Kevin O'Gorman v. City of Chicago

In the

United States Court of Appeals

For the Seventh Circuit

No. 13-2877

KEVIN O’GORMAN,

Plaintiff-Appellant,

v.

CITY OF CHICAGO,

Defendant-Appellee.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:11-cv-02439— Robert M. Dow, Jr., Judge.

ARGUED SEPTEMBER 9, 2014 — DECIDED JANUARY 26, 2015

Before FLAUM, ROVNER, and HAMILTON, Circuit Judges.

ROVNER, Circuit Judge. Kevin O’Gorman filed suit under 42

U.S.C. § 1983 against the City of Chicago, alleging that the City

violated his Fourteenth Amendment right to due process and

equal protection in its actions surrounding his employment

with the City. The district court granted the motion to dismiss

O’Gorman’s amended complaint, and O’Gorman appeals that

dismissal.

2 No. 13-2877

As is appropriate in the context of a motion to dismiss, we

take as true the facts as set forth in the complaint along with all

reasonable inferences. Thulin v. Shopko Stores Operating Co.,

LLC, 771 F.3d 994, 995 (7th Cir. 2014). O’Gorman worked for

the City of Chicago’s Department of General Services from

1996 until 2007, first as a carpenter and later as a General

Foreman of the General Trades. In the latter capacity, he

regularly placed orders for the City with Arrow Lumber

Company (“Arrow”), which was owned and operated by

Donald Beal. In November 2004, the Inspector General’s Office

of the City began an investigation upon receiving reports from

an Arrow employee that the company treated orders placed by

O’Gorman differently than other orders. The complaint alleges

that the investigation improperly focused on O’Gorman and

protected Arrow and Beal for political reasons. We will not set

forth those allegations in detail as they are ultimately irrelevant

to the analysis of the issues before us, but the complaint

includes allegations that Beal shredded some documents and

forged other documents to cover up Arrow’s fraud.

On May 7, 2007, O’Gorman was arrested and charged with

theft of City property. He was placed on paid administrative

leave, and on May 10 the City issued a press release announc-

ing the charges against O’Gorman, including that he had

diverted “more than $50,000 in goods from a city lumber

contractor for his own use from early 2003 to 2005, and then

filed false paperwork in an attempt to cover up the theft.” The

information was subsequently published in the Chicago

Tribune, and a link to that Tribune article was placed on the

Inspector General’s website. That announcement remained on

the website from that date to the present.

No. 13-2877 3

During the summer of 2007, O’Gorman was charged by the

City with violations of eleven City Personnel Rules based on

the same conduct, and including alleged false statements and

alleged theft and diversion of property paid for with City

funds. According to the complaint, Fran Bailey, the City’s

Human Resources Director, informed O’Gorman’s union

representative that if O’Gorman did not resign he would be

fired and that a hearing on the charges would be a “sham.”

O’Gorman also alleged that Frank Scalise, Deputy Commis-

sioner, and Ron Huberman, then-Chief of Staff to the Mayor

and O’Gorman’s immediate supervisor, told him that if he

resigned, he would be reinstated once he was acquitted of the

criminal charges. O’Gorman opted to resign on August 24,

2007.

Beal was also criminally charged, and pled guilty to

defrauding the City. O’Gorman was ultimately acquitted of all

criminal charges on January 19, 2010. He immediately re-

quested reinstatement to his City job. According to his com-

plaint, his attorney met with City Commissioner Judy Martinez

and gave her an affidavit from Scalise stating that Scalise told

O’Gorman he would be reinstated. Martinez affirmed that his

application would be reviewed in light of that information and

his acquittal, but he was not reinstated to his position.

O’Gorman alleges that the City refused to reinstate him

because he was placed on a “Do-Not-Hire List.” The existence

of the list was first made public in 2009, although the list itself

was not released to the public at that time. The list consisted of

names of individuals all of whom had either been terminated

from City positions or had resigned in the face of allegations of

wrongdoing. Individuals on the list were barred from City

4 No. 13-2877

employment, and there was no process in place by which a

person could seek removal of his name from the list. It con-

tained over 4,500 names at one point, but in early 2011, the

Inspector General’s Office and the Shakman hiring monitor

worked with the Mayor’s office to overhaul the list. The Mayor

retained sole discretion as to whether an individual was placed

on the list. A Chicago Tribune article in February 2011 revealed

that the list had been revised to include 218 names. Pursuant

to a Freedom of Information Act request, the Better Govern-

ment Association (BGA) obtained a copy of the list, and

published the names, including O’Gorman’s name.

