Ivani Contracting Corp. v. City of New York

• Decision Date: 07 January 1997
• Docket Number: No. 352,D,352
• Citation: 103 F.3d 257
• Parties: IVANI CONTRACTING CORPORATION, Plaintiff-Appellant, v. The CITY OF NEW YORK; David N. Dinkins, in his former capacity as Mayor of the City of New York; and Michael C. Rogers, in his former capacity as Chief Procurement Officer of the City of New York, Defendants-Appellees. ocket 95-9186.
• Court: U.S. Court of Appeals — Second Circuit

Page 257

103 F.3d 257

IVANI CONTRACTING CORPORATION, Plaintiff-Appellant, v. The CITY OF NEW YORK; David N. Dinkins, in his former

capacity as Mayor of the City of New York; and Michael C.

Rogers, in his former capacity as Chief Procurement Officer

of the City of New York, Defendants-Appellees.

No. 352, Docket 95-9186.

United States Court of Appeals, Second Circuit.

Argued Oct. 17, 1996.

Decided Jan. 7, 1997.

Michael J. Strenk, Commack, NY, for Plaintiff-Appellant.

Julian L. Kalkstein, Assistant Corporation Counsel of the City of New York, New York City (Paul A. Crotty, Corporation Counsel of the City of New York, Larry A. Sonnenschein, Assistant Corporation Counsel of the City of New York, New York City, of counsel), for Defendants-Appellees.

Before: NEWMAN, Chief Judge, and McLAUGHLIN, Circuit Judge. ^*

McLAUGHLIN, Circuit Judge:

Ivani Contracting Corporation ("Ivani") appeals from an order of the United States District Court for the Eastern District of New York (Eugene H. Nickerson, Judge ), dismissing its complaint in a civil rights action against the City of New York (the "City") on the ground of laches. The court also dismissed Ivani's claim for punitive damages as unsupported by the record. Ivani appeals, arguing that a laches defense is unavailable against its legal claims and that the district court improperly dismissed its claim for punitive damages. For the reasons stated below, we affirm the order of the district court in part, reverse in part, and remand for further proceedings.

BACKGROUND

Under New York state law, all public contracts involving more than $10,000 shall be awarded to the "lowest responsible bidder." N.Y. Gen. Mun. Law § 103. In April 1992, the City adopted § 3-09 of The Official Compilation of the Rules of New York City, providing that the City would award certain public contracts to contractors substantially owned by minorities or females ("M/WBE" contractors)--even if those businesses were not the "lowest responsible" bidders--so long as their bids fell within a designated percentage of the lowest responsible bid.

In November 1992, the City invited bids on two contracts to construct sewers in Queens County. Ivani, a contractor owned by Italian males, submitted the lowest bids on both contracts, but was awarded neither.

Ivani submitted a bid of $195,836 on the first sewer contract. Although that bid was lowest, the City awarded the contract to the third-lowest bidder ($203,273), a joint venture between Vassallo Construction Corporation and Island Pavement Cutting Company that had sufficient minority and/or female ownership to qualify for the City's bidding preference. The City informed Ivani by letter on December 22, 1992, that it would not receive the contract; officially awarded the contract to the M/WBE contractor on July 6, 1993; and issued an order to start work on January 24, 1994.

Ivani submitted a bid of $2,925,830 on the second (and much larger) contract. Again, although Ivani's bid was lowest, the City awarded the contract to the sixth-lowest bidder ($3,094,444), a joint venture between H.H.M. Associates, Inc. and Two Gals Development Corporation that also had sufficient minority and/or female ownership to qualify for the bidding preference. The City informed Ivani by letter on April 22, 1993 that it would not receive the contract; officially awarded the contract to the M/WBE contractor on July 16, 1993; and issued an order to commence work on November 17, 1993.

Ivani served the City with a notice of claim on July 19, 1993. Exactly one year later, on July 19, 1994, it sued the City in the United By July 1994, when Ivani filed its action, work on both contracts was significantly--if not completely--finished, and the City had paid out most of the contract prices to the contractors on both projects. In neither instance had Ivani attempted to stop the awarding of the contract to the higher-bidding M/WBE contractor by initiating an Article 78 proceeding. See N.Y. C.P.L.R. §§ 7801-06.

States District Court for the Eastern District of New York. Ivani alleged that the City discriminated against it on the basis of race and/or gender by awarding the two public contracts for which Ivani had submitted the lowest bids to the M/WBE contractors. Ivani asserted claims under 42 U.S.C. §§ 1981, 1983, and 2000d, the Equal Protection Clauses of the United States and New York Constitutions, and N.Y. Gen. Mun. Law § 103. Ivani sought $1,075,000 in lost profits and $10,000,000 punitive damages.

The City moved for summary judgment pursuant to Fed.R.Civ.P. 56(c), asserting that Ivani's laches barred its claims. The district court agreed. The court also found no evidentiary basis for punitive damages. Thus, the district court granted summary judgment to the City and dismissed Ivani's complaint in its entirety.

Ivani now appeals, arguing that (1) laches is unavailable against its legal claims for damages for civil rights violations; (2) in any event, laches should not apply on these facts; and (3) the district court improperly dismissed its claim for punitive damages.

