Weathers v. Sch. Dist. of Phila., CIVIL ACTION NO. 18-3982

• Decision Date: 18 March 2019
• Docket Number: CIVIL ACTION NO. 18-3982
• Parties: JOHN M. WEATHERS, et al., v. THE SCHOOL DISTRICT OF PHILADELPHIA, et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

JOHN M. WEATHERS, et al., v. THE SCHOOL DISTRICT OF PHILADELPHIA, et al.

CIVIL ACTION NO. 18-3982

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

March 18, 2019

MEMORANDUM RE: MOTION TO SEVER AND REMAND

Baylson, J.

I. Introduction

In this case, Plaintiffs John Weathers, Richard Dido, and David Taylor (together, "Taxpayer Plaintiffs") as well as Plaintiff 21st Century Partnership for STEM Education ("21PSTEM") allege that the request-for-proposal ("RFP") process of Defendants School District of Philadelphia and the School Reform Commission¹ (together, the "School District" or "Defendants") violates state and federal procurement regulations. Plaintiff 21PSTEM also alleges that Defendants' refusal to provide it with a debriefing after it filed a bid protest violated its free speech and petition rights under the First Amendment. The First Amended Complaint alleges two causes of action:

1. Count I: Taxpayer Plaintiffs and 21PSTEM seek declaratory and injunctive relief to enjoin Defendants from continuing to violate Pennsylvania common law, the School District's Procurement Manual, the School District's RFPs, and applicable federal procurement regulations when procuring professional services.

2. Count II: 21PSTEM alleges that Defendants' refusal to provide 21PSTEM with a debriefing after it filed a bid protest amounts to unlawful retaliation in violation ofthe First Amendment of the United States Constitution and seeks declaratory and injunctive relief.

Presently before this Court is Plaintiffs' Motion to Sever and Remand Plaintiffs' procurement claim-Count I of the First Amended Complaint. For the reasons discussed below, the Motion is denied.

II. Factual Background

Taxpayer Plaintiffs are residents of Philadelphia, Pennsylvania who own property situated within the School District for which they have paid real estate taxes to the District and the City of Philadelphia. (FAC ¶¶ 5-8.) They also pay taxes to the Commonwealth of Pennsylvania, which provides funding support to the School District and the School Reform Commission. (Id.) Dr. Weathers and Mr. Taylor are employed by Plaintiff 21PSTEM: Dr. Weathers as a Senior Researcher and Mr. Taylor as a Senior Web Developer. (Id. ¶¶ 5, 7.) Plaintiff 21PSTEM is a non-profit organization that offers consultative services to improve the performance of teachers, school principals, and other supervisors. (Id. ¶¶ 9-10.) On several occasions, 21PSTEM has responded to RFPs for professional services issued by the School District, including RFPs covering services that would be funded at least in part by federal grants, and intends to do so in the future. (Id. at ¶ 11.) Defendant School District is a public school district and political subdivision of the Commonwealth of Pennsylvania and is governed by Defendant School Reform Commission. (Id. at ¶¶ 13-14.)

Defendant School District adopted School District Policy No. 610 pursuant to its authority to adopt reasonable regulations related to procurement under Pennsylvania's Public School Code. (Id. ¶¶ 19, 21.) Policy No. 610 provides that the School District "shall obtain competitive bids and price quotations for products and services where such bids or quotations are required by law or may result in monetary savings to the school district." (Id. ¶ 21; id. Exs. 1-2.) Policy No. 610also requires the School District's Office of Procurement Services to "maintain a Policies and Procedures Manual to identify the district's process for obtaining competitive bids and price quotations as required by applicable law." (FAC ¶ 22.)

The Office of Procurement Services maintains a Policies and Procedures Manual ("Procurement Manual"), which states that the purpose of a competitive procurement process "is to ensure that bid solicitations are awarded on the basis of a competitive process designed to select qualified vendors to provide goods and services." (Id. ¶ 26; id. Ex. 3.) Pursuant to the Procurement Manual, the RFP process is "generally used to select a vendor for a professional or consulting service." (FAC ¶ 29.) When the School District procures such services through an RFP, the Procurement Manual states that the RFP process described in the Manual "MUST be followed" and that "[c]ompliance with this process and file management are CRITICAL to defend an evaluation decision." (Id.) The Procurement Manual also provides that "[t]here must be a common standard throughout the competitive RFP process," which requires "an understanding on the part of all competitors of the basis upon which the award of contract will be made." (Id. ¶ 30.) Similarly, "[a]ll factors or criteria that will be used to evaluate proposals must be clearly set forth in the RFP," and "[t]he RFP shall clearly define all evaluation factors or criteria in order of importance, including price." (Id. ¶ 31.) The Procurement Manual explains that a "common standard" on which bids and proposals are based is central to competitive procurement, and that the purpose of bidding requirements is to invite competition and secure the best work or supplies at the lowest price practicable. (Id. ¶¶ 27-28.)

