Opinion
1049 CA 18-01943
06-12-2020
In the Matter of BARRETT PAVING MATERIALS, INC., Bothar Construction, LLC, CCI Companies, Inc., Cold Spring Construction Co., Hanson Aggregates New York LLC, Slate Hill Constructors, Inc., Tioga Construction Co., Inc., and Vector Construction Corp., Petitioners-Plaintiffs-Appellants, v. NEW YORK STATE THRUWAY AUTHORITY, Joanne M. Mahoney, in Her Official Capacity as Chair of New York State Thruway Authority Board of Directors, Bill Finch, in His Official Capacity as Acting Executive Director of New York State Thruway Authority, and D.A. Collins Construction Co., Inc., Respondents-Defendants-Respondents.
COUCH WHITE, LLP, ALBANY (JENNIFER KAVNEY HARVEY OF COUNSEL), FOR PETITIONERS-PLAINTIFFS-APPELLANTS. LETITIA JAMES, ATTORNEY GENERAL, ALBANY (ALLYSON B. LEVINE OF COUNSEL), FOR RESPONDENTS-DEFENDANTS-RESPONDENTS NEW YORK STATE THRUWAY AUTHORITY, JOANNE M. MAHONEY, IN HER OFFICIAL CAPACITY AS CHAIR OF NEW YORK STATE THRUWAY AUTHORITY BOARD OF DIRECTORS, AND BILL FINCH, IN HIS OFFICIAL CAPACITY AS ACTING EXECUTIVE DIRECTOR OF NEW YORK STATE THRUWAY AUTHORITY. GLEASON, DUNN, WALSH & O'SHEA, ALBANY (THOMAS F. GLEASON OF COUNSEL), FOR RESPONDENT-DEFENDANT-RESPONDENT D.A. COLLINS CONSTRUCTION CO., INC.
COUCH WHITE, LLP, ALBANY (JENNIFER KAVNEY HARVEY OF COUNSEL), FOR PETITIONERS-PLAINTIFFS-APPELLANTS.
LETITIA JAMES, ATTORNEY GENERAL, ALBANY (ALLYSON B. LEVINE OF COUNSEL), FOR RESPONDENTS-DEFENDANTS-RESPONDENTS NEW YORK STATE THRUWAY AUTHORITY, JOANNE M. MAHONEY, IN HER OFFICIAL CAPACITY AS CHAIR OF NEW YORK STATE THRUWAY AUTHORITY BOARD OF DIRECTORS, AND BILL FINCH, IN HIS OFFICIAL CAPACITY AS ACTING EXECUTIVE DIRECTOR OF NEW YORK STATE THRUWAY AUTHORITY.
GLEASON, DUNN, WALSH & O'SHEA, ALBANY (THOMAS F. GLEASON OF COUNSEL), FOR RESPONDENT-DEFENDANT-RESPONDENT D.A. COLLINS CONSTRUCTION CO., INC.
PRESENT: CENTRA, J.P., CARNI, CURRAN, TROUTMAN, AND WINSLOW, JJ.
MEMORANDUM AND ORDER It is hereby ORDERED that the judgment so appealed from is unanimously affirmed without costs.
Memorandum: In 2017, respondent-defendant New York State Thruway Authority (NYSTA) solicited bids for a project that included the replacement of eight highway bridges throughout central New York (project) and, in conjunction therewith, elected to include a project labor agreement (PLA) in the project's bid specifications. Petitioners-plaintiffs (petitioners) elected not to submit a bid on the project because of the inclusion of the PLA, which they alleged effectively excluded "open-shop" construction firms, such as themselves, from bidding on the project. Instead, petitioners, et al., commenced this hybrid CPLR article 78 proceeding and declaratory judgment action seeking, inter alia, to annul NYSTA's determination to include the PLA in the bid specifications, alleging, among other things, that the inclusion of the PLA violated various provisions of the New York State Constitution, the Labor Law, the State Finance Law, and the Legislative Law. Supreme Court, sua sponte, dismissed the petition-complaint (petition) for lack of standing. This Court reversed, concluding that lack of standing did not constitute extraordinary circumstances justifying the court's sua sponte dismissal of the petition ( Matter of Associated Gen. Contrs. of NYS, LLC v. New York State Thruway Auth. , 159 A.D.3d 1560, 1560-1561, 70 N.Y.S.3d 420 [4th Dept. 2018] ), and reinstated the petition.
