Opinion
No. CV 106015417
December 21, 2010
MEMORANDUM OF DECISION RE MOTION TO DISMISS (#106)
The present case concerns the award of a contract by the defendant, the State of Connecticut Commissioner of Transportation, to O G Industries, Inc./Tudor Perini Joint Venture (O G Joint Venture) for reconstruction of the I-91 and I-95 Interchange in New Haven. The contract, denoted as Contract E, was awarded to O G Joint Venture on December 10, 2010 and was executed on December 14, 2010. The plaintiff, SDE Interchange Joint Venture (SDE), is the unsuccessful bidder for Contract E. In that role, it challenges the award of the contract and argues that the defendant was barred from awarding such contract to O G Joint Venture based upon General Statutes § 31-57b. More specifically, the plaintiff claims that because O G, which has an ownership interest in O G Joint Ventures, received more than three willful and/or serious safety violations within three years of its bid, it is precluded by law from receiving Contract E. The defendant counters that because the safety violations are being appealed, it was proper to receive O G Joint Venture's bid and subsequently, to award Contract E to O G Joint Venture.
The Summons lists the defendant as "State of Connecticut Commissioner of Transportation c/o Connecticut Attorney General." The Complaint identifies the defendant as the "duly authorized representative of a Connecticut state agency." ¶ 2, Counts One, Two, Three and Four.
Contract E involves the reconstruction of the I-95, I-91 and Route 34 Interchange with the Q-Bridge Replacement District 3A, New Haven, CT. It is the latest phase in a mutliphased federally funded project to improve a portion of the highway located in New Haven, CT.
Text provided, infra, Section I.A.
By way of an amended complaint filed on November 11, 2010, the plaintiff makes four claims. In Count One, SDE seeks injunctive relief and in Count Two, it seeks an order of mandamus directing the defendant to award the contract to the plaintiff. In Count Three, the plaintiff seeks an order of mandamus to require the defendant to enforce the provisions of § 31-57b and bar/rescind the award of the contract to O G Industries, Inc. (O G) and any entity in which O G maintains an ownership interest. Finally, in Count Four, the plaintiff seeks a declaratory judgment construing the provisions of § 31-57b to bar the award of the contract to O G and any entity in which O G maintains an ownership interest.
At oral argument on December 7, 2010, plaintiff's counsel represented that the plaintiff would not pursue Counts One and Two if the contract was awarded before the court issued a decision regarding the Motion to Dismiss. As a result, the court will not reach these claims for relief.
The defendant moves to dismiss the plaintiff's complaint on the ground that the plaintiff lacks standing to bring its claims. (Motion to Dismiss, #106.) In its Objection to the Motion to Dismiss, (#109), the plaintiff argues that it will suffer a direct injury if the Commissioner of Transportation fails to enforce the mandatory provisions of General Statutes § 31-57b and asserts that it brings the present action as a "private attorney general." Additionally, on November 30, 2010, the plaintiff filed a Memorandum in Support of its Application for Temporary Injunction, and a Reply Memorandum in Support of Its Application for Temporary Injunction and Objection to Motion to Dismiss. (#108 and 110, respectively.) The court heard oral arguments on December 7, 2010. The contract was awarded three days later, before this court could issue a decision. Thereafter, the plaintiff filed a Supplemental Statement of Fact and Reply Memorandum. (#115.) Then, on December 14, 2010, the defendant filed a supplemental Motion to Dismiss (#116) on the ground that the matter is moot because the contract has been awarded and executed by the state and O G Joint Venture, to which the plaintiff objected on December 16, 2010 (Objection #117).
The defendant also claimed in the Motion to Dismiss #106 that the plaintiff's claims are not ripe for adjudication. "The rationale of the ripeness doctrine is to prevent courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements . . . Thus, a court must be satisfied that the case before it does not present a hypothetical injury or a claim contingent upon some event that has not and indeed may never transpire." Keller v. Beckenstein, 122 Conn.App. 438, 443, 998 A.2d 838, cert. granted, 298 Conn. 921 (2010). While the defendant's ripeness argument may have been relevant before the state awarded the contract, the plaintiff's claims for a writ of mandamus and declaratory became ripe for adjudication once the contract in question was awarded to O G Joint Venture on December 10, 2010.