In conducting the RFP evaluation process, the Procurement Manual requires the School District's Evaluation Committee to review and evaluate all proposals in accordance with the criteria identified in the RFP; the Commission may not consider factors or criteria that are notspecified in the RFPs in its evaluation. (Id. ¶ 32.) The Procurement Manual also states that an unsuccessful bidder must be debriefed and provided with the basis for the selection and award of the contract at its request. (Id. ¶ 33.) These debriefings must include copies of the evaluator's scoresheets and the overall evaluated cost and technical rating of the winning bidder. (Id.)

When a procurement by the School District would be paid for at least in part by federal grant money, federal regulations require the District to follow the RFP procedures outlined in the Procurement Manual. (Id. ¶¶ 39-40) (citing 2 C.F.R. § 200.318; id. Ex. 4.) Federal law also requests RFPs to identify all evaluation factors and their relative importance. (FAC ¶ 41) (citing § 200.320(d)(1).) Moreover, a written policy adopted by the District acknowledges that a procurement that involves federal funds must "adhere to all of the procurement standards identified in 2 CFR Part 200.317, et seq.," and that if District policies are more restrictive than state or federal regulations, the District must follow its own policies. (FAC ¶ 42.)

In its day-to-day operations, the School District takes the position that the Procurement Manual "does not have the force of law." (Id. ¶ 46; id. Ex. 5.) The School District's practice is also to refuse to provide a debriefing to any RFP respondent that files a bid protest. (FAC ¶ 49.)

On November 9, 2017, the School District, through its Office of Procurement Services, issued RFP-567, which solicited proposals for a professional services contract involving job training and professional development support for first-and second-year principals. (Id. ¶ 51.; id. Ex. 6.) Under the awarded contract, services would begin on July 1, 2018 and end on June 30, 2020. (FAC ¶ 51.) Federal funds would be used to pay for a portion of the costs of the new principal coaching requested. (Id. ¶ 53.) RFP-567 listed eight evaluation criteria but did not provide any information about the relative weight attributed to each criterion. (Id. ¶ 56.) However, in an Addendum to RFP-567, the School District "strongly suggested that price would be aparamount consideration" by stating that RFP-567 was a "proposal[] based on the District seeking the most competitive pricing." (Id.; id. Ex. 7.) However, when the School District evaluated responses to RFP-567, it made pricing the least important factor in its evaluation matrix. (FAC ¶ 58.) The winning respondent submitted a proposal at the maximum allowable budget of $4 million, but it received the same or higher pricing scores as respondents who submitted proposals for less than $3 million. (Id. ¶ 59.) Though the RFP listed eight criteria, the evaluation matrix completed by the School District did not have eight scoring sections. (FAC ¶¶ 61-63.)

After 21PSTEM was not awarded a contract for RFP-567, 21PSTEM requested a debriefing and filed a bid protest. (Id. ¶ 78.) The School District refused to provide a debriefing to 21PSTEM because it had filed a bid protest with respect to RFP-567. (Id. ¶ 79.)

III. Procedural History

On May 30, 2018, Taxpayer Plaintiff's filed the Original Complaint against Defendants School District, School Reform Commission, and The New Teacher Project, which was awarded the services contract, in the Court of Common Pleas of Philadelphia County. (ECF 1) The Original Complaint alleged that Defendants School District and School Reform Commission unlawfully conducted an RFP process involving a professional development program for new principals and sought a preliminary injunction to enjoin the enforcement of the contract awarded to the New Teacher Project. (Id. ¶¶ 15-43.) Taxpayer Plaintiffs withdrew their request for preliminary injunction with respect to the specific contract, and Defendants School District and School Reform Commission filed preliminary objections to the Original Complaint on July 17, 2018.² (ECF 7, Motion to Sever and Remand, "Mot." at 2; ECF 10, "Resp." at 2; ECF 1 at 3, ¶ 3.)

On August 28, 2018, Plaintiffs filed the First Amended Complaint, which added 21PSTEMas a Plaintiff and voluntarily dismissed The New Teacher Project as a Defendant. (ECF 1 Ex. A.) On September 14, 2018, Defendants filed a Notice of Removal in this Court, alleging federal question jurisdiction pursuant to 28 U.S.C. § 1331 (ECF 1). Defendants contend in the Notice of Removal that this Court has jurisdiction because the First Amended Complaint added allegations that Defendants' practices in the procurement of professional services violate federal procurement regulations and that D...