Opinion
Case No. CV03-288-S-EJI.
July 22, 2003.
ORDER
Pursuant to federal Rule of Civil Procedure 65, Plaintiff Hobson Fabricating Corporation moves the court for entry of a Temporary Restraining Order and a Preliminary Injunction against Defendants Blaine County Board of Commissioners, et al., and Beniton. Construction Co., Inc. Hobson is the disappointed bidder on Bid Package 22, which requested invitations to complete certain mechanical work for the Blanc County Courthouse Annex Construction Project (the "Annex Project"). After opening the bids submitted for Bid Package 22, Defendants learned that Hobson, the low bidder, did not believe that Bid Package 22 (as modified by Bid Clarification No. 001), required it to furnish and install certain HVAC controls. Defendants disagreed, and presented Hobson with a contract for execution of Bid Package 22 which included the HVAC controls. Hobson modified the proffered contract by striking the disputed work requirements, and then signed and delivered the contract to Defendants.
Thereafter the Blaine County Board of Commissioners ("Commissioners") met and decided not to accept the modified contract tendered by Hobson, but instead determined that the project should be rebid Hobson then filed this lawsuit pursuant to 42 U.S.C. § 1983, alleging that as low bidder it possesses a protected property interest in Bid Package 22 and that to preserve its due process right to notice and hearing, the Defendants must he enjoined from opening and/or awarding any bid received on the rebid project. Hobson's Motion for Temporary Restraining Order, Preliminary Injunction, and Declaratory Relief is now ripe. Having fully reviewed the record, the Court finds that the facts and legal arguments are adequately presented in the briefs and affidavits. Accordingly, in the interest of a voiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, this matter shall be decided on the record before this Court without a hearing.
1. Standards For Issuing a Preliminary Injunction
Where, as here, both parties have had the opportunity to submit briefs, affidavits and exhibits, the party seeking a TRO must satisfy the same test required for the issuance of a preliminary injunction. Bronco Wine Co. v. U.S. Dept. of Treasury, 997 F. Supp. 1309, 1313 (E.D. Cal 1996). In the Ninth Circuit a party seeking preliminary injunctive relief must meet one of two tests. Under the first, a court may issue a preliminary injunction if it finds: (1) a strong likelihood of success on the merits, (2) the possibility of irreparable injury to plaintiff if the preliminary relief is not granted, (3) a balance of hardships favoring the plaintiff and (4) advancement of the public interest. See, e.g. Dollar Rent a Car v. Travelers Indem., 774 F.2d 1371, 1374 (9th Cir. 1985), Under an "alternative test," a court may issue a preliminary injunction if the moving party demonstrates either (1) probable success on the merits and the possibility of irreparable injury or (2) that serious questions are raised by plaintiff and the balance of hardships tips sharply in plaintiff's favor. See, e.g., Caribbean Marine Servs. Co. v. Baldridge, 844 F.2d 668, 674 (9th Cir. 1988). "These are not separate tests, but the outer reaches `of a single continuum.'" Dollar Rent a Car, 774 F.2d at 1375. "Under either test, however, the district court must consider the public interest as a factor in balancing the hardships when the public interest may be affected." Caribbean Marine Servs. Co., 844 F.2d at 674.
Hobson advances its Motion for Temporary Restraining Order and Preliminary Injunction under the "alternative test." (Mem. in Supp. at 5). The two formulations of the alternative test "represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases." Idaho Sporting Congress, Inc. v. Alexander, 222 F.3d 562, 565 (9th Cir. 2000). However, under the "last part of the alternative test, even if the balance of hardships tips decidedly in favor of the moving party, it must be shown as an irreducible minimum that there is a fair chance of success on the merits." Bronco Wine, 997 F. Supp. at 1313.
2. Likelihood of Success
In order to succeed on the merits, Hobson must show that (1) Defendants acted under color of state law when committing the challenged act, and (2) the Defendants' conduct deprived Hobson of a constitutionally protected light. Dana, Larson, Roubal Assocs. v. Board of Comm'rs of Canyon County, 864 P.2d 632, 636 (Idaho Ct.App. 1993) (citing Leer v. Murphy, 844 F.2d 628, 632-33 (9th Cir. 1988)). Here, Defendants do not contest the first requirement. As to the second requirement: "Property interests are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.'" Scott v. Buhl Joint School District No. 412, 852 P.2d 1376, 1381 (Idaho 1993) (quoting Board of Regents v. Roth, 408 U.S. 564, 577 (1972)). Under Idaho case law, it is clear that the lowest responsible bidder on a project may possess a protected property right in the award of the contract. See e.g., Scott, 852 P.2d at 1382.
