Metric Constructors, Inc. v. Gwinnett County, Ga.

• Decision Date: 09 January 1990
• Docket Number: Civ. A. No. 1:89-CV-835-MHS.
• Parties: METRIC CONSTRUCTORS, INC., Plaintiff, v. GWINNETT COUNTY, GEORGIA, Defendant.
• Court: U.S. District Court — Northern District of Georgia

729 F. Supp. 101

METRIC CONSTRUCTORS, INC., Plaintiff, v. GWINNETT COUNTY, GEORGIA, Defendant.

Civ. A. No. 1:89-CV-835-MHS.

United States District Court, N.D. Georgia, Atlanta Division.

January 9, 1990.

Nancy Becker Hewes, William E. Sumner, Sumner & Hewes, Atlanta, Ga., for plaintiff.

George Gibson Dean, II, David Paul Brenskelle, Dean Rosskopf & Brenskelle, Buford, Ga., for defendant.

ORDER

SHOOB, District Judge.

At the Court's request, the parties have briefed the issue of whether this case presents a substantial federal question that invokes the jurisdiction of the Court. See Order dated August 1, 1989. Plaintiff Metric Constructors, Inc. ("Metric") was the lowest bidder on a public works project sought by defendant Gwinnett County, Georgia ("the County"). As a result, Metric contends that it was a denial of due process to award the contract to another bidder without first conducting a hearing regarding plaintiff's bid. Defendant argues that this Court does not have jurisdiction over plaintiff's claim because there is no protected property interest in the award of a project and, therefore, there is no substantial federal question raised.

I. FEDERAL QUESTION JURISDICTION

The Court has reviewed the various briefs submitted by the parties as well as the widely conflicting authority concerning the rights of a disappointed bidder to obtain judicial relief. As a general matter, a plaintiff bringing suit under 42 U.S.C. § 1983 must allege the existence of a liberty or property interest that has been abridged under color of state law without adequate due process. See Board of Regents v. Roth, 408 U.S. 564, 569-70, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972). To establish a property interest, plaintiff must have a legitimate claim of entitlement as determined by reference to state law. Id. at 577, 92 S.Ct. at 2709; Bishop v. Wood, 426 U.S. 341, 344, 96 S.Ct. 2074, 2077, 48 L.Ed.2d 684 (1976). The Court therefore must first determine whether a disappointed bidder may possess a protected property interest and, if so, whether such a property interest exists under Georgia law.

The Court is not aware of any Eleventh Circuit precedent on the existence of a constitutionally protected property interest prior to the time a government contract is actually awarded. It has long been established that the government enjoys relatively "unrestricted power ... to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases." Perkins v. Lukens Steel Co., 310 U.S. 113, 127, 60 S.Ct. 869, 876, 84 L.Ed. 1108 (1940). A number of federal court decisions, including one within this district, have held that this unrestricted power precludes existence of a property interest for a bidder seeking a government contract. See, e.g., Estey Corp. v. Matzke, 431 F.Supp. 468 (N.D.Ill. 1976); City of Atlanta v. Ashland-Warren, Inc., No. C81-106A, 1981 WL 2187 (N.D.Ga. Aug. 20, 1981). An increasing number of federal court decisions, however, including several within this circuit, have held that a "narrow" property interest may exist when the lowest qualified bidder does not receive the contract. See, e.g., Three Rivers Cablevision v. City of Pittsburgh, 502 F.Supp. 1118 (W.D.Pa. 1980); Kendrick v. City Council, 516 F.Supp. 1134 (S.D.Ga.1981); Douglas N. Higgins, Inc. v. Florida Keys, 565 F.Supp. 126 (S.D.Fla.1983). The rationale behind these more recent decisions is that denial of a government contract to the lowest qualified bidder may, under certain circumstances, be analogous to withholding of a government benefit, which cannot occur without due process of law.

The Court concludes that the position most faithful to the Supreme Court's decision in Roth is that a constitutionally protected property interest exists if acknowledged by applicable state law. A further requirement that limits the availability of a cause of action for a disappointed bidder is that the bidder must have been entitled to award of the project under the applicable state law. In this latter regard, the Court believes the appropriate consideration is not whether the successful bidder complied with bidding procedures, as suggested by Three Rivers and Kendrick; rather, "if a property interest exists at all, it must evolve from the expectations of the plaintiff and the entitlement granted by state law irrespective of actions or omissions of third parties." L & H Sanitation, Inc. v. Lake City Sanitation, Inc., 585 F.Supp. 120, 124 (E.D.Ark.1984), aff'd, 769 F.2d 517 (8th Cir.1985). Accord Teleprompter of Erie, Inc. v. City of Erie, 567 F.Supp. 1277, 1287-88 (W.D.Pa.1983).

Because a constitutionally protected property interest may be possessed by a disappointed bidder, the sole jurisdictional issue remaining in this case is whether such an interest exists under Georgia law. It is not a difficult question. In Hilton Construction Co. v. Board of Education, 245 Ga. 533, 266 S.E.2d 157 (1980), the Georgia Supreme Court held that the low bidder on a project that was to be awarded "to the responsible bidder submitting the lowest acceptable bid" could maintain a cause of action for refusal to award it the contract. The Court therefore concludes that it has jurisdiction over this case insofar as disappointed bidders may possess protected property interests under Georgia law.

II. SUFFICIENCY OF PLAINTIFF'S COMPLAINT

The fact that a disappointed bidder may possess a protected property interest under Georgia law, however, does not mean that Metric has stated a cause of action in this case. Plaintiff must demonstrate that it was entitled to award of the contract under the statute that governs defendant's bidding procedures.

Both parties agree that the...