Rochester City Lines, Co. v. City of Rochester
| Decision Date | 17 June 2014 |
| Docket Number | No. A13–1477.,A13–1477. |
| Citation | 846 N.W.2d 444 |
| Parties | ROCHESTER CITY LINES, CO., Appellant, v. CITY OF ROCHESTER, et al., Respondents, First Transit, Inc., Respondent, and Daniel Holter, third party plaintiff, Appellant, v. Michael Wojcik, third party defendant, Respondent. |
| Court | Minnesota Court of Appeals |
OPINION TEXT STARTS HERE
Syllabus by the Court
Because the award of a public contract based on a best-value determination offers greater discretion to the contracting entity than a lowest-responsive-bidder determination, the reviewing court must balance the requirements of competitive-bidding law with that discretion when reviewing a common-law bid-protest claim.
Gary Van Cleve, Rob A. Stefonowicz, Larkin Hoffman Daly & Lindgren, Minneapolis, Minnesota, (for appellants).
John M. Baker, Monte A. Mills, Greene Espel, P.L.L.P., Minneapolis, Minnesota, (for respondents City of Rochester, et. al.).
Charles K. Maier, Matthew G. Plowman, Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, (for respondent First Transit, Inc.).
Julie Fleming–Wolfe, Saint Paul, Minnesota, (for respondent Michael Wojcik).
Considered and decided by CONNOLLY, Presiding Judge; CHUTICH, Judge; and SMITH, Judge.
Appellant, a longtime provider of transit services in the City of Rochester, challenges the summary-judgment dismissal of its claims arising out of the city's solicitation of bids and acceptance of a competing bid for transit services, arguing that the district court erred by determining as a matter of law that (1) the city did not take appellant's property without just compensation; (2) the bidding process was not unfair, prejudicially biased, and infected with organizational conflicts of interest; (3) the bidding process did not violate appellant's due-process rights; and (4) respondent Michael Wojcik did not defame appellant. We affirm.
Appellant Rochester City Lines (RCL) has operated a fixed—route transit service in respondent City of Rochester since 1966. In 1975, RCL began receiving subsidies from the city. In 1977, the city began receiving federal transit financial assistance. Some of these funds were used for capital improvements-including buses which were then leased to RCL—and to subsidize fares. As of 2010, approximately 26% of the cost of the system came from rider fares and other revenues collected directly by RCL, 8% from corporate sponsorships, and 65% from federal, state, and local subsidies.
In 1979, the city granted RCL a five-year nonexclusive regulatory franchise to operate a fixed-route transit system within the city. This franchise was continuously renewed from 1979 through December 31, 2011. In 2010, however, the Federal TransitAdministration (the FTA) determined that the contract between RCL and the city needed to be competitively bid to comply with federal transit aid requirements.1 In December 2011, the city granted RCL a six-month nonexclusive franchise, set to expire on June 30, 2012, and issued a request for proposals (the RFP) to provide publicly subsidized fixed-route bus service in Rochester beginning July 1, 2012 through December 31, 2016.
The city received responsive bids from four companies, including RCL and respondent First Transit. After reviewing the proposals, the city determined that First Transit's proposal represented the “best-value” for the city and awarded it the contract. First Transit commenced operations on July 2, 2012. Although the city granted RCL a nonexclusive franchise to continue operating an unsubsidized fixed-route transit system, RCL ceased all fixed-route operations on July 3, 2012. It continued to provide commuter and charter bus services.
RCL commenced this litigation on February 14, 2012. Its complaint requested (1) declaratory judgment stating that RCL was the “owner” of the transit system and the only entity with a legal right to operate that system, and that the RFP was unlawful and must be terminated; (2) injunctive relief ordering the city to cancel the RFP and renew RCL's franchise for five years; and (3) a writ of mandamus ordering the city to commence condemnation proceedings. On February 29, the district court denied the request for injunctive relief.
