INDEPENDENT ENTERPRISES INC.; THOMAS LOZECKI v. PITTSBURGH WATER AND SEWER AUTHORITY; CITY OF PITTSBURGH
No. 96-3009
United States Court of Appeals for the Third Circuit
January 9, 1997
1997 Decisions. Paper 9.
Opinions of the United States Court of Appeals for the Third Circuit
1-9-1997
Independent Entr Inc v. Pittsburgh Water
Precedential or Non-Precedential:
Docket 96-3009
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1997
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 1997 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
Recommended Citation
“Independent Entr Inc v. Pittsburgh Water” (1997). 1997 Decisions. Paper 9. http://digitalcommons.law.villanova.edu/thirdcircuit_1997/9
N0. 96-3009
INDEPENDENT ENTERPRISES INC.; THOMAS LOZECKI Appellants
v.
PITTSBURGH WATER AND SEWER AUTHORITY; CITY OF PITTSBURGH
On Appeal From the United States District Court For the Western District of Pennsylvania (D.C. Civil Action No. 95-cv-01358)
Argued July 25, 1996
BEFORE: BECKER, STAPLETON and MICHEL,* Circuit Judges
(Opinion Filed January 9, 1997)
Alan S. Miller (Argued)
Picadio, McCall, Kane & Norton
Suite 3180 USX Tower
600 Grant Street
Pittsburgh, PA 15219
Attorneys for Appellants
Kimberly A. Brown (Argued)
Stacey L. Jarrell
Thorp, Reed & Armstrong
One Riverfront Center
Pittsburgh, PA 15222
and
Craig E. Frischman
Kapetan, Meyers, Rosen, Louik & Raizman
Suite 200, The Frick Building
Pittsburgh, PA 15219-6003
Attorneys for Appellee Pittsburgh Water and Sewer Authority
Virginia S. Scott (Argued)
City of Pittsburgh
Department of Law
313 City County Building
Pittsburgh, PA 15219
Attorney for Appellee City of Pittsburgh
OPINION OF THE COURT
STAPLETON, Circuit Judge:
We here review the district court‘s dismissal under
Because the district court dismissed Independent‘s claims pursuant to a motion to dismiss under
In 1986, Independent sued the City and Authority in the United States District Court for the Western District of Pennsylvania after the City declared that Independent was “noncompetent” to bid on any projects in which it had an interest and the Authority consequently rejected a low bid by Independent.
In settlement of that suit, the parties agreed to a consent decree that was ultimately entered by the court. The consent decree provided that Independent could not be “debarred” from bidding on City contracts based on any past performance, and that if the City or Authority wanted to “disqualify” Independent from
In May 1995, the Authority solicited bids for two projects, the “Annual Water Line Contract” and the “Grandview Avenue Project.” Independent submitted bids for both projects. In accordance with the Authority‘s “MBE/WBE Utilization Requirements,” each of Independent‘s bids included a list of minority- and women-owned business enterprises (“MBE/WBEs“) that Independent intended to use as subcontractоrs if awarded the contract. One of the MBEs Independent listed was Whaley & Sons, a firm that Independent claims was certified by the Authority as an approved MBE/WBE vendor. Independent‘s bids were the lowest for both projects, and an independent consultant recommended that the Authority award both contracts to Independent.
Before the Authority made a decision about awarding the contracts, the City‘s Deputy Mayor of Government Operations, Salvatore Sirabella, issued a memorandum (the “Sirabella memorandum“) to the Authority‘s Executive Director. In the memorandum Sirabella expressed concern about the cost over-run on a recent Authority project that had been completed by Independent, and directed the Authority to “temporarily halt awarding any contracts to Independent ....” App. at 87. Shortly after receiving the Sirabella memorandum, the governing body of
In June, 1995, Independent submitted a bid to the Authority for the “Annual Sewer Improvement Contract.” Again, Independent‘s was the lowest responsible bid. And again, despite its low bid, Independent was not awarded the contract. There was apparently some communication between the attorney for the Authority and Independent regarding the absence of a Power of Attorney form in Independent‘s bid package, but ultimately the Authority did not reject Independent‘s bid on that basis. Instead, the Authority‘s Board simply rejected all of the Sewer Improvement Contract bids withоut explanation and readvertised the project.
In response to the Authority‘s failure to award it the Water Line Contract, the Grandview Avenue Project, and the Sewer Improvement Contract, Independent filed this suit. Its complaint alleged that: (1) the Authority and City violated the terms of the consent decree by “disqualifying” Independent from Authority and City contracts; (2) the Authority‘s MBE/WBE
The district court dismissed all of Independent‘s federal claims. First, the court dismissed the § 1983 claims against the Authority on the ground that the Authority is not a “person” within the meaning of § 1983. The district court then dismissed the civil contempt claim on the ground that Independent had not been “debarred” from bidding on City or Authority contracts.
Turning to Independent‘s procedural due process claim, the district court held that “Pennsylvania provides a judicial procedure for unsuccessful bidders to challenge whether a local contracting authority has violated a bidder‘s rights under the Municipal Authority Act.” Op. at 7. In the court‘s view, an adequate post-deprivation procedure thus existed to satisfy the demands of the Due Process Clause. The court dismissed Independent‘s substantive due process claims because it found that Independent had not alleged facts showing that the City had deprived it of a protected property interest.
With respect to the equal protection claim, the court held that Independent lacked standing because the complaint
We will affirm the dismissal of Independent‘s due process claims. We will reverse the judgment of the district court, however, and remand for further proceedings on Independent‘s civil contempt and equal protection claims.
II. The Civil Contempt Claim
In Count I of its complaint, Independent alleges that the Authority and City are in civil contempt of court because their disqualification of Independent pursuant to the Sirabella memorandum and the Authority‘s resulting rejection of Independent‘s three low bids violated the terms of the 1986 consent decree. The district court dismissed the contempt claim because it found that the facts alleged did not show a violation of the terms of the consent decree. We disagree.
The 1986 consent decree provided in part:
2. Independent shall not be debarred from bidding on any City of Pittsburgh Contract based on past conduct or performance.
3. Independent, City and Authority shall act in a cooperative mаnner on all contracts. Independent shall:
(a) cooperate with inspectors at job site; and
(b) cooperate with consultants and officials of the City and Authority in regard to problems that occur at the job site and administrative matters; and
(c) move quickly to resolve any disputes with adjoining property owners as a result of their work.
4. If, because of problems with future performances, the City or Authority desire to disqualify Independent from City or Authority work, a hearing shall be held prior to disqualification under the Pennsylvania Local Agency Law, and Independent shall have all rights afforded thereunder.
App. at 138-39.
At the time the consent decree was entered, the Pittsburgh Code contained a provision entitled “Debarment from Bidding On and Participating in City Contracts.”
(10) Willful or material failure to perform the terms of a contract or agreement in accordance with specifications or within contractual time limits;
(11) A record of failure to perform or of unsatisfactory performance in accordance with the terms of one or more contracts, provided that the failure or unsatisfactory performance was within a reasonable period of time preceding the determination to debar and was caused by acts within the control of the person or enterprise debarred;
* * *
(16) Other cause affecting responsibility as a city contractor or vendor as may be determined by the city.
The Pennsylvania Local Agency Law referenced in paragraph 4 of the consent decree is found in Title 2 of the Pennsylvania Consolidated Statutes Annotated at
