Midwest Auto Auction, Inc. v. McNeal
| Decision Date | 14 August 2012 |
| Docket Number | Case No. 11-14562 |
| Court | U.S. District Court — Eastern District of Michigan |
| Parties | MIDWEST AUTO AUCTION, INC., Plaintiff, v. CLARENCE McNEAL, Individually, COUNTY OF WAYNE, METRO AUCTION SERVICES, INC., and BOULEVARD & TRUMBULL TOWING, INC., Defendants. |
HON. AVERN COHN
This is an action asserting antitrust and tort claims arising out of a bidding process which resulted in an award of a contract to provide auction services for Wayne County. Plaintiff Midwest Auto Auction, Inc. (Midwest) is suing defendants Boulevard & Trumball Towing (B&T), its subcontractor, Metro Auction Services (MAS), Wayne County, and Clarence McNeal (McNeal), the former Purchasing Director for Wayne County. Midwest generally claims violations of federal and state anti-trust law and tortious interference under state law. The First Amended Complaint (FAC) (Doc. 16), which runs 42 pages and 337 paragraphs, asserts the following fifteen claims, phrased by Midwest as follows:
Before the Court are separate motions to dismiss by B&T and MAS (Doc. 20)1 and Wayne County and McNeal (Doc. 18). Both motions raise essentially the same arguments. That is, that the FAC is subject to dismissal for failure to state a claim under Rule 12(b)(6)2 because Midwest has not plead a plausible claim for antitrust injury. Defendants also contend that Midwest's tort claims fail to state a claim. In short, it is defendants' position that the FAC reveals nothing more than a disappointed bidder who seeks legal redress for its failed bid against its competitors, B&T and MAS, who were awarded the bid from Wayne County. The Court agrees. Accordingly, defendants' motions will be granted and this case will be dismissed.
On February 11, 2010, Wayne County issued an Invitation to Bid for Vehicle and Equipment Auction Service (Invitation) for the "purpose of providing vehicle and equipment auction services for Wayne County DPS Equipment Division.". FAC at ¶ 28. Under the Invitation, Wayne County sought and received bids from five competingvendors for the towing and auctioning of surplus vehicles responsive to the bid. FAC at ¶ 64. Both Midwest and B&T submitted bids in response to the Invitation. FAC at ¶¶ 35, 38. There is no dispute that Wayne County ultimately accepted the lowest responsible bid. FAC at ¶ 39
The Invitation had several requirements relating to geographical distance, licensing, and experience. FAC at ¶ 30. For instance, Wayne County required bidders to have a location within 15-miles from Wayne County's equipment yard purportedly "to minimize costs associated with transportation of items and auctions." FAC at ¶ 32.
From Wayne County's perspective, it was important that the Invitation be competitively bid because the auction was generating revenue for it. A competitively bid contract assured Wayne County that compensation paid to the successful vendor is limited in an effort to generate the best net return. Section 8.01 of the Form Contract ("Contract") (included in the Invitation) defined vendor compensation under the Invitation as follows:
See Wayne County's Ex. A at 13, App. C at 39. Although these are the only forms of "remuneration," to the successful bidder from Wayne County, the Invitation and Contract do not prohibit the vendor from charging other additional fees at the auctions.
The third form of remuneration, "transportation costs," had three elements: (1) towing hookup (price per hookup); (2) towing rate per mile; and (3) trailer hauling for larger vehicles. Id. at 39, App. C. In calculating each element, the Invitation relied onestimates. Wayne County's Ex. A at 7, 5. ("[t]he quantities indicated are reasonable approximates of the County's anticipate usage"). For instance, the Invitation estimated that Wayne County would haul vehicles about 3,000 miles over the three years of the contract. To minimize transportation costs, Wayne County's Department of Public Works (whose surplus vehicles were auctioned) wanted vendors to be within a 15 mile radius of its Goddard maintenance yard. Id. at 7, 2.
B&T's bid identified two possible locations in its bid, one at 7900 Dix Road inn Detroit, Michigan, which is within the 15 mile radius, and one just outside the radius at 2411 Vinewood, Detroit.
The Invitation required bidders to submit pricing for two separate categories: Commission and Transportation Cost. See Ex. A, p. 4 to B&T and MAS's motion. Under the heading "Transportation Cost," the Invitation's price sheet had, among other things, one price line for "Towing Hookup" and one price line for "Towing Rate per mile." Id. at p. 39. Although the price sheet had just one line for "Towing Hookup," Midwest's bid apparently contained two prices for "Towing Hookup." FAC at ¶¶ 52, 53, 55. Indeed, Midwest bid $140.00 per tow for vehicles over 12,000 pounds, and $55.00 per tow for vehicles under 12,000 pounds). B&T's bid, unlike Midwest's, contained just one price for "Towing Hookup," $30.00, which was much lower than Midwest's bid. See Ex. B to B&T and MAS's motion, Official Bid Tabulation; FAC at ¶¶ 52, 53, 55.
According to Wayne County, section 1 is a standard provision in all of its Invitations and grants it discretion to review, accept and reject bids. Id. at 3-6. Paragraph of 10 of section 1 provides in relevant part:
The County reserves the right to reject any or all bids, or to accept or reject anybid in part and to waive any minor informality or irregularity in bids received if it is determined by Purchasing Director that the best interest of the County will be served by doing so.
When Wayne County issued its Official Bid Tabulation, it identified B&T as the lowest bidder, Martin's Towing & Auto Sales as the second lowest bidder, and Midwest as the third lowest bidder. FAC at ¶ 47; Ex. B. Wayne County used Midwest's price of $140.00 per tow in determining that the it was the third lowest bidder. B&T and MAS's Ex. B; FAC at . ¶¶ 47, 52. Midwest says that Wayne County miscalculated its bid. FAC at ¶ 47. However, Midwest also says that B&T submitted the lowest bid. FAC at ¶ 39.
In the Official Bid Tabulation, Wayne County deemed B&T as "non responsible" because it "exceeded 15 mile limit required in Invitation." B&T and MAS's Ex. B. Wayne County notified M&T of this on May 27, 2010. Initially, Wayne County intended to recommend non party, Martin's Towing & Auto Sales, for award of the Invitation's contract. FAC at ¶ 46.
On June 2, 2010, B&T filed a bid protest. FAC at ¶ 49; See Ex. C to B&T and MAS's motion. Wayne County Ordinance, § 120.161(a), provided for a formal protest procedure.3
The protest made two arguments. FAC at ¶ 49. First, B&T was "responsive" because its bid identified a location within the 15-mile exclusionary zone, B&T and MAS's Ex. C, pp.1-2. Second, B&T argued that the 15-mile exclusionary zone would not minimize Wayne County's transportation costs. According to B&T, mileage pricing, not geographical distance, proved more determinative for minimizing Wayne County's cost. FAC at ¶ 51; B&T and MAS's Ex. C, pp. 3-4, n 1-2.
On July 13, 2010, Wayne County, through McNeal, granted the protest, noting that it had overlooked the Dix Highway address which was within the geographical range. FAC at. ¶ 61; Letter, B&T and MAS's Ex. D (July 13, 2010). Wayne County then awarded the contract to B&T (the "Auction Contract"). FAC at ¶ 56.
Also, on July 13, 2010, Wayne County, through McNeal, wrote Midwest advising that it had accepted B&T's bid.
On October 21, 2010, the Wayne County Commission approved B&T as the vendor on the auction contract. See B&T and MAS's...
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