently, the Department notified Berwick on April 9 that it was still not in compliance with the statutory financial requirements and that a show cause hearing would be convened April 16. On that date, a Department hearing officer revoked Berwick's grain dealer's and warehouse licenses. The hearing officer also ordered the Department's Bureau of Warehouses to take control of Berwick's facilities and to liquidate its assets for the benefit of creditors.
Although McCrery did not pursue administrative remedies, his quest for a grain dealer's license did not end. In 1990, he applied for a license as president of A Grain Company, Inc. ("AGC"), a wholly owned subsidiary of Berwick. By letter, the Department denied the application on the ground that "the applicant does not have the qualifications and background essential to conduct a grain dealer's business," and a hearing officer subsequently upheld this determination. (McCrery's wife attended the hearing alone and represented that she would run AGC, but the hearing officer -- the same who had presided over the Berwick hearings -- did not believe her.) On February 15, 1991, the Department Director (defendant Doyle) denied McCrery's request for reconsideration. Noting that more than $700,000 worth of unsatisfied creditors' claims had remained after liquidation of Berwick, the Director determined, in words borrowed from the relevant statutes, that AGC's officers "are not of good business reputation and do not have the qualifications and background essential for the conduct of a grain dealers business."
The plaintiffs (collectively, "McCrery") commenced this action in December 1991 -- too late in the district court's estimation. Applying Illinois' two-year statute of limitations for personal injury actions, the district court held that Counts I and III, relating to the Berwick proceedings, were time barred. With respect to Count II, which arose out of the denial of AGC's license application, the district court concluded that McCrery had failed to raise an issue of material fact as to whether he had been denied due process. Accordingly, the district court granted the defendants' motion for summary judgment.
This appeal presents no legal or factual question of any substance. With respect the denial of the license to Berwick (Counts I and III), the gravamen of McCrery's complaint is twofold: (1) that the true reason for the license revocation was not, as the Department indicated, Berwick's failure to maintain the required debt-to-asset ratio, but rather "personal antipathy" on the part of Department officials, and (2) that the Department, in order to prevent renewal of the licenses, communicated "false and defamatory" information to UAP. The Department's actions, according to McCrery, violated his due process rights by denying him notice and an opportunity to be heard.
In the district court's view, McCrery's insurmountable hurdle was that, although Berwick's licenses were revoked in April 1987, he did not file suit until December 1991, well beyond the applicable two-year statute of limitations. McCrery maintains that in 1989 he did not yet have information raising any suspicion of wrongdoing on the part of Department officials. Invoking various doctrines to defeat the time bar, McCrery insists that it was not until 1991, when the Department denied AGC's license application on the basis of "bad business reputation," that "Berwick got wind that matters other than its inability to attain the financial ratios played a part in the decision in April, 1987 to revoke Berwick's license." In this regard, it does not help McCrery that in 1989, during the deposition of a former UAP official, Lloyd Bettis, in a separate litigation against the Exchange National Bank, McCrery's counsel remarked, "Are you suggesting I . . . ought to have a 1983 suit going against the Department of Agriculture?" ...