Taake v. County of Monroe

• Decision Date: 18 June 2008
• Docket Number: No. 07-2620.,07-2620.
• Citation: 530 F.3d 538
• Parties: Gene A. TAAKE, Plaintiff-Appellant, v. COUNTY OF MONROE, a Body Corporate and Politic of the State of Illinois, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

530 F.3d 538

Gene A. TAAKE, Plaintiff-Appellant, v. COUNTY OF MONROE, a Body Corporate and Politic of the State of Illinois, Defendant-Appellee.

No. 07-2620.

United States Court of Appeals, Seventh Circuit.

Argued April 15, 2008.

Decided June 18, 2008.

Timothy A. Gutknecht (argued), Crowder & Scoggins, Columbia, IL, for Plaintiff-Appellant.

Brian T. Kreisler (argued), Becker, Paulson, Hoerner & Thompson, Belleville, IL, for Defendant-Appellee.

Before CUDAHY, KANNE, and SYKES, Circuit Judges.

KANNE, Circuit Judge.

Gene Taake brought suit in federal district court, under 42 U.S.C. § 1983, in an attempt to force the County of Monroe into selling him a piece of land that Taake argues the County contractually agreed to sell him. Taake alleged a deprivation of his rights to procedural and substantive due process under the United States Constitution. See U.S. Const. amend. XIV. He also raised a state-law breach-of-contract claim, sought specific performance from the County, and requested a preliminary injunction. Because there is no basis for federal jurisdiction in this case, we vacate the district court's decision and remand with instructions to dismiss the case without prejudice.

The County listed a piece of land for sale in July 2005. In August, Taake submitted a bid to purchase the property. The ultimate factual dispute at the heart of this case is whether the County accepted the bid and entered into a contract with Taake for the sale of the land; Taake, of course, contends that the County entered into a contract with him, while the County denies it did so. The district court proceeded to the merits of the contract claim, and decided that the County had not accepted Taake's offer to purchase the property. It granted summary judgment to the County and dismissed the case.

Neither party addressed the issue of federal jurisdiction, and thus the district court moved directly to the substantive contract claim. At oral argument, we asked the parties to explain the basis for federal jurisdiction, and informed them that caselaw from our circuit dispels the notion that a substantive constitutional property interest arises simply because a state actor breaks a contract with a state citizen. See Garcia v. Kankakee County Hous. Auth., 279 F.3d 532, 535 (7th Cir. 2002); Mid-Am. Waste Sys., Inc. v. City of Gary, Ind., 49 F.3d 286, 290 (7th Cir. 1995); Sudeikis v. Chicago Transit Auth., 774 F.2d 766, 770 (7th Cir.1985). We asked the parties to provide supplemental briefing on the issue of jurisdiction. The briefing confirmed the conviction we had from the outset: this case has no place in federal court because it presents only state-law claims that cannot come into federal court by way of a § 1983 action.

Taake readily conceded upon supplemental briefing that there is no federal jurisdiction in this case and asked that we vacate the judgment of the district court and instruct the court to dismiss the case without prejudice, thus allowing Taake to proceed with the action in state court. The County, on the other hand, argues — in a last ditch attempt to save the favorable disposition it received below — that there is jurisdiction under § 1983 because Taake raised "serious constitutional issues to invoke the jurisdiction of the court" on the face of the complaint. The County also argues that our previous decisions do not "foreclose" the possibility of jurisdiction in a case such as this, so the case should live on in federal court.

