Cardi Corporation v. Department of Administration
| Decision Date | 22 September 2021 |
| Docket Number | C.A. No. 21-233 WES |
| Citation | 561 F.Supp.3d 244 |
| Parties | CARDI CORPORATION, Plaintiff, v. State of Rhode Island DEPARTMENT OF ADMINISTRATION, et al., Defendants. |
| Court | U.S. District Court — District of Rhode Island |
Jeremy Ritzenberg, Pro Hac Vice, Cardi Corporation, Warwick, RI, William Mark Russo, Ferrucci Russo P.C., Providence, RI, for Plaintiff.
Daniel W. Majcher, Rhode Island Department of Administration, Providence, RI, for Defendants State of Rhode Island Department of Administration, State of Rhode Island Department of Transportation.
Kevin Love Hubbard, United States Attorney's Office, Providence, RI, for Defendant United States Department of Transportation, Federal Highway Administration.
Defendants R.I. Department of Transportation ("RIDOT") and R.I. Department of Administration (collectively, the "State") tentatively awarded a bridge repair contract to Plaintiff Cardi Construction, but Defendant Federal Highway Administration ("FHWA"), which controls the relevant federal purse strings, refused to concur in the State's selection. The State therefore cancelled the solicitation and initiated a new procurement process. In this action, Cardi seeks an injunction forcing Defendants to give it the contract, arguing that the non-concurrence violated a provision of the Federal-Aid Highway Act (the "Act"), 23 U.S.C. § 101, et seq., as well as the Administrative Procedures Act ("APA"), 5 U.S.C. § 706. The Court denied Cardi's Motion for a Temporary Restraining Order, ECF No. 5, and set an expedited summary judgment briefing schedule. On August 11, 2021, the Court issued an Order, ECF No. 34, granting Defendants’ motions for summary judgment. Due to the time-sensitive nature of the proceedings, the Order was issued without a full account of the Court's reasoning. This Memorandum fills in the gaps.
To obtain funding for a highway project through the Act, the State is required to solicit bids via a request for proposals. See 23 U.S.C. § 112(a). The winning contractor is to be chosen "only on the basis of the lowest responsive bid submitted by a bidder meeting established criteria of responsibility." Id. § 112(b)(1). After selecting a proposal, RIDOT must obtain FHWA's concurrence; otherwise, no money will flow from Washington. See id. The scope of FHWA's review is cabined by the following statutory language:
No requirement or obligation shall be imposed as a condition precedent to the award of a contract to such bidder for a project, or to the Secretary's concurrence in the award of a contract to such bidder, unless such requirement or obligation is otherwise lawful and is specifically set forth in the advertised specifications.
Id. Similarly, FHWA's regulations state that design-build contracts "shall be awarded in accordance with the Request for Proposals document." 23 CFR § 635.114(k).
This case deals with the twists and turns of one such project. Rhode Island is in the process of improving the I-195 Washington Bridge, which connects Providence and East Providence, spanning the Seekonk River. Joint Statement of Facts ("Joint Statement") ¶¶ 1-3, ECF No. 25; I-195 Washington Bridge, Phase 2, Request for Proposals, Part 1 ("Request for Proposals") ¶ 2.1 (April 10, 2020), ECF No. 7-1. In mid-2020, Cardi Corporation and two other companies submitted bids to complete a portion of the project. Joint Statement ¶ 7. The State selected Cardi, whose bid was the lowest by a long shot ($17 million below the others), as the best apparent value respondent. Id. ¶¶ 8-9. One of the other bidders, Barletta/Aetna, sued the R.I. Department of Administration in the Rhode Island Superior court, alleging that Cardi's participation in the previous phase of the project gave the company an unfair advantage. See Barletta/Aetna 1-195 Washington Bridge North Phase 2 JV v. State, Dept. of Admin. ("Barletta/Aetna I"), No. PC-2020-06551, 2020 WL 7774450, at *1–2 (R.I. Super. Dec. 21, 2020).
While the state court litigation was playing out, the procurement process continued. To receive funding through the Act, the State needed FHWA to concur with its selection of Cardi. See 23 U.S.C. § 112(b)(1). Accordingly, in September 2020, RIDOT submitted a request for concurrence to FHWA. See Letter from Anthony Pompei to Carlos Padilla (Sept. 16, 2020), ECF No. 1-3. A month later, RIDOT followed up, writing that a "post qualification process [wa]s ongoing." See Oct. 16, 2020 Letter, Ex. H to Compl., ECF No. 1-8. RIDOT subsequently reaffirmed its request for FHWA's concurrence, writing that RIDOT had "determined through its technical evaluation, price evaluation, and final scoring that Cardi was the Apparent Best Value Respondent, as specified in the [request for proposals]." See Letter from Anthony Pompei to Carlos Padilla (Dec. 4, 2020), ECF No. 1-9. But FHWA declined to concur, stating in a letter to RIDOT that "the recommended Design-Builder was deemed to be non-responsive according to the terms of the [request for proposals]." See Letter from H. Randall Warden to Peter Alviti (Dec. 23, 2020), ECF No. 1-10. Based on FHWA's non-concurrence, the State withdrew the request for proposals and issued another, somewhat modified solicitation, with proposals due on July 2, 2021. See Letter from Peter Alviti to Carlos Machado 1 (Feb. 4, 2021), ECF No. 25-2; I-195 Washington Bridge, Phase 2, Request for Proposals, Part 1, at ¶ 2.3 (March 17, 2021), ECF No. 25-4.
