Durr Heavy Constr., LLC v. City of New Orleans

217 So.3d 566

DURR HEAVY CONSTRUCTION, LLC

v.CITY OF NEW ORLEANS.

No. 2015–CA–0915.

Court of Appeal of Louisiana, Fourth Circuit.

March 16, 2016.

L. Etienne Balart, Jarred G. Trauth, Lauren C. Mastio, Jones, Walker, L.L.P., New Orleans, LA, for Plaintiff/Appellant.

Sarah C. Wellman, Derek M. Mercadal, Assistant City Attorney, Adam J. Swensek, Deputy City Attorney, Sharonda R. Williams, City Attorney, City of New Orleans, New Orleans, LA, for Defendant/Appellee.

Scott J. Hedlund, Deutsch, Kerrigan, L.L.P., New Orleans, LA, for Intervenor/Appellee.

(Court composed of Chief Judge JAMES F. McKAY, III, Judge DENNIS R. BAGNERIS, SR., Judge JOY COSSICH LOBRANO, Judge ROSEMARY LEDET, Judge SANDRA CABRINA JENKINS ).

JOY COSSICH LOBRANO, Judge.

In this public bid case, appellant Durr Heavy Construction ("Durr") appeals the portion of the district court's judgment of July 30, 2015 denying Durr's petition for injunctive relief to enjoin the awarding of a public work contract. For the reasons which follow, the district court's order denying injunctive relief is reversed, and this matter is remanded to district court for proceedings consistent with this opinion.

FACTUAL AND PROCEDURAL HISTORY

On March 24, 2015, the City of New Orleans ("City") issued an Invitation to Bid on a public work for the paving of streets in Lakeview pursuant to the Louisiana Public Bid Law, La. R.S. 38:2211, et seq. ("Public Bid Law"). On page one of the Invitation to Bid, the City identified the public work with Proposal Number 500C–01811 and with the Project Name as "Lakeview Quad 2 Pavement–2012–FEMA–1C–2A." On the same page, the City instructed that bids should be submitted either online or in sealed envelopes bearing the Proposal Number and a Louisiana State Contractor's License Number.¹

On May 15, 2015, the sealed bids for the public work were submitted to the City and opened. The City's bid tabulation reflected that TKTMJ, Inc. ("TKTMJ") submitted the lowest numerical bid, Roubion Roads & Streets, L.L.C. ("Roubion") submitted the second-lowest numerical bid, and Appellant Durr was the third-lowest numerical bidder. Neither TKTMJ's nor Roubion's bids contained the Proposal Number on the envelope. Rather, both TKTMJ and Roubion had marked their envelopes with the Project Name and with PW 17124. Durr marked its envelope with the Proposal Number as well as with the Project Name and PW 17124.

Durr filed a protest with the City, arguing that the two lower bids were non-responsive, because they did not include the Proposal Number on the front of their submission envelopes as required by the Invitation to Bid. The City denied Durr's protest, and Durr sought injunctive and other relief in district court which was denied. Durr appeals, arguing that the district court committed legal error by allowing the City to waive a non-waivable provision of the bidding documents, and requesting that we reverse the district court's denial of the preliminary injunction, and remand this matter to district court. In its appeal, Durr identifies two assignments of error/issues for review: (1) whether the district court erred in concluding that a requirement stated in the bidding documents was waivable; and (2) whether under the Public Bid Law, the City has any discretion to waive a stated requirement for "good reason."

DISCUSSION

When a petitioner seeks to enjoin conduct in direct violation of a prohibitory law, it must demonstrate the following: "first, that the conduct violates a prohibitory law (ordinance or statute) or the constitution; second, that the injunction seeks to restrain conduct, not order it; and third, that the plaintiff has met the low burden of making a prima facie showing that he is entitled to the relief sought." Yokum v. Pat O'Brien's Bar, Inc., 2012–0217, pp. 8–9 (La.App. 4 Cir. 8/15/12), 99 So.3d 74, 81. Generally, "[i]n reviewing the denial of a preliminary or permanent injunction, an appellate court uses the abuse of discretion standard of review." Smith v. Tsatsoulis, 2014–0742, p. 5 (La.App. 4 Cir. 1/14/15), 158 So.3d 887, 890. This deferential standard is "based upon the conclusion that the trial court committed no error of law...." Smith v. Brumfield, 2013–1171, p. 7 (La.App. 4 Cir. 1/15/14), 133 So.3d 70, 75.

This appeal calls for us to interpret Louisiana's Public Bid Law, La. R.S. 38:2211 et seq. As it is a matter of statutory interpretation, our standard of review of the district court's legal conclusion is de novo.Dynamic Constructors, L.L.C. v. Plaquemines Par. Gov't, 2015–0271, p. 4 (La.App. 4 Cir. 8/26/15), 173 So.3d 1239, 1243.

