Prn Assocs. LLC v. State, Dept. of Admin.

• Decision Date: 17 June 2009
• Docket Number: No. 2007AP476.,No. 2007AP751.,2007AP476.,2007AP751.
• Citation: 766 N.W.2d 559,2009 WI 53
• Parties: PRN ASSOCIATES LLC and PGN Associates LLC, Plaintiffs-Appellants-Petitioners, v. STATE of Wisconsin DEPARTMENT OF ADMINISTRATION, Defendant-Respondent. PRN Associates LLC and PGN Associates LLC, Plaintiffs-Appellants-Petitioners, v. State of Wisconsin Department of Administration, Defendant-Respondent.
• Court: Wisconsin Supreme Court

766 N.W.2d 559

2009 WI 53

PRN ASSOCIATES LLC and PGN Associates LLC, Plaintiffs-Appellants-Petitioners, v. STATE of Wisconsin DEPARTMENT OF ADMINISTRATION, Defendant-Respondent.

PRN Associates LLC and PGN Associates LLC, Plaintiffs-Appellants-Petitioners, v. State of Wisconsin Department of Administration, Defendant-Respondent.

No. 2007AP476.

No. 2007AP751.

Supreme Court of Wisconsin.

Argued March 5, 2009.

Decided June 17, 2009.

For the plaintiffs-appellants-petitioners there were briefs by Joseph R. Cincotta and the Law Offices of Joseph R. Cincotta, Milwaukee, and oral argument by Joseph R. Cincotta.

For the defendant-respondent the cause was argued by Richard E. Braun, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general.

¶ 1 ANN WALSH BRADLEY, J

The petitioner, Prism,¹ seeks review of two decisions of the court of appeals: (1) affirming the dismissal of Prism's petition for judicial review of an agency decision; and (2) affirming the dismissal of Prism's amended complaint for declaratory judgment.² These consolidated cases arise out of a dispute over a state procurement. Prism submitted a bid, but the contract was ultimately awarded to another developer. The Wisconsin Department of Administration ("DOA") denied Prism's protest, concluding that Prism was not entitled to the contract.

¶ 2 Prism asserts that its petition for judicial review of the DOA's determination was erroneously dismissed as moot. Specifically, Prism contends that it is entitled to relief— either money damages or the award of a state contract. It argues that the circuit court erroneously determined that Prism was required to enjoin the DOA from awarding the contract to another bidder in order to preserve its remedies.

¶ 3 Prism also contends that its amended complaint for a declaratory judgment was erroneously dismissed because sovereign immunity is not a bar to the action. In addition, it argues that the type of relief it seeks can be maintained as a declaratory action and that the legislature has consented to suit under Wis. Stat. § 775.01 (2007-08).³

¶ 4 We conclude Prism's petition for judicial review of the DOA's decision was properly dismissed. Even assuming that all of Prism's allegations are true, there is no relief that Prism can receive at this point. Although Prism could have sought an injunction to protect its interest, it failed to do so. Therefore, we determine that resolution of Prism's protest cannot have any practical effect on this existing controversy and it is therefore moot.

¶ 5 We further conclude that Prism's amended complaint for declaratory judgment was properly dismissed. Wis. Stat. § 775.01 does not waive sovereign immunity in this case because Prism has not complied with the statutory conditions precedent for initiating an action. Even if it had, a claim for the damages Prism seeks cannot be maintained in an action under § 775.01. Accordingly, we affirm the decisions of the court of appeals.

I

¶ 6 These consolidated cases originated with a document Prism filed in Ozaukee County entitled "Petition for Review Pursuant to Wis. Stats. § 227.52 and § 227.53 and/or for Declaratory Judgment Pursuant to Wis. Stat. § 806.04." The action was subsequently split into two separate cases, which have been reconsolidated for our review. The facts recounted below are primarily taken from the petition for review of the agency decision filed in Ozaukee County and the amended complaint for declaratory judgment filed in Dane County.

¶ 7 In October 2002, the University of Wisconsin-Milwaukee ("UWM") and the University of Wisconsin System ("the System") sought a developer to completely renovate the Kenilworth Building, located on Milwaukee's east side. They issued a request for proposals ("the first RFP") pursuant to Wis. Admin. Code Adm Ch. 10.⁴ In addition and also pursuant to Adm Ch. 10, they established an evaluation committee to review the proposals.

¶ 8 Prism submitted a bid which was selected by the evaluation committee. The Vice Chancellor of UWM sent Prism a letter which stated in part:

I am pleased to inform you that, after careful review and consideration of the final proposals, the University and the Evaluation Team has selected Prism Development Company as the developer UWM would like to pursue negotiations with regarding the Kenilworth redevelopment project.

On September 5, 2003, a resolution was passed granting the System the authority to negotiate a contract with Prism. Because of a lease-back provision in Prism's proposal, the State Building Commission's approval was also required.

