Darakjian v. City of Birmingham
| Decision Date | 29 July 2019 |
| Docket Number | Case No. 19-10277 |
| Parties | ARA DARAKJIAN, et al. Plaintiffs, v. CITY OF BIRMINGHAM, et al. Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Defendants, Woodward Bates Partners, LLC, and the City of Birmingham, et al., filed Motions to Dismiss and for Judgment on the Pleadings, respectively. Because the Motions assert the same arguments and require a similar standard of review, the Court addresses them together.
The motions challenge Plaintiffs' standing. Defendants say: (1) Ara Darakjian ("Darakjian") lacks standing as an individual; and (2) TIR Equities LLC ("TIR") lacks standing because it is a "disappointed bidder."
Because Darakjian does not have standing as an individual to bring a claim, Defendants' Motions are GRANTED on his claims. Because TIR lacks standing because he is a disappointed bidder and no exceptions apply, Defendants' Motions are GRANTED on TIR's claims.
Darakjian founded TIR in 2014 and is its sole owner.
In 2017, the City of Birmingham ("the City") initiated a public bidder selection process to redevelop a parcel of City property ("the Project"). Around March 2017, the City issued a Request for Qualifications ("RFQ"), inviting respondents to submit their qualifications and experience for an invitation to submit a bid, also known as a "proposal," for the Project. From this process, the City invited four entities to bid; TIR and Defendant Woodward Bates Partners, LLC were two of the four.
Next, the City issued a Request for Proposals ("RFP") to the four entities. The RFP outlined development guidelines and design issues for the Project and included a "conceptual illustration" of a "sample plan" for redevelopment of the Project site. The deadline to submit bids was January 3, 2018. Darakjian says the sample plan was created by Woodward Bates.
In January of 2018, TIR and Woodward Bates submitted bids to the City's Ad Hoc Parking Development Committee ("the Committee"). Darakjian and TIR allege that Woodward Bates' proposal included the same images included in the sample plan from the RFP. The City requested additional information from both bidders and invited both to a formal interview. The Committee interviewed both TIR and Woodward Bates on March 9, 2018.
The Committee met to discuss the two bids. The Committee analyzed whether TIR's bid was in compliance with the RFP and compared the bid to the sample design. This same day, Darakjian served a letter to the Committee addressing concerns about TIR's bid. The Committee did not respond.
The Committee recommended to the Birmingham City Commission that the City move forward with Woodward Bates. The Commission approved the recommendation on June 25, 2018.
On July 3, 2018, Darakjian sent a letter to the Commission saying that TIR would make changes to its bid, including that TIR would build a parking structure at no cost to the City. He also read this letter into the record during the Commission meeting on July 9, 2018.
On July 17, 2018, Darakjian met with Defendant Joseph Valentine and others to discuss TIR's bid. On July 18, 2018, Defendant Valentine sent a letter to Darakjian advising that the City would move forward with Woodward Bates and was unable to consider any new proposals by Darakjian's team.
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests a complaint's legal sufficiency. Although the federal rules only require that a complaint contain a "short and plain statement of the claim showing that the pleader is entitled to relief," see Rule 8(a)(2), the statement of the claim must be plausible. Indeed, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible where the facts allow the Court to infer that the defendant is liable for the misconduct alleged. Id. This requires more than "bare assertions of legal conclusions";a plaintiff must provide the "grounds" of his or her "entitlement to relief." League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007).
In deciding a motion under Rule 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept as true all well-pled factual allegations. Id. The Court "may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein." Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).
The Court applies essentially the same standard of review for judgment on the pleadings as it does for a motion to dismiss under Fed. R. Civ. P. 12(b)(6). Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010). "For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment." Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C., 636 F.3d 235, 240 (6th Cir. 2011) (citation omitted).
To withstand a Rule 12(c) motion, "a complaint must contain direct or inferential allegations respecting all the material elements under some viable legal theory." Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007). The "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true." Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quotingBell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In deciding this motion, the Court does not consider materials raised outside of the pleadings.
Defendants say Darakjian lacks standing as an individual because TIR submitted the bid - not him. They say his claim should be dismissed because TIR asserted its own claim and Darakijan does not allege a derivative claim.
Darakjian says he has standing because: (1) he was a "prospective bidder" for the Project; (2) he is a citizen and taxpayer of the City of Birmingham; (3) he suffered an injury distinct and separate from TIR; and (4) he satisfies the Supreme Court's general test for Article III standing by alleging economic damages.
Defendants say: (1) only TIR submitted a bid for the Project; and (2) Darakjian's alleged attempt to submit a revised bid through a letter to the City in July of 2018 does not qualify him as a prospective bidder.
In support of standing as a prospective bidder, Darakjian relies on Club Italia Soccer & Sports Organization, Inc. v. Charter Tp. Of Shelby, Mich., 470 F.3d 286, 294 (6th Cir. 2006), overruled on other grounds as recognized by Davis v. Prison Health Services, 679 F.3d 433 (6th Cir. 2012).
Club Italia is distinguishable. There, the Sixth Circuit found the plaintiff had a sufficient economic interest at stake to support standing after the defendant refused toallow him to bid on the contract in an open bidding process. Id. at 294. Here, Darakijan was not precluded from submitting a bid during the open bidding process. Darakjian claims he attempted to submit a revised proposal in July of 2018 - about seven months after the January 3rd submission deadline.
Darakjian's correspondence to the City regarding this revised bid was on behalf of TIR. The letter sent by Darakjian on July 3, 2018 begins: "I represent the applicant TIR Equities, which submitted a response to the RFP for the Bates Street Extension." Defendant City of Birmingham's Motion for Judgment on the Pleadings. ECF No. 15-5, Page ID.253. Any assertion that this letter shows Darakjian's intent to submit a new bid himself is disingenuous.
Importantly, throughout his complaint and in his response brief, Darakjian repeatedly refers to TIR's bid and highlights his advocacy efforts on behalf of TIR. The following excerpts are the relevant portions of Darakjian's complaint:
Plaintiff's Amended Complaint. ECF No. 9, Page ID. 44-45, 46 (emphasis in original).
As the City points out, nowhere in his complaint does Darakjian allege anything except that he is the owner of TIR, and that he was acting on behalf of TIR when he sent letters concerning its bid. Although Darakjian interchangeably references the bid as "Plaintiffs' proposal" and "TIR's proposal," it is undisputed that only TIR responded to the City's Request for Qualifications and, that TIR - not Darakjian - submitted a bid for the Project by the January 3, 2018 deadline. Only TIR was a prospective bidder by the time bids closed on January 3, 2018.
Darakjian does not have standing as a prospective bidder.
Defendants say Darakjian cannot establish Article III standing...
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