Kendrick v. City Council of Augusta, Ga., Civ. A. No. 179-266.

• Decision Date: 19 June 1981
• Docket Number: Civ. A. No. 179-266.
• Parties: Frances and Thomas KENDRICK d/b/a Georgia Paint & Body Works, Plaintiff, v. CITY COUNCIL OF AUGUSTA, GEORGIA, Defendant.
• Court: U.S. District Court — Southern District of Georgia

516 F. Supp. 1134

Frances and Thomas KENDRICK d/b/a Georgia Paint & Body Works, Plaintiff, v. CITY COUNCIL OF AUGUSTA, GEORGIA, Defendant.

Civ. A. No. 179-266.

United States District Court, S. D. Georgia, Augusta Division.

June 19, 1981.

Victor C. Hawk, Augusta, Ga., for plaintiff.

Stephen E. Shepard, Samuel F. Maguire, Roy V. Harris, Augusta, Ga., for defendant.

ORDER

BOWEN, District Judge.

The subject of this litigation is a tow-in contract for the removal of wrecked and abandoned vehicles within the limits of the City of Augusta, Georgia, which was awarded by the City of Augusta to one of plaintiff's competitors. The case is presently before the Court on defendant's motion for summary judgment.

By legal notice published on four successive days in October, 1979, defendant, the City Council of Augusta, Georgia, City Council invited sealed bids for a tow-in contract. The notice provided that the contract was for a period of three years commencing December 15, 1979. Bidders were requested to bid a storage charge of a twenty-four hour period, a tow-in charge for each vehicle, and a charge for removing vehicles from the Augusta Canal. The successful bidder was required to maintain two crews on duty and two wreckers in service at all times as well as execute a performance bond and provide liability insurance. Following the submission of bids, a subcommittee of the City Council was to inspect the premises and equipment of a prospective contractor to determine the bidder's ability to perform the contract. Defendant expressly reserved the right to reject any or all bids.

On October 30, 1979, the sealed bids were opened and tabulated. The tabulations showed that plaintiff, Georgia Paint & Body Works, bid $10.00 for tows each, $2.00 for storage per day and $25.00 for canal towing. Plaintiff's competitor, Terry's Paint & Body Works, Inc., which was ultimately awarded the contract, bid $16.00 for tows each, $2.65 for storage per day and $26.00 per hour with a $52.00 minimum. Of the four bidders tabulated, two of which are not at issue in this action, plaintiff made the lowest bid in two of the three services bid.

As set forth in the published notice, a subcommittee of the Augusta City Council Public Safety Committee was appointed to investigate the various wrecker services bidding on the tow-in contract. The members of this subcommittee were William C. Calhoun, Chairman, Sebron H. Butler, Sr., and M. D. Philpot, then Assistant Chief of Police. Of the three members, it appears that only Mr. Philpot visited the facilities of the wrecker services which bid on the contract. By letter to subcommittee chairman Calhoun, Mr. Philpot stated in pertinent part that he had visited the following companies:

2. Georgia Paint and Body Works

....

Georgia Paint and Body Works is located at 578 13th Street. I visited this location at 1:45 P.M., November 27, 1979, and talked to Mr. Thomas Kendrick. Mr. Kendrick stated that he had storage area for 400 vehicles, operates 24 hours a day with two (2) wreckers and plans to add the third wrecker if he receives the City of Augusta contract. He also stated that his wreckers are equipped with two way radios. Georgia Paint and Body Works is also on the wrecker list for the Richmond County Sheriff's Department.

3. Terry's Paint and Body Works

....

Terry's Paint and Body Works is located at 1346 Reynolds Street. I visited this location at 1:30 P.M., November 27, 1979, and found Mr. Terry at lunch. I talked with Mr. Dewey Terry later in the day and learned the following information. Mr. Terry stated that he could store 200 vehicles and operates 24 hours a day with three (3) wreckers. Mr. Terry's wreckers are equipped with police scanners without two way communication. Terry's Paint and Body Works is not on the Richmond County Sheriff's Department wrecker list.

At the conclusion of his letter, Mr. Philpot made the following relevant comments:

3. Terry's Paint and Body Works has no two way communication in his wreckers to communicate with his office for faster service.

4. Georgia Paint and Body Works with a $10.00 bid per tow is rather low. Mr. Kendrick feels he can make up the difference in repair work he receives by towing wrecks for the City.

See plaintiff's exhibit 1, attached to deposition of Sebron H. Butler.

