Big D Const. Corp. v. Court of Appeals for State of Ariz., Div. One
| Decision Date | 28 March 1990 |
| Docket Number | CV-89-0362-PR,Nos. CV-89-0304-S,s. CV-89-0304-S |
| Parties | , 89 A.L.R.4th 567 BIG D CONSTRUCTION CORPORATION, a Utah corporation, Petitioner, v. The COURT OF APPEALS FOR the STATE of ARIZONA, DIVISION ONE, Edward C. Voss, Presiding Judge, Superior Court of the State of Arizona, In and For the County of Maricopa, the Honorable Alfred J. Rogers, a judge thereof, Respondent Judges, City of Tempe, a municipal corporation, Respondents. BIG D CONSTRUCTION CORPORATION, a Utah corporation, Petitioner, v. SUPERIOR COURT OF the STATE of ARIZONA, In and For the COUNTY OF MARICOPA, the Honorable Alfred J. Rogers, a Judge thereof, Respondent Judge, CITY OF TEMPE, a municipal corporation, Weitz Company, Inc., an Iowa corporation, Real Parties in Interest. |
| Court | Arizona Supreme Court |
Big D Construction Corporation (Big D) filed a direct special action petition 1 against the Court of Appeals, Division One, the City of Tempe (Tempe), and Weitz Company, Inc. (Weitz), asking this court to consider the constitutionality of Arizona's bid preference statute, A.R.S. § 34-241. We have jurisdiction pursuant to Ariz. Const. art. 6, §§ 5(1) and 5(3) and Rule 8, Ariz.R.P.Spec.Act., 17B A.R.S.
In early 1989, Tempe invited bids for the construction of the National Football League Cardinals Training Facility and Corporate Headquarters (the Project). Pursuant to a lease agreement between Tempe and B & B Holdings, Inc., d/b/a/ the Phoenix Cardinals (Cardinals), Tempe agreed to contribute a maximum of $6.5 million for the planning and building of the Project. The balance of the cost and any cost overruns were to be paid by the Cardinals. The Cardinals provided a letter of credit in the amount of $3,338,000 for Tempe to draw upon to cover "improvements and expenses" required to complete the Project. Upon completion, Tempe will be the legal owner of the property and all improvements, and the Cardinals will be the beneficial owners. The Project is a Tempe public works project and thus is controlled by A.R.S. Title 34.
In response to the notice and call for bids, both Big D, a Utah corporation, and Weitz, an Iowa corporation, submitted bids on the Project. Both companies are qualified to do business in Arizona. The bids were opened on July 18, 1989. The lowest bid was submitted by Big D, in the amount of $7,102,700. The bid submitted by Weitz was approximately $137,000 higher. Pursuant to A.R.S. § 34-201 et seq., Tempe was required to let the bid to the lowest responsible bidder. Just before the Tempe City Council was to award the contract to Big D, however, Weitz filed a bid protest, claiming to be the better bidder under A.R.S. § 34-241, Arizona's bid preference statute.
Tempe's City Attorney held a hearing on August 2, 1989 to determine whether A.R.S. § 34-241 applied to the Project and which company should be awarded the bid. His opinion stated that Weitz's bid was the better bid under the statute and should be considered the low bid. The Tempe City Council awarded the contract to Weitz on August 3, 1989.
Big D filed a Petition for Special Action and Application for Interlocutory Stay of Proceedings in the Maricopa County Superior Court. The stay was granted on August 4, 1989, but after oral argument on August 7, the court denied the requested relief. Big D then filed a Petition for Special Action and Application for Interlocutory Stay of Proceedings in the Arizona Court of Appeals, Division One. The court granted the stay and accepted jurisdiction, but denied the requested relief on August 10. Big D then filed a Petition for Special Action and Application for Interlocutory Stay in this court, requesting an accelerated hearing in order that the Project's completion date would not be jeopardized.
Due to the summer recess, the earliest date available for the full court to hear the constitutional challenge was in September 1989. Big D therefore voluntarily withdrew its application for a stay, thus permitting Tempe and Weitz to execute the contract and begin construction. Weitz, Big D, and Tempe signed a settlement agreement and release relating to construction of the Cardinals facility. The agreement allowed the action to be dismissed against Weitz but to continue against Tempe. The parties also agreed not to seek further costs, attorney's fees, or other damages from each other notwithstanding Big D's continued pursuit of this action.
