International Business Machines Corp. v. Evans

• Decision Date: 20 February 1995
• Docket Number: No. S95A0072,S95A0072
• Citation: 265 Ga. 215,453 S.E.2d 706
• Parties: INTERNATIONAL BUSINESS MACHINES CORPORATION v. EVANS et al.
• Court: Georgia Supreme Court

Page 706

453 S.E.2d 706

265 Ga. 215

INTERNATIONAL BUSINESS MACHINES CORPORATION v. EVANS et al.

No. S95A0072.

Supreme Court of Georgia.

Feb. 20, 1995.

Reconsideration Denied March 20, 1995.

Gordon D. Giffin, David L. Balser, Albert G. Norman, Jr., Harold N. Hill, Jr., Long, Aldridge & Norman, Atlanta, for appellant.

Michael J. Bowers, Atty. Gen., William C. Joy, Sr. Asst. Atty. Gen., Teresa E. Lazzaroni, Asst. Atty. Gen., Mark S. Vanderbroek, Eric A. Szweda, Troutman Sanders, Atlanta, for appellees.

Charles T. Lester, Jr., Richard L. Robbins, Sutherland, Asbill & Brennan, Atlanta, for amicus curiae.

FLETCHER, Justice.

International Business Machines sued the Georgia Department of Administrative Services (DOAS), and David Evans, in his official capacity as commissioner of DOAS, seeking to enjoin DOAS's award of a state contract for a computer system to Hitachi Data Systems or, in the alternative, to have DOAS re-bid the contract. The trial court dismissed IBM's complaint on the ground that sovereign immunity barred the action. We reverse and remand.

DOAS issued a Request For Proposal (RFP) pursuant to OCGA § 50-5-67(a) for the procurement of a mainframe computer. According to the terms of the RFP, the contract award would be made to the "responsible offeror(s) whose proposal(s) is determined in writing to be the most advantageous to the State, taking into account all of the evaluation factors set forth in this RFP. No other factors or criteria shall be used in the evaluation." The RFP detailed the evaluation criteria and provided a range of points to be given to a proposal if it met specified requirements. A team of technical experts from DOAS would evaluate each proposal and award points based on that evaluation. The DOAS technical team awarded Hitachi's proposal the most points and DOAS awarded the contract to Hitachi based on the recommendation of the technical team. IBM's primary complaint is that the technical team did not award IBM a certain number of points that IBM alleges the RFP issuing officer orally told IBM it would receive and that the failure to award these points violated the terms of the RFP. IBM contends that if the points had been awarded in accordance with the oral representation of the issuing officer, IBM would have received the highest number of points and should have been awarded the contract. ¹

1. DOAS and the commissioner both contend that sovereign immunity protects them from injunctive relief. We disagree. This court has long recognized an exception to sovereign immunity where a party seeks injunctive relief against the state or a public official acting outside the scope of lawful authority. See Chilivis v. Nat. Distrib. Co., 239 Ga. 651, 654, 238 S.E.2d 431 (1977) (citing cases); Irwin v. Crawford, 210 Ga. 222, 224, 78 S.E.2d 609 (1953) ("if the actions of [public corporations, boards or commissions] are illegal or contrary to law, the courts will intervene in order to prevent [an action] illegal or contrary to law").

To avoid the harsh results sovereign immunity would impose, the court has often employed the legal fiction that such a suit is not a suit against the state, but against an errant official, even though the purpose of the suit is to control state action through state employees. See Undercofler v. Seaboard Air Line R. Co., 222 Ga. 822, 827, 152 S.E.2d 878 (1966) (suit seeking to enjoin assessment of property taxes was not suit against the state because complaint alleged tax commissioner was acting contrary to state and federal constitutions). In other instances, the court has scrutinized the challenged act and if the act is legal, found sovereign immunity applies; on the other hand, if the act is illegal, then the court has held that sovereign immunity is no bar. See Evans v. Just Open Government, 242 Ga. 834, 843-44, 251 S.E.2d 546 (1979) (Hill, J., concurring specially) (noting that holding that sovereign immunity barred suit was dicta because it depended upon analysis that officials had not violated any laws); Cannon v. Montgomery, 184 Ga. 588, 591-92, 192 S.E. 206 (1937). The underlying, though often unstated, premise in these cases is that the executive branch of government cannot cloak itself in the mantle of sovereign immunity when an injured party seeks to enjoin an illegal action. However, the use of such legal fictions and circular reasoning has contributed greatly to the confusion that exists regarding the proper application of sovereign immunity. Recognizing a suit for injunctive relief to restrain an illegal act as an exception to sovereign immunity will permit a more logical analysis. ²