However, the fact that a disappointed bidder may possess a protected property interest under Idaho law, does not mean that Hobson has demonstrated a likelihood of success in this case. Hobson must show that it was entitled to award of the contract under the statutory provisions that govern Defendants' bidding procedure. See e.g., Metric Constructors, Inc. v. Gwinnett County, Ga., 729 F. Supp. 101, 102 (N.D. Ga. 1990), aff'd, 969 F.2d 1047 (11th Cir. 1992). In this regard, Hobson turns to Chapter 40 of Title 31, Idaho Code, and points to § 31-4003 which states that when a board of county commissioners is faced with an expenditure exceeding $25,000, "it shall be contracted for and let to the lowest responsible bidder." But the Chapter 40 procedure for bid solicitations also provides that "[i]n its discretion, the board of county commissioners may reject any bids presented and readvertise." I.C. § 31-4011. The statutory discretion possessed by the Commissioners to reject bids and re-advertise was disclosed to Hobson in the preliminary bid materials. (See e.g., Aff. of Dennis Wright ¶ 11). Where the statutory provisions that create the alleged property interest provide the state actor with discretion to reject all bids and "call for a second round of bidding," the bidder lacks a protected property interest in the award of the contract. Kim Construction v. Board of Trustees of the Village of Mundelein, 14 F.3d 1243, 1245-50 (7th Cir. 1994) (explaining that under the United States Supreme Court decision of Kentucky Dep't of Corrections v. Thompson, 490 U.S. 454, 464-65 n. 4 (1989), to establish a protected property interest, a disappointed bidder "must show that at the close of the first round of bids, the Board was without discretion to call for a second round of bidding, and instead was legally required to award the contract to [to plaintiff]").
The circumstances presented by the instant matter are distinct and different from any situation previously addressed by a Idaho court decision. First, it appears that Chapter 40 of Title 31, Idaho Code, has not yet been construed by the Idaho courts in the context of a due process challenge. Cf.e.g., Scott, 852 P.2d at 1380-81 (construing the statutory scheme that governs award of pupil transportation contracts); Dana, Larson Roubal Assocs., 864 P.2d at 636 (construing statutory scheme in regards to a potential bidder). Second, other Idaho due process cases involve a challenge to the award of a bid to someone other than the plaintiff, and not, as here, a challenge to a decision to reject all bids and to rebid a clarified bid package. Cf. e.g., Scott, 852 P.2d at 1380-82 (action by second highest bidder to challenge award of contract to lowest bidder); Scysler v. Mowery 160 P. 262 (Idaho 1916) (action by lowest bidder to challenge award to highest bidder).
Hobson does not allege in its Complaint, and there is nothing in the record to show, that the exercise of the Commissioners' statutory discretion to reject all bids and rebid the project was arbitrary or made in bad faith. See Metric Constructors, 729 F. Supp. at 102-03. To the contrary, the parties' extensive disagreement as to whether Hobson's bid was responsive and whether the modified Bid Package 22 was ambiguous, demonstrates the existence of a factual basis and the presence of policy considerations which supports the Commissioners' decision to exercise its statutory discretion and rebid the project Therefore, the Commissioners appear to have acted in accordance with the relevant statutory provisions.
Hobson's Motion to Strike is inappropriate because the evidence Hobson seeks to exclude is admissible and relevant to exercise of the Commissioners' discretion pursuant to § 31-4011.
Because the statutory scheme relevant to the bid process at issue in this case allows the Commissioners the discretion to "reject any bids presented and readvertise," § 31-4011 the Court finds it unlikely that Hobson will be able to establish a constitutionally protected property interest in the award of a contract under Bid Package 22. See Kim Construction, 14 F.3d at 1247; Neilsen Co. v. Cassia Twin Falls County Joint Class A School District 151, 536 P.2d 1113, 1116 (Idaho 1975) ("Provisions affecting competitive bidding on public works were initially established to invite effective competition, prevent fraud, and to secure subcontractors who were capable of satisfactorily performing the work and furnishing supplies at the lowest overall cost. Only through application of the entire scheme can these initial purposes be reached.").
2. Irreparable Injury and Balance of Hardships
Hobson maintains that it seeks "simply [to] obtain that which the state competitive bidding statute provides; i.e. the opportunity to provide quality work and equipment and be paid for it pursuant to the bid that it submitted." (Mem. in Supp. at 6). Hobson, however, may yet secure the contract that has been re-advertised for bid. There is nothing in the record that suggests the Commissioners' decision to re-advertise the project has compromised Hobson's ability to submit a competitive bid. Further, if a trial is resolved in Hobson's favor, it maybe able to collect damages from Defendants for any monetary harm it incurred for preparation of the rejected bid and/or for lost profits.
On the other hand, Defendants state that the issuance of a preliminary injunction "will result in delays to other work that is to be performed on the Annex Project [and] [t]hese delays will lead to increased unexpected costs that will be paid for by the citizens of laine County and result in the Annex Project coming in well over budget." (Aff. of Dennis Wright ¶ 16). Thus, the potential harm to Defendants and to the public appear significant. While the Court recognizes that Hobson seeks a immediate due process hearing, in the unlikely event it could establish a right to the same, the Court finds that the governmental interest and the interest of the public in proceeding with the Annex Project outweighs the interest of Hobson. See Caribbean Marine Servs. Co., 844 F.2d at 677-78.
Because Hobson has not satisfied its burden under any formulation of the "alternative test" for the issuance of an injunction, Hobson's motion will be denied,
ORDER
Based on the foregoing, and being fully advised in the premises, the Court HEREBY ORDERS that the Plaintiff's Motion for Temporary Restraining Order, Preliminary Injunction, and Declaratory Relief (Docket No. 20) is DENIED. IT IS FURTHER ORDERED that Plaintiff's Motion to Strike (Docket No. 20) is DENIED,