Aids Healthcare Found. v. Dep't of Pub. Health

AIDS HEALTHCARE FOUNDATION, a California non-profit corporation, Appellant, v. DEPARTMENT OF PUBLIC HEALTH, d/b/a PUBLIC HEALTH—SEATTLE &KING COUNTY, a division of King County, a political subdivision of the State of Washington, Respondent.

No. 80532-1-I

COURT OF APPEALS FOR THE STATE OF WASHINGTON DIVISION ONE

April 19, 2021

UNPUBLISHED OPINION

ANDRUS, A.C.J. — AIDS Healthcare Foundation (AHF) appeals the dismissal of its lawsuit against King County's Department of Public Health. AHF sought to enjoin the Department from awarding federal funds for AIDS/HIV-related services to other service providers and to reallocate funding to AHF. We affirm.

FACTUAL BACKGROUND

The Ryan White Comprehensive AIDS Resources Emergency (CARE) Act and the subsequent Ryan White HIV/AIDS Treatment Extension Act of 2009,¹allocate federal funds to state and local governments to provide services and treatment to those suffering from or affected by HIV/AIDS. 42 U.S.C. § 300ff. King County, through the Department of Public Heath—Seattle & King County (Department), is eligible to receive this funding, called Ryan White Part A funding, and distributes the money to private organizations through a competitive application process.

On September 13, 2018, the Department advertised a Request for Applications (RFA) and invited service providers to apply for funding in six different service categories for the 2019 fiscal year of March 1, 2019 to February 29, 2020. It had approximately $6,087,110 available for a 12-month award. Of this sum, approximately $186,653 was allocated for a "Minority AIDS Initiative" in the area of "Early Intervention Services" (EIS), described as outreach and health education/risk reduction, HIV testing, referrals, and linkage to HIV care for members of a racial or ethnic community disproportionately affected by HIV.

AHF, a California nonprofit that has provided HIV/AIDS services in King County since 2015 applied for EIS funding. Two other organizations applied for the same EIS funding, the Center for Multicultural Health (CMCH) and People of Color Against AIDS Network (POCAAN).

The organizations' applications were reviewed by the "Objective Review Committee" (ORC), a team of five people appointed by King County to evaluate and score the applications and make funding recommendations to the Department. Each applicant was scored based on their program design, capacity andexperience, plans for collaborating with other agencies and providers, cultural competency, quality management, and budget.

The ORC scored AHF lower than POCAAN and CMCH. It concluded that AHF's application lacked sufficient information to determine whether it could meet program needs. It noted that AHF sought a 256 percent increase in cost per client from the amount it received in Ryan White funds in 2018 without concern that AHF's quarterly reports submitted with its application showed it served no clients and conducted no testing events during the first half of 2018. And ORC reviewers were concerned that AHF did not provide specifics about how it was connected to the target population or how it would adapt to changes in community needs. Because requests for EIS funding exceeded the money available, ORC opted to recommend that the Department provide funding to CMCH and POCAAN, instead of AHF.

In late December 2018, the Department awarded $118,827 in EIS funding to CMCH and the remaining $67,826 in EIS funding to POCAAN. It notified AHF that it would not receive any funding.

On January 9, 2019, AHF filed an administrative appeal of the Department's award decision, arguing the ORC's technical review document contained inaccurate statements about AHF's services and the ORC failed to apply its standards consistently across the three applications. The Department denied the appeal on March 18, 2019.

AHF then brought this action for injunctive relief and sought a temporary restraining order (TRO) to enjoin the County from executing contracts with thesuccessful applicants. AHF named the Department as the sole defendant and did not serve a complaint or summons on defense counsel or the Department within ninety days of commencing the action.

A superior court commissioner denied the motion for a TRO, finding that AHF failed to demonstrate it was denied funding for any reason other than the quality of its application. AHF did not move to revise the commissioner's ruling.² AHF thereafter filed an amended complaint seeking to compel the Department to enter into a contract with AHF and to prohibit the Department from distributing funds to the successful applicants. AHF did not, however, move for a preliminary injunction or seek any type of a stay from this court. The Department thus moved ahead and executed contracts with CMCH and POCAAN, awarding all of the available EIS funding to these two organizations. By mid-July 2019, the Department had awarded all available grant funds through the RFA process.

