Demien Constr. Co. v. O'Fallon Fire Prot. Dist.

72 F.Supp.3d 967

DEMIEN CONSTRUCTION CO., Plaintiff

v.O'FALLON FIRE PROTECTION DISTRICT, Defendant.

No. 4:14–CV–1014 JAR.

United States District Court, E.D. Missouri, Eastern Division.

Signed Dec. 11, 2014.

Joshua M. Avigad, Lawrence P. Kaplan, Kaplan Associates, L.L.C., Clayton, MO, for Plaintiff.

Lawrence R. Smith, James E. Beal, Brinker and Doyen, St. Louis, MO, for Defendant.

MEMORANDUM AND ORDER

JOHN A. ROSS, District Judge.

This matter is before the Court on Defendant O'Fallon Fire Protection District's Rule 12(b)(6) Motion to Dismiss. (Doc. No. 11) The motion is fully briefed and ready for disposition.¹ For the following reasons, the motion will be granted.

I. Background

Plaintiff brings this action under 42 U.S.C. § 1983 alleging a violation of due process under the First and Fourteenth Amendments. Plaintiff also alleges state law claims for violation of Mo.Rev.Stat. § 321.220(4), and the Missouri Constitution. According to Plaintiff, during the spring of 2014, the District solicited a bid from it for the general construction of a new fire house. (First Amended Complaint (“FAC”), Doc. No. 3 at ¶¶ 7–8) The “INVITATION TO BID” incorporated by reference a “Recommended Guide for Bidding Procedures and Contract Awards” published by the American Institute of Architects to guide all bidding. (Doc. No. 3–1 at 5) The Guide provides that “[t]he contract should be awarded to the lowest responsible bidder.” (Doc. No. 3–2 at 10) Plaintiff submitted the “lowest responsible bid” for the general construction on the fire house. (FAC at ¶ 9) On May 27, 2014, the District awarded the contract to another general contractor with a higher bid. (Id. at ¶ 11)

Plaintiff alleges that “by not awarding the bid for general construction of the fire house to [Plaintiff], the District did not meet the basic standards of due process under the First and Fourteenth Amendments of the United States Constitution as well as the Missouri Constitution because the District did not have objective data to not award the contract to [Plaintiff] on more than surmise, guesswork, or gut feeling.” (FAC at ¶¶ 18, 28) Plaintiff further alleges that under Mo.Rev.Stat. § 321.220(4), the contract was not fairly bid. (Id. at ¶¶ 24–27) Plaintiff seeks damages for lost profits and loss of goodwill and business reputation as well as punitive damages.

II. Legal standard

In ruling on a motion dismiss under Rule 12(b)(6), the Court must view the allegations in the complaint in the light most favorable to Plaintiff. Foster v. Deutsche Bank Nat. Trust Co., 2012 WL 5285887, *2 (E.D.Mo. Oct. 25, 2012) (citing Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir.2008) ). The Court “must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party.” Id. (quoting Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir.2005) ). The complaint's factual allegations must be sufficient “to raise a right to relief above the speculative level,” however, and the motion to dismiss must be granted if the complaint does not contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (abrogating the “no set of facts” standard for Fed.R.Civ.P. 12(b)(6) found in Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). Thus, a dismissal under Rule 12(b)(6) should be granted “only in the unusual case in which a plaintiff includes allegations that show, on the face of the complaint, that there is some insuperable bar to relief.” Strand v. Diversified Collection Serv., Inc., 380 F.3d 316, 317 (8th Cir.2004). The issue on a motion to dismiss is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of his or her claim. Rosenberg v. Crandell, 56 F.3d 35, 37 (8th Cir.1995).

III. Discussion

A. Standing

The District first argues that Plaintiff lacks standing, as an unsuccessful bidder, to bring this action. In support of its motion, the District argues that because it expressly reserved the right “to select a Bidder other than the lowest” in accordance with its best interest (see, Doc. No. 3–1 at 7), Plaintiff “was not deprived of anything to which it was legally entitled,” citing Metcalf & Eddy Services, Inc. v. City of St. Charles, 701 S.W.2d 497, 499 (Mo.Ct.App.1985). (Doc. No. 12 at 3–4) Plaintiff responds that the Eighth Circuit has held that an unsuccessful bidder has standing to challenge a contract that was not fairly bid, citing Metropolitan Express Services, Inc. v. City of Kansas City, 23 F.3d 1367, 1371 (8th Cir.1994). (Doc. No. 13 at 3–4)

