State Ex Rel. American Subcontractors Ass'n v. Ohio State University
129 Ohio St. 3d 111
| Ohio | 2011Background
- In 2005 OSU began a $1 billion ProjectOne expansion; Turner was contracted in Feb. 2009 to provide construction-manager-at-risk services, with work starting fall 2009 and completion planned for 2014.
- HB 318 Sec. 8 (Dec. 2009) authorized Construction Reform Demonstration Projects at three state universities to test alternative delivery methods for public construction.
- OSU designated core ProjectOne phases as a Construction Reform Demonstration Project in March-April 2010, with core phases valued at $658.3 million.
- Turner was selected as construction manager at risk on July 8, 2010 through a qualifications-based process; traditional lowest-bid competition was not used.
- Turner did not post a surety bond; instead OSU accepted a $20 million irrevocable standby letter of credit and Turner obtained subcontractor-default insurance; numerous subcontracts were executed and subcontractors were paid promptly.
- ASA, ASA-Ohio, and SFAA filed a mandamus action Nov. 30, 2010 seeking to force OSU to require Turner to furnish a bond; the case proceeded with briefing and evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do ASA/ASA-Ohio and SFAA have standing to seek mandamus? | ASA/ASA-Ohio: members injured by lack of bond; SFAA: possible injury to sureties. | OSU: associations lack concrete injury; SFAA has potential injury via bond profits. | ASA/ASA-Ohio lack standing; SFAA has standing; proceed on SFAA's claim. |
| Is bonding required for Construction Reform Demonstration Projects under HB 318 and R.C. 153.54? | SFAA contends bonding applies under R.C. 153.54 to such projects. | OSU contends R.C. 153.54 does not apply due to lack of bidding under qualifications-based selection. | Bonding not required; R.C. 153.54 not applicable to construction-manager-at-risk under HB 318. |
| Does the construction-manager-at-risk framework trigger bonding requirements under 153.54? | SFAA asserts bonding should be required for CM at risk. | OSU argues CM at risk uses a different process, with no bidding as contemplated by 153.54. | No reading in of 153.54 bonding requirement; CM at risk governed by HB 318 and open-book provisions, not by 153.54. |
| Did the majority’s statutory construction respect HB 318 and related bonding framework? | SFAA's reading aligns with bonding intent to protect sureties. | Legislation allows flexibility and avoids additional costs by not imposing 153.54 bonds. | Court did not read in a bonding obligation; upheld denial of mandamus. |
Key Cases Cited
- Ohio Contractors Assn. v. Bicking, 71 Ohio St.3d 318 (1994) (standing requires actual injury to association members)
- Am. Civ. Liberties Union of Ohio, Inc. v. Cuyahoga Cty. Bd. of Commrs., 128 Ohio St.3d 256 (2011) (standing and mandamus standards for public entities)
- State ex rel. Columbia Res. Ltd. v. Lorain Cty. Bd. of Elections, 111 Ohio St.3d 167 (2006) (court cannot add nonexistent statutory requirements)
- Warth v. Seldin, 422 U.S. 490 (1975) (concrete injury required for standing)
- Am. Fiber Sys., Inc. v. Levin, 125 Ohio St.3d 374 (2010) (statutory interpretation in pari materia; cannot import missing requirements)
- Lucas Cty. Republican Party Exec Comm. v. Brunner, 125 Ohio St.3d 427 (2010) (standing and public-law preconditions in election-related disputes)