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Dunnet Bay Construction Company v. Gary Hannig

November 9, 2011


The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:


Wednesday, 09 November, 2011 04:32:07 PM Clerk, U.S. District Court, ILCD


This matter comes before the Court on Plaintiff Dunnet Bay Construction Company's (Dunnet Bay) Motion to Compel Production by Taxpayers for Quinn (d/e 51) (Motion). For the reasons set forth below, the Motion is DENIED.


On December 4, 2009, the Defendant Illinois Department of Transportation (hereinafter Department or IDOT) issued an invitation for bids on Contract No. 60157 for repair work on the Eisenhower Expressway (Project). The announcement stated that the bids would be let on January 15, 2010. Second Amended Complaint (d/e 19) (Complaint), ¶ 31. The Project was federally funded. The Department also published the "IDOT For Bid List of Bidders" (List of Bidders) which listed the general contractors that would be expected to bid on the Project. The Department erroneously omitted Dunnet Bay from the List of Bidders. Complaint, ¶ 39.

Pursuant to federal regulations, the bid specifications set a goal (DBE Goal) of the percentage of work going to contractors and subcontractors that fit the federal criteria for Disadvantaged Business Enterprises (DBE). DBEs are businesses controlled by socially and economically disadvantaged individuals. See 49 C.F.R. §§ 26.5, 26.67; Northern Contracting, Inc. v. Illinois, 473 F.3d 715, 715 (7th Cir. 2007). Dunnet Bay did not fit the definition of a DBE. Dunnet Bay, thus, had to secure DBE subcontractors to meet the DBE Goal.

Dunnet Bay alleges that the DBE Goal for the Project was 8 percent originally, but was changed to 22 percent. Dunnet Bay alleges that the increase to 22 percent was arbitrary and capricious and was not done in compliance with federal regulations. Complaint, ¶¶ 32-36.

Dunnet Bay submitted the low bid on the Project in the amount of $10,548,873.98. Dunnet Bay alleges that it made a good faith effort, but could not meet the 22 percent DBE Goal. Id. ¶ 39. The Department rejected Dunnet Bay's bid as non-responsive because of the failure to meet the DBE Goal. Id. ¶ 42.

Dunnet Bay asked for reconsideration because it alleges that it had made a good faith effort. The applicable regulations stated that the Department would issue a waiver of the DBE Goal requirement if the bidding contractor made a good faith effort to meet the DBE Goal set for the particular project. Id. ¶¶ 13, 19.

Dunnet Bay alleges that the Department instituted an unwritten policy not to issue waivers regardless of whether contractors made good faith efforts to meet a DBE goal (No Waiver Policy). On January 6, 2010, the Department's District 8 EEO officer announced at an informational meeting for general contractors that the Department would no longer grant waivers with respect to DBE contract goals. Id. ¶ 24. Defendant Hannig personally told Dunnet Bay's President Tod Faerber that he was under pressure not to give out waivers. Hannig further told Faerber that Darryl Harris, the Illinois Director of Diversity Enhancement, called the Secretary every day to tell him not to give out any waivers. Id. ¶ 47. Dunnet Bay alleges that the No Waiver Policy effectively turned the DBE Goal into an unlawful quota.

Id. ¶ 51.

The Department's Chief of Staff Bill Grunloh conducted the reconsideration hearing. The Department denied reconsideration. Hannig sustained the decision. Dunnet Bay alleges that the Department denied reconsideration because of the No Waiver Policy. Id. ¶¶ 44, 49-50.

The Department, however, decided to re-let the bids for the Project because Dunnet Bay was left off the List of Bidders. Id. ¶¶ 48, 51. This time, however, Dunnet Bay was the third lowest bidder. Id. ¶ 53. The Complaint alleges that Department is preparing to go forward with the lowest bid. Id. ¶ 54; see Opinion entered March 26, 2010 (d/e 15), at 6 (evidence submitted in connection with motion for a temporary restraining order indicated that the Department intended to enter into a contract on April 5, 2010, with the lowest bidder, Albin Carlson & Co).

Based on these allegations, Dunnet Bay brings claims under 42 U.S.C. §§ 1981 and 1983 against Hannig in his official capacity for injunctive relief (Counts I and II); claims against the Department under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, for injunctive relief and damages (Counts IV and V); and a state law claim against the Department under the Illinois Civil Rights Act of 2003, 740 ILCS 23/5, for damages (Count VI).*fn1

On February 8, 2011, Dunnet Bay served Respondent Taxpayers for Quinn (Taxpayers) with a Subpoena to Produce Documents (Subpoena).

Taxpayers is Illinois Governor Patrick Quinn's political campaign committee. The Subpoena commanded the ...

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