Polyvend, Inc. v. Puckorius

• Decision Date: 07 June 1978
• Docket Number: No. 77-1740,77-1740
• Citation: 61 Ill.App.3d 163,18 Ill.Dec. 524,377 N.E.2d 1160
• Parties: , 18 Ill.Dec. 524 POLYVEND, INC., a corporation, Plaintiff-Appellant, v. Theodore PUCKORIUS, Individually and as director of the Illinois Department of Administrative Services and the Illinois Department of Administrative Services, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1160

377 N.E.2d 1160

61 Ill.App.3d 163, 18 Ill.Dec. 524

POLYVEND, INC., a corporation, Plaintiff-Appellant, v. Theodore PUCKORIUS, Individually and as director of the Illinois Department of Administrative Services and the Illinois Department of Administrative Services Defendants-Appellees.

No. 77-1740.

Appellate Court of Illinois, First District, Third Division.

June 7, 1978.

Foran, Wiss & Schultz, Chicago, for plaintiff-appellant; Richard Schultz, Chicago, of counsel.

William J. Scott, Atty. Gen., for defendants-appellees; Michael J. Hayes, Asst. Atty. Gen., Chicago, of counsel.

JIGANTI, Presiding Justice.

The plaintiff, Polyvend, Inc. (Polyvend) submitted the only bid to manufacture the 1979 motor vehicle license plates for the State of Illinois. The bid was rejected by the State pursuant to the Purchasing Act, Ill.Rev.Stat.1977, ch. 127, section 132.10-1 which provides:

"No person or business entity shall be awarded a contract or sub-contract if that person or business entity: (a) has been convicted of bribery or attempting to bribe an officer or employee of the State of Illinois in that officer or employee's official capacity; or (b) has made an admission of guilt of such conduct which is a matter of record but has not been prosecuted for such conduct.

For purposes of this Section, where an official, agent, or employee of a business entity committed the bribery or attempted bribery on behalf of such an entity and pursuant to the direction or authorization of a responsible official thereof, the business entity shall be chargeable with the conduct."

The plaintiff immediately filed a declaratory judgment action requesting the court to declare that portion of the Purchasing Act unconstitutional; the plaintiff also asked for injunctive relief and damages. The trial court granted the defendant's motion for summary judgment and the plaintiff's appeal follows.

The plaintiff is a manufacturer of license plates. On or about September 18, 1977 the Illinois Department of Administrative Services advertised for bids for a contract to manufacture the 1979 multi-year motor vehicle license plates. On October 12, 1977, the plaintiff made the only bid on the contract. On November 18, 1977, the State purchasing agent sent a telegram and a letter advising the plaintiff that the bid was rejected pursuant to certain Department of Administrative Services' purchasing rules and regulations, which are not an issue in this case, and because of the statute that was previously cited.

The bid for the license plates contract was signed by Patrick J. Stoltz as president of Polyvend. Stoltz while an officer of Metal Stamping Corporation (Metal Stamping), on March 6, 1974 approximately 3 1/2 years prior to submitting the bid in this case, pleaded guilty to the charge of bribery of an Illinois official. Metal Stamping at that time owned all of the stock of Polyvend. On June 30, 1974, Metal Stamping merged Polyvend into Metal Stamping and a few days later Metal Stamping changed its name to Polyvend. Metal Stamping was the successful bidder for Illinois license plates contracts in 1976 and again in 1977. Polyvend was the successful bidder in 1978. There is no explanation in the record of how the contract was granted to Metal Stamping for the years 1976 and 1977 when at the time those bids were let, the name of Metal Stamping had already been changed to Polyvend.

The plaintiff makes a number of attacks on the statute. We will only consider its contention that the statute violates procedural due process of lawunder the Federal and State constitutions. Our resolution of that issue is dispositive of this appeal. The plaintiff charges that the statute finds an entity guilty of bribery by legislative fiat without providing for any due process such as notice of the charge, a hearing before an impartial tribunal, an opportunity to be heard and the right to a review of the decision. Without these safeguards, the plaintiff states, an unknown person made a factual determination that: Polyvend is the same "business entity" as Metal Stamping; Stoltz was an official, agent or employee of that business entity; and Stoltz committed bribery on behalf of that entity pursuant to the direction and authorization of a responsible officer of the entity.

The plaintiff argues that the holding in Gonzalez v. Freeman (1964), 118 U.S.App.D.C. 180, 334 F.2d 570 is applicable here. In Gonzalez, Thomas P. Gonzalez, Carmen Gonzalez, Thomas P. Gonzalez Corporation and others received a telegram stating that they and any corporation in which Thomas or Carmen Gonzalez was a partner or officer were "temporarily debarred from doing business with Commodity Credit (Corporation) pending investigation into possible misuse of official inspection certificates * * *." Gonzalez, 118 U.S.App.D.C. at 182, 334 F.2d at 572.) The suspension was for five years. The Thomas P. Gonzalez Corporation had a record of contractual relations with the Commodity Corporation for a number of years. Prior to the debarment, Thomas P. Gonzalez pled guilty to a misdemeanor based on his misuse of official inspection certificates. The United States Circuit Court of Appeals held that Thomas P. Gonzalez individually and Thomas P. Gonzalez Corporation were entitled to summary judgment because the debarment was imposed without observance of procedural requirements and hence in excess of statutory jurisdiction and authority.

The defendant responds that before procedural due process guaranties attach, the plaintiff must show that some guaranteed right will be affected or deprived by the action of the government. In the present matter, it urges, the plaintiff has no such interest since the plaintiff has no right to perform government contracts citing Perkins v. Lukens Steel Co. (1940), 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108. The invitation to bid gives the State the unqualified right to reject any and all bids and to readvertise for submission. The defendant distinguishes Gonzalez by pointing out that it involved an existing relationship between those plaintiffs and the Commodity Credit Corporation, whereas in the instant case the party initially seeking the government contract has no protectable property right to which procedural due process would attach. Similarly it distinguishes Bio-Medical Laboratories v. Trainor (1977), 68 Ill.2d 540, 12 Ill.Dec. 600, 370 N.E.2d 223 since in that case the protectable property right was the "continued participation" in statutorily created Public Aid programs. Hathaway v. Mathews (7th Cir. 1976) 546 F.2d 227, Chicagoland Agencies, Inc. v. Palmer (1936), 364 Ill. 13, 2 N.E.2d 910 and Mayhew v. Nelson (1931), 346 Ill. 381, 178 N.E. 921 were also inapplicable for comparable reasons.

We cannot accept the distinctions as drawn by the defendant. Perkins indeed, holds that no citizen has the "right" to do business with the government. There iron and steel manufacturers attempted to...