K. S. B. Technical Sales Corp. v. North Jersey Dist. Water Supply Commission of State of N. J.
| Decision Date | 04 May 1977 |
| Citation | 376 A.2d 203,150 N.J.Super. 533 |
| Parties | K. S. B. TECHNICAL SALES CORP. and Sieglinde Fazio, Plaintiffs, v. NORTH JERSEY DISTRICT WATER SUPPLY COMMISSION OF the STATE of NEW JERSEY, Defendant, v. BRISCOE/COURTER/CONDUIT, a joint venture, Terminal Construction Co. and State of New Jersey, Intervenors. |
| Court | New Jersey Superior Court |
McCarter & English, Newark, for plaintiffs (Julius B. Poppinga, Newark, appearing; Bernard Babb, New York City, of the New York Bar, of counsel).
Teltser & Perle, East Orange, for defendant (Harold R. Teltser, East Orange, appearing).
McElroy, Connell, Foley & Geiser, Newark, for intervenor Briscoe/Courter/Conduit (Theodore W. Geiser, Newark, appearing).
Heller & Laiks, Passaic, for intervenor Terminal Const. Co. (Herbert R. Ezor, Newark, appearing).
William F. Hyland, Atty. Gen., for intervenor State of N. J. (Michael S. Bokar, Trenton, appearing).
North Jersey District Water Supply Commission (Commission) is a public agency organized and functioning under N.J.S.A. 58:5-1 et seq. It created and operates a water system known as the Ramapo-Wanaque System, with a reservoir and facility located in Wanaque, New Jersey, with aqueducts serving water to Newark, Clifton, Paterson, Passaic, Bloomfield, Glen Ridge, Kearney, Montclair and Bayonne.
This action is brought by plaintiffs K.S.B. Technical Sales Corp. (K.S.B.) and Sieglinde Fazio, a taxpayer, against the Commission to restrain it from receiving, evaluating or accepting any bids in connection with Contract W-76, Wanaque Filtration Plant, or awarding any contract which contains a "Buy American" specification. Intervention has been permitted on behalf of the State of New Jersey and two bidders, Terminal Construction Corporation (Terminal) and Briscoe/Courter/Conduit, a joint venture (Briscoe).
On February 9, 1977 the Commission caused to be advertised an invitation to bid on Contract W-76. Bids were returnable at 11 a. m., Wednesday, April 13, 1977, at the office of the Commission, at which time they were to be opened. Included in the specifications are requirements for the water pumps needed in this project.
K.S.B. is a New York corporation which imports and distributes water-pumping equipment made in and exported from foreign countries. K.S.B. is a wholly-owned subsidiary of Klein Schanzlin Becker AG, a West German manufacturer of pumps and pumping equipment. K.S.B. obtained a copy of the specifications for Contract W-76 with a view towards submitting bids for the pumps to be used on the project to a number of general contractors who proposed to bid in connection with the project.
On April 4, 1977, nine days prior to the date on which the bids were to be opened, an addendum to the contract specifications was sent to all prospective bidders. Item 9 of this addendum included, for the first time, a specification that only products manufactured in the United States, wherever available, be used in the project, citing as authority N.J.S.A. 40A:11-18. Such a provision is commonly known as a "Buy American" specification.
On April 11, 1977 K.S.B. instituted an action against the Commission in the United States District Court for the District of New Jersey seeking to restrain the Commission's bidding process due to the alleged invalidity of the "Buy American" specification. As a result of those proceedings a consent order, dated April 13, 1977, appointed a conservator to collect the bids for the Commission and hold them unopened until further order of the court. It also ordered the Commission to send a mailgram, on April 13, 1977, to all persons and entities who purchased plans and specifications for Contract W-76, reading:
This mailgram was sent as directed and only the six original bidders submitted further bids, which bids were also impounded by the conservator.
At the conclusion of the hearing before the United States District Court, Judge Meanor invoked the doctrine of abstention to give the state courts an opportunity to resolve the unsettled question of state law raised by this litigation. R.R. Comm. of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). On April 20, 1977 K.S.B. initiated the present action by order to show cause.