DISCUSSION

We review the district court's grant of summary judgment de novo. Graham v. Henderson, 89 F.3d 75, 79 (2d Cir.1996); Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 967 F.2d 742, 746 (2d Cir.1992).

A. Laches

Ivani argues that the district court erred in holding that laches could bar its claims. We agree.

As Justice Holmes has observed, "a page of history is worth a volume of logic." New York Trust Co. v. Eisner, 256 U.S. 345, 349, 41 S.Ct. 506, 507, 65 L.Ed. 963 (1921). The doctrine of laches has a historical pedigree pre-dating the statutory enactment of periods of limitations. Even when there were no statutory periods, the Chancellor in Equity, the "King's Conscience," could withhold relief when the plaintiff's delay in coming to Equity was inordinate and had caused prejudice to the defendant.

Laches is "an equitable defense based on the ... maxim vigilantibus non dormientibus aequitas subvenit (equity aids the vigilant, not those who sleep on their rights)." Stone v. Williams, 873 F.2d 620, 623 (2d Cir.), cert. denied, 493 U.S. 959, 110 S.Ct. 377, 107 L.Ed.2d 362 (1989), vacated on other grounds, 891 F.2d 401 (2d Cir.1989), cert. denied, 496 U.S. 937, 110 S.Ct. 3215, 110 L.Ed.2d 662 (1990). It bars a plaintiff's equitable claim where he is "guilty of unreasonable and inexcusable delay that has resulted in prejudice to the defendant." Goodman v. McDonnell Douglas Corp., 606 F.2d 800, 804 (8th Cir.1979), cert. denied, 446 U.S. 913, 100 S.Ct. 1844, 64 L.Ed.2d 267 (1980); see also Gardner v. Panama R.R. Co., 342 U.S. 29, 30-31, 72 S.Ct. 12, 13-14, 96 L.Ed. 31 (1951).

The first attempt at legislating a period of limitations is found in the statute of 32 Henry VIII (1541) and was restricted to actions involving real property. It was superseded by the statute of 21 James I, ch. 16 (1624), extending the limitation to personal actions as well as real. Modern statutes of limitations trace directly back to 1624, and embody the notion that fixing the periods for bringing damages actions is a legislative function that imposes certainty and predictability upon how long a defendant should be subject to suit.

The Supreme Court long ago recognized that, while the doctrine of laches survived as a further limitation upon granting relief in equity, "[l]aches within the term of the statute of limitations is no defense at law." United States v. Mack, 295 U.S. 480, 489, 55 S.Ct. 813, 818, 79 L.Ed. 1559 (1935). True, Mack preceded the "merger" of law and equity in the federal courts. See Fed.R.Civ.P. 2. But the Court reiterated this traditional rule much more recently, at least We have held--without explication and citing only Mack--that laches cannot bar a suit under the federal False Claims Act, see 31 U.S.C. § 231 et seq., because "[l]aches is not a defense to an action filed within the applicable statute of limitations." United States v. RePass, 688 F.2d 154, 158 (2d Cir.1982); see also Morgan v. Koch, 419 F.2d 993, 996 (7th Cir.1969) ("[w]here ... a litigant is seeking to enforce federal and state rights in law only, the applicable statute of limitations controls rather than laches"). Citing (among diverse other cases) our decision in RePass, the Eighth Circuit has more cogently stated that "separation of powers principles dictate that federal courts not apply laches to bar a federal statutory claim that is timely filed under an express federal statute of limitations." Ashley v. Boyle's Famous Corned Beef Co., 66 F.3d 164, 170 (8th Cir.1995) (Title VII and Equal Pay Act claims); see also Miller v. Maxwell's Int'l, Inc., 991 F.2d 583, 586 (9th Cir.1993) ("[b]ecause Congress provided a statute of limitations to govern ADEA actions ... [those] claims cannot be barred by laches"), cert. denied, 510 U.S. 1109, 114 S.Ct. 1049, 127 L.Ed.2d 372 (1994). An express limitations period "reflect[s] a legislative 'value judgment' " striking the appropriate balance between the interests promoted by the statute and countervailing interests of repose. Ashley, 66 F.3d at 169 (quoting Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 463-64, 95 S.Ct. 1716, 1722, 44 L.Ed.2d 295 (1975)).

in dicta. In Oneida County v. Oneida Indian Nation of New York, 470 U.S. 226, 105 S.Ct. 1245, 84 L.Ed.2d 169 (1985), the Court found it unnecessary to reach the issue, but nonetheless volunteered that "application of the equitable defense of laches in an action at law would be novel indeed." Id. at 244-45 n. 16, 105 S.Ct. at 1256 n. 16. Justice Stevens, in a dissent, noted that, "[i]n deference to the doctrine of the separation of powers, the Court has been circumspect in adopting principles of equity in the context of enforcing federal statutes." Id. at 262 n. 12, 105 S.Ct. at 1266 n. 12 (Stevens, J., dissenting).

The prevailing rule, then, is that when a plaintiff brings a federal statutory claim seeking legal relief, laches cannot...