After this agreement, Big D filed an amended petition for special action, asking, inter alia, that this court hold Arizona's bid preference statute unconstitutional. Big D also filed a petition for review of the court of appeals' decision in the matter to preserve its appeal rights in the event this court declined jurisdiction of the special action. We accepted jurisdiction of the petition for special action, granted the petition for review on the issue of constitutionality, 2 and ordered the two matters consolidated. Cf. State v. Boykin, 109 Ariz. 289, 291, 508 P.2d 1151, 1153 (1973). Subsequently, the Arizona League of Cities and Towns was allowed to appear as amicus curiae, urging this court to declare A.R.S. § 34-241 unconstitutional. Weitz, the Associated General Contractors of America, Arizona Building Chapter, and the American Subcontractors Association of Arizona were also allowed to appear as amici, arguing that we should declare A.R.S. § 34-241 constitutional.
Because the parties have settled, the controversy between them is moot. Unlike the federal system, however, Arizona's judicial system has no constitutional provision constraining it to consider only cases or controversies. See U.S. Const. art. III. Thus, our reluctance to consider a moot or abstract question is solely a matter of prudential or judicial restraint. See In re Strobel, 149 Ariz. 213, 216, 717 P.2d 892, 895 (1986); Armory Park v. Episcopal Community Servs., 148 Ariz. 1, 6, 712 P.2d 914, 919 (1985); State v. B Bar Enters., Inc., 133 Ariz. 99, 101 n. 2, 649 P.2d 978, 980 n. 2 (1982); Fraternal Order of Police v. Phoenix Employee Relations Bd., 133 Ariz. 126, 127, 650 P.2d 428, 429 (1982). We will consider cases that have become moot when significant questions of public importance are presented and are likely to recur. Fraternal Order of Police, 133 Ariz. at 127, 650 P.2d at 429.
The bid preference statute impacts considerably on the municipal entities and counties that have public contracts to let and must comply with this statute. 3 Compliance with A.R.S. § 34-241 can be very costly to the public, because a five percent preference on a large public project may amount to millions of dollars. 4 The issue is also likely to recur because many bidders on future public works contracts will face the same problem as Big D. Further, the issue is one that evades review. As illustrated by this case, litigation of an adverse decision under the statute is virtually impossible to pursue without jeopardizing the completion date of whatever project is in question.
Finally, although the contest between the actual parties, Big D and Tempe, is moot, the issues have been briefed in an adversarial fashion by these parties and by the various amici, giving this court the benefit of opposing arguments. For these reasons, we exercise our discretion to turn to the merits of the arguments.
The Arizona preference statute originally was enacted during the "Great Depression" in 1933 by the Eleventh Legislature. It was introduced as part of House Bill 37 and became part of Chapter 12 of the Session Laws of 1933. The title of the bill as introduced provided:
THAT RESIDENT CONTRACTORS PAYING TAXES ON A PLANT WITHIN THE STATE, OR THE EQUIVALENT THEREOF, FOR TWO YEARS IMMEDIATELY PRIOR TO THE AWARDING OF THE CONTRACT SHALL BE GIVEN THE PREFERENCE IN AWARDING THE CONTRACT TO THE EXTENT OF TEN PERCENT; ...
H.B. 37, 11th Legislature, Reg.Sess., 1933 (emphasis added).
The bill included an emergency clause that explicitly stated the act's purpose:
Section 9. WHEREAS, many residents of the state of Arizona are without employment and many contractors and producers and dealers within the state of Arizona are without work, or without a market for their products, and non-resident contractors bring into the state non-resident employees to remain and become a burden on the public after their contracts are completed, and many resident contractors, producers and dealers are unable to pay their taxes, and the provisions of this act will tend to relieve such unemployment, to prevent the increase of the unemployed, and to aid in the collection of taxes, the immediate operation of this act is required to preserve the public peace, health and safety, and said act is hereby declared an emergency measure and shall take effect immediately upon its passage in the manner provided by law.
Id. As finally adopted, the title of the act provided in relevant part:
AN ACT AMENDING SECS. 1350 TO 1353, BOTH INCLUSIVE, OF THE REVISED CODE OF 1928, ... THE ADDITION
OF FIVE NEW SECTIONS RELATING TO QUALIFICATIONS OF EMPLOYEES, AND PROHIBITING EMPLOYMENT OF NONRESIDENTS TO QUALIFICATIONS OF CONTRACTORS, AND GIVING PREFERENCE TO RESIDENT TAX PAYING CONTRACTORS, ...
Laws 1933, ch. 12, § 3 (emphasis added).
As originally enacted, the statute required that...
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