Cornelius v. La Croix

Decision Date03 April 1986
Docket NumberNo. 83-C-470.,83-C-470.
Citation631 F. Supp. 610
PartiesIsaac J. CORNELIUS and Cornelius Contractors Corp., Plaintiffs, v. David B. LA CROIX, James F. Estes, Milwaukee Metropolitan Sewerage District, Letha F. Harmon, E. Marty Payne, David Manning, and William P. Beckett, Defendants.
CourtU.S. District Court — Eastern District of Wisconsin

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Frank A. Putz, Asst. Corp. Counsel, Milwaukee, Wis., for defendant Letha F. Harmon.

Mark M. Camp, Pfannerstill & Camp, Milwaukee, Wis., for plaintiffs.

James H. Peterson, Milwaukee, Wis., for defendants La Croix and Sewerage Dist.

Daniel S. Farwell, Asst. Atty. Gen., Madison, Wis., for defendants Payne, Manning & Beckett.

DECISION and ORDER

MYRON L. GORDON, Senior District Judge.

The plaintiffs, Isaac J. Cornelius, a full-blooded American Indian, and Cornelius Contractors Corporation (Cornelius), filed this action pursuant to 42 U.S.C. § 1983 and sixteen other federal statutory and constitutional provisions. They alleged that the defendants conspired to deprive the corporate plaintiff, Cornelius, of its certification as a minority business enterprise (MBE) eligible for preference in the awarding of federally funded construction contracts. The plaintiffs charged that the defendants' actions constituted unlawful discrimination and deprived them of their property without due process of law.

The liability and damage issues were tried to a jury; the question of equitable relief was reserved for the court. At the close of the plaintiffs' case, the court granted the defendants' motion for a directed verdict as to the conspiracy and discrimination claims. At the same time, the court dismissed with prejudice the plaintiffs' action against three defendants: the County of Milwaukee, the Wisconsin Department of Natural Resources (DNR), and the Wisconsin Department of Development (DOD).

The jury returned a special verdict finding that each of the remaining defendants had deprived Cornelius of its status as a certified MBE without due process of law. The jury awarded Cornelius damages for lost profits of $20,000 each against defendants David La Croix, James F. Estes, and the Milwaukee Metropolitan Sewerage District (District). In addition, the jury assessed punitive damages of $50,000 against Letha Harmon, $45,000 against Mr. Estes, and $5,000 against Mr. La Croix. Currently pending are several post-trial motions as well as the plaintiffs' claim for equitable relief.

I. POST-TRIAL MOTIONS OF THE DISTRICT AND DAVID LA CROIX

Defendants David La Croix and the District (collectively referred to as "the District defendants") have filed a motion for judgment notwithstanding the verdict (J.N. O.V.) or, alternatively, a new trial contending that (1) neither they nor defendant James Estes deprived Cornelius of its MBE certification without due process of law; (2) Mr. La Croix is entitled to qualified immunity from damages; and (3) challenging the jury award of both compensatory damages against Mr. La Croix, Mr. Estes and the District, and the punitive damage award against Mr. La Croix. As a prerequisite to their claim that Mr. La Croix is entitled to qualified immunity in this case, the District defendants have moved to amend their complaint to assert the affirmative defense of qualified immunity on behalf of Mr. La Croix. Finally, the District has moved for an enlargement of time to answer Mr. Estes' cross-claim against the District for indemnification.

Before addressing the merits of these motions, the court notes that counsel for Mr. La Croix and the District, James H. Petersen, challenges not only the verdict against his own clients but also contests the verdict against Mr. Estes. Mr. Petersen never has purported to appear on behalf of Mr. Estes in this action, nor has he filed a notice of appearance on behalf of Mr. Estes. Neither has Mr. Estes, appearing pro se in this action, indicated to the court that he joins in the District defendants' post-trial motions. The court simply will not allow counsel to speak on behalf of a party to this lawsuit that he does not represent and who has not joined in the pending motions. Accordingly, the court will not entertain the District defendants' challenge to the verdict against Mr. Estes.

A. Due Process Violation

The District defendants, Mr. La Croix and the District itself, move for J.N.O.V. or a new trial as to the jury's finding that they deprived Cornelius of its MBE certification without due process of law. In deciding a (J.N.O.V.) motion, the court must consider whether the evidence presented, combined with all reasonable inferences that can be drawn from it, is sufficient to support the verdict when viewed in the light most favorable to the prevailing party. Syvock v. Milwaukee Boiler Mfg. Co., 665 F.2d 149, 153 (7th Cir.1981). A court may not judge the credibility of the witnesses or reweigh the evidence to find a preponderance on one side or the other. La Montagne v. American Convenience Products, Inc., 750 F.2d 1405, 1410 (7th Cir.1984). The court, however, will consider whether the evidence to support the verdict is substantial; "a mere scintilla of evidence will not suffice." Id.

