T & S Serv. Assoc., Inc. v. Crenson

• Decision Date: 14 January 1981
• Docket Number: Civ. A. No. 77-0538.
• Citation: 505 F. Supp. 938
• Court: U.S. District Court — District of Rhode Island
• Parties: T & S SERVICE ASSOCIATES, INC. and Robert L. Thomas, Plaintiffs, v. John CRENSON et al., Defendants.

505 F. Supp. 938

T & S SERVICE ASSOCIATES, INC. and Robert L. Thomas, Plaintiffs, v. John CRENSON et al., Defendants.

Civ. A. No. 77-0538.

United States District Court, D. Rhode Island.

January 14, 1981.

Walter Stone, Stone, Clifton & Clifton, Providence, R. I., for plaintiffs.

Michael P. DeFanti, Hinckley, Allen, Salisbury & Parsons, Providence, R. I., for defendants.

OPINION

FRANCIS J. BOYLE, District Judge.

This action for money damages is premised upon the asserted racial discrimination of the Barrington School Committee of the Town of Barrington, Rhode Island, in the awarding of federally funded Type A school lunch contracts.¹ It is a broad attack brought pursuant to the equal protection and due process clauses of the United States Constitution, 42 U.S.C. § 1981, 42 U.S.C. § 1983 and 42 U.S.C. § 2000d. Jurisdiction is asserted under the provisions of 28 U.S.C. § 1331 and 28 U.S.C. § 1343(3) and (4).

The Plaintiffs in this action are T & S Service Associates, Inc. hereinafter T & S, a Rhode Island corporation with a principal place of business in Providence, Rhode Island, and Robert L. Thomas, a black Rhode Island citizen and sole owner of T & S.

T & S is engaged in the business of preparation and service of food.

The Defendants are the Barrington School Committee, hereinafter Committee² and William J. Wert, in his capacity as Barrington School Superintendent.

FACTUAL BACKGROUND

Prior to July 1, 1977, the State Food Services Program provided meals in the Barrington Public Schools. The State Department of Education operated and staffed this program, requiring only book-keeping services of local authorities. Contemplating a change from the State Food Services Program to that of an independent vendor, Dr. Aaron F. DeMoranville, Assistant Superintendent of the Barrington Public Schools, in July, 1976, sought information concerning both procedures and specifications for contracting with private vendors of food service. At that time Plaintiff Thomas and other representatives of T & S met with Dr. DeMoranville to assess the needs of the Barrington School System in the event of such a change. T & S provided Dr. DeMoranville with copies of contracts under which T & S was presently providing food services in other Rhode Island schools. Thereafter Nancy Ronci, operations manager of T & S, spoke with Dr. DeMoranville several times with respect to foods services contracts, and representatives of T & S, including Mr. Thomas, twice visited the Barrington schools.

Three members of the Committee, forming a subcommittee, also made on site inspections of at least three, and possibly four, of the five ultimate bidders.³ The subcommittee did not visit the operation site of T & S.

In June, 1977, the School Committee voted to withdraw from the State Food Service Program. On July 1, 1977, the Barrington School Department, through the office of Dr. DeMoranville, solicited bids from independent vendors for the preparation, delivery and services of Type A lunches.⁴ The bid invitation established the requirements of a responsive bid.⁵ On July 29, 1977, five food service vendors submitted bids to the Barrington School Department.

There was some apparent confusion as to what type of bid was specified in the invitation.⁶ Of the five bids that were submitted, four were profit and loss bids.⁷ T & S submitted the lowest profit and loss bid with a bid price of seventy cents per meal which incorporated all costs of preparing and serving the meals, including management costs. The fifth vendor, Servomation Corporation, submitted what it termed "a management fee" bid which projected a cost of fifty-seven and one-half cents per meal at the elementary level and sixty-two and one-half cents at the secondary level.⁸ It should be noted at this juncture, however, that the figures quoted in the Servomation bid did not reflect the total costs per meal, in that they did not include federal and state reimbursement subsidies. Upon adding the reimbursement subsidies to the quoted prices, it is clear that the costs per meal would exceed seventy cents. On July 29, 1977, the five bids were opened in the presence of the representatives of the five bidders. The price per meal contained in each bid was announced.⁹ Dr. William Wert and Dr. DeMoranville then privately analyzed the bids for the asserted purpose of comparing them to the specifications as established in the bid invitation. Dr. Wert forwarded three of the bids to the Committee and recommended that the Committee award the contract to Servomation. The T & S bid was not forwarded to the Committee. In a memorandum to the Committee which accompanied those three bids, Dr. Wert stated that the T & S bid was deficient in five areas, to be discussed infra.