The list published by the BGA merely sets forth a list of

persons who are ineligible for rehire for a defined period of

time, and a list of persons ineligible for an indefinite period of

time. O’Gorman is on the latter list, and the only information

included as to him is his department name and that he re-

signed in lieu of discharge. The list also set forth the criteria for

deeming an employee ineligible for rehire indefinitely. It

provided that a former employee was ineligible for rehire if his

or her termination resulted from a discharge or from a resigna-

tion in lieu of discharge in which the employee resigns after

having been served with charges. If the charges alleged

criminal activity or certain actions of moral turpitude, the

person was deemed ineligible for rehire indefinitely.

The City also pursued a civil case against O’Gorman under

the Illinois Whistleblower Act and the Chicago False Claims

Act. That case was stayed during the pendency of the criminal

proceeding, but reopened upon its termination and was

pending at the time of argument in this case.

No. 13-2877 5

We review a dismissal under Fed. R. Civ. P. 12(b)(6) de novo.

Ball v. City of Indianapolis, 760 F.3d 636, 642 -43 (7th Cir. 2014).

A complaint need not contain detailed factual allegations, but

must contain sufficient factual matter, accepted as true, to state

a claim for relief that is facially plausible. Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. 662,

678 (2009); Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013). The

allegations must be sufficient to raise a right to relief above the

speculative level. Twombly, 550 U.S. at 555. A complainant can

plead himself out of court by including factual allegations that

establish that the plaintiff is not entitled to relief as a matter of

law. Hollander v. Brown, 457 F.3d 688, 691 n.1 (7th Cir. 2006).

Thus, although a plaintiff need not anticipate or overcome

affirmative defenses such as those based on the statute of

limitations, if a plaintiff alleges facts sufficient to establish a

statute of limitations defense, the district court may dismiss the

complaint on that ground. Cancer Fndtn, Inc. v. Carberus Capital

Management, LP, 559 F.3d 671, 674-75 (7th Cir. 2009).

O’Gorman asserts on appeal that the district court erred in

dismissing the amended complaint because he adequately

alleged violations of due process and equal protection that are

actionable under 42 U.S.C. § 1983. Specifically, in his amended

complaint he alleged that the City deprived him of his prop-

erty and liberty interests in employment without due process,

and that he was selectively prosecuted and treated less

favorably than similarly situated job applicants when he

sought reinstatement in 2010 in violation of the equal protec-

tion clause. We will consider these claims in turn.

6 No. 13-2877

With respect to the due process claims based on a property

interest, the district court identified five allegedly separate

claims raised by O’Gorman: (1) his loss of City employment in

July 2007 without due process; (2) his loss of all future City

employment without due process when O’Gorman was placed

on the “Do-Not-Hire List” in July 2007; (3) his “second loss” of

future City employment without due process around 2010 or

2011 when the list was revised but continued to include his

name; (4) his loss of employment as a teacher with the City

Colleges in August 2008 without due process; and (5) the City’s

failure to rehire him without due process in early 2010 after he

was acquitted of criminal charges. On appeal, he makes no

argument related to his employment as a teacher with the City

Colleges, and therefore we need not address that claim at all.

As to O’Gorman’s challenge to the “forced” resignation in

2007, the district court held that the claim should be dismissed

based on the statute of limitations. The limitations period for

§ 1983 claims is based in state law, and the statute of limitations

for § 1983 actions in Illinois is two years. Moore v. Burge,

771 F.3d 444, 446 (7th Cir. 2014); Wallace v. Kato, 549 U.S. 384,

387 (2007). Therefore O’Gorman’s due process claims had to be

brought within two years. The date at which the claim accrues

and thus starts the running of the limitations period is a matter

of federal law, and generally occurs when a plaintiff knows the

fact and the cause of an injury. Moore, 771 F.3d at 447; Wallace,

549 U.S. at 388. The amended complaint alleged that at the time

of his resignation in 2007, O’Gorman had been informed that

he would receive only a sham hearing and that the decision to

terminate him was preordained. Therefore, the district court

held that, by his own allegations, O’Gorman should have

No. 13-2877 7

known in 2007 that his constitutional rights to due process

were being violated, and that he had two years to pursue a

claim based on that deprivation.

