Group v. the P.R. Ports Auth.

• Decision Date: 22 November 2010
• Docket Number: Civil No. 10–1834 (GAG).
• Citation: 756 F.Supp.2d 169
• Parties: DEL VALLE GROUP, Plaintiff,v.The PUERTO RICO PORTS AUTHORITY, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

756 F.Supp.2d 169

DEL VALLE GROUP, Plaintiff,

v.The PUERTO RICO PORTS AUTHORITY, et al., Defendants.

Civil No. 10–1834 (GAG).

United States District Court, D. Puerto Rico.

Nov. 22, 2010.

Stuart A. Weinstein–Bacal, Peter W. Miller, Weinstein–Bacal & Associates, PSC, Old San Juan, PR, Jose A. Axtmayer–Balzac, Axtmayer & Associates, San Juan, PR, for Plaintiff.Myra M. Velez–Plumey, Robert T. Collins–Viera, Myra M. Velez–Plumey, Robert T. Collins–Viera, Fernandez, Collins & Rivero Vergne, Carlos E. Cardona–Fernandez, San Juan, PR, Eliezer Aldarondo–Ortiz, Carolina Guzman–Tejada, Aldarondo & Lopez Bras, Guaynabo, PR, for Defendants.

OPINION AND ORDER

GUSTAVO A. GELPÍ, District Judge.

Plaintiff in this matter, Del Valle Group (“DVG” or “Plaintiff”) brought suit against the Puerto Rico Ports Authority (“PRPA”); Alberto Escudero Morales (“Morales”), in his individual capacity and as the Executive Director of PRPA; and Milagros Rodriguez (“Rodriguez”), in her individual capacity and as President of the Board of Awards of PRPA (collectively, “Defendants”), seeking temporary, preliminary, and permanent injunctive relief and damages for alleged violations of Plaintiff's constitutional and civil rights. The action is brought pursuant to 42 U.S.C. Section 1983, for alleged violations of Plaintiff's rights under the First, Fifth, and Fourteenth Amendments to the United States Constitution. Plaintiff contends that, through the use of a “No Litigation Clause,” PRPA has debarred Plaintiff from bidding on projects offered for bid by PRPA in direct violation of Plaintiff's constitutional guarantees.

Presently before the court is Plaintiff's motion for preliminary injunction (Docket No. 3) and Defendants' motions to dismiss (Docket Nos. 71 & 73). Plaintiff filed oppositions to Defendants' motions to dismiss (Docket Nos. 81 & 82). The court ordered Defendants to show cause as to why Plaintiff's injunctive relief should not be granted (Docket Nos. 41 & 43). Plaintiff filed a joint reply to Defendants motions (Docket No. 54). After being granted leave by the court (Docket No. 62), Defendants filed a sur-reply (Docket No. 70). After considering the parties' submissions and the pertinent law, the court GRANTS in part and DENIES in part Defendants' motions to dismiss (Docket No. 71 & 73) and in turn GRANTS in part and DENIES in part Plaintiff's motion for preliminary injunction (Docket No. 3).

I. Standard of ReviewA. Motion to Dismiss

Under Rule 12(b)(1) a party may move the court to dismiss a complaint for lack of subject matter jurisdiction at any time. In ruling on a Rule 12(b)(1) motion, the court must construe the complaint liberally and indulge in all reasonable inferences in favor of the plaintiff. Aversa v. United States, 99 F.3d 1200, 1210 (1st Cir.1996). A defendant may challenge the court's subject-matter jurisdiction in either of two ways: a facial attack on the sufficiency of the plaintiff's jurisdictionally-relevant pleadings in the complaint, or a factual challenge. Torres–Negron v. J & N Records, LLC, 504 F.3d 151, 162 (1st Cir.2007). A factual challenge involves a two-step inquiry. Id. “First, the court must determine whether the relevant facts, which would determine the court's jurisdiction, also implicate elements of the plaintiff's cause of action.” Id. at 163. If the jurisdictional issue is intertwined with the merits of the plaintiff's case, the court must adopt the summary-judgment standard, such that the court would only dismiss if the material jurisdictional facts are beyond dispute and the defendant is entitled to dismissal as a matter of law. Id. Second, if the jurisdictional issue is not so intertwined, the court may simply weigh the evidence at hand to determine its competence to hear the case. Id.

Under Rule 12(b)(6), a defendant may move to dismiss an action against him for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). When considering a motion to dismiss, the court must decide whether the complaint alleges enough facts to “raise a right to relief above the speculative level.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). In so doing, the court accepts as true all well-pleaded facts and draws all reasonable inferences in the plaintiff's favor. Parker v. Hurley, 514 F.3d 87, 90 (1st Cir.2008). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ ” Iqbal, 129 S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)).

