Alabama Dept. of Transp. v. Blue Ridge Sand and Gravel, Inc.

• Citation: 718 So.2d 27
• Parties: ALABAMA DEPARTMENT OF TRANSPORTATION et al. v. BLUE RIDGE SAND AND GRAVEL, INC.; and Bob Estes. 1961920.
• Decision Date: 26 June 1998
• Court: Alabama Supreme Court

Page 27

718 So.2d 27

ALABAMA DEPARTMENT OF TRANSPORTATION et al. v. BLUE RIDGE SAND AND GRAVEL, INC.; and Bob Estes.

1961920.

Supreme Court of Alabama.

June 26, 1998.

Jim R. Ippolito, Jr., chief counsel, Alabama Department of Transportation, for appellants.

David Cromwell Johnson and J. Flint Liddon of Johnson, Liddon & Tuggle, Birmingham, for appellees.

ALMON, Justice.

The Alabama Department of Transportation and a number of its officials and employees, who were defendants in the circuit court, appeal from a preliminary injunction. The circuit court's injunction has the effect of prohibiting the use of the Department's "Standard Specifications for Highway Construction" unless and until those specifications are adopted as rules pursuant to the Alabama Administrative Procedure Act ("AAPA"), Ala.Code 1975, § 41-22-1 to -27. We conclude that the injunction should be dissolved and the case remanded.

The plaintiffs, Blue Ridge Sand and Gravel, Inc., and Bob Estes, sought, among other relief, a preliminary injunction against the Department's implementation of amendments to §§ 801.01(a), 801.03(a), and 802.06 of the standard specifications and supplemental specification 4-92(2). These amendments and the supplemental specification require that gravel for use in hot mix asphalt for roads and in the superstructure of bridges "shall have a bulk specific gravity greater than 2.550." The plaintiffs contend that each of these amendments to the standard specifications is a "Rule" as that term is defined in § 41-22-3(9), so that the rulemaking provisions of the AAPA, especially §§ 41-22-4, -5, and -23, apply to the promulgation of the amendments. The plaintiffs contend that, because the Department did not comply with those provisions, it cannot use the amended standard specifications in any highway construction contract. Blue Ridge quarries and sells gravel made from chert, which has a specific gravity less than 2.550.

The Department presented evidence indicating that it adopted the 2.550 standard after experiencing premature failures of road surfaces and bridges with gravel made from chert. Larry Lockett, a materials and test engineer with the Department who had authority in this matter, testified:

"Q. Do you know why the Department of Transportation adopted the bulk specific gravity specification for coarse gravel?

"A. To prevent the use of chert gravels in hot asphalt and bridge decks.

"Q. All right. Do you know why the Department of Transportation wanted to eliminate the use of chert gravel in hot mix asphalt and bridge decks?

"A. Poor pavement performance in hot mix and poor bridge performance in bridge decks.

"Q. When you say 'poor performance,' would you please explain what you mean?

"A. A large, a very high, an unusually high occurrence of failure due to stripping of the asphalt off the aggregates in the hot mix and we would have--when the gravel would absorb moisture and freeze in bridge decks, we would have pop-outs. It would look like a divot on a golf course in the bridge deck.

"Q. You mean a chunk coming out? Is that what you mean?

"A. Yes.

"Q. Is rutting a problem also?

"A. When stripping starts at the underlying layers, you lose some support, and the surface ruts--you have permanent deformation due to that lack of support.

"....

"Q. Do you know why [the 2.550 specific-gravity specification was used]?

"A. It was made at the direction of the Federal [Highway] Administration to be able to obtain federal funds."

Lockett also testified that the Department had experienced failures of asphalt pavements with chert gravel within 6 to 24 months, while the average life span of asphalt pavements is 12 years. Lockett said that he had been studying the problem for years and that the Department had done testing before it arrived at the 2.550 specific-gravity specification. Thus, the Department's evidence showed that its adoption of the 2.550 specific-gravity specification was an attempt to improve road and bridge longevity and to reduce maintenance costs.

The question is whether the standard specifications are "rules" within the meaning of § 41-22-3(9), Ala.Code 1975. The Department argues that they are not, but that they are only, as they purport to be, specifications for engineering details and materials that may be incorporated by reference into a request for bids for highway construction contracts. Section 41-22-3(9) defines "Rule" as "Each agency regulation, standard or statement of general applicability that implements, interprets, or prescribes law or policy, or that describes the organization, procedure, or practice requirements of any agency...."

