Gen. Elec. Co. v. W. Feliciana Parish Hosp. Serv. Dist. No. 1, CIVIL ACTION NO. 16-449-JWD-RLB
| Decision Date | 29 November 2016 |
| Docket Number | CIVIL ACTION NO. 16-449-JWD-RLB |
| Parties | GENERAL ELECTRIC COMPANY v. WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1 |
| Court | U.S. District Court — Middle District of Louisiana |
This matter came before the Court on Plaintiff's Motion for Preliminary Injunction (Doc. 6) and Defendant's Motion to Dismiss (Doc. 15). The Court heard oral arguments on October 26, 2016, at which time it exercised its authority under Federal Rule of Civil Procedure 12(d) to convert the Motion to Dismiss to a Motion for Summary Judgment,1 and permitted the parties ten days to submit post-hearing briefs and supplement the record with evidence for the Court to consider in its Ruling. (See Doc. 28.) After considering the parties' arguments, the unique factual circumstances of this case, and the relevant jurisprudence, for the reasons stated below, the Motion for Summary Judgment is GRANTED and Plaintiff's Motion for Preliminary Injunction is DENIED.
General Electric Company's Healthcare Division ("Plaintiff") is a New York corporation headquartered in Fairfield, Connecticut with its principle place of business in Chicago, Illinois. (Doc. 3 at 1—2.) West Feliciana Parish Hospital Service District No. 1 ("Defendant") is a politicalsubdivision of the State of Louisiana. Id. at 2. On December 17, 2015, Defendant publicized an Invitation for Bids, Project No. 2015-0001, for qualified vendors to provide specified medical equipment. Id. Three bids were received timely, including a bid by Plaintiff. Id. at 3. On February 4, 2016, Defendant rejected all three bids due to alleged deficiencies. Id. Plaintiff subsequently learned its bid was rejected because it failed to acknowledge Addendum No. 1 to the IFB; in other words, it failed to write the number "1" on the bid form. Id. Had Plaintiff complied with this requirement, it would have been awarded the bid; nonetheless, understanding the highly technical nature of Louisiana's Public Bid Law, it did not contest Defendant's rejection of its bid. Id.
On February 11, 2016, Defendant advertised an invitation for bid, for Project No. 2016-0001-A (the "IFB"), for qualified vendors to provide state-of-the-art imaging equipment consisting of a MRI; CT Scanner; X-Ray Unit General RAD, Digital; and X-Ray Unit, RAD, Fluoro, Digital (the foregoing, collectively, the "Equipment"), including all components and services necessary to seamlessly integrate the Equipment with Defendant's other day-to-day clinical and business software and systems. (Id. at 4.) Defendant issued multiple addenda to the IFB, to update interested parties of modifications to the IFB, schedule of events, and specifications for the Equipment. Id. Defendant specifically stated in the IFB and in Exhibit A "that the equipment specifications were used only to denote the quality and standard of the product desired, and that the equipment specifications did not restrict bidders to the specific brand, make, manufacturer, or specification named" and that equivalent products were acceptable. (Doc. 15 at 2.)
On the same day the IFB was advertised, Defendant published Addendum No. 1 advising interested bidders that Exhibit A, Equipment Specifications, would be released via a separate addendum. Id. On February 16, 2016, Defendant published Addendum No. 2 providing interested bidders with Exhibit A, Equipment specifications. Id. On February 25, 2016, Defendant publishedAddendum No. 3, which provided interested bidders with an updated Exhibit A-1, Equipment Specifications, which, by its terms, superseded the Exhibit A that was previously provided to interested parties via Addendum No. 2 and further modified the Schedule of Events. Id.
Plaintiff claims these revisions to Exhibit A-1 helped Hitachi Medical Systems of America ("Hitachi") become more responsive to the IFB by removing several of the specifications that Hitachi was unable to meet in the previous round of bidding in 2015. Id. at 4, 6. Further, Plaintiff, in its complaint, points to a litany of specifications which it claims Hitachi failed to meet or exceed, and which thereby rendered Hitachi's bid nonresponsive.2
Bidders were required to submit bids electronically no later than 1:00 p.m. on March 7, 2016. Id. Defendant received three timely bids on March 7, 2016: (i) Hitachi's bid in the amount of $2,165,900; (ii) GE's bid in the amount of $2,396,763.66; and (iii) Siemens Medical Solutions USA's bid in the amount of $2,587,023. Id. Philips Healthcare submitted a bid after 1:00 p.m., which Defendant refused to consider because it was untimely. Id.