O’Gorman raised two arguments in the district court to

rebut that conclusion. First, he contended that under an Illinois

savings provision applicable to counter-claims, he had until

2013 to file his claim; second, he maintained that the discovery

rule should apply to his claims based on his 2007 resignation

because he did not discover the nature of his injuries until 2011.

The district court rejected both of those arguments.

On appeal, O’Gorman has abandoned those arguments.

Instead, he now argues that the statute of limitations is in-

applicable because the 2007 violation was part of a continuing

violation or that it was part of an eight-year long conspiracy

and that the statute of limitations does not begin to run until

the last of the actions occurred. Those arguments, which are in

any case meritless, see e.g. Moore, 771 F.3d at 447 (“[e]ach

discrete act—something wrongful independent of other

events—carries its own period of limitations”), were not

presented to the district court. We have repeatedly held that a

party opposing a motion in the district court must inform the

court of the factual and legal reasons why the motion should

not be entered, and if it fails to do so it cannot then raise those

arguments on appeal. United States v. Ritz, 721 F.3d 825, 827-28

(7th Cir. 2013); Frey Corp. v. City of Peoria, 735 F.3d 505, 509 (7th

Cir. 2013)(where defendant changed its theory after losing

below, the argument not raised in the district court is waived

on appeal). Accordingly, the district court properly dismissed

the due process challenge to the 2007 “forced” resignation as

untimely.

8 No. 13-2877

We are left, then, with his due process challenges to the

failure to reinstate him to his position after acquittal, and

failure to rehire him for a City position in 2010 and 2011 based

on his presence on the Do-Not-Hire List. The district court held

that he had failed to demonstrate a property interest in future

employment by the City, and that dismissal was proper. In

order to proceed on his claim that he was deprived of a

property interest, O’Gorman had to allege the existence of a

constitutionally-protected interest. Moss v. Martin, 473 F.3d 694,

700 (7th Cir. 2007). Property interests are not created by the

Constitution, but rather are created and defined by existing

rules or understandings that stem from an independent source

such as state law. Akande v. Grounds, 555 F.3d 586, 590 (7th Cir.

2009); Chicago Teachers Union, Local No. 1, Am. Federation of

Teachers v. Bd. of Educ. of the City of Chicago, 662 F.3d 761, 763

(7th Cir. 2011). “Accordingly, federal property interests under

the 14th Amendment usually arise from rights created by state

statutes, state or municipal regulations or ordinances, and

contracts with public entities.” Ulichny v. Merton Community

School Dist., 249 F.3d 686, 700 (7th Cir. 2001). O’Gorman points

to no state law, ordinance or contract that would entitle him to

reinstatement in his position after resigning, or after being

terminated and subsequently cleared of criminal charges. In

fact, O’Gorman relies on the Collective Bargaining Agreement

(CBA) in his argument that he could only be terminated for just

cause, but does not dispute that the same CBA, which was

adopted by the City Council as an ordinance, provides that

“[n]otwithstanding the provisions of any ordinance or rule to

the contrary ... the employee shall have no right to be rehired,

if the employee quits, [or] is discharged ...” That affirmatively

No. 13-2877 9

indicates that there is no property interest in being rehired.

O’Gorman has failed to identify any source of state law or rules

that would establish a property interest here. O’Gorman points

instead to the representations by Scalise and Huberman that he

would be reinstated once he was acquitted in the criminal trial.

Those statements cannot form the basis for a suit against the

City because there is no plausible allegation that Scalise or

Huberman were policy-makers for the City in a position to

bind the City or enter into a contract, particularly given the

clear language of the CBA on the matter. O’Gorman also claims

that the CBA establishes a property interest in providing that

he can only be terminated for just cause, but as previously

noted, the challenge to the original resignation (or constructive

discharge as he characterizes it) is barred by the statute of

limitations.