¶ 9 A developer who had submitted a losing bid protested the selection of Prism pursuant to Adm Ch. 10. The developer argued that the selection process had been faulty. At the Building Commission's February 18, 2004 meeting, the System withdrew its request for approval. Subsequently, the System sent a letter to Prism explaining that the request had been withdrawn because "it became apparent that there was no support by [the State Building Commission]. That body's approval was essential to moving forward." The letter invited Prism to participate in a second round of bidding.

¶ 10 In March 2004, a second request for proposals ("the second RFP") was issued by the DOA Division of State Facilities at the direction of the State Building Commission. Prism again submitted a bid. At the same time and pursuant to Wis. Admin. Code Adm § 10.15, Prism filed Notices of Intent to protest the decision to withdraw consideration of the first RFP.

¶ 11 Prism's protest was denied and it appealed to DOA Secretary Mark Marotta. He denied the appeal as untimely, stating in part:

You have also indicated that you believe s. Adm 10.15(1), Code, allows you to both protest and appeal the decision of the University not to proceed further with the procurement. Section Adm 10.15, Code, allows a protest to be filed within 10 days after the issuance of a solicitation or after issuance of the letter of intent to award a contract. The solicitation in this matter was issued in October, 2002. Thus, your opportunity to protest and appeal decisions relating to the issuance of the solicitation are passed. No letter of intent [for the second RFP] has been issued.

Prism did not seek judicial review of this decision.

¶ 12 Prism alleges that it was "lulled into a belief that a Letter of Intent pursuant to Adm § 10.08 would be forthcoming" to alert those who had submitted bids that a developer had been selected. It believed that this letter was necessary to trigger its right to protest the selection of another developer. As Prism awaited the issuance of a letter of intent, it simultaneously participated in the second RFP.

¶ 13 In response to a January 26, 2005 letter requesting information, the DOA informed Prism that another developer, WEAS, had been selected as the winning bidder. The DOA's letter explained that Adm Ch. 10 did not apply to the second RFP process because the State Building Commission, a legislative body, authorized the RFP. Therefore, it concluded Prism was not entitled to protest the award under Adm Ch. 10.

¶ 14 Prism viewed the DOA's assertion that Adm Ch. 10 did not apply as "incorrect and incredible." In February 2005, Prism filed a Notice of Intent to Protest and a Protest pursuant to Adm § 10.15. The protest made the following claims: (a) Adm Ch. 10 did not permit the initial award to Prism to be rescinded, and by rescinding the award the System acted ultra vires;⁵ (b) the System's withdrawal of the award to Prism was arbitrary and therefore void; (c) the issuance of the second RFP was contrary to law, ultra vires, and void; (d) the State should award the contract to Prism because it submitted the best proposal; and (e) the disclosure of Prism's initial bid was a violation of Adm Ch. 10, rendering the selection process for the second RFP void.

¶ 15 The System denied Prism's protest on March 25, 2005. It determined that the protest did not fit within the requirements of Adm Ch. 10 and that Adm Ch. 10 does not prohibit a procuring agency from abandoning a RFP prior to the issuance of a contract. It further determined that the second RFP, issued by the Building Commission, was not covered under Adm Ch. 10 and therefore could not be protested.⁶ Prism appealed to the Secretary of the DOA pursuant to Adm § 10.15(5).

¶ 16 On June 6, 2005, DOA Secretary Mark Marotta issued a seven-page decision denying Prism's appeal. This decision is the subject of Prism's petition for judicial review, and it was attached to the petition.

¶ 17 Secretary Marotta's decision concluded that the System had the authority to withdraw its letter of intent to award Prism the project during the February Building Commission meeting. It further determined that because Prism did not appeal this decision on time, it had waived its right to object to the first RFP process. Additionally, it concluded that the second RFP was not governed by Adm Ch. 10 because it was issued by the Building Commission, which is a legislative rather than an executive commission.

¶ 18 Meanwhile, on March 15, 2005, the State and WEAS signed the contract. At no point did Prism seek an injunction in circuit court alleging that the DOA was acting beyond its authority. The parties acknowledge that the contract was subsequently executed by WEAS and the redeveloped Kenilworth Building was completed in August 2006.

¶ 19 On July 6, 2005, Prism filed a "Petition for Review Pursuant to Wis. Stats. § 227.52 and § 227.53 and/or for Declaratory Judgment Pursuant to Wis. Stat. § 806.04." Prism asserted that it was entitled to a remedy because the System and the DOA's actions to abandon the first RFP process and then award the contract to WEAS were "ultra vires of their delegated power under Ch. 16 stats. and Adm. 10."⁷

¶ 20 The Ozaukee County circuit court severed Prism's petition into two independent actions — one for judicial review of the DOA's administrative...