After the opening of the bids, but prior to the final award by the Committee, several of the bidders, including T & S, called Dr. Wert and expressed concern over the unusually low per meal costs figure submitted by Servomation. After Committee members also expressed concern about that figure, the Committee solicited further information from Servomation. On or about August 4, 1977, however, the Committee decided to follow Dr. Wert's recommendation and awarded the contract to Servomation. The Committee had not seen and, therefore, had not considered the T & S bid at any time.

Seeking to enjoin the performance of the Barrington-Servomation contract, T & S brought suit in the Superior Court, State of Rhode Island. In that proceeding, T & S alleged that the Committee was legally obligated to award the bid to T & S as the lowest bidder. On August 12, 1977, the Superior Court denied relief stating, in essence, that the plaintiffs had failed to demonstrate both irreparable harm and bad faith on the part of Barrington officials in awarding the contract. In the interim, the Committee decided to shorten the Servomation contract from three years to one year so that the contract could be rebid the following year.¹⁰

After hearing in the State court proceedings the Plaintiffs sought a preliminary injunction in this Court, alleging that the Defendants had denied them the three year contract on the basis of racial discrimination. This Court denied that relief because a controversy on the same subject matter was pending in the State court. (Order, September 15, 1977). Thereafter, the State court action was withdrawn and the Plaintiffs filed an amended complaint seeking monetary damages in which the Plaintiffs asserted that the Defendants had discriminated against T & S throughout the entire bidding process because of the minority participation of T & S.

LAW

Plaintiffs contend that the Defendants have violated the equal protection and due process clauses of the United States Constitution, 42 U.S.C. § 1981, 42 U.S.C. § 1983 and 42 U.S.C. § 2000d. Each of these alleged violations will not be discussed in this Opinion. The discussion in the decision will be confined to 42 U.S.C. § 1981 because that statute is determinative of the issues.

Section 1981 provides:

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.

42 U.S.C. § 1981. Section 1981 is based upon the Thirteenth Amendment to the United States Constitution. Lewis v. Bethlehem Steel Corp., 440 F.Supp. 949, 964 (D.Md.1977); Gourdine v. Ellis, 435 F.Supp. 882, 885 (D.S.C.1977). As originally designed in 1866, it was intended to abolish slavery and to eradicate its badges and incidents. Long v. Ford Motor Co., 496 F.2d 500, 504 (6th Cir. 1974). See also Jones v. Alfred H. Mayer Co., 392 U.S. 409, 422, 88 S.Ct. 2186, 2194, 20 L.Ed.2d 1189 (1968). "The purpose for which the Section was enacted — to afford equal opportunities to secure the benefits of American Life regardless of race — requires that a court adopt a broad outlook in enforcing Section 1981. Schemes whether blatant or subtle, are forbidden." Long v. Ford Motor Co., supra, at 505. On its face, Section 1981 relates particularly to the making and enforcement of contracts. Johnson v. Railway Express Agency, 421 U.S. 454, 459, 95 S.Ct. 1716, 1719, 44 L.Ed.2d 295 (1975). Nonetheless, Section 1981 is not an affirmative action mandate. It is, instead, an equalizing provision designed to ensure that rights—primarily contractual rights — do not vary according to race. Greene v. Johns Hopkins University, 469 F.Supp. 187, 193 (D.Md.1979); see Long v. Ford Motor Co., supra, at 505.

To state a cause of action under § 1981 the plaintiff must assert a deprivation of rights which, under analogous circumstances, would have been accorded to a person of a different race. Greene v. Johns Hopkins University, supra, at 193. In this action, therefore, the Plaintiffs have properly alleged that because of their race Defendants treated them differently than the other vendors involved in the bidding process.¹¹ Before addressing the merits of this action, however, it is necessary to first consider the issue of standing.

There are two Plaintiffs in this action. As such, each plaintiff must satisfy the requirements of standing. It is clear that T & S has satisfied the Article III standing requirements as set forth in Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2204, 45 L.Ed.2d 343 (1975), and statutory standing under Section 1981. See Des Vergnes v. Seekonk Water District, 601 F.2d 9, 14 (1st Cir. 1979). In contrast, Robert L. Thomas, the sole stockholder of T & S lacks standing in the instant case. As noted by the First Circuit Court in Des Vergnes, "the personal insolvency of and loss of future earning power of the stockholder ... do not give ... the sole shareholder a...