Harbert Intern., Inc. v. James

• Court: U.S. Court of Appeals — Eleventh Circuit
• Writing for the Court: Before CARNES and HULL, Circuit Judges, and HENDERSON; CARNES
• Citation: Harbert Intern., Inc. v. James, 157 F.3d 1271 (11th Cir. 1998)
• Decision Date: 14 October 1998
• Docket Number: No. 97-6793,97-6793
• Parties: , 12 Fla. L. Weekly Fed. C 151 HARBERT INTERNATIONAL, INC., Plaintiff-Appellant, v. Fob JAMES, James Folsom, et al., Defendants-Appellees.

Page 1271

157 F.3d 1271

41 Fed.R.Serv.3d 1512, 12 Fla. L. Weekly Fed. C 151

HARBERT INTERNATIONAL, INC., Plaintiff-Appellant, v. Fob JAMES, James Folsom, et al., Defendants-Appellees.

No. 97-6793.

United States Court of Appeals Eleventh Circuit.

Oct. 14, 1998.

Forrest S. Latta, Mobile, AL, Charles S. Leeper, Stephen A. Klein, William J. Cople, Douglas Patin, Spriggs & Hollingsworth, Washington, DC, for Plaintiff-Appellant.

Bill Pryor, John J. Parks, Atty. Gens., Montgomery, AL, F. Alan Cummings, Patricia A. Snyder, Tallahassee, FL, for Defendants-Appellees.

Champ Lyons, Jr., William R. Lancaster, Helmsing, Lyons, Sims & Leach, P.C., Mobile, AL, for James.

Appeal from the United States District Court for the Southern District of Alabama.

Before CARNES and HULL, Circuit Judges, and HENDERSON, Senior Circuit Judge.

CARNES, Circuit Judge:

Harbert International, Inc. appeals from the judgment of the district court in favor of defendants Fob James (current Governor of Alabama), James Folsom (former Governor of Alabama), Jimmy Butts (Director of the Alabama Department of Transportation, which we will refer to as the "Department"), G. Mack Roberts and Perry Hand (former Department Directors), Newal S. Cauthen, G.M. Harper, William Hartzog, and John Jernigan (Department employees), and Alan Cummings (an attorney who performed work for the Department). This lawsuit arose out of the defendants' alleged failure to make payments and perform contractual duties in connection with Harbert's construction of the Cochrane Bridge in Mobile, Alabama.

Harbert's appeal from the district court's entry of judgment in favor of the defendants raises two general issues: (1) whether Eleventh Amendment sovereign immunity bars Harbert's Fifth Amendment Takings Clause claim against the defendants in their official capacities; and (2) whether qualified immunity protects the defendants from Harbert's claims against them in their individual capacities. Answering both questions in the affirmative, we affirm the judgment of the district court.

I. FACTUAL HISTORY

This appeal arises from two procedural dispositions. Harbert's claims against the defendants in their official capacities were dismissed by the district court upon the defendants' motion to dismiss, while the defendants were granted summary judgment on Harbert's claims against them in their individual capacities. Insofar as Harbert's appeal raises issues pertaining to its official capacity claims, we accept the allegations in Harbert's complaint as true, and construe the facts in the light most favorable to Harbert. See, e.g., Harper v. Thomas, 988 F.2d 101, 103 (11th Cir.1993). Insofar as Harbert's appeal raises issues pertaining to its individual capacity claims, we view the evidence in the light most favorable to Harbert. See, e.g., Hale v. Tallapoosa County, 50 F.3d 1579, 1581 (11th Cir.1995). Because there is no material variation between the allegations of the complaint and the evidence construed in the light most favorable to Harbert, the following factual account, which reflects the evidence viewed in the light most favorable to Harbert, controls our disposition of the entire appeal.

In 1989, the Department began soliciting bids for the construction of the Cochrane Bridge. Prior to that time, the Department had contracted with a company to construct the bridge, but it terminated that contract because the company performed unsatisfactory work. In conjunction with its solicitation of bids, the Department represented that it would assume the responsibility for defects in the initial contractor's work. It also promised to supply certain equipment and supplies. The Department agreed that the contractor selected to construct the bridge could propose alternative construction methods to those specified in the construction contract. Finally, the Department agreed to compensate the contractor for any necessary work not contemplated by the construction contract. Relying on those representations, Harbert submitted the lowest aggregate bid, and was awarded the contract.

