McDonough Assocs., Inc. v. Schneider

McDonough is an engineering firm that frequently does design jobs for the Illinois Department of Transportation (IDOT). The Illinois Procurement Code provides that, absent required signatures, a contract of the type in dispute is not valid and not an enforceable debt, 30 ILCS 500/20-80(d). McDonough claimed that IDOT owed it $2 million for additional work on three projects, none of which had a supplemental agreement that was fully executed. McDonough claimed that it continued working without the agreements because it was IDOT’s normal business practice always to sign an agreement after a prior approval letter was sent. Based on findings that McDonough had made accounting errors that called its business integrity into question, the chief procurement officer suspended McDonough’s status as a “prequalified vendor” automatically eligible to bid on IDOT projects. McDonough claimed that refusal to sign the agreements deprived it of property interests in the debts without due process of law. Faced with threats, of bankruptcy, the district court entered a temporary restraining order, effectively ordering state officials to pay. The Seventh Circuit vacated, finding that the suit is, in substance, an effort to have a federal court order state officials to make payments from the state treasury to remedy alleged breaches of contract and is prohibited by the Eleventh Amendment. View "McDonough Assocs., Inc. v. Schneider" on Justia Law