B. Preliminary Injunction

In considering whether a grant or denial of preliminary injunction will issue, the court must consider four factors: “(1) the plaintiff's likelihood of success on the merits; (2) the potential for irreparable harm in the absence of an injunction; (3) whether issuing an injunction will burden the defendants less than denying an injunction would burden the plaintiff; and (4) the effect, if any, on the public interest.” Gonzalez–Droz v. Gonzalez–Colon, 573 F.3d 75 (1st Cir.2009) (quoting Boston Duck Tours, LP v. Super Duck Tours, LLC, 531 F.3d 1, 11 (1st Cir.2008)). Of the four criteria listed above, a showing of the likelihood of success on the merits has been held to be “the touchstone of the preliminary injunction inquiry.” Philip Morris, Inc. v. Harshbarger, 159 F.3d 670, 674 (1st Cir.1998). “[I]f the moving party cannot demonstrate that he is likely to succeed in his quest, the remaining factors become matters of idle curiosity.” New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir.2002).

II. Relevant Facts & Procedural Background

On July 10, 2001, DVG bid for the construction of a project known as the Wharves E & F Project, of which PRPA was the owner. On August 29, 2001, DVG, as the lowest bidder, was awarded the project. During the construction of the Wharves E & F Project, DVG encountered complications as a result of changes made by PRPA in the design of the project. On or around September 9, 2005, DVG presented PRPA with a claim for the costs of the delays incurred on the Wharves E & F Project in the amount of nearly $1,000,000. In accordance with its contract, DVG submitted its claim to the project's “Architect or Engineer,” who was employed by PRPA. On or around June 1, 2010, after waiting five years for a response from PRPA, DVG filed suit against PRPA in the Puerto Rico Court of First Instance, seeking to collect on this claim.

On or about April 12, 2010, PRPA issued an “Advertisement for Bids” for a project known as the Mercedita Airport Project. On April 16, 2010, DVG obtained copies of the bidding documents. Included amongst the Mercedita Airport Project bid documents was an unexecuted proposed agreement, which was to be executed by the successful bidder for the project. Article VIII, Paragraph P, item 4 of this agreement (the “No Litigation Clause”) provided: “The Contractor certifies that it does not represent or will not accept to represent interests in conflict with those of the Authority, and that he does not represent any complaint against the Commonwealth of Puerto Rico, its agencies or instrumentalities.” ( See Docket No. 1–16 at 23, ¶ P.4)

On May 13, 2010, DVG submitted its bid for the Mercedita Airport Project. With its bid of $1,464,00, DVG was the lowest bidder for the project. Internal memos dated May 17 and May 18 reflect recommendations by the Award Board to award the contract to DVG. A letter dated May 21, 2010, to Engineer Garcia of PRPA, recommended that DVG be awarded the contract as it had provided the lowest bid complying with the requirements established by PRPA. On June 10, 2010, 9 days after DVG had filed suit on its Wharves E & F Project claim, an internal memo was distributed by PRPA. The memo requested a legal opinion on the implication of DVG's Wharves E & F claim against PRPA and informed that the bid had not yet been awarded to DVG for the Mercedita Airport Project. On July 7, 2010, an internal document was given to the awarding board of PRPA. The document stated that, because DVG now had a pending lawsuit against PRPA, it was now in violation of the No Litigation Clause, and as such they were retracting the prior recommendation to award the Mercedita Airport Project to DVG.

A letter dated August 5, 2010 was sent to all of the bidders for the Mercedita Airport Project. The letter informed all bidders that, although DVG was the lowest bidder, it had a pending lawsuit against PRPA, and therefore was not awarded the project. Instead, the project was awarded to the second lowest bidder, Desarrolladora J.A. Inc.¹

DVG sent a letter dated August 11, 2010 to defendants Morales and Rodriguez, requesting an appointment to review the Board of Awards' meeting minutes and the official meeting Act for the award recommendation. On August 13, 2010, Representatives from DVG met with officers of PRPA, including Rodriguez, to review the Board's minutes. The minutes of this meeting indicated that at some point Rodriguez informed DVG that PRPA's decision to reject its bid was based on the lawsuit instituted by DVG against PRPA. PRPA cited the No Litigation Clause as partial grounds for this rejection.²

Since the disqualification of DVG's bid for the Mercedita Airport Project, DVG has submitted bids for two other PRPA projects. These two projects are the Ceiba Airport Project and the Pier 3 Project. With regard to the Ceiba Airport Project, DVG once again submitted the lowest bid. However, as of...