Subsequently, petitioners moved to amend the petition to include respondent-defendant D.A. Collins Construction Co., Inc.—the firm ultimately selected for the contract via the bid solicitation process. The court granted that motion, and petitioners filed an amended petition-complaint (amended petition). Respondents-defendants answered and, inter alia, asserted affirmative defenses and objections in point of law that petitioners lacked standing and failed to exhaust their administrative remedies. Petitioners now appeal from a judgment dismissing the amended petition based on, inter alia, petitioners' lack of standing and failure to exhaust administrative remedies. We affirm.
Contrary to petitioners' contentions on appeal, we conclude that the court properly determined that petitioners lacked standing to commence this proceeding. To establish traditional common-law standing, petitioners were required to show that they "suffered an injury in fact, distinct from that of the general public," and that their alleged injury "falls within the zone of interests" sought to be protected by the provisions in question ( Matter of Transactive Corp. v. New York State Dept. of Social Servs. , 92 N.Y.2d 579, 587, 684 N.Y.S.2d 156, 706 N.E.2d 1180 [1998] ; see generally Society of Plastics Indus. v. County of Suffolk , 77 N.Y.2d 761, 772-774, 570 N.Y.S.2d 778, 573 N.E.2d 1034 [1991] ). Here, petitioners failed to establish an injury in fact because the alleged harm occurred, not by their failure to secure the winning bid, but via their voluntary decision to entirely forego the bid solicitation process (see Lancaster Dev., Inc. v. McDonald , 112 A.D.3d 1260, 1261-1262, 978 N.Y.S.2d 398 [3d Dept. 2013], lv denied 22 N.Y.3d 866, 2014 WL 1362325 [2014] ; see also Transactive Corp. , 92 N.Y.2d at 587, 684 N.Y.S.2d 156, 706 N.E.2d 1180 ). Even assuming, arguendo, that petitioners suffered an injury in fact, we further conclude that any "economic injury or lost business opportunity" that petitioners suffered "does not fall within the zone of interests to be protected by the competitive bidding statutes" ( Lancaster Dev., Inc. , 112 A.D.3d at 1262, 978 N.Y.S.2d 398 ). "[T]he fact that certain nonunion contractors may be disinclined to submit bids where, as here, a PLA is included in the contract specifications does not preclude competition such that the competitive bidding mandate [of the statutes] is offended" ( id. [internal quotation marks omitted] ). Notably, petitioners did not allege that NYSTA precluded or impeded their ability to submit a bid on the project (see Albert Elia Bldg. Co. v. New York State Urban Dev. Corp. , 54 A.D.2d 337, 341-342, 388 N.Y.S.2d 462 [4th Dept. 1976] ).