On June 6, 2012, RCL filed an amended complaint, adding a contract-award bid-protest appeal; a claim of defamation against Rochester Common Council member Michael Wojcik; claims for violations of 42 U.S.C. §§ 1983 and 1988, and 49 U.S.C. § 5323; substantive- and procedural-due-process claims; and a third-party complaint by RCL's owner Daniel Holter for defamation against Wojcik. On June 25, RCL moved for a temporary injunction staying the city's decision on its bid-protest appeal, enjoining the approval and execution of the contract with First Transit, enjoining the grant of a franchise to First Transit, and enjoining First Transit from commencing operations.
The district court denied the request for a temporary injunction. On November 2, 2012, it issued an order granting summary judgment in favor of the city and First Transit on the reverse-condemnation claim and in favor of Wojcik on the defamation claim. And on June 7, 2013, it issued an order granting summary judgment in favor of the city and First Transit on all remaining claims. Judgment was entered on June 10, 2013.
This appeal follows.
I. Did the district court err when it concluded that no taking had occurred and granted summary judgment in favor of respondents on appellant's inverse-condemnation claim?
II. Did the district court err when it concluded that no evidence supports RCL's bid-protest claim?
III. Does a bidder have a protectable property interest in being awarded a public contract if its proposal represents the “best value” for the awarding entity?
IV. Did the district court err in granting summary judgment for respondents because Wojcik's statements are not actionable defamation?
“On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the [district court] erred in [its] application of the law.” State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990). The district court must grant summary judgment if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law.” Minn. R. Civ. P. 56.03.
Because the “district court's function on a motion for summary judgment is not to decide issues of fact, but solely to determine whether genuine factual issues exist ... the [district] court must not weigh the evidence.” DLH, Inc. v. Russ, 566 N.W.2d 60, 70 (Minn.1997). The district court must view the evidence in the light most favorable to the nonmoving party, and “[a]ll doubts and factual inferences must be resolved against the moving party.” Nord v. Herreid, 305 N.W.2d 337, 339 (Minn.1981). But the district court “is not required to ignore its conclusion that a particular piece of evidence may have no probative value, such that reasonable persons could not draw different conclusions from the evidence presented.” DLH, Inc., 566 N.W.2d at 70.2
RCL alleges that the city “took RCL's privately-owned transit system, claimed it as its own, put it out for competitive bid, awarded it to another transit company to operate and failed and refused to pay RCL just compensation for the taking.” The Minnesota and United States Constitutions prohibit the governmental taking of private property without the payment of just compensation. U.S. Const. amend. V (); Minn. Const. art. I, § 13 (). The Minnesota Constitution provides broader protections than the U.S. Constitution. DeCook v. Rochester Int'l Airport Joint Zoning Bd., 796 N.W.2d 299, 301 (Minn.2011).
Inverse condemnation is “a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency.” Alevizos v. Metro. Airports Comm'n of Minneapolis & St. Paul, 298 Minn. 471, 477, 216 N.W.2d 651, 657 (1974) (quotation omitted). To prevail in an inverse-condemnation action, the plaintiff must establish that the government actor interfered with ownership, possession, or enjoyment of a property right. Oliver v. State ex rel. Comm'r of Transp., 760 N.W.2d 912, 915 (Minn.App.2009), review granted (Minn. Apr. 29, 2009) and appeal dismissed (Minn. Nov. 16, 2009) ( that the petition for further review was “improvidently granted”). Whether a taking has occurred is a question of law, which we review de novo. C & R Stacy, LLC v. Cnty. of Chisago, 742 N.W.2d 447, 457 (Minn.App.2007).
RCL argues that the district court “ignored abundant evidence confirming RCL's ownership of the transit system, disregarded well-established takings law, and permitted the city's uncompensated takeover of RCL's system by labeling it ‘competition.’ ” RCL does not appear to assert that the city's actions deprived it of any tangible property—indeed, the undisputed evidence indicates that, at least as of the time the city issued the RFP in 2012, the city owned most of the physical components of the public transit system operated by RCL, including “the buses, radio system, security cameras, bus-stop benches, bus-stop signs, and bus-stop shelters.” But RCL argues that it is entitled to compensation for intangible property, including “[r]outes, schedules, ‘going concern’ value, as well as operating system, operating rights, permits, franchise, records, procedures, trained personnel, and other ... intangible property.”
RCL argues at length that this intangible property is compensable under...
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