The standard specifications do not "describe[ ] the organization, procedure, or practice requirements of" the Department. Pursuant to the AAPA, the Department has adopted administrative rules that describe its organization, procedure, and practice requirements. See Alabama Administrative Code, Chapter 450-1-1 et seq.

Nor do the standard specifications constitute an "agency regulation, standard or statement of general applicability that implements, interprets, or prescribes law or policy." Rather, each of the specifications, including the amended specifications directly at issue here, is simply a term that may be incorporated into a contract between the Department and some other party. See generally § 41-16-27, Ala.Code 1975, which provides that, in accepting or rejecting competitive bids, an awarding authority may take into consideration "the qualities of the commodities proposed to be supplied, their conformity with specifications, the purposes for which required," and so forth. Ala.Code 1975, § 41-16-27(a) (emphasis added). If an unsuccessful bidder or another interested party ¹ considers specifications for a given contract to be inappropriate, the competitive bid law provides a means for challenging the inclusion of those specifications. See § 41-16-31; White v. McDonald Ford Tractor Co., 287 Ala. 77, 248 So.2d 121 (1971). The fact that the Department has established standard specifications that it may incorporate by reference rather than setting forth all specifications in each highway construction contract does not elevate those specifications to the status of "rules." All interested parties seriously involved in highway contracting and supplying materials know of these standard specifications, because the Department makes them available to the public. ² See § 23-1-34; Chapter 450-1-1-.09 and 450-1-2-.06, Ala. Admin. Code.

The Supreme Court of Michigan, in affirming the lower courts' holding that the Michigan highway department's standard specifications were not an agency rule subject to the Michigan Administrative Procedures Act, stated:

"The 1970 Standard Specifications for Highway Construction are found in a bound volume of 735 pages. The specifications include definitions of terms, allocation of duties between the contractor and the state, payment terms, and hundreds of pages of highly technical and detailed information concerning construction methods and techniques, soil composition requirements, metal heat treating methods, and technical details touching almost every conceivable aspect of highway construction work for which the State of Michigan might contract. Relevant portions of the standard specifications ... are routinely incorporated by reference in the Highway Department construction contracts not only to avoid the cumbersome necessity of reproducing the highly detailed information in every separate contract, but to enable prospective bidders upon state construction contracts to know in advance the bid requirements and construction specifications which will apply if they bid upon a state owned highway construction project.

"It is undisputed that no part of the 1970 Standard Specifications for Highway Construction have ever been promulgated as agency rules within the meaning of ... the Administrative Procedures Act ... as a condition of their validity. It is likewise undisputed that the statutory steps preliminary to the adoption of agency rules, including publication of the proposed rule, and publication and transmission of notice of public hearing were never undertaken with respect to Sec. 1.04.03(c) or any of the standard specifications.

"We agree with the trial court and the Court of Appeals that Sec. 1.04.03(c) of the 1970 Standard Specifications for Highway Construction is not an agency rule within the meaning of Sec. 7 of the Administrative Procedures Act. It is, as its title suggests, one of hundreds of standard contract terms and specifications governing the contractual relationship between the state and contractors engaged in highway work."

Greenfield Constr. Co. v. Michigan Dep't of State Highways, 402 Mich. 172, 190-91, 261 N.W.2d 718, 722-23 (1978). Section 7 of the Michigan APA cited in Greenfield Constr. Co. is very similar to the first part of § 41-22-3(9) of the AAPA.

To like effect is Department of Transportation v. Blackhawk Quarry Co. of Florida, 528 So.2d 447 (Fla.Dist.Ct.App.), rev. denied, 536 So.2d 243 (Fla.1988), which held that a standard specification similar to the one here was not a "rule" within the meaning of § 120.52(16) of the Florida Statutes, which sets out an APA definition virtually identical to that in our § 41-22-3(9):

"[S]ection 915 simply sets out specifications for acceptable coquina material as part of the comprehensive standards for state road and bridge construction. It is more in the nature of a contract term between the contractor and DOT as opposed to a rule."

528 So.2d at 450.

We agree with the Michigan Supreme Court and the Forida District Court of Appeal that such standard specifications are not "rules" within the purview of the Administrative Procedure Act.

Moreover, even if the Department of Transportation's Standard Specifications for Highway Construction might be considered "rules," the evidence presented to the circuit court brings the amended and supplemental...