O’Gorman also pursues procedural due process challenges

premised on a liberty interest rather than a property interest.

In order to proceed on such a claim, O’Gorman must suffi-

ciently allege that he has a cognizable liberty interest under the

Fourteenth Amendment, that he was deprived of that liberty

interest, and that the deprivation was without due process.

Mann, 707 F.3d at 877. It is well-established that an individual

does not have any cognizable liberty interest in his reputation,

and therefore “‘mere defamation by the government does not

deprive a person of liberty protected by the Fourteenth

Amendment, even when it causes serious impairment of one’s

future employment.’” Id. at 878 quoting Dupuy v. Samuels,

397 F.3d 493, 503 (7th Cir. 2005); Hojnacki v, Klein-Acosta,

285 F.3d 544, 548 (7th Cir. 2002); Siegert v. Gulley, 500 U.S. 226,

233-34 (1991). Only when paired with the alteration of legal

10 No. 13-2877

status, such as a right previously held, will such defamation

implicate due process rights. Mann, 707 F.3d at 878. If the state

actor casts doubt on the individual’s reputation or character in

such a manner that it becomes virtually impossible for that

person to find employment in his chosen field, then the

government has infringed upon that individual’s liberty

interest to pursue the occupation of his choice. Id.

O’Gorman presents only a cursory argument in his opening

brief on appeal that the City deprived him of a liberty interest

without process, devoting only four conclusory sentences to

identifying the actions that impaired his liberty interest and the

impact on his ability to pursue his occupation. He asserts that

“repeated publications by various City agents ... significantly

impinge[d] his ability to pursue any occupation at all.” The

“publications” that he identifies include that in 2007 the

Inspector General’s office posted and left displayed for over

five years on its website the information that O’Gorman had

been arrested for theft, that the City’s Law Department

reinstated civil charges of theft, and that the Inspector

General’s office in 2011 issued a press release stating that

O’Gorman was permanently banned from City employment

based on his resignation in lieu of discharge when facing such

charges (which apparently refers to the BGA’s press release

regarding the do-not-hire list which O’Gorman attributes to the

City).

There are numerous potential problems with this challenge,

including that he presents no allegations that the process

provided in the Law Department’s civil lawsuit itself is

constitutionally deficient, and that the City refused to publish

the do-not-hire list in 2009 and released it in 2011 only in

No. 13-2877 11

response to a FOIA request, at which time it was publicly

released by the BGA not the City. We need not consider

whether compliance with a FOIA request could constitute

actionable dissemination of that information to the public,

though, because the liberty interest claim fails for the more

fundamental reason that it was not timely filed. For all of

those allegations, the alleged stigma to his reputation stemmed

from the charges of theft, but as O’Gorman himself recognizes

those allegations were first publicly disclosed by the City in

2007 when the Inspector General’s office posted it on its

website where it remained for five years. O’Gorman failed to

pursue a due process challenge based upon the public disclo-

sure of that information within the two year limitations period,

and therefore is barred from asserting it at this time. Moore,

771 F.3d 444, 446 (statute of limitations for § 1983 actions in

Illinois is two years).

Finally, his remaining claims are similarly without merit.

He alleges that he was denied equal protection based on

theories of selective prosecution and a class-of-one theory that

he was treated differently than other employees or prospective

employees not based on his membership in a protected class.

The selective prosecution claim was not developed on appeal

and is waived. See Zuppardi v. Wal-mart Stores, Inc., 770 F.3d

644, 648 (7th Cir. 2014). As for his class-of-one theory, the

Supreme Court has held that class-of-one claims are inapplica-

ble to situations of public employment such as the one pre-

sented here, and he has presented no reasoned basis to

distinguish that authority. See Engquist v. Oregon Dept. of Agr.,

553 U.S. 591, 598 (2008). He also raises a claim of malicious

prosecution but that claim was never presented in the district

12 No. 13-2877

court or in the complaint itself, and therefore is not before us.

Ritz, 721 F.3d at 827-28; Frey Corp., 735 F.3d at 509.

The decision of the district court is AFFIRMED.