Lancaster Dev., Inc. v. McDonald

• Decision Date: 26 December 2013
• Citation: 2013 N.Y. Slip Op. 08572,978 N.Y.S.2d 398,112 A.D.3d 1260
• Parties: LANCASTER DEVELOPMENT, INC., et al., Appellants, v. Joan McDONALD, as Commissioner of Transportation, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

112 A.D.3d 1260
978 N.Y.S.2d 398
2013 N.Y. Slip Op. 08572

LANCASTER DEVELOPMENT, INC., et al., Appellants,
v.
Joan McDONALD, as Commissioner of Transportation, et al., Respondents.

Supreme Court, Appellate Division, Third Department, New York.

Dec. 26, 2013.

[978 N.Y.S.2d 399]

Couch White, LLP, Albany (Jeremy M. Smith of counsel), for appellants.

Eric T. Schneiderman, Attorney General, Albany (Owen Demuth of counsel), for respondents.

Adams Bell Adams, PC, Rochester (Anthony J. Adams Jr. of counsel), for The National Black Chamber of Commerce, Inc. and others, amici curiae.

Brown & Weinraub, PLLC, Albany (Patrick E. Brown of counsel), for New York Building & Construction Trades Council, AFL–CIO, amicus curiae.

Before: ROSE, J.P., SPAIN, GARRY and EGAN JR., JJ.

EGAN JR., J.

Appeal from an amended judgment of the Supreme Court (Zwack, J.), entered January 17, 2013 in Albany County, which, in a combined proceeding pursuant to CPLR article 78 and action for declaratory judgment, granted respondents' motion to dismiss the petition/complaint.

In 2011, respondent Department of Transportation (hereinafter DOT) solicited bids to reconstruct Exit 122 of State Route 17 in the Town of Wallkill, Orange County and, in conjunction therewith, elected to include a project labor agreement (hereinafter PLA) in the bid specifications for the project.¹ Although petitioner Lancaster

[978 N.Y.S.2d 400]

Development, Inc., a nonunion shop, submitted the lowest bid, DOT declared Lancaster's bid to be “ informal” based upon Lancaster's refusal to abide by the terms of the PLA. ² In response, Lancaster commenced a combined CPLR article 78 proceeding and action for declaratory judgment to challenge the inclusion of the PLA in the 2011 bid. Supreme Court (Teresi, J.) declared that the subject PLA violated the competitive bidding laws and directed that the project be rebid.

In June 2012, DOT rebid the project as directed, and the bid specifications again included a PLA—one that was based upon a recently commissioned labor/cost analysis. Lancaster elected not to submit a bid and, instead, together with petitioner Empire State Chapter of the Associated Builders and Contractors, Inc. and petitioner Lori Florian, commenced this combined CPLR article 78 proceeding and declaratory judgment action seeking to challenge DOT's inclusion of a PLA in its 2012 bid specifications. Respondents moved to dismiss contending, among other things, that petitioners lacked standing. Supreme Court (Zwack, J.) granted respondents' motion, and this appeal by petitioners ensued.

To establish standing, Lancaster was required to demonstrate that it “suffered an injury in fact, distinct from that of the general public [,] ... [and] that the injury claimed falls within the zone of interests to be protected by the statute challenged” (Matter of Transactive Corp. v. New York State Dept. of Social Servs., 92 N.Y.2d 579, 587, 684 N.Y.S.2d 156, 706 N.E.2d 1180 [1998]; see Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 772–774, 570 N.Y.S.2d 778, 573 N.E.2d 1034 [1991]; see also Matter of Ricket v. Mahan, 97 A.D.3d 1062, 1063, 949 N.Y.S.2d 272 [2012] ). This it failed to do. As a starting point, inasmuch as the harm purportedly suffered by Lancaster was occasioned not by its failure to secure the winning bid for the project ( compare Maraia v. Orange Regional Med. Ctr., 63 A.D.3d 1113, 1115, 882 N.Y.S.2d 287 [2009] ) but, rather, by its entirely voluntary decision to forgo submitting a bid at all, we are not persuaded that Lancaster has suffered an injury in fact distinct from that of the public at large. Moreover, even assuming that Lancaster met this aspect of the standing test, it is clear that any economic injury or lost business opportunity suffered by Lancaster does not fall within the zone of interests to be protected by the competitive bidding statutes ( see Matter of Transactive Corp. v. New York State Dept. of Social Servs., 92 N.Y.2d at 587–588, 684 N.Y.S.2d 156, 706 N.E.2d 1180), which were designed to “protect [ ] ... the public fisc by obtaining the best work at the lowest possible price” and prevent “favoritism, improvidence, fraud and corruption in the awarding of public contracts” ( Matter of New York State Correctional Officers & Police Benevolent Assn., Inc. [New York State Dept. of Civ. Serv.], 70 A.D.3d...