D'Eramo v. Allegheny Cnty., Pa., & Pub. Commc'ns Servs., Inc.

Matthew E. D'Eramo v. Allegheny County, Pennsylvania, and Public Communications Services, Inc.

Appeal of: Allegheny County

Matthew E. D'Eramo v. Allegheny County, Pennsylvania, and Public Communications Services, Inc.

Appeal of: Public Communications Services, Inc.

No. 1282 C.D. 2011

No.1283 C.D. 2011

COMMONWEALTH COURT OF PENNSYLVANIA

Argued: November 14, 2011

January 12, 2012

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge¹ HONORABLE ROBERT SIMPSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE SIMPSON

In these consolidated appeals, Allegheny County (County) and Public Communications Services, Inc. (PCS)² ask whether the Court of Common Pleas of Allegheny County (trial court) erred in granting a preliminary injunction in favorof Taxpayer Matthew D'Eramo³ (D'Eramo), who challenged the County's award of a contract for an inmate telephone system for the County Jail and juvenile detention facility (collectively, the Jail) to PCS, who it deemed the successful bidder. The trial court determined that multiple irregularities in the County's evaluation of the proposals it received from potential vendors warranted enjoining the award of the contract to PCS. Additionally, the trial court credited testimony that one of the members of the County's evaluation committee was on a course to steer the contract to a particular vendor. Because reasonable grounds exist to support the trial court's entry of preliminary injunctive relief, we affirm.

I. Background

The trial court provided the following background to this dispute. This case has a history related to a similar proceeding involving Securus Technologies, Inc. (Securus) and the County. That prior matter originated in the trial court in 2006 before the Honorable Judith L.A. Friedman.

In that prior case, after hearings on a taxpayer's motion for preliminary injunction, Judge Friedman found the evaluation committee did not adhere to the provisions of the County's Home Rule Charter, the County Administrative Code, the County Purchasing Manual and the Request for Proposals (RFP) in its evaluation of the proposals submitted. Notably, she found one member of the evaluation committee, then-Lieutenant Thomas Leicht, a Jailemployee, engaged in conduct designed to steer the award away from Securus and to another vendor. Thus, Judge Friedman granted a preliminary injunction prohibiting award of the contract.

On consolidated appeals by the County and the vendor who was awarded the contract, this Court affirmed the grant of preliminary prohibitory injunctive relief to the taxpayer. See Lemansky v. Allegheny County et al., No. GD 06-3583 (C.P. Allegheny 2006), aff'd in part, rev'd in part, (Pa. Cmwlth., Nos. 1057, 1078 & 1142 C.D. 2006, filed June 11, 2007) (unreported) (affirming grant of prohibitory preliminary injunction that barred County's award of contract for inmate phone service where record revealed County's evaluation of proposals violated provisions of its Home Rule Charter, Administrative Code, and RFP; reversing grant of mandatory preliminary injunction that awarded contract to Securus).

In the interim, Securus became the County's provider for the Jail's inmate phone services. Securus also previously served as the County's provider for inmate telephone services for several years without any complaint.

With the three-year contract between Securus and the County set to expire, the County issued an RFP seeking to change and upgrade the Jail's phone system. Under the RFP, the successful vendor would install and maintain the system at no cost to the County. In turn, the vendor would pay the County a commission based on the gross revenue generated from the phone system.

Initially, six applicants responded to the RFP. The County appointed the following individuals to serve on a committee to evaluate the proposals: John Deighan, Purchasing Manager of the County Procurement Office; Dennis Madoni, Assistant Purchasing Manager; Alan Opsitnick, Assistant County Solicitor; and, now-Captain Thomas Leicht.

In an effort to avoid the obvious infirmity in an evaluation committee that continued to include Captain Leicht, the County retained a third-party consulting company known as Praeses, LLC, a computer and software evaluation entity. Praeses' representative to the evaluation committee was Ann O'Boyle.

After its evaluation of the proposals, the County awarded the contract to PCS. The facts surrounding the evaluation committee's review process are explored in greater detail below.

D'Eramo subsequently filed a taxpayer suit challenging the County's decision to award the contract to PCS. Shortly thereafter, the County transferred the Jail's phone services from Securus, the incumbent provider and a disappointed bidder, to PCS, the successful bidder.