On December 13, 1979, the subcommittee, through Chairman Calhoun, made the following report to the City Council Public Safety Committee:

The committee met and reviewed the bids for the tow-in contract. We checked the police records of the owners of these businesses and interviewed the various individuals who operate these businesses. We found that A. C. Proctor Paint & Body Shop is located six miles from the Police department. We felt it would be a great inconvenience to the owners of the cars to pick them up and to our officers to go outside the jurisdiction to conduct business in that location. The bid of Kendricks Paint & Body Works at $20.00 per tow is fairly high for 16 square miles they would cover under the contract with the City. Terry's Paint & Body Works has no two-way communication with his wreckers to communicate with his office for faster service. The bid of Georgia Paint & Body Works was the low bid and we thought it was rather low and I think Mr. Kendrick told Chief Philpot that he could make up the difference in repair work he receives from towing from the City. It seemed to the committee that was a contingent thing that if he didn't repair wrecks he would lose money on it. There were pros and cons for all of these but we recommend that the contract be awarded to Terry's Paint & Body Works.

Upon the recommendation of the subcommittee, the Public Safety Committee accepted the bid submitted by Terry's Paint & Body Works, Inc.

Thereafter, plaintiff petitioned to the full City Council to reconsider the contract award made by the Public Safety Committee. On December 17, 1979, plaintiff, through his attorney, argued his motion for reconsideration of the Public Safety Committee's award to the City Council. After consideration of these arguments, the City Council voted overwhelmingly (12 yes, 2 no, 2 abstentions) to approve the award of the tow-in contract to Terry's Paint $ Body Works, Inc. This action was the seventh time since 1963 that the Augusta City Council awarded a multi-year tow-in contract to Terry's Paint & Body Works, Inc.

In the present action, plaintiff alleges several state law claims pendent to two federal law claims: (1) the conduct of the City Council allegedly deprived plaintiff of certain constitutional rights in violation of 42 U.S.C. §§ 1983, 1985; and (2) the conduct of the City Council allegedly amounted to a restraint on free and open competition in violation of the federal antitrust laws. By motion for summary judgment, defendant seeks judgment on the above-enumerated federal claims and concomitant dismissal of the pendent state claims for lack of subject matter jurisdiction.

I

In Count Six of the complaint, plaintiff alleges:

The conduct of the Defendants, deprived the Plaintiff of the following rights, privileges, and immunities as secured to it by the Constitution of the United States and Civil Rights Act of 1861 sic as follows:

The right of the Plaintiffs are not to be denied their property without due process of law; the right to equal protection of the laws; the right to pursue their lawful occupation; and, to conduct business as secured by the 14th Amendment to the Constitution of the United States.

Since the right to pursue a lawful business is subsumed in the "property rights" claim, it is apparent that Count Six alleges two main deprivations of constitutional rights in violation of 42 U.S.C. §§ 1983, 1985: (1) a deprivation of a property interest without procedural due process under law, and (2) a denial of equal protection under law. Before considering the propriety of summary judgment in favor of defendant on one or both of these claims, it is beneficial to review the admittedly scant authority relevant to the "bidding" issue in this case.

In support of its position, the City Council cites Estey Corporation v. Matzke, 431 F.Supp. 468 (N.D.Ill.1976). There, plaintiff, an unsuccessful bidder on a state contract, alleged that a state agency unlawfully awarded the contract to one of plaintiff's competitors. On motion by defendant, the Estey court dismissed the complaint concluding that plaintiff had no standing under state or federal statute to challenge the award and that, as a mere bidder on a state contract, plaintiff had no property interest in the contract to support a claim under 42 U.S.C. § 1983. Specifically, with respect to the section 1983 claim, the court held that a property interest in a state contract "does not arise until such time as the contract is actually awarded." Id. at 470.

Recently, in Three Rivers Cablevision, Inc. v. City of Pittsburgh, 502 F.Supp. 1118 (W.D.Pa.1980), a case neither party cited, Judge Diamond rejected any blanket application of the Estey ruling that a losing bidder on a state contract had no property interest in the award thereof. Id. at 1132 n.15. Instead, the district court undertook an extensive analysis of the present law in the property interest/procedural due process area and concluded that, under the peculiar facts of the case before it, plaintiff, as an unsuccessful bidder, stated a claim under section 1983.

Pertinent to an understanding of the court's rationale in Three Rivers Cablevision, are certain factual allegations in plaintiff's complaint. The City of Pittsburgh decided to solicit bids for a cable television contract. Pursuant to this decision, the city enacted an ordinance to regulate strictly the prospective cable television system and to provide the basic contract terms and specifications which bidders must meet. The city further provided that all bids must meet the construction and service specifications set forth in the ordinance as a prerequisite to...