Alva Electric, Inc. v. Evansville-Vanderburgh School Corp.
7 N.E.3d 263
Ind.2014Background
- Evansville-Vanderburgh School Corporation faced a $6.5 million funding cut and planned to convert a former warehouse into administrative offices but lacked funds to publicly bid and complete renovations.
- The School proposed conveying the Building to the EVSC Foundation (a private nonprofit), which would contract with Industrial Contractors, Inc. (ICI) to perform the renovation, then sell the Building back to the School with installment payments timed to ICI’s payment schedule.
- The parties implemented the plan via six contracts; School officials selected the arrangement specifically because the Foundation was not subject to public bidding laws.
- Several local contractors and taxpayers (Taxpayers) sued, alleging the arrangement violated Indiana’s Public Work Statute (competitive-bidding laws) and, secondarily, the Indiana Antitrust Act; the trial court granted summary judgment to defendants, the Court of Appeals reversed on the bidding issue, and the State Supreme Court granted transfer.
- The Indiana Supreme Court affirmed that the transaction violated the Public Work Statute but held the Taxpayers failed to prove the antitrust injury required for relief under the Antitrust Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the School’s use of the Foundation to carry out the renovation violated the Public Work Statute | The scheme was a purposeful circumvention of public competitive-bidding requirements | Foundation was a private titleholder, signed the construction contract, and paid ICI from its account, so public-bid rules did not apply | Court: Violation of the Public Work Statute; affirmed Court of Appeals and reversed trial court on this issue |
| Whether defendants’ conduct violated the Indiana Antitrust Act by restraining bidding/competition | The collaboration to avoid bidding restrained competition, injuring taxpayers and prospective bidders (lost profits; higher price) | Plaintiffs have no evidence of actual injury or that any plaintiff would have been the winning bidder — a required element | Court: Antitrust claim fails for lack of proof of injury; summary judgment for defendants affirmed on this claim |
| Proper remedy for the Public Work Statute violation and antitrust claim | Declaratory judgment, injunction, void contracts, treble damages, costs, and fees | Many contracts already performed; plaintiffs abandoned injunctive relief; no antitrust damages without injury | Court: Enter summary judgment for Taxpayers and declare the transactions violated the Public Work Statute; no antitrust damages, costs, or fees awarded |
| Mootness / standing to sue as taxpayers | Taxpayers sought public-lawsuit relief and antitrust remedies | Defendants argued project completion and missing party (ICI) rendered claims moot | Court: Claims are not moot; Public Lawsuit Statute applies and suit may proceed on merits (but antitrust claim failed on injury element) |
Key Cases Cited
- Angel v. Behnke, 337 N.E.2d 503 (Ind. Ct. App. 1975) (legislative purpose of public bidding statutes: prevent fraud, favoritism, and ensure honest competition)
- Shook Heavy & Envtl. Constr. Grp. v. City of Kokomo, 632 N.E.2d 355 (Ind. 1994) (private parties may challenge government contracting practices under public-lawsuit statutes and antitrust provisions)
- Thompson v. Vigo Cnty. Bd. of Cnty. Comm’rs, 876 N.E.2d 1150 (Ind. Ct. App. 2007) (private antitrust plaintiff must prove statutory violation, proximate injury to business/property, and actual damages)
- Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679 (U.S. 1978) (agreements restricting competitive bidding are per se suspect under federal antitrust law; government sought injunctive relief)
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (U.S. 1977) (antitrust injury must reflect the anticompetitive effect the statute was designed to prevent)