Defendant submitted Hitachi's apparent low bid to Defendant's evaluation committee to determine whether Hitachi's proposed equipment was, in the opinion of the evaluation committee, equivalent to the Equipment specifications set forth in Exhibit A-1 to the IFB. (Doc. 15-1 at 3.) On April 22, 2016, Defendant awarded Hitachi the contract for the Equipment in response to the IFB. Id. at 4. On June 6, 2016, Defendant executed purchase agreements with Hitachi for the Equipment, at which time Hitachi began performance under the contract, including commencement of production of the equipment and meeting with Defendant's design team to ensure the plans and specifications fit Defendant's layout. Id. at 4.
On May 5, 2016, Plaintiff, via counsel, filed a formal protest letter with the Office of State Procurement ("OSP") and sent a copy to Defendant. (Docs. 15-1 at 3; 42-1 at 1.) The seven and a half page letter contained several detailed allegations of the deficiencies in Hitachi's bid proposal, many of which mirrored the allegations in Plaintiff's complaint (see Docs. 42-1 at 3—7; 3 at 5—15), and asserted that because Hitachi's bid was nonresponsive, Plaintiff actually submitted the lowest responsive and responsible bid and therefore must be awarded the contract. (Doc. 42-1 at 1, 7—8.) Plaintiff's letter to the OSP concluded:
Hitachi's bid is non-responsive as a matter of law... Hitachi was improperly awarded the contract. Now that their failure to supply a legally responsive bid is known to the Hospital, that error cannot stand. Hitachi's bid must be rejected as non-responsive, and GE Healthcare, as the lowest responsive and responsible bidder, must be awarded with the contract.
(Doc. 42-1 at 7—8 (emphasis added).)
The OSP subsequently responded to counsel's letter informing Plaintiff it lacked jurisdiction over its claim. Id. On May 24, 2016, counsel for Defendant sent a letter to Plaintiff that reiterated that the OSP had no jurisdiction over the IFB. (Id.; Doc. 6-2 at 1—3.) The letter further stated:
[a]fter a thorough evaluation of the equipment specifications bid by [Hitachi] against the specifications set forth on Exhibit A-1 to the IFB, Project No. 2016-0001-A, the Hospital determined that the HMSA equipment substantially met, and therefore was the functional equivalent of, the Equipment Specifications set forth on Exhibit A-1 of IFB, Project No. 2016-0001-A. The Hospital further determined that [Hitachi's] proposed equipment fulfilled the required functionality to provide the necessary services to patients presenting at the Hospital. Consequently, Hospital awarded [Hitachi], as the lowest, most responsive and responsible bidder, the contract for the Equipment in response to IFB, Project No. 2016-0001-A.
On July 5, 2016, approximately eleven weeks after it first learned it had not been awarded the contract, Plaintiff initiated this litigation. (See Doc. 1.) In its Amended Complaint, filed on July 13, 2016, Plaintiff demanded four kinds of relief: (1) a permanent injunction enjoining performance under the contract between Defendant and Hitachi; (2) a declaratory judgment declaring the award of the bid to Hitachi as violative of the Louisiana Public Bid Law; (3) a writ of mandamus directing Defendant to award it the 2016 bid, as Plaintiff was the lowest responsible and responsive bidder; and (4) damages, costs, and attorneys' fees. (Doc. 3 at 15—19.) Subsequently, on July 22, 2016, Plaintiff filed for a preliminary injunction seeking to enjoin performance under the contract between Hitachi and Defendant. (Doc. 6.)
Plaintiff requested Defendant waive service of summons, thereby allowing Defendant sixty days to file its answer pursuant to Rule 12.3 Defendant signed the waiver on July 8, 2016 and Plaintiff filed the returned waiver of service into the record on July 13, 2016. (Doc. 4.) At no time did Plaintiff file for a temporary restraining order, nor did it request an expedited hearing on its motion for preliminary injunction. The parties requested a continuance of the Magistrate Judge's scheduling conference from September 15, 2016 to September 22, 2016. (Doc. 17.) After hearing on the instant motions was set for October 26, 2016 (Doc. 18), the scheduling conference with the Magistrate Judge was reset for November 3, 2016 without objection from either party. (Doc. 19.) The Court heard oral arguments on Plaintiff's Motion for Preliminary Injunction and Defendant's Motion to Dismiss on October 26, 2016. Based on factual representations made by both parties in briefing and in argument for which there was no support in the record and based on evidence which was produced, the Court gave notice of its intention to convert the Motion to Dismiss to a Motion for Summary Judgment and permitted the parties an additional two weeks to supplement the record with additional evidence for the Court to consider in its Ruling. (Doc. 28.) Post-hearing briefs were submitted to the Court by both parties on November 9, 2016. (Docs. 42—43.)
In its initial motion before this Court, Defendant argued dismissal is appropriate for several reasons. First and foremost, Defendant argued that Plaintiff's request for a permanent injunction was untimely filed, and therefore Plaintiff waived its right to all the remedies it seeks in its amended complaint, including the permanent...
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