Standing is a jurisdictional issue that must be addressed by a court before reaching the merits of a lawsuit. City of Clarkson Valley v. Mineta, 495 F.3d 567, 569 (8th Cir.2007) ; see also, Elk Grove Unified School District v. Newdow, 542 U.S. 1, 11, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004) (in every federal lawsuit, the party must establish standing to prosecute the action). “In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues.” Elk Grove, 542 U.S. at 11, 124 S.Ct. 2301 (quoting Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ). When a motion to dismiss is made on standing grounds, the standing inquiry must be done in light of the factual allegations of the pleadings. City of Clarkson Valley, 495 F.3d at 570. In order to have standing, a plaintiff must sufficiently allege a “special pecuniary interest” in the matter that demonstrates a clear legal right to the relief sought. Metcalf, 701 S.W.2d at 499. Plaintiff bears the burden of establishing standing to challenge the award of the contract. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

Missouri cases hold that a disappointed bidder competing for a government contract does not have a special pecuniary interest in the award of the contract to it, and therefore generally lacks standing to challenge the award of the contract to another bidder.² See, e.g.,

State ex rel. Johnson v. Sevier, 339 Mo. 483, 98 S.W.2d 677, 679 (1936) ; Brannum v. City of Poplar Bluff, 439 S.W.3d 825 (Mo.Ct.App.2014) ; Public Communications Services, Inc. v. Simmons, 409 S.W.3d 538, 546–47 (Mo.Ct.App.2013) ; State ex rel. Mid–Mo. Limestone, Inc. v. County of Callaway, 962 S.W.2d 438, 441–42 (Mo.Ct.App.1998) ; Metcalf, 701 S.W.2d at 499 ; La Mar Const. Co. v. Holt County, R–II School Dist., 542 S.W.2d 568, 570–71 (Mo.Ct.App.1976).

Despite this general rule, Missouri courts recognize that members of the public have standing to challenge a contract award where the contracting authority exercises its discretion to solicit and evaluate bids unlawfully or capriciously. Simmons, 409 S.W.3d at 546.³ Relying on this principle, the Eighth Circuit has held that an unsuccessful bidder has standing to challenge a contract award under Missouri law “if the bidding procedure did not permit all bidders to compete on equal terms” or where the lowest bid is rejected “fraudulently, corruptly, capriciously or without reason.” Metropolitan, 23 F.3d at 1371.

Metropolitan is distinguishable from the present case. The plaintiff in Metropolitan was not claiming it should have been awarded a contract; it did not even submit a bid. Rather, the plaintiff alleged that the city had completely “disregarded [applicable] competitive bidding procedures.” 23 F.3d at 1370–71. Specifically, the city provided the successful bidder with information that other bidders did not receive and, as a result of negotiations based on that information, offered the successful bidder a contract that was materially different from the contract proposed in the bid package. The Eighth Circuit held that a plaintiff has standing to challenge a municipality's bidding procedure, where such procedure prevented the plaintiff from submitting a bid. Id. at 1372. In addition, the plaintiff was not seeking damages but rather to void the contract at issue. Id. at 1369.

Here, Plaintiff was invited to bid and did in fact bid on the project. Plaintiff alleges the District's bidding procedure did not permit all bidders to compete on equal terms, and that the contract was not fairly bid. (FAC at ¶ ¶ 26–27) Plaintiff further alleges the District's award of the contract was based on “surmise, guesswork, or gut feeling” as opposed to “objective data.” (Id. at ¶¶ 18, 28) Finally, Plaintiff claims the District's failure to award it the contract was “arbitrary, capricious and fraudulent.” (Id. at ¶ 29) Plaintiff fails to plead facts which support these conclusory allegations—even under notice pleading standards. “Threadbare recitals ... supported by mere conclusory statements do not suffice.” Croskey v. County of St. Louis, 2014 WL 3956617, at *1 (E.D.Mo. Aug. 13, 2014). Cf., Simmons, 409 S.W.3d at 543 (plaintiff made specific allegations that the State acted arbitrarily and capriciously by failing to consider Securus' charges for optional services, or prepaid account fees, while at the same time referring to Securus' bid as the “lowest and best.”) Thus, Plaintiff has not met its burden to establish standing to challenge the award of the contract at issue. See Lujan, 504 U.S. at 560, 112 S.Ct. 2130.

B. 42 U.S.C. § 1983 claim

Plaintiff's federal claims are based on 42 U.S.C. § 1983. “Section 1983 provides a cause of action to persons deprived of a liberty or property interest without due process of law.” Clark v. Mickes, 2006 WL 1877084, at *3 (E.D.Mo. July 6, 2006) (quoting Barry v. Blue Springs R–IV Sch. Dist., 557 F.Supp. 249, 252 (W.D.Mo.1983) ). Plaintiff alleges that the District's failure to award it the contract deprived it “of its due process rights under the First and Fourteenth Amendment.” (FAC at ¶ 19)

1. First Amendment

To state a violation of the First Amendment, Plaintiff must allege facts...