The defendant filed a Memorandum in Support of the Motion to Dismiss on the same day. (Entry #107.)
At the outset, this court notes that most of the relevant issues of fact are undisputed. Though there are some minor or peripheral factual disputes between the parties, the facts upon which the court rests its decision in this matter are uncontested. They are as follows.
1. The State Department of Transportation (DOT) put Contract E out to bid on April 28, 2010.
2. Bids were originally due for Contract E in September 2010.
3. The due date for bids for Contract E was postponed to October 13, 2010 on which date the bids were opened.
4. O G Joint Ventures, of which O G has an interest, was one of the bidders.
5. O G Joint Ventures was the apparent low bidder, with a bid price of $356,823,512.20.
6. SDE was the apparent second low bidder, with a bid price of $377,989,999.62.
7. Cianbro/Middlesex X was the apparent third low bidder, with a bid price of $387,458,760.00.
8. After opening the bids, the DOT asked the bidders to extend their bids to January 11, 2011.
9. The state awarded Contract E to O G Joint Venture on December 10, 2010.
10. The contract was executed between the State and O G Joint Venture on December 14, 2010.
11. All three bidders had been pre-qualified and/or pre-certified, as necessary, in order to participate in the bidding process.
12. Within the last three years, O G Industries has received 139 willful and/or serious violations from United States Occupational Safety and Health Administration (OSHA).
Attached to the Amended Complaint are 98 pages of "violations," characterized as "Serious" or "Willful." The violations are dated August 3, 2010, with abatement dates of August 9, 2010 and contest date of August 27, 2010.
13. O G has timely contested/appealed the violations, which appeals/contests are currently pending.
14. The defendant Commissioner interpreted section 31-57b as not precluding his consideration of the O G Joint Venture bid.
15. The defendant Commissioner interpreted section 31-57b as not precluding the awarding of Contract E to O G Joint Venture.
As with the facts, the parties agree, mostly, on the applicable law. Both sides agree that the underlying legal issues, whether or not section 31-57b prohibits the consideration of O G Joint Venture's bid, and whether section 31-57b proscribes the awarding of Contract E to O G Joint Venture, are ones of first impression. However, both sides offer differing interpretations of the statute and of the legal authority of the defendant to interpret the statute in the first instance. Notwithstanding this disagreement over interpretation, the surrounding law regarding motions to dismiss, standing, unsuccessful bidders and writs of mandamus, is fairly well-settled and thus unchallenged by either party. Notably, the parties largely rely upon the same cases to support their opposing views.
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Internal quotation marks omitted.) Bacon Construction Co. v. Dept. of Public Works, 294 Conn. 695, 706, 987 A.2d 348 (2010). "A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., 294 Conn. 206, 213, 982 A.2d 1053 (2009). "When a [trial] court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint in their most favorable light . . . In this regard, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." (Internal quotation marks omitted.) State v. Marsh McLennan Cos., 286 Conn. 454, 464, 944 A.2d 315 (2008).
"A case that is nonjusticiable must be dismissed for lack of subject matter jurisdiction." (Internal quotation marks omitted.) Chapman Lumber, Inc. v. Tager, 288 Conn. 69, 86, 952 A.2d 1 (2008). "[J]usticiability comprises several related doctrines, namely, standing, ripeness, mootness and the political question doctrine, that implicate a court's subject matter jurisdiction and its competency to adjudicate a particular matter." (Internal quotation marks omitted.) Coalition for Justice in Education Funding, Inc. v. Rell, 295 Conn. 240, 254, 990 A.2d 206 (2010). "The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss. Practice Book § 10-31(a)." (Internal quotation marks omitted.) Wilcox v. Webster, supra, 294 Conn. 213. "The proper procedural vehicle for disputing a party's standing is a motion to dismiss." (Internal quotation marks omitted.) D'Eramo v. Smith, 273 Conn. 610, 615 n. 6, 872 A.2d 408 (2005).