2. The 1991 amendment to the State Constitution does not negate this long-standing principle of law. See Ga. Const. of 1983, Art. I, Sec. II, Par. IX. Rather, the 1991 amendment changed the way in which the state waived its immunity, by removing the insurance waiver that existed under the prior law. See Curtis v. Bd. of Regents, 262 Ga. 226, 228, 416 S.E.2d 510 (1992) (intent of 1991 amendment is to "redraw and redefine the terms of the state's waiver of sovereign immunity"); Donaldson v. Dept. of Transp., 262 Ga. 49, 50, 414 S.E.2d 638 (1992) (discussing background of 1991 amendment). The 1991 amendment is not implicated in this case because sovereign immunity has never applied to bar this type of action seeking injunctive relief. See also City of Thomasville v. Shank, 263 Ga. 624, 625, 437 S.E.2d 306 (1993) (long standing exception to sovereign immunity that a municipality may be held liable for creating a nuisance was not abrogated by 1991 constitutional amendment). Therefore, sovereign immunity does not stand as a bar to IBM's complaint, and injunctive relief may be granted if DOAS acted without lawful authority and beyond the scope of its official power in the manner in which it evaluated IBM's proposal. ³

3. The burden on the party seeking to challenge a decision of the state or one of its officials is a heavy one. A court may not substitute its judgment for that of the state or its employees. Rather, a court may interfere with an exercise of the state's statutory and regulatory authority only where the state has acted wholly outside its authority; has acted arbitrarily and capriciously in its decisionmaking; has rendered a decision that is clearly erroneous; or has acted in violation of constitutional rights. See Bentley v. Chastain, 242 Ga. 348, 352, 249 S.E.2d 38 (1978); see also OCGA § 50-13-19(h) (applying similar standard for judicial review under the Administrative Procedures Act).

In this case, the terms of the RFP provide the limits of the authority of DOAS to award the contract. See Amdahl Corp. v. Dept. of Admin. Svcs., 260 Ga. 690, 696, 398 S.E.2d 540 (1990) (DOAS and its commissioner are bound by the terms of the RFP). The trial court did not address IBM's allegation that DOAS violated the terms of the RFP in its evaluation of IBM's proposal. Therefore, we remand the case to allow the trial court to consider, in light of this opinion, IBM's arguments that the alleged violation of the RFP entitles IBM to injunctive relief.

Judgment reversed and case remanded.

All the Justices concur, except BENHAM, P.J., and HUNSTEIN, J., who concur in part and dissent in part.

HUNT, Chief Justice, concurring.

While I fully concur with the majority, I write to say that simple common sense tells us that the doctrine of sovereign immunity should not be applied in this case. The primary purpose of the doctrine of sovereign immunity is the protection of the public purse. Protection of the public purse is also a primary objective of competitive bidding statutes. Should IBM be successful in compelling the State to accept a bid which will cost the taxpayers of Georgia less, rather than more, it will be advancing the same purpose which the doctrine is intended to advance. This is not a case in which a party is attempting to enrich itself at the public's expense; on the contrary, this attempt to have the State follow its own competitive bidding statute will, if successful, result in that which is advantageous to the State. ⁴ In a very real and practical way, it may be said that IBM's suit is as much on behalf of the State as against it, just as a shareholder's action against the officers of a corporation is a suit on behalf of the corporation. Were the State successful in defending on the doctrine of sovereign immunity, the taxpayers of the State, whom the doctrine is supposed to protect, would be the losers.

BENHAM, Presiding Justice, concurring in part and dissenting in part.

The majority sets forth that neither DOAS nor its commissioner can rely on the doctrine of sovereign immunity as a shield from IBM's suit seeking injunctive relief. I do not believe that DOAS and its commissioner are so inextricably entwined that they can be painted with the same broad stroke. Instead, I am of the opinion that the 1990 constitutional amendment (1983 Ga. Const. Art. I, Sec. II, Par. IX) places DOAS, as a department of the state, within the folds of the cloak of sovereign immunity, and the question of the commissioner's immunity from suit is determinable only after further fact-finding by the trial court. In addition, I do not join the majority's implicit holding that subparagraph (d) of the constitutional amendment is not applicable to the case at bar. By so holding, the majority does not include suits for injunction within the term "suit" as it is used in the constitutional subsection (d), which states that officers and employees of the state or its agencies shall not be subject to suit or liability absent special circumstances. Compare Department of Human Resources v. Briarcliff Haven, 141 Ga.App. 448, 450, 233 S.E.2d 844 (1977) ("The word 'suit' is all-inclusive and applicable to any type of action.") Thus, I would affirm the trial court's decision that sovereign immunity immunizes DOAS from this suit and, while I endorse the remand of this case to the...