We further conclude that petitioners did not establish that they had citizen taxpayer standing pursuant to State Finance Law § 123-b. Petitioners are precluded from asserting citizen taxpayer standing against NYSTA because, as a public authority (see Public Authorities Law § 352 [1] ), NYSTA "enjoys an existence separate and apart from the State, even though it exercises a governmental function" ( Matter of Plumbing, Heating, Piping & A.C. Contrs. Assn. v. New York State Thruway Auth. , 5 N.Y.2d 420, 424, 185 N.Y.S.2d 534, 158 N.E.2d 238 [1959] ; see generally John Grace & Co. v. State Univ. Constr. Fund , 44 N.Y.2d 84, 88, 404 N.Y.S.2d 316, 375 N.E.2d 377 [1978] ; E.W. Howell Co., LLC v. City Univ. Constr. Fund , 149 A.D.3d 479, 480, 53 N.Y.S.3d 260 [1st Dept. 2017], lv denied 29 N.Y.3d 914, 2017 WL 2802296 [2017] ). Even assuming, arguendo, that State Finance Law § 123-b applies to NYSTA, petitioners are not entitled to assert citizen taxpayer standing because they merely seek to challenge the contract's PLA requirement, "not the unlawful expenditure of any [state] funds distributed pursuant thereto" ( Lancaster Dev., Inc. , 112 A.D.3d at 1263, 978 N.Y.S.2d 398 ; see generally Saratoga County Chamber of Commerce v. Pataki , 100 N.Y.2d 801, 803, 813-814, 766 N.Y.S.2d 654, 798 N.E.2d 1047 [2003], cert denied 540 U.S. 1017, 124 S.Ct. 570, 157 L.Ed.2d 430 [2003] ; Transactive Corp. , 92 N.Y.2d at 589, 684 N.Y.S.2d 156, 706 N.E.2d 1180 ; E.W. Howell Co., LLC , 149 A.D.3d at 480, 53 N.Y.S.3d 260 ). Petitioners are also unable to assert common-law taxpayer standing because they "do not seek review of any legislative action" ( Transactive Corp. , 92 N.Y.2d at 589, 684 N.Y.S.2d 156, 706 N.E.2d 1180 ) and, in any event, they are unable to show that "the failure to accord such standing would be in effect to erect an impenetrable barrier" to judicial review of the PLA requirement ( Matter of Colella v. Board of Assessors of County of Nassau , 95 N.Y.2d 401, 410, 718 N.Y.S.2d 268, 741 N.E.2d 113 [2000] [internal quotation marks omitted] ).
Moreover, contrary to petitioners' further contention, we conclude that the court properly determined that dismissal of the amended petition was warranted because petitioners failed to exhaust their administrative remedies before commencing this proceeding (see generally Watergate II Apts. v. Buffalo Sewer Auth. , 46 N.Y.2d 52, 57-58, 412 N.Y.S.2d 821, 385 N.E.2d 560 [1978] ; Matter of Pilot Travel Ctrs., LLC v. Town Bd. of Town of Bath , 163 A.D.3d 1409, 1411, 80 N.Y.S.3d 799 [4th Dept. 2018], lv denied 32 N.Y.3d 914, 2019 WL 192029 [2019] ). Petitioners did not engage in the detailed formal protest process laid out by the bid specifications that served as a condition precedent to commencing litigation. Merely alleging a constitutional violation, as petitioners did here, does not excuse a litigant's duty to exhaust administrative remedies where, as here, the " ‘constitutional claim ... may require the resolution of factual issues reviewable at the administrative level’ " ( Town of Oyster Bay v. Kirkland , 19 N.Y.3d 1035, 1038, 954 N.Y.S.2d 769, 978 N.E.2d 1237 [2012], cert denied 568 U.S. 1213, 133 S.Ct. 1502, 185 L.Ed.2d 550 [2013], quoting Matter of Schulz v. State of New York , 86 N.Y.2d 225, 232, 630 N.Y.S.2d 978, 654 N.E.2d 1226 [1995], cert denied 516 U.S. 944, 116 S.Ct. 382, 133 L.Ed.2d 305 [1995] ; see Griffiss Local Dev. Corp. v. Gardner , 103 A.D.3d 1276, 1277, 960 N.Y.S.2d 284 [4th Dept. 2013], lv denied 21 N.Y.3d 856, 2013 WL 2395642 [2013] ). Additionally, we conclude that petitioners' failure to exhaust their administrative remedies should not be excused on the ground that pursuing them would have been futile (see generally Lehigh Portland Cement Co. v. New York State Dept. of Envtl. Conservation , 87 N.Y.2d 136, 140, 638 N.Y.S.2d 388, 661 N.E.2d 961 [1995] ). The evidence submitted by petitioners demonstrated, at most, that they merely had "some reason to doubt" that pursing such remedies would have been successful ( Matter of Pfaff v. Columbia-Greene Community Coll. , 99 A.D.2d 887, 887, 472 N.Y.S.2d 480 [3d Dept. 1984] ).
In light of the foregoing, we do not address petitioners' remaining contentions.