I.
DEFENDANT'S MOTION TO DISMISS THE MANDAMUS CAUSE OF ACTION
Because the plaintiff previously indicated that it would not pursue Count Two if the State awarded the contract prior to the court issuing its decision, the court does not address the Motion to Dismiss Count Two, but proceeds directly to Count Three.
In Count Three, pursuant to General Statutes § 31-57b, the plaintiff seeks an order of mandamus directing the defendant to enforce the provisions in the statute and bar/rescind the award of Contract E to O G Joint Venture and any entity in which O G maintains an ownership interest. The defendant seeks to dismiss the plaintiff's mandamus claim arguing that the plaintiff does not have a legal right to receive the contract; and that the plaintiff lacks standing to pursue the claim. In its Objection, the plaintiff contends that § 31-57b is mandatory in nature and compels certain action if the provisions of the statute are not met. Moreover, the plaintiff contends that it has standing to bring the present action as a private attorney general.
"Mandamus is an extraordinary remedy, available in limited circumstances for limited purposes . . . It is fundamental that the issuance of the writ rests in the discretion of the court, not an arbitrary discretion exercised as a result of caprice but a sound discretion exercised in accordance with recognized principles of law . . . That discretion will be exercised in favor of issuing the writ only where the plaintiff has a clear legal right to have done that which he seeks . . . The writ is proper only when (1) the law imposes on the party against whom the writ would run a duty the performance of which is mandatory and not discretionary; (2) the party applying for the writ has a clear legal right to have the duty performed; and (3) there is no other specific adequate remedy." (Internal quotation marks omitted.) Miles v. Foley, 253 Conn. 381, 391, 752 A.2d 503 (2000).
Resolving the defendant's Motion to Dismiss Count Three requires this court to determine whether or not the plaintiff has standing to pursue this claim. "Standing is not a technical rule intended to keep aggrieved parties out of court; nor is it a test of substantive rights. Rather it is a practical concept designed to ensure that courts and parties are not vexed by suits brought to vindicate nonjusticiable interests and that judicial decisions which may affect the rights of others are forged in hot controversy, with each view fairly and vigorously represented . . . Thus, standing does not hinge on whether the plaintiff will ultimately be entitled to obtain relief on the merits of an action, but on whether he is entitled to seek the relief . . ." (Internal quotation marks omitted.) Lewis v. Swan, 49 Conn.App. 669, 675, 716 A.2d 127 (1998). "Standing concerns the question whether the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute . . . in question." (Internal quotation marks omitted.) Id. In other words, "it is not enough that a party is injured by an act or omission . . . [T]he relevant question would not be simply whether the official or agency violated the law, but rather whether the official or agency violated any duty to the plaintiff." Id. 677.
The question for this court is whether the plaintiff has a right, vis-a-vis § 31-57b, to request that the court order that the state be barred from awarding Contract E to O G Joint Venture. For reasons explained below, this court concludes that it does not.
A.
Zone of Interests
The first issue the court must address is whether or not the plaintiff falls within the zone of interests sought to be protected or regulated by the statute, § 31-57b. To answer this question, the court turns to the terms of the statute.
When construing a statute, including whether or not the claimant falls within the statutory zone of interest, "[the court's] fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply . . . In seeking to determine the meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered." (Citation omitted; internal quotation marks omitted.) Cogan v. Chase Manhattan Auto Financial Corp., 276 Conn. 1, 7, 882 A.2d 597 (2005).
Section 31-57b provides in relevant part: "No contract shall be awarded by the state or any of its political subdivisions to any person or firm or any firm, corporation, partnership or association in which such persons or firms have an interest . . . which has been cited for three or more willful or serious violations of any occupational safety and health . . . during the three-year period preceding the bid, provided such violations were cited in accordance with the provisions of any state occupational safety and health act or the Occupational Safety and Health Act of 1970, and not abated within the time fixed by the citation and such citation has not been set aside following appeal to the appropriate agency or court having jurisdiction . . ."