The authority to grant a new trial, unlike J.N.O.V., rests almost completely within the trial court's discretion. Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 190, 66 L.Ed.2d 193 (1980). A new trial is warranted to prevent a miscarriage of justice if the district court determines that the jury verdict is contrary to the clear weight of the evidence, the damages are excessive, or, for any other reason, the trial was not fair to the moving party. Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct. 189, 194, 85 L.Ed. 147 (1940); General Foam Fabricators, Inc. v. Tenneco Chemicals, Inc., 695 F.2d 281, 288 (7th Cir.1982). A new trial is not justified merely because the jury could have reached a different result. Continental Air Lines, Inc. v. Wagner-Morehouse, Inc., 401 F.2d 23, 30 (7th Cir.1968).

The District defendants, in their post-trial motion, do not challenge the court's earlier finding that MBE status is a constitutionally protected property interest. Rather, they contend that Cornelius was not recognized by the District as having MBE status at the time the firm was denied MBE certification. The evidence proves otherwise.

In early 1981, Cornelius submitted a registration form to the District identifying itself as an MBE. Firms submitting such registration forms were accepted by the District as MBEs if no questions arose from an examination of the forms themselves. Pursuant to this "self-certification," Cornelius was treated by the District as having MBE status and was placed on a list of firm names supplied to potential prime contractors seeking MBE subcontractors to meet the participation goals for District work funded in whole or in part by federal or state grants. During the time Cornelius was recognized by the District as a certified MBE, the company bid on and received subcontract work as an MBE on District contracts.

There is no evidence to suggest that under the District's program MBE certification was effective for only a limited period of time or lapsed automatically at the end of one year. It was Mr. Cornelius' reasonable understanding that his firm's MBE certification did not automatically lapse but could be revoked only for good cause. It can be inferred that this was also the District's understanding based on the fact that the District felt it necessary in July 1982 to change the procedural rules governing its MBE program.

In July 1982, the District altered its rules to require that each firm seeking MBE status file a certified affidavit after October 15, 1982, to be effective for one year only. The notice requiring submission of the certified affidavit also purported to withdraw all prior MBE certification. It is true that a public entity may redefine property interests without causing a deprivation of due process. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 433, 102 S.Ct. 1148, 1156, 71 L.Ed.2d 265 (1982) ("A welfare recipient is not deprived of due process when the legislature adjusts benefit levels."). That, however, is not the case here. The District changed only the procedure governing MBE certification and not the substantive standard for certification.

Pursuant to the District's new rules, Cornelius submitted its affidavit in November 1982. On March 17, 1983, with no prior notice or opportunity to be heard, Cornelius was informed that it would not be certified by the District as an MBE. The reasons for the deprivation of certification are not relevant to the plaintiffs' procedural due process claim and need not be addressed by the court.

The key issue, as the District itself asserts, is whether Cornelius had attained MBE status with the District prior to March 1983. The District contends that because of its 1982 rule change, Cornelius as well as all other previously certified MBEs automatically lost their certification as of October 15, 1982, pending the submission of new affidavits subject to District approval and only effective for a one-year period. Therefore, according to the District, Cornelius did not lose anything in March 1983 when it was denied MBE certification because it had already lost its certification in October 1982.

Cornelius, however, had been treated as an MBE by the District prior to the time it was denied certification in March 1983. Mr. La Croix testified that even after the District changed its procedures for MBE certification in 1982, he continued to recognize Cornelius as an MBE. The District, of course, was entitled to change its procedure for MBE certification. It was not permissible to revoke such certification, however, without due process of law, whether that revocation occurred on October 15, 1982, on March 17, 1983, or at some point between these dates. "`While the Legislature may...

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4 cases
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    • December 3, 1993
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    ...interest in MBE status. I. The facts are laid out in Judge Gordon's opinion on various post-trial motions. See Cornelius v. LaCroix, 631 F.Supp. 610, 616-17 (E.D.Wis.1986). 1 Defendant Milwaukee Metropolitan Sewerage District (the "District"), established an MBE policy in 1978, the stated p......
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