## Facts

- Chicago United Industries, Ltd. (CUI) held multiple contracts to supply goods to the City of Chicago.
- The City suspected CUI billed for goods it knew were not delivered and notified CUI it intended to cancel contracts and impose a three-year debarment, allowing 30 days to respond.
- After CUI responded, the City terminated the contracts and instituted the debarment.
- CUI sued in federal court alleging denial of Fourteenth Amendment due process for lack of a predeprivation hearing, seeking injunctive relief and lost profits.
- The district court issued a temporary restraining order (TRO) blocking cancellation, debarment, and related proceedings; it was extended multiple times while a preliminary-injunction hearing was pending.
- During the TRO period, the City withdrew the contract cancellations and rescinded the debarment “without prejudice,” and sought dismissal as moot; the district court denied the motion.
- Over the City’s objection, the district court modified the TRO to prevent the City from awarding certain contracts to anyone other than CUI when CUI was the lowest responsible bidder.
- The City filed an interlocutory appeal, arguing the order was appealable and the request for injunctive relief was moot.

## Issues

1. Whether an order labeled a TRO became an appealable preliminary injunction under 28 U.S.C. § 1292(a)(1) due to its duration and modification.
2. Whether the City’s rescission of the debarment and contract cancellations, coupled with its intent to restart any future proceedings, mooted CUI’s request for prospective injunctive relief.
3. Whether any part of the case remained live despite mootness of injunctive relief, including claims for damages such as lost profits.

## Decision

- The court held the challenged order was appealable because it functioned as a preliminary injunction rather than a short-lived TRO.
- The court held CUI’s claim for injunctive relief was moot after the City rescinded the challenged actions and represented it would proceed anew with constitutionally adequate process if it acted again.
- The court held the case was not entirely moot because CUI’s damages claim (including lost profits) remained.
- The court vacated the injunction and remanded for further proceedings on damages.

## Legal Principles

- A TRO is ordinarily not appealable, but an order labeled a TRO may be treated as a preliminary injunction when, in practical effect, it extends beyond Rule 65(b)’s short-term function and/or is substantively modified, especially over the restrained party’s objection.
- Government rescission of the challenged action can moot claims for prospective injunctive relief when there is no concrete, non-speculative basis to expect repetition of the same alleged wrong and the government indicates it will restart any future process in a lawful manner.
- Mootness of prospective equitable relief does not moot retrospective claims for damages arising from alleged past harm.
- Federal equitable relief should be limited when a municipal government has withdrawn the contested action and is willing to reconsider through proper procedures, reflecting respect between levels of government.

## Conclusion

The Seventh Circuit treated the extended and modified TRO as an appealable preliminary injunction, vacated it because the City’s rescission mooted the request for prospective injunctive relief, and remanded because CUI’s damages claims—such as lost profits—remained justiciable.


Chi. United Indus., Ltd. v. City of Chi., 445 F.3d 940 (7th Cir. 2006)