According to Harbert, the Department did not honor its representations, but instead unreasonably refused Harbert's request to utilize alternative time- and expense-saving construction methods and failed to supply Harbert with adequate equipment and supplies. As a result, Harbert experienced delays and increased costs to complete the bridge. By the time Harbert completed the bridge in August of 1991, those increased costs amounted to more than $13 million. Additionally, because Harbert had failed to complete the bridge in a timely manner, the Department withheld $1.3 million in liquidated damages from Harbert.

In January 1992, Harbert submitted a claim to the Department to recover the increased costs it had incurred as a result of the Department's misrepresentations. Defendant Hand referred Harbert's claim to a "Claims Committee" for consideration. Hand also created a "Special Claims Committee" to provide additional review of Harbert's claim. Both committees were supposed to report to Hand by March 1992, but neither did. In June 1992, Harbert appeared before the Claims Committee to press its claim. The Claims Committee requested additional information from Harbert, which it provided in July 1993.

In August 1993, Harbert asked defendant Cauthen to convene an "Advisory Board" pursuant to the Department's Standard Specification for Highway Construction § 109.10(b). That section provides in relevant part:

Upon request of the Contractor, the Director may at his discretion refer any question at issue involving the amount or rate of settlement or the liability of the State for any amount, other than as shown by the Engineer's estimates, to an advisory board for its findings and recommendations.

Cauthen asked Harbert to give the Claims Committee more time to resolve the dispute. Harbert agreed to wait until September. In October 1993, Cauthen informed Harbert that another Claims Committee had been formed, and that it needed additional information from Harbert. Harbert provided that information in December 1993.

In May 1994, Harbert again requested that an Advisory Board be convened to consider its claim, and this time the request was granted. The Advisory Board scheduled an organizational meeting for November 1994, and a hearing on Harbert's claim for January 1995. Before the Advisory Board could take any action, however, it was abolished by defendant Roberts on the ground that defendant James had recently been elected Governor of Alabama. Harbert requested that Roberts reconvene the Advisory Board. Roberts, in turn, informed Harbert that he would not accept any recommendation from the Advisory Board which exceeded $600,000.

After assuming office in January 1995, Governor James appointed Butts as Director of the Department. Butts refused to convene a new Advisory Board. In May 1995, Harbert met with Governor James, Butts, and Cauthen to discuss Harbert's claim. At that meeting, the defendants admitted to mishandling Harbert's claim. Butts told Harbert that he would convene an Advisory Board within sixty days of the date he completed his review of Harbert's claim. A short time later, however, Butts informed Harbert that he would not follow any recommendation made by the Advisory Board.

II. PROCEDURAL HISTORY

After the previously described events, Harbert filed a complaint in federal court asserting claims against the defendants in both their official and individual capacities. The complaint asserted claims under 42 U.S.C. § 1983 alleging that the defendants had violated Harbert's substantive and procedural due process rights as well as its rights under the Fifth Amendment's Takings Clause. In addition to damages, Harbert sought injunctive relief against the defendants in their official capacities to compel the release of the $1.3 million withheld by the defendants as liquidated damages.

The defendants filed a motion to dismiss. They argued that Harbert did not have viable procedural due process claims because (1) Harbert was not deprived of a constitutionally protected property interest, and (2) Harbert had not demonstrated that it could not obtain adequate post-deprivation process to remedy the alleged deprivation. The district court found that both Alabama law and the Department's Standard Specifications for Highway Construction ("Standard Specifications") incorporated into the construction contract conferred upon Harbert a protected property interest. Specifically, the court found that Alabama Code § 41-16-3, ¹ which mandates timely payment to a contractor who has executed his duties under a contract with the state, and Standard Specification 109.10(a), ² which provides that claims for extra compensation must be paid if the claims are found to be just, gave Harbert a protected property interest in being paid for the services it had rendered. The court also found Harbert's allegations established that it had attempted to utilize the state's post-deprivation processes, but that the Department's unreasonable delay in processing Harbert's claim had effectively foreclosed any such process. Accordingly, the court concluded Harbert had alleged viable procedural due process claims.

The district court agreed with the defendants that Harbert's allegations did not state substantive due process claims, and it dismissed those claims against all the defendants. (Harbert does not appeal that dismissal.) Relying on its conclusion that Harbert had a protectible property interest, the court concluded Harbert had alleged a viable Fifth Amendment Takings claim.

The defendants argued that even if Harbert had alleged viable claims against them, they were immune from suit in their official capacity under the Eleventh Amendment, and that they were immune from suit in their individual capacity under the doctrine of qualified immunity. The district court noted that the injunctive relief Harbert sought in its claims against the...