In December 2010, D'Eramo filed a complaint and motion for preliminary injunction seeking to prevent the County's transition of the Jail's phone service from Securus to PCS. D'Eramo first sought an injunction in advance of a hearing, which was denied. D'Eramo's motion for preliminaryinjunction was then assigned to the then-sitting motions court judge, who conducted hearings over portions of a six-day period.

Before the trial court, D'Eramo asserted the County should have awarded the contract to Securus rather than PCS. He argued the failure to award the contract to Securus violated the County Administrative Code. Further, D'Eramo maintained the award process was flawed and was based on arbitrary and capricious conduct by the County. D'Eramo asserted the individuals assigned to perform the evaluation and make the award were biased against Securus. Thus, D'Eramo sought an injunction terminating the contract awarded to PCS and directing the issuance of a new RFP. He also requested the trial court restore the status quo so that Securus, the provider of the phone service prior to the award, would be reinstated until a proper award could be made.

After a lengthy set of hearings, the trial court issued a decision in which it determined the County engaged in "many deviations" from the standards set forth in the RFP. Tr. Ct., Slip Op., at 9. The trial court found Captain Leicht manipulated the "testing" component of the evaluation process, and it credited testimony that Captain Leicht "was on a course to steer the award from Securus ...." Id. As such, the trial court granted a preliminary injunction: (1) invalidating the contract between the County and PCS; (2) authorizing Securus to reassume its role as the County's inmate phone service provider; and, (3) requiring the County to commence a new RFP process for the desired inmate telephone system in which all potential vendors could participate. The County and PCS appealed to this Court.

II. Standards for Preliminary Injunction

At the outset, we note, to obtain a preliminary injunction, a petitioner must establish: (1) relief is necessary to prevent immediate and irreparable harm that cannot be adequately compensated by monetary damages; (2) greater injury will occur from refusing to grant the injunction than from granting it; (3) the injunction will restore the parties to their status quo as it existed before the alleged wrongful conduct; (4) the activity it seeks to restrain is actionable, that its right to relief is clear, and that the wrong is manifest, or, in other words, that it is likely to prevail on the merits; (5) the injunction is reasonably suited to abate the offending activity; and, (6) the public interest will not be harmed if the injunction is granted. Brayman Constr. Corp. v. Dep't of Transp., ___ Pa. ___, 13 A.3d 925 (2011); Summit Towne Ctr., Inc. v. Snow Shoe of Rocky Mt., Inc., 573 Pa. 637, 828 A.2d 995 (2003). Appellate courts review a trial court's order refusing or granting a preliminary injunction for an abuse of discretion. Brayman Constr. This standard is applied as follows:

[O]n an appeal from the grant or denial of a preliminary injunction, we do not inquire into the merits of the controversy, but only examine the record to determine if there were any apparently reasonable grounds for the action of the court below. Only if it is plain that no grounds exist to support the decree or that the rule of law relied upon was palpably erroneous or misapplied will we interfere with the decision of the Chancellor.

Brayman Constr., ___ Pa. at ___, 13 A.3d 935-36 (emphasis added) (citation omitted). Here, the parties' arguments primarily focus on whether D'Eramopossesses a clear right to relief so as to warrant entry of preliminary prohibitory injunctive relief.⁴

III. Issues

In their joint brief, the County and PCS assert the trial court erred in: (1) improperly relying on the "missing witness rule" to draw a negative inference against the County and to create a clear right to relief for D'Eramo when no such right existed; (2) failing to afford proper deference to the administrative discretion of a local government unit by impermissibly substituting its judgment for that of the County; and, (3) finding D'Eramo satisfied the high evidentiary burden necessary to support the extraordinary remedy of a preliminary injunction.

IV. Discussion/Analysis

A. "Missing Witness" Rule

The County and PCS begin by noting that, in order to grant a preliminary injunction, a trial court must conclude the moving party has a clear right to relief. They contend that, where, as here, the trial court commits an error of law or abuses its discretion in the manner in which it makes the determination regarding a party's right to relief, the grant of a preliminary injunction may be vacated.

The County and PCS then devote a substantial portion of their brief and a portion of their reply brief to their assertions that the trial court erred in applying the "missing witness rule." Their argument is as follows. The trial court both erred as a matter of law and abused its discretion when it drew a negative inference against the County's selection procedure founded on the...