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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION L. DAGOSTINI & SONS, INC., Plaintiff, v. Honorable ___________ CITY OF DETROIT, Magistrate ___________ Defendant, Case No. 2:12-cv-10041

_________________________________________/ VERIFIED COMPLAINT Plaintiff L. DAgostini & Sons, Inc., through its undersigned counsel, MCALPINE & ASSOCIATES, P.C., states as follows for its Complaint against the City of Detroit, acting through the Detroit Water and Sewerage Department (the DWSD): STATEMENT OF THE CASE This is a civil action for declaratory and injunctive relief against the DWSD. DAgostini seeks to have this Court declare the DWSDs actions, described herein, in violation of the Due Process Clause of the Fourteenth Amendment of the United States Constitution and 42 U.S.C. 1983. DAgostini also seeks attorneys fees and costs of litigation as allowed under 42 U.S.C. 1988 and as otherwise permitted by law. JURISDICTION AND VENUE 1. This Court has jurisdiction pursuant to 28 U.S.C. 1331 as this is a civil action

arising under Constitution and the laws of the United States. 2. This Court has authority to award the requested declaratory relief under 28 U.S.C.

2201; the requested injunctive relief under 28 U.S.C. 1343(3); and attorneys fees under 42

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U.S.C. 1988. 3. Venue is proper in the United States District Court for the Eastern District of

Michigan under 28 U.S.C. 1391 because the DWSD is located in this district and all of the events and omissions giving rise to the claims alleged here occurred in this district. 4. Venue in the Southern Division is proper because the case arises in Wayne

County, Michigan, which is within the Southern Division. PARTIES 5. DAgostini is a Michigan corporation with its principal place of business located

in Macomb Township, MI. 6. The City of Detroit is a municipal corporation of the State of Michigan, located in

Wayne County, Michigan. For purposes of this dispute, the City of Detroit acted by and through the DWSD, which is located in Wayne County, Michigan. COMMON ALLEGATIONS The Romeo Arm Repair 7. In the summer of 2004 through the spring of 2005, DAgostini worked as a

contractor on a project in Sterling Heights, Michigan (the Romeo Arm Repair). 8. The impetus for the Romeo Arm Repair was a massive sewer line failure

necessitating an emergency repair effort, which involved round-the-clock work by the most experienced and tested sewer line contractors in the business. 9. The emergency occurred on August 22, 2004, when a portion of the Romeo Arm

Interceptor seweran eleven-foot-wide, 65-foot-deep concrete sewer pipe in Sterling Heights suffered a catastrophic failure, forming a giant sink hole. Six homes were evacuated, and thousands more faced the possibility of a massive sewer backup.

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10.

In order to repair the sewer, the DWSD engaged Inland Waters Pollution Control,

Inc. (Inland) as the general contractor, agreeing to pay Inland on a cost-plus basis (costs plus a markup) using agreed-upon rates and markups. 11. Inland then contracted with DAgostini, again on a cost-plus basis, for much of

the work, including the crucial steps of bypassing the damaged portion of the sewer, repairing the collapse, and restoring flow to the system. 12. Over the course of about seven months, DAgostini successfully restored the

system and averted wider damage to homes and businesses in the area. The Kilpatrick Indictment 13. On December 14, 2010, a federal grand jury issued an indictment against five

individuals: Kwame Kilpatrick, Bobby Ferguson, Bernard Kilpatrick, Victor Mercado, and Derrick Miller. 14. The indictment alleged that those individuals had participated in a scheme to

funnel money to Ferguson through numerous city-owned construction projects. 15. With respect to the Romeo Arm Repair, the Government alleges that Kwame

Kilpatrick steered work to Ferguson and then extorted $350,000 from Inland. 16. Importantly, the indictment does not implicate DAgostini in any wrongdoing.

No company associated with Ferguson was a subcontractor to DAgostini; instead, Fergusons company was a subcontractor to Inland. 17. The indictment only makes passing reference to DAgostini, referring to

DAgostini (as Subcontractor DA) in two paragraphs. 18. One paragraph states that [Bobby Ferguson] advised [Kilpatrick] that although

[Inland] would be overseeing the overall project, [DAgostini] had hired all of the subcontractors

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at the site. 19. The other paragraph merely recounts communications between Kilpatrick and

Ferguson about Inland splitting a portion of DAgostinis work with Ferguson and Fergusons proposal that Kilpatrick review DAgostinis invoices to ensure that Ferguson was receiving an amount of work comparable to what DAgostini was performing on the project. 20. The indictment ultimately alleges that Inland and Inlands partner agreed to pay

Ferguson $350,000 for the profits Ferguson believed he should have received on the sewer collapse. 21. DAgostini did not contract with Ferguson or otherwise pay Ferguson any money,

and DAgostini has never been a target or subject of a federal grand jury investigation. The DWSD Debarred DAgostini without Notice and without a Hearing. 22. On December 21, 2011, the DWSD Board convened a special meeting where it

debarred all of the companies referenced in the indictment for three years. 23. Fred Barnes, Macomb Countys representative to the Board, voted for the

debarment, despite the fact that Macomb County is presently engaged in litigation with DAgostini and other debarred contractors, and to vote otherwise would prejudice Macomb Countys lawsuit. 24. The Board found all of the fourteen companies non-responsible bidders, and

barred them from bidding on any new contracts for three years. 25. According to the Board, the companies actions during the period of 2002-2008,

has or may have caused economic or non-economic harm to the DWSD. 26. In defending the Boards actions to the media, the Board Chairman stated that the

indictment raised serious issues involving integrity of the contractors.

