Grace & Naeem Uddin, Inc. v. N. Broward Hosp. Dist.

• Decision Date: 28 June 2013
• Docket Number: Case No. 13-60814-CIV-COHN/SELTZER
• Court: U.S. District Court — Southern District of Florida
• Parties: GRACE & NAEEM UDDIN, INC., Plaintiff, v. NORTH BROWARD HOSPITAL DISTRICT, Defendant.

GRACE & NAEEM UDDIN, INC., Plaintiff,

v.NORTH BROWARD HOSPITAL DISTRICT, Defendant.

Case No. 13-60814-CIV-COHN/SELTZER

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Dated: June 28, 2013

ORDER DENYING MOTION TO DISMISS

THIS CAUSE is before the Court upon Defendant's Motion to Dismiss [DE 11]. The Court has considered the motion, Plaintiff's response [DE 19], Defendant's reply [DE 22], the record in this case, and is otherwise fully advised in the premises.

I. BACKGROUND

On November 10, 2011, Defendant North Broward Hospital District ("Defendant") released a Formal Request for Quotation ("RFQ") for the construction of a "Sports Medicine and Center of Excellence" at the Broward General Medical Center ("Sports Medicine Project"). See DE 1-3 at 1; DE 1 ¶ 7. The RFQ contains an administrative remedy provision, which provides in relevant part as follows:

If a Contractor disputes any matter arising out of this RFQ or the RFQ process including the award of the Contract, Contractor shall send written notice of dispute to Broward Health Director of Corporate Resource & Materials Management . . . within 5 business days after the issue arises or the Contract is awarded. Within 10 business days from the date of receipt of the Contractor's dispute, the Director of Corporate Resource & Materials Management will render a written decision on the dispute and forward the decision to the Contractor via the appropriate chain of command. A Contractor may appeal this decision by giving written notice of appeal to the Senior Vice President/Chief Financial Officer of BrowardHealth within 5 business days after receipt of the Director of Corporate Resource & Materials Management written decision . . . The Senior Vice President/Chief Financial Officer of Broward Health shall render a written decision within 5 business days after receipt of the notice of appeal. This decision shall be a final order on the RFQ dispute. Until a final order is entered under this administrative procedure, Contractor shall not be entitled to institute an action contesting this RFQ, the RFQ process, or the Contract award.

DE 1-3 at 36-37.

According to the Complaint, Plaintiff Grace and Naeem Uddin, Inc. ("Plaintiff") timely submitted its base bid on December 20, 2011, in the amount of $6,316,973.00. DE 1 ¶¶ 9, 11. Another construction firm, Turner Construction, Inc. ("Turner") submitted a base bid on the project for $7,388,650.00. Id. ¶ 13. Plaintiff was determined to be the lowest bidder, while Turner was the second-lowest. Id. ¶¶ 12-13. Moreover, Plaintiff asserts that its total bid was lower than Turner's by $903,249.00. See id. ¶ 26; DE 1-5 at 1-2. The Complaint states that, on February 3, 2012, Turner signed an agreement with Defendant to build the Sports Medicine Project. DE 1 ¶ 28; DE 1-7 at 12. On February 6, 2012, Plaintiff received a letter from Defendant saying that Defendant's RFQ study committee had "recommended starting contract negotiations" with Turner regarding the project. DE 1 ¶ 27; DE 1-6 at 2. Plaintiff alleges that, on February 10, 2012, it submitted a Notice of Dispute to Defendant concerning Defendant's choosing Turner for the project. DE 1 ¶ 29; DE 1-8. On February 14, 2012, Plaintiff received a letter from Defendant denying Plaintiff's claim, and stating that "[Turner] and MBR Construction were determined to be the lowest responsive and responsible (or qualified) bidders." DE 1 ¶ 30; DE 1-9 at 1. No further explanation was given as to the grounds for rejection of Plaintiff's bid. On February 17, 2012, Plaintifffiled a Notice of Appeal of the February 14 decision. DE 1 ¶ 32; DE 1-10. One week later, on February 24, 2012, Defendant denied the appeal, again without explanation. DE 1 ¶ 33; DE 1-11 at 1.

On April 8, 2013, Plaintiff brought this action under 42 U.S.C. § 1983, alleging that Defendant deprived Plaintiff of its property interest in the award of the Sports Medicine Project contract without due process of law. In the Complaint, Plaintiff argues that a provision of the Florida competitive bidding statute, Florida Statutes § 255.20(1)(d)(1), mandates that Defendant award the contract at issue to the lowest qualified and responsive bidder. Plaintiff claims that it was the low bid, that it was qualified, and that it was responsive. Therefore, Plaintiff contends, Defendant lacked discretionary authority to give the contract to Turner. In the instant motion, Defendant moves to dismiss the Complaint on the grounds that Plaintiff has no protected property interest in the contract, and therefore Plaintiff has failed to state a claim under § 1983. Plaintiff opposes the motion.