Plaintiff sought a declaration that N.J.S.A. 40A:11-18 is unconstitutional; a declaration that N.J.S.A. 52:32-1 et seq. and N.J.S.A. 52:33-1 et seq. are unconstitutional; to declare N.J.S.A. 40A:11-18, 52:32-1 et seq. and 52:33-1 et seq. inapplicable to any bidding proposal published by the Commission; that N.J.S.A. 40A:11-18, 52:32-1 et seq. and 52:33-1 et seq. contravene public policy, and restraining the Commission from receiving, opening, evaluating or awarding a contract containing the "Buy American" specification and striking that provision from the contract. At a hearing conducted at the time of the filing of the order to show cause and complaint, the Commission was temporarily restrained from opening, evaluating or awarding a contract in response to any bidder's proposal.
Due to the urgent public need and the $40,000,000 expense involved in this filtration plant project, and the undisputed factual posture of the case, counsel requested and the court granted an expedited hearing, which was conducted on April 28, 1977. Decision was rendered May 4, 1977.
The issues presented and determined are as follows:
I. Under the abstention doctrine, are federal constitutional issues, as well as unsettled state law issues, presented to this court for determination?
II. Do plaintiffs have standing to bring this action?
III. Are N.J.S.A. 40A:11-18, 52:32-1 et seq. and 52:33-1 et seq. applicable to the Commission?
IV. Assuming any of the aforementioned statutes to be applicable, are they unconstitutional in violation of the Commerce Clause, Art. I, § 8 of the United States Constitution, or the Supremacy Clause, Art. VI, par. 2, of the United States Constitution?
V. Should defendant be enjoined from receiving, opening, evaluating or awarding a contract in response to any bidder's proposal prepared in accordance with the terms of the addendum incorporating the "Buy American" provision?
Being mindful that under the abstention doctrine a party litigant may reserve its right to return to the United States District Court for resolution of federal constitutional issues, the court inquired at the inception of argument whether any party desired to make such a reservation. England v. Louisiana State Bd. of Med. Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964). All parties elected to present all issues raised, federal as well as state, to this court. Accordingly, this opinion determines all issues presented.
K.S.B. alleges that the "Buy American" addendum improperly prevents it from bidding, and because it is so prevented, it has standing to challenge the validity of that requirement. The Commission contends that K.S.B., as a potential subcontractor of a potential bidder and which will not enter into a contractual relationship with the Commission, lacks standing to maintain this action. Although K.S.B. and the Commission will not have a direct contractual relationship, for the purpose of standing it is of no moment.
The court notes that specifications for the pumping equipment to be used in Contract W-76 state that the pumps are to be supplied by Allis-Chalmers, DeLaval, or "approved equal." Thus the Commission must approve the pumping equipment supplier in any event.
Standing requires a litigant to allege a sufficiently personal stake in the outcome of a controversy, a concrete adverseness, in order to insure effective presentation of the legal interests claimed to require judicial redress. Crescent Park Tenants Ass'n v. Realty Equities Corp. of New York, 58 N.J. 98, 275 A.2d 433 (1971). K.S.B. contends that it was precluded from bidding as a result of the addendum. As such, it asserts a sufficient adverseness to entitle it to bring this action.
It is unquestioned that an unsuccessful bidder does not have standing to attack the contract award. Waszen v. Atlantic City, 1 N.J. 272, 63 A.2d 255 (1949). This, however, is not K.S.B.'s position. Rather, K.S.B. contends that it was deprived of the opportunity to offer its pumps to prospective bidders. As such it has adequate standing to challenge the alleged illegal exclusionary addendum. Interstate Waste Removal Co. v. Bordentown Comm'rs, 140 N.J.Super. 65, 69, 355 A.2d 197 (App.Div.1976); Lieberman v. Neptune Tp., 50 N.J.Super. 192, 197, 198, 141 A.2d 553 (App.Div.1958); Juice Bar Corp. v. Neptune Tp. Comm., 36 N.J.Super. 164, 115 A.2d 131 (App.Div.1955).
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