After executing these agreements, the Department moved to dismiss AHF's complaint under CR 12(b)(6) and CR 56, arguing that AHF had named the wrong defendant, that it had not served process on the Department or the County, and that AHF's claim for injunctive relief was moot because the Department had awarded all available grant funds to other organizations. AHF served process on the Department after receiving this dispositive motion and it moved to substitute King County as the properly named defendant. It also opposed the dismissal ofits complaint, arguing that there could be funds that the Department chose to reallocate during the relevant funding period and the trial court had the equitable authority to order it to award any such funds to AHF, if or when they became available.

The trial court dismissed AHF's complaint under CR 56, concluding that AHF had failed to name King County, the proper defendant here; failed to effectuate proper service of process; and failed to state a claim for which it could grant relief. The trial court denied AHF's motion to amend the complaint to name King County as the defendant, concluding the amendment would be futile. The court recognized that a dismissal for failure to name the County as the proper defendant and for lack of service of process was without prejudice but it concluded that dismissal with prejudice was appropriate on the alternative basis that AHF had not filed and served its injunction action before the County signed contracts with the competing service providers.

AHF moved for reconsideration but then filed a notice of appeal with this court before the trial court ruled on its pending motion. The trial court concluded that it lacked the authority to rule on the motion without permission from this court under RAP 7.2(a). AHF did not seek permission from this court to allow the trial court to consider its motion for reconsideration.

On appeal, AHF assigns error to the order dismissing its complaint with prejudice and the order denying its motion for reconsideration.³

ANALYSIS

A. Standard of Review

Although the Department moved to dismiss AHF's complaint under both CR 12(b)(6) and CR 56, the trial court treated the motion as one for summary judgment because both parties submitted declarations and documentary evidence to support their respective positions. The order reflected this conclusion, clearly indicating the trial court had applied the summary judgment standard under CR 56.

We review the trial court's summary judgment ruling de novo. Borton & Sons, Inc. v. Burbank Properties, LLC, 196 Wn.2d 199, 205, 471 P.3d 871 (2020). A moving party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact." CR 56(c).⁴

B. Mootness

The trial court dismissed AHF's complaint because it concluded there was no relief it could grant to AHF under this Court's decision in Dick Enterprises, Inc. v. Metro. King County, 83 Wn. App. 566, 922 P.2d 184 (1996). AHF contends the trial court erred in applying Dick Enterprises to this case. We reject AHF's narrow reading of Dick Enterprises and conclude, as did the trial court, that AHF's failure to seek and obtain injunctive relief before King County executed contracts with CMCH and POCAAN renders its lawsuit for injunctive relief moot.

A case is moot when a court can no longer provide an effective remedy. Hart v. Dep't of Soc. & Health Servs., 111 Wn.2d 445, 447, 759 P.2d 1206 (1988). Under Dick Enterprises, a disappointed bidder for a public contract may seek to enjoin an agency from executing a contract with a successful bidder, but once the agency has executed the contract, public policy precludes a suit to enjoin performance of that contract. 83 Wn. App. at 571.

In AHF's amended complaint, it sought only injunctive relief. It asked the court to enjoin the Department from distributing payments of the Ryan White funds for EIS to the successful applicants, to require the Department to rescind all contracts for EIS, and to require the Department to issue a revised RFA to rebid all undistributed Ryan White funds in the EIS category.

AHF was unsuccessful in obtaining a TRO, did not file a motion to revise the commissioner's decision, and did not seek any relief from this court before the County entered into contracts with CMCH and POCAAN, committing all of the available EIS funds. By the time the Department moved to dismiss AHF's complaint, there were no Ryan White funds available for the trial court to order the Department to allocate or reallocate to AHF. Under Dick Enterprises, it would have violated public policy to order the Department to rescind validly executed public contracts and to order the agency to enter into a contract with AHF instead.

AHF argues Dick Enterprises should not be extended to applications for Ryan White funding and should be limited to "contracts awarded for a defined scope of work (e.g. construction projects) pursuant...