II. LEGAL STANDARDS

Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss lies for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In order to state a claim, Federal Rule of Civil Procedure 8(a)(2) requires "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2); and Conley v. Gibson, 355 U.S. 41, 47 (1957)). "While a complaint attacked by a Rule12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations omitted). "To 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 Twombly, 550 U.S. at 570). At this stage in the litigation, the Court must consider the factual allegations in the complaint as true, and accept all reasonable inferences therefrom. Jackson v. Okaloosa Cnty., Fla., 21 F.3d 1531, 1534 (11th Cir. 1994). Nevertheless, the Court may grant a motion to dismiss when, "on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action." Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993).

Here, Plaintiff brings a claim under 42 U.S.C. § 1983 for deprivation of property without due process. To state a claim for violation of due process, a party must allege that it was "deprived of a constitutionally protected liberty or property interest. Absent such a deprivation, there can be no denial of due process." Economic Dev. Corp. v. Stierheim, 782 F.2d 952, 954-55 (11th Cir. 1986). To have a property interest in a benefit, the party must have more than an abstract need for it or a unilateral expectation of it. Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). Rather, it must have a "legitimate claim of entitlement" to the benefit. Id. For the purpose of a § 1983 claim, the sufficiency of property interests are determined by reference to state law. Mackenzie v. Rockledge, 920 F.2d 1554, 1559 (11th Cir. 1991); see also Logan v.Zimmerman Brush Co., 455 U.S. 422, 430 (1982) ("The hallmark of property . . . is an individual entitlement grounded in state law, which cannot be removed except 'for cause.'"). Florida law provides that a property interest may be created by a statute or ordinance that supports a claim of entitlement. T & A Utils. v. City of Panama City, No. 5:96cv97/SMN, 1997 U.S. Dist. LEXIS 4121, at *6 (N.D. Fla. Jan. 22, 1997) (citing Key West Harbour v. City of Key West, 987 F.2d 723, 727 (11th Cir. 1993)). A property interest may also be created by the policies of a governmental agency, if there is a "Florida state law authority that elevates that policy to the status of a regulation with the force of law." Morley's Auto Body v. Hunter, 70 F.3d 1209, 1214 (11th Cir. 1995). In considering whether a protectable interest has been created,

the determinative issue is the level of discretion afforded to the governmental body by the statutes, ordinances, policies or rules. The more discretionary authority afforded the governmental body by the statutes, etc., the less likely a constitutional protected property right exists.

American Recycling Co. v. Cnty. of Manatee, 963 F. Supp. 1572, 1583 (M.D. Fla. 1997) (citing Circa Ltd. v. City of Miami, 79 F.3d 1057 (11th Cir. 1996); Key West, 987 F.2d 723; Pataula Elec. Membership Corp. v. Whitworth, 951 F.2d 1238 (11th Cir. 1992)). Thus, "no property interest inures if the decisionmaker is not constrained by objective considerations." T & A Utils., 1997 U.S. Dist. LEXIS 4121, at * 9 (citing Circa, 79 F.3d at 1061-62). In the context of bidding contracts, courts have generally found that a bidder has a property interest in a contract "only if the bidding procedures are sufficiently explicit and the decisionmaker's discretion is sufficiently limited to entitle the bidder to receive the contract if it satisfies a certain set of conditions." City-Wide Asphalt Paving v. Alamance Cnty., No. 2:96CV66, 1996 U.S. Dist. LEXIS 14428, at *7(M.D.N.C. Aug. 12, 1996) (citing, e.g., Pataula, 951 F.2d at 1242-43; Buckley Constr., Inc. v. Shawnee Civic & Cultural Dev. Auth., 933 F.2d 853, 858 (10th Cir. 1991)).

III. ANALYSIS

In the instant motion, Defendant contends that Plaintiff fails to state a claim because Plaintiff cannot establish that it had a property interest in the Sports Medicine Project contract. Defendant argues that the language of Florida Statutes, § 255.20(1)(d)(1), and the terms of the RFQ left Defendant with complete discretion in awarding the contract. Plaintiff responds that Defendant's discretion was restricted both by § 255.20(1)(d)(1) and the Florida common-law prohibition against awarding contracts arbitrarily and capriciously.

A. Existence of a Property Interest

First, the parties dispute the amount of discretion afforded Defendant un...