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27.

The DWSD failed to provide the debarred contractors any advance notice or an

opportunity to be heard before the debarments became effective. Thus, the Board did not allow for any kind of pre-debarment mechanisms for due process. 28. As for post-debarment procedures, the Board purports to offer the following: (1) a

request for reconsideration by the Board; and (2) an appeal to an ad hoc committee of the Board. 29. Under the former procedure, [t]he Board shall reconsider the parties and

suspension period upon receiving additional information from the US Attorneys office. 30. The latter procedure does not afford any kind of third-party review before an

unbiased decision-maker. 31. Rather, the policy provides that [a] company may appeal the application of this

policy to an ad hoc committee of the [Board], appointed by the Chair, which shall receive evidence and information and report to the entire Board. The suspension can only be modified by motion of the Board, and also authorizes the Deputy Director to take such other action as may be necessary to accomplish the intent of this vote. The ad hoc committee has not even been formed yet, and there appear to be no standards that govern its review. 32. On December 22, 2011, DAgostini demanded that DWSD repeal its debarment

and requested reconsideration and appeal. The DWSD has not responded as of January 5, 2023. The Debarment Will Impair DAgostinis Ability to Bid on Future Public Contracts. 33. DAgostini has successfully completed public construction work for the City of

Detroit, including the DWSD, for over thirty years. 34. 35. In 2011, DWSD projects represented nearly 70% of DAgostinis total work. At least two projects that will be let for bid this year for work within DAgostinis

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specialty. 36. Because of the debarment, DAgostini will be disqualified from bidding on these

DWSD projects. 37. The debarment will also have an effect on DAgostinis ability to bid on non-

DWSD projects because many public bodies require its disclosure as part of the bid qualification process. 38. Because DAgostini will be required to disclose the debarment when bidding for

future workwhich without injunctive relief will likely lead to being deemed a non-responsible bidder on projects for the DWSD and beyondDAgostini faces the prospect of being unable to obtain future work in its principal line of business. COUNT I VIOLATION OF PROCEDURAL DUE PROCESS 39. DAgostini incorporates by reference the allegations of the preceding paragraphs

as if set forth herein at length. 40. The unlawful acts described herein are committed under color of state law and

have deprived, and will continue to deprive, DAgostini of its procedural due process rights afforded to every business and every individual under the Fourteenth Amendment to the United States Constitution. 41. DAgostini has a liberty interest in avoiding the damage to its reputation and

business caused by a stigmatizing suspension. 42. The debarment has deprived DAgostini of its procedural due process rights

afforded under the Fourteenth Amendment to the United States Constitution. 43. DAgostinis ability to contract for public service contracts has been, and will

continue to be, impaired by the continued denial of its procedural due process rights.

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44.

DAgostini will suffer a wrongful deprivation of rights unless its procedural due

process rights are restored. WHEREFORE, DAgostini respectfully requests that this Court: (1) pursuant to 28 U.S.C. 2201, enter a declaratory judgment stating that the debarment violates the Due Process Clause of the Fourteenth Amendment and 42 U.S.C. 1983, and is therefore null and void; (2) enjoin the DWSD, preliminarily during the pendency of this action and permanently thereafter, from directly or indirectly causing DAgostini to be debarred without due process; (3) award DAgostini its costs, interest, and attorneys fees; and (4) grant such other and further relief as this Court deems equitable, just, and appropriate. COUNT II VIOLATION OF 42 U.S.C. 1983 45. DAgostini incorporates by reference the allegations of the preceding paragraphs

as if set forth herein at length. 46. Insofar as the DWSD is enforcing the debarment, the DWSD is depriving and will

continue to deprive DAgostini of numerous rights secured by the Fourteenth Amendment to the United States Constitution in violation of 42 U.S.C. 1983. WHEREFORE, DAgostini respectfully requests that this Court: (1) pursuant to 28 U.S.C. 2201, enter a declaratory judgment stating that the debarment violates 42 U.S.C. 1983, and is therefore null and void; (2) enjoin the DWSD, preliminarily during the pendency of this action and permanently thereafter, from directly or indirectly causing DAgostini to be debarred without due process; (3) award DAgostini its costs, interest, and attorneys fees; and (4) grant such other and further relief as this Court deems equitable, just, and appropriate.

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Respectfully submitted, MCALPINE & ASSOCIATES, P.C.

/s/Mark L. McAlpine Mark L. McAlpine (P35583) Don W. Blevins (P64146) David M. Zack (P69944) 3201 University Drive, Suite 100 Auburn Hills, MI 48326 (248) 373-3700 mlmcalpine@mcalpinelawfirm.com dwblevins@mcalpinelawfirm.com dmzack@mcalpinelawfirm.com Attorneys for L. DAgostini & Sons, Inc. Date: January 5, 2012

VERIFICATION I, James A. DAgostini, the Secretary/Treasurer of L. DAgostini & Sons, Inc., declare under penalty of perjury that I have read the attached Verified Complaint, and that the facts stated in it are true and correct, based on my personal knowledge, information, and belief.

L. DAGOSTINI & SONS, INC.

/s/James A. DAgostini By: James A. DAgostini Its: Secretary/Treasurer

Date: January 5, 2012