If the County means to say by its "not foreclosed" argument that we have not before said: "there is no federal jurisdiction simply because a state actor allegedly breached a contract for the sale of land," the County is reading our precedent very narrowly. For we have said: "the Constitution does not require states to keep all promises made in their contracts and regulations.... [A] unit of state or local government does not violate the federal Constitution just because it violates a state or local law, including the law of contracts," Garcia, 279 F.3d at 535 (internal citations omitted); "[i]t has long been settled that a mere breach of contract by the government does not give rise to a constitutional claim," Sudeikis, 774 F.2d at 770; "[i]f a state's violation of its own laws and regulations does not violate the due process clause, it is hard to see how failure to keep a promise contained in a contract can violate the due process clause," Mid-Am. Waste, 49 F.3d at 290; and, "the purely commercial interest of which the plaintiff was deprived [a contract to purchase 142 acres] doesn't seem to be the kind of contractual interest that the values that inform the concept of due process require to be classified as property," Ind. Land Co. v. City of Greenwood, 378 F.3d 705, 709-10 (7th Cir.2004).

Notwithstanding our precedent, the County counters that because Taake invoked "procedural due process" and "substantive due process" in his complaint, jurisdiction was proper from the outset because "jurisdiction depended upon the allegations of the bill, and not upon the facts as they subsequently turned out to be." City Ry. Co. v. Citizens' St. R.R. Co., 166 U.S. 557, 562, 17 S.Ct. 653, 41 L.Ed. 1114 (1897). But the County's reliance on City Railway—a Contracts Clause case—is misplaced. The issue in City Railway was whether the city of Indianapolis impaired a contract in violation of the Contracts Clause, U.S. Const. art. I, § 10, cl. 1. A Contracts Clause claim presents a different jurisdictional analysis than that of a due process claim under the Fourteenth Amendment. Cf. City Ry. Co., 166 U.S. at 563, 17 S.Ct. 653 (explaining that, for a contracts claim, "[a]ll that is necessary to establish the jurisdiction of the court is to show that the complainant had, or claimed in good faith to have, a contract with the city, which the latter had attempted to impair"); Khan v. Gallitano, 180 F.3d 829, 832-36 (7th Cir.1999) (explaining what must be demonstrated to sustain a Contracts Clause claim and what must be demonstrated for procedural and substantive due process claims); Horwitz-Matthews, Inc. v. City of Chicago, 78 F.3d 1248, 1249-50, 1252 (7th Cir.1996) (analyzing whether the district court was correct to dismiss the case for lack of jurisdiction by way of the Contracts Clause).

Taake did not argue under the Contracts Clause that the County had legislatively impaired the contract it allegedly entered into with Taake. His failure to make such an argument was prudent, as we have refuted the notion that the Contracts Clause is at issue simply because a state actor allegedly broke a contract with a citizen. See Horwitz-Matthews, 78 F.3d at 1250 ("For when a state repudiates a contract to which it is a party it is doing nothing different from what a private party does when the party repudiates a contract; it is committing a breach of contract. It would be absurd to turn every breach of contract by a state or municipality into a violation of the federal Constitution.").

The County would have us exercise jurisdiction in this case simply because the plaintiff stated in the complaint that he was raising procedural and substantive due process claims. In so arguing, the County asks us to turn a blind eye to the unfounded invocation of federal jurisdiction and to ignore the very task we are required to undertake as a court of limited jurisdiction-determining whether we are permitted by the Constitution and Congress to adjudicate a particular matter. See Goros v. County of Cook, 489 F.3d 857, 860 (7th Cir.2007). "Distinguishing between `essentially fictitious' claims that do not invoke federal jurisdiction and those in which a fairly debatable claim fails on the merits is essential if the federal courts are to remain tribunals of limited jurisdiction." Id. (quoting Bailey v. Patterson, 369 U.S. 31, 33, 82 S.Ct. 549, 7 L.Ed.2d 512 (1962) (internal citation omitted)).

With respect to the substantive due process claim, Taake appears to have initially assumed that because the alleged contract had to do with land, a substantive constitutional property interest was at stake. In reality, Taake's interest was a commercial interest under a contract to benefit from the deal he believes he struck with the County. There are only a "handful of fundamental rights [for which] the due process clause has a substantive component," id. at 860; see also Washington v. Glucksberg, 521 U.S. 702, 719...