A review of the plain language of the statute does not indicate the "zone of interests" to be protected by its provisions. The legislative history of § 31-57b, however, reveals an intent on the part of the legislature to protect the safety of workers on state contracts. Thus, though the legislative history evidences an intent to protect the bidding process from "unsafe" bidders for the benefit of worker safety, it is clear that, as a competitor of the joint venture, the plaintiff is not within the zone of interests protected by § 31-57b. Thus, the wrongs allegedly suffered by the plaintiff are not the result of a breach of a duty owed to the plaintiff, pursuant to that statute. As a result, the plaintiff cannot maintain its mandamus claim in its role as an individual business competitor.
B.
Statutory Exception to Lack of Standing of Unsuccessful Bidder
Generally, an unsuccessful bidder lacks standing to challenge a contract award. However, there are a few, limited exceptions to this rule. Therefore, the court next addresses the plaintiff's claim that it has standing to bring its writ of mandamus claim even though it is an unsuccessful bidder. The plaintiff argues that it is functioning, essentially, as a private attorney general because it is litigating this matter to ensure fairness within the bidding process. For reasons explained below, this court finds that this case does not fit within one of the previously delineated exceptions which allow unsuccessful bidders to bring actions in Connecticut.
It is well established that "[a] bid, even the lowest responsible one, submitted in response to an invitation for bids is only an offer which, until accepted by the municipality, does not give rise to a contract between the parties . . . An unsuccessful bidder, therefore, has no legal or equitable right in the contract. Not unlike any other person whose offer has been rejected, the disappointed bidder has no right to judicial intervention." (Citations omitted, internal quotation marks omitted.) Ardmare Construction Co. v. Freedman, 191 Conn. 497, 501-02, 467 A.2d 674 (1983). "The only exception to that lack of standing is where fraud, corruption or favoritism has influenced the conduct of the bidding officials or when the very object and integrity of the competitive bidding process is defeated by the conduct of . . . officials . . ." (Internal quotation marks omitted.) AAIS Corp. v. Dept. of Administrative Services, 93 Conn.App. 327, 331, 888 A.2d 1127, cert. denied, 277 Conn. 927, 895 A.2d 798 (2006).
"[T]he public interest in preventing the granting of contracts through arbitrary or capricious action can properly be vindicated through a suit brought by one who suffers injury as a result of the illegal activity, but the suit itself is brought in the public interest by one acting essentially as a private attorney general." Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859, 864 (D.C. Cir. 1970); see Spiniello Construction Co. v. Manchester, 189 Conn. 539, 456 A.2d 1199 (1983). It is through this action as a private attorney general that an unsuccessful bidder has standing to maintain its claim for relief. See Id., 416; Ardmare Construction Co., Inc. v. Freedman, supra, 191 Conn. 504-05. Thus, the issue of whether an unsuccessful bidder such as the plaintiff has standing to challenge the defendant's award of the contract to the joint venture depends upon whether that bidder has a viable claim of favoritism, fraud, or corruption.
The plaintiff alleges that the defendant's failure to enforce the provisions of § 31-57b is an act of favoritism, which placed O G Joint Venture at a competitive advantage. The plaintiff contends that the state is barred from awarding any contract to the joint venture because O G has been issued 139 willful and/or serious violations in the past three years, and such violations remain outstanding, unresolved and unabated. The defendant asserts that he has, in good faith, interpreted the statute to allow the award of the contract to O G Joint Venture because the citations issued by the OSHA to O G have been timely contested and there have been no final findings regarding the citations.
In Connecticut, allegations sufficient to confer standing upon an unsuccessful bidder acting as a private attorney general must contain "the elements traditionally thought to undermine the competitive bidding process." Ardmare Construction Co., Inc. v. Freedman, supra, 191 Conn. 506. In other words, the plaintiff must allege that there is a "situation whereby the chosen bidder has received an advantage not afforded to other bidders, thereby skewing the competitive bidding process and its aims . . ." Meta-Life, Inc. v. Hamden, Superior Court, judicial district of New Haven, Docket No. NNH CV 09 5032680 (June 7, 2010, Corradino, JTR). For example, courts have stated that business competitors who are unsuccessful bidders may have standing as a private attorney generals when they can establish that:(1) there was a lack of parity of information made available to bidders; Spiniello Construction Co. v. Manchester, supra, 189 Conn. 539; (2) potential bidders would have submitted a bid, but were prevented from doing so because of allegedly illegal bid specifications; Unisys Corp. v. Dept. Of Labor, 220 Conn. 689, 600 A.2d 1019 (1991); and (3) there has been a departure from bid requirements that unfairly placed one bidder at an advantage; Meta-Life, Inc. v. Hamden, supra, Superior Court, Docket No. NNH CV 09 5032680.