Louisiana's Public Bid Law governs the manner by which all contracts for public works are to be awarded. Id. at pp. 5–6, 173 So.3d at 1243–44. It was enacted in the interest of the taxpaying citizens, to protect against favoritism in contracting by public officials resulting in exorbitant and extortionate prices. Id., citing Haughton Elevator Div. v. State Div. of Admin., 367 So.2d 1161, 1164 (La.1979) ; Concrete Busters of Louisiana, Inc. v. Board of Comm'rs of the Port of New Orleans, 10–1172, p. 4 (La.App. 4 Cir. 2/2/11), 69 So.3d 484, 486. As such, it is "a prohibitory law founded on public policy," and must be strictly construed. Id., quoting Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Auth., 04–0211, 04–0212, pp. 6, 8–9 (La.3/18/04), 867 So.2d 651, 656–57.

Relevant to the case at bar is La. R.S. 38:2212, which provides:

A. (1) All public work exceeding the contract limit as defined in this Section, including labor and materials, to be done by a public entity shall be advertised and let by contract to the lowest responsible and responsive bidder who had bid according to the bidding documents as advertised, and no such public work shall be done except as provided in this Part.

(2) The term "bidding documents" is defined in R.S. 38:2211(A).

B. (1) The provisions and requirements of this Section and those stated in the bidding documents shall not be waived by any entity.

La. R.S. 38:2212 (emphasis added).

" ‘Bidding documents' means the bid notice, plans and specifications, bid form, bidding instructions, addenda, special provisions, and all other written instruments prepared by or on behalf of a public entity for use by prospective bidders on a public contract." La. R.S. 38:2211(A)(2).

Thus, according to the plain language of the statute, the provisions and requirements stated in the City's Invitation to Bid are not waivable.

Notwithstanding these provisions, the City maintains that in choosing to disregard the provision in the Invitation to Bid directing bidders to include the Proposal Number on the front of the bid envelope, it did not waive a requirement, but rather made a reasonable, good-faith interpretation of an unclear term in its bidding documents.

We disagree. Applying the plain language of the Public Bid Law, we find that the City did not have the discretion to waive the provision in its Invitation to Bid which directed bidders to include the Proposal Number on the front of the bid envelope.² We also find that the identification of the Proposal Number and the instruction to include the Proposal Number were unambiguous. The Invitation to Bid clearly identified the Proposal Number at the top of the document, the same page which contained the instruction that it must be included on bid envelopes. For this reason, we find the City's reliance on Clement v. St. Charles Par., 524 So.2d 86 (La.App. 2 Cir.1988), unavailing. In that case, the Second Circuit held that an agency's "reasonable, good faith interpretation of its own specifications should not be disturbed by a court whose views might be different." Id. at 89. Clement is distinguishable because in that case the agency was called upon to interpret an ambiguous instruction. The same cannot be said in this case, where the instruction to include the Proposal Number, on the same page and six inches below the number identified as the Proposal Number, was very clear and unambiguous.

We have also considered TKTMJ's argument that the Proposal Number is waivable because it is not a "requirement" of the bidding documents as set forth in La. R.S. 38:2212(B). That statute provides in part:

(2) Any public entity advertising for public work shall use only the Louisiana Uniform Bid Form as promulgated in accordance with the Administrative Procedure Act by the division of administration, office of facility planning and control. The bidding documents shall require only the following information and documentation to be submitted by a bidder at the time designated in the advertisement for bid opening: Bid Security or Bid Bond, Acknowledgment of Addenda, Base Bid, Alternates, Signature of Bidder, Name, Title, and Address of Bidder, Name of Firm or Joint Venture, Corporate Resolution or written evidence of the authority of the person signing the bid, and Louisiana Contractors License Number, and on public works projects where unit prices are utilized, a section on the bid form where the unit price utilized in the bid shall be set forth including a description for each unit; however, unit prices shall not be utilized for the construction of building projects, unless the unit prices and their extensions are incorporated into the base bid or alternates. (Emphasis added.)

TKTMJ contends that the foregoing suggests that the non-waivable requirements of the bidding documents are limited to the exclusive list of items set forth in the above provision, and a public entity may impose no further non-waivable requirements upon bidders.

However, we note that the broad, mandatory non-waiver language of La. R.S. 38:2212(B)(1) is not limited to the statutory requirements of 38:2212(B)(2). Rather, it states that "[t]he provisions and requirements of this Section and those stated in the bidding documents shall not be waived by any entity." La. R.S. 38:2212(B)(1) Y (emphasis added). Thus, even if we were to adopt the view that the non-waivable requirements of the bidding documents...