933 F.2d 853 (10th Cir. 1991), 90-6158, Buckley Const., Inc. v. Shawnee Civic & Cultural Development Authority

Docket Nº:90-6158.
Citation:933 F.2d 853
Party Name:BUCKLEY CONSTRUCTION, INC., Plaintiff-Appellant, v. SHAWNEE CIVIC & CULTURAL DEVELOPMENT AUTHORITY; Charles T. Henry; James Bradshaw; Dr. Joe Taron; Clarke A. Bohan; Jim R. Hudgens, Defendants-Appellees, and Cecil Bernard, doing business as B & B Builders, Defendant.
Case Date:May 14, 1991
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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933 F.2d 853 (10th Cir. 1991)

BUCKLEY CONSTRUCTION, INC., Plaintiff-Appellant,

v.

SHAWNEE CIVIC & CULTURAL DEVELOPMENT AUTHORITY; Charles T.

Henry; James Bradshaw; Dr. Joe Taron; Clarke A.

Bohan; Jim R. Hudgens, Defendants-Appellees,

and

Cecil Bernard, doing business as B & B Builders, Defendant.

No. 90-6158.

United States Court of Appeals, Tenth Circuit

May 14, 1991

Page 854

Clyde A. Lewis, Oklahoma City, Okl., for plaintiff-appellant.

Mack J. Morgan III of Crowe & Dunlevy, Oklahoma City, Okl., for defendants-appellees.

Randy Parsons and J. David Cawthon, Shawnee, Okl., for defendant.

Before ANDERSON and TACHA, Circuit Judges, and KANE, [*] District Judge.

KANE, Senior District Judge.

Plaintiff Buckley Construction, Inc. filed this civil action against defendants Shawnee Civic & Cultural Development Authority (the Authority), its trustees, and B & B Builders alleging, inter alia, that they conspired against the company in failing to award it a construction contract. The district court dismissed all claims pursuant to Fed.R.Civ.P. 12(b)(6). We affirm. 1

I.

The Authority is a public trust created pursuant to Oklahoma statute. See Okla.Stat. tit. 60, Sec. 176 (1981). One of its purposes is to coordinate bidding on construction projects for the City of Shawnee, Oklahoma. In this capacity, the Authority is governed by the provisions of the Oklahoma Public Competitive Bidding Act of 1974 (OPCBA). See Okla.Stat. tit. 61, Secs. 101-136 (1981).

In late 1988 and early 1989, the Authority placed advertisements in several trade magazines soliciting bids for construction of the "Heart of Oklahoma Exposition Center Phase 1." In response, Buckley Construction submitted a low bid of $815,237. B & B Builders submitted the second lowest bid of $819,000.

On April 12, 1989, Buckley Construction representatives attended a meeting with the project architect, exposition manager, Authority chairman and Shawnee city manager. After discussing the company's qualifications, these individuals told Buckley representatives they would recommend to the Authority that Buckley Construction be awarded the contract.

Later that month, the Authority awarded the contract to B & B Builders, the second lowest bidder. Buckley representatives were told the rejection was not due to any

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negative aspects of the Buckley bid, but that B & B Builders received the contract because the Authority "knew what kind of contractor he [sic] was." Rec. Vol. I, doc. 1 at 14, p 34. This lawsuit followed.

In the complaint, Buckley stated seven causes of action. They included: 1) restraint of trade under section 1 of the Sherman Antitrust Act, 15 U.S.C. Sec. 1; 2) monopoly under section 2 of the Sherman Act, 15 U.S.C. Sec. 2; 3) procedural due process and equal protection violations brought pursuant to 42 U.S.C. Sec. 1983; and 4) four state law causes of action for fraud, deceit, conspiracy, and promissory estoppel.

The Authority filed two different motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted both motions, thus dismissing all claims against the Authority. 2 B & B Builders then filed a motion to dismiss all claims based on the court's previous rulings. That motion was likewise granted.

II.

We review the sufficiency of a complaint de novo and apply the same standard as the district court. Morgan v. City of Rawlins, 792 F.2d 975, 978 (10th Cir.1986). "[W]e must take as true all well-pleaded allegations in the plaintiff's complaint...." Curtis Ambulance of Fla., Inc. v. Board of County Comm'rs, 811 F.2d 1371, 1374 (10th Cir.1987). A complaint cannot be dismissed unless it appears beyond all doubt the plaintiff cannot prove any facts entitling him to relief. Id. at 1375 (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974)).

III.

Antitrust Claims

Generally, a state's anticompetitive actions are immune from civil antitrust laws. Parker v. Brown, 317 U.S. 341, 350-52, 63 S.Ct. 307, 313-14, 87 L.Ed. 315 (1943). "In creating this immunity, the Supreme Court recognized that the free market principles espoused in the Sherman Antitrust Act end where countervailing principles of federalism and respect for state sovereignty begin." Traweek v. City & County of San Francisco, 920 F.2d 589, 591 (9th Cir.1990) (citing Parker, 317 U.S. at 350-51, 63 S.Ct. at 313-14). Under certain circumstances, this immunity also applies to municipalities. See Community Communications Co. v. City of Boulder, 455 U.S. 40, 51, 102 S.Ct. 835, 840, 70 L.Ed.2d 810 (1982).

In order to qualify for Parker-type immunity, a municipality must demonstrate its anticompetitive activities "were authorized by the State 'pursuant to state policy to displace competition with regulation or monopoly public service.' " Town of Hallie v. City of Eau Claire, 471 U.S. 34, 39, 105 S.Ct. 1713, 1716, 85 L.Ed.2d 24 (1985) (quoting City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 413, 98 S.Ct. 1123, 1137, 55 L.Ed.2d 364 (1978)). Specifically, the municipality has the burden of showing the state policy under which it acted was "clearly articulated and affirmatively expressed." Lafayette, 435 U.S. at 410, 98 S.Ct. at 1135. A state policy meets these requirements when the empowering statute shows the anticompetitive action was contemplated. Jacobs, Visconsi & Jacobs Co. v. City of Lawrence, 927 F.2d 1111, 1120 (10th Cir.1991).

This court has adopted a two-part test for evaluating municipal state action immunity. "First, the state legislature must have authorized the action under challenge. Second, the legislature must have intended to displace competition with regulation." Id. (citing Oberndorf v. City & County of Denver, 900 F.2d 1434, 1438 (10th Cir.), cert. denied, --- U.S. ----, 111

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S.Ct. 129, 112 L.Ed.2d 97 (1990)). Here, the challenged activity is the selection of a contractor other than that which submitted the lowest bid. This selection was made pursuant to the express policies found in the OPCBA. The act clearly contemplates anticompetitive activity. See Mercy-Peninsula Ambulance, Inc. v. San Mateo County, 791 F.2d 755, 756-58 (9th Cir.1986) (competitive bidding procedure which excluded some...

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