Cardi then filed counterclaims in the ongoing state court case, seeking equitable relief similar to that requested here, as well as damages. See Barletta/Aetna I-195 Washington Bridge North Phase 2 JV v. State ("Barletta/Aetna II"), No. PC-2020-06551, 2021 WL 925000, at *2 (R.I. Super. Mar. 5, 2021). The superior court dismissed the equitable counterclaims (though not the claims for damages) because Cardi had failed to join FHWA, which the court ruled to be an indispensable party. Barletta/Aetna I-195 Washington Bridge North Phase 2 JV v. State, Dept. of Admin. ("Barletta/Aetna III"), No. PC-2020-06551, 2021 WL 1049458, at *10 (R.I. Super. March 12, 2021). The superior court also rejected Barletta/Aetna's argument that, instead of cancelling and restarting the solicitation, the State should have turned to Barletta/Aetna, the runner up in the initial bidding. See Barletta/Aetna II, 2021 WL 925000, at *2, *10. Subsequently, Cardi filed its Complaint, ECF No. 1, and Motion for a Temporary Restraining Order, ECF No. 5, in this Court. The Court declined to issue a temporary restraining order, and the parties filed cross-motions for summary judgment. See July 7, 2021 Mem. & Order, ECF No. 24.
Cardi argues that Defendants’ rejection of its proposal violated the Act.
See Cardi's Cross-Motion & Mem. of Law in Supp. of Summ. J. ("Cardi's Cross-Motion") 3, ECF No. 28. Therefore, the merits of the action are evaluated under the APA. See Glasgow, Inc. v. Fed. Hwy. Admin., 843 F.2d 130, 133 (3d Cir. 1988). "[A] motion for summary judgment is simply a vehicle to tee up a case for judicial review...." Bos. Redevelopment Auth. v. Nat'l Park Serv., 838 F.3d 42, 47 (1st Cir. 2016) (citing Mass. Dep't of Pub. Welfare v. Sec'y of Agric., 984 F.2d 514, 526 (1st Cir. 1993) ). Pursuant to the APA's deferential standard, a court may vacate or reverse an agency decision only if "it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ " Sorreda Transport, LLC v. U.S. Dept. of Transportation, 980 F.3d 1, 3–4 (1st Cir. 2020) (quoting Darrell Andrews Trucking, Inc. v. Fed. Motor Carrier Safety Admin., 296 F.3d 1120, 1124 (D.C. Cir. 2002) ); see also 5 U.S.C. § 706(2)(A). Moreover, the Court defers to the agency's factfinding "unless ‘the record evidence would compel a reasonable factfinder to make a contrary determination.’ " Guzman v. INS, 327 F.3d 11, 15 (1st Cir. 2003) (quoting Aguilar–Solis v. INS, 168 F.3d 565, 569 (1st Cir. 1999) ).
As explained below, Cardi has statutory standing to challenge FHWA's decision. Moreover, review is not blocked by Rooker- Feldman, the law of the case, or the other doctrines raised by the State. Nonetheless, Cardi has identified no adequate basis for overturning the State's cancellation of the solicitation. "Therefore, the Court need not decide whether FHWA's decision was arbitrary and capricious; either way, Cardi's request for relief would fall short." Aug. 11, 2021 Order, ECF No. 34.
To seek redress for a statutory violation, a federal-court plaintiff must have statutory standing. Vander Luitgaren v. Sun Life Assur. Co. of Canada, 765 F.3d 59, 62 (1st Cir. 2014). This generally requires that "Congress has accorded this injured plaintiff the right to sue the defendant" under the statute at issue. Id. (quoting Graden v. Conexant Sys. Inc., 496 F.3d 291, 295 (3d Cir. 2007) ). In the APA context, though, the test "is not meant to be especially demanding" because Congress had the "evident intent ... to make agency action presumptively reviewable." Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209, 225, 132 S.Ct. 2199, 183 L.Ed.2d 211 (2012) (quoting Clarke v. Securities Indus. Assn., 479 U.S. 388, 399-400, 107 S.Ct. 750, 93 L.Ed.2d 757 (1987) ). Therefore, a claimant will have statutory standing unless its "interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit." Id. (quoting Clarke, 479 U.S. at 399, 107 S.Ct. 750 ).
Cardi claims violations of 23 U.S.C. § 112(b)(1). That provision explicitly discusses bidders who, like Cardi, have been selected by the state. See 23 U.S.C. § 112(b)(1). Furthermore, the statute limits the reasons for which FHWA can refuse to concur with the selection of any such bidder. Id. Thus, on first blush, Cardi has statutory standing because its claims are "arguably within...
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