In the absence of these elements (of fraud, corruption or favoritism), however, unsuccessful bidders have been unable to meet the necessary threshold to establish standing. In Ardmare Construction Co., Inc., supra, the court held, inter alia, that the plaintiff did not have standing to challenge the award of the contract at issue because there was no evidence of favoritism or fraud. In that case, the plaintiff alleged that the defendant undermined the purpose of the competitive bidding process when it rejected the plaintiff's bid because it did not have a handwritten stamp. The defendant asserted that it rejected all bids without a handwritten signature based upon an interpretation of the relevant statutory bidding requirements. The court found that "the commissioner made a good faith interpretation of the competitive bidding statute requirements, and applied it in a consistent [and non-discriminatory] fashion." Ardmare Construction Co., Inc. v. Freedman, supra, 191 Conn. 506.
In AAIS Corp. v. Dept. of Administrative Services, supra, 93 Conn.App. 327, the court affirmed the trial court decision to grant the defendant's motion to dismiss on the ground that the plaintiff had failed to allege or establish favoritism. The plaintiff in AAIS Corp. alleged that the defendant exhibited favoritism toward other bidders and "defeated the integrity of the bidding process . . ." when it considered the criminal history of an employee of the plaintiff's and rejected its bid on that basis. The court concluded that the plaintiff's allegations lacked the necessary elements of favoritism. Id., 332-33. Rather, the court stated, the defendant's "actions in this instance sought to preserve the integrity of [the competitive bidding] process, a function well within the [defendant's] discretion." Id., 333.
In the present case, the parties' positions are somewhat analogous to those in Ardmare Construction Co., Inc. v. Freedman, supra, 191 Conn. 497. In both that case and the present one, neither the plaintiff's factual allegations nor the evidence presented to the court indicate that any party in the competitive bidding process was placed at an unfair advantage as a result of the defendant's interpretation of a statute. To be sure, the defendant's interpretation of § 31-57b was favorable to O G Joint Venture. However, the evidence does not support the conclusion that the defendant's statutory interpretation was applied differently to the three bidders or that other bidders were prohibited from bidding whereas O G Joint Venture was not. In other words, in neither Ardmare nor the present case, was there evidence that the defendant interpreted or applied the statute in a discriminatory manner.
In fact, in the instant case, there is no evidence that the defendant applied § 31-57b in an inconsistent manner or in a manner that placed O G Joint Venture in a more favorable position than other similarly situated bidders or potential bidders.
As a result, based upon the evidence, the plaintiff does not have standing to bring its writ of mandamus claim as a private attorney general. The defendant's motion to dismiss the plaintiff's claim for a writ of mandamus, as alleged in Count Three of the Amended Complaint, is granted because this court does not have subject matter jurisdiction over that claim based upon the plaintiff's lack of standing.
The traditional law regarding the standing of unsuccessful bidders does not address or specifically contemplate the scenario presented in this case, namely, whether § 31-57b requires the preclusion of bids from entities that have received three or more willful and/or serious safety violations within three years of their bids. There is evidence within the legislative history that this was precisely one of the goals of certain legislators who supported this law. However, no Connecticut Court has yet considered the qualifying language contained within the statute, or how this qualifying language is to be applied. It may well be that upon appellate review, Connecticut Courts will expand the common-law doctrine of standing to include unsuccessful bidder claims based upon § 31-57b, even when such claims are not based upon the discriminatory application of the statute. However, the state of the law in Connecticut, as it currently exists, provides for only narrow exceptions to unsuccessful bidders who seek to challenge governmental contract awards. The plaintiff has failed to establish that its claim falls within one of these narrow exceptions. Therefore, notwithstanding the fact that the plaintiff raises many compelling arguments, this court concludes that SDE has failed to establish that it has the requisite standing to pursue its claim for a writ of mandamus.
There is also evidence within the legislative history that certain legislators cautioned that the bill, as drafted, did not accomplish this goal.
II.
DECLARATORY JUDGMENT ACTION
Finally, the plaintiff seeks a declaratory judgment that section 31-57b precludes the award of the contract to O G Joint Ventures. Practice Book § 17-54 provides that "[t]he judicial authority will . . . render declaratory judgments as to the existence or nonexistence (1) of any right, power, privilege or immunity; or (2) of any fact upon which the existence or nonexistence of such right, power, privilege or immunity does or may depend, whether such right, power, privilege or immunity now exists or will arise in the future." See also General Statutes § 52-29(a). "The purpose of a declaratory judgment action . . . is to secure an adjudication of rights where there is a substantial question in dispute or a substantial uncertainty of legal relations between the parties . . . Thus, [d]eclaratory relief is a mere procedural device by which various types of substantive claims may be vindicated." (Citations omitted; internal quotation marks omitted.) Wilson v. Kelley, 224 Conn. 110, 115-16, 617 A.2d 433 (1992).
In its first brief in support of the Motion to Dismiss, the defendant argued that the plaintiff's claim for a declaratory judgment was not ripe and therefore any opinion of the court would be merely advisory, in nature. At that time, the contract had not been awarded and the defendant's contention had some merit. However, the defendant has now acted and such action is alleged by the plaintiff to have been in contravention of § 31-57b. Therefore, the ripeness argument no longer applies. In its supplemental Motion to Dismiss, the defendant argues that the plaintiff's claim for declaratory judgment is moot. For reasons explained below, this court finds this argument to be without merit. Accordingly, the defendant's Motion to Dismiss the plaintiff's claim for declaratory judgment is denied.
Although the court did not specifically address the issues raised in the second Motion to Dismiss and the Objection, thereto, arguments raised therein are discussed throughout this Memorandum of Decision. One issue which has not yet been addressed is the plaintiff's objection to the defendant's second motion to dismiss on the grounds of the exception to the mootness doctrine, namely the "collateral consequences doctrine." Pursuant to that doctrine, a court may "retain jurisdiction when the litigant shows that there is a reasonable possibility that prejudicial collateral consequences will occur [if the case is dismissed on grounds of mootness] . . . The array of collateral consequences that will preclude dismissal on mootness grounds is diverse . . ." Putnam v. Kennedy, 279 Conn. 162, 169, 900 A.2d 1256 (2006). This case would seem to fall within this exception, even if the court deemed it to be moot.
"Mootness presents a circumstance wherein the issue before the court has been resolved or had lost its significance because of a change in the condition of affairs between the parties . . . A case becomes moot when due to intervening circumstances a controversy between the parties no longer exists . . . An issue is moot when the court can no longer grant any practical relief." (Internal quotation marks omitted.) Taylor v. Zoning Board of Appeals of Wallingford, 71 Conn.App. 43, 46, 800 A.2d 641 (2002). Despite the defendant's arguments to the contrary, the mootness doctrine is inapplicable in the present case. First, a controversy still exists between the parties because they disagree about whether the defendant's award of the contract to O G Joint Venture was legal, in light of the provisions of § 31-57b. Second, the court may grant practical relief to the plaintiff, by way of declaratory judgment.
With Defense Counsel's concession during oral arguments that the state would be required to void the contract and pursue other options if the OSHA violations are not dismissed or overturned or remain unabated, the defendant implicitly acknowledges that the execution of Contract E is only valid if the terms of section 31-57b are met. Construction of the terms of the statute must ultimately be done by Connecticut courts.
For the reasons set forth herein, this court grants the defendant's Motion to Dismiss Counts One, Two and Three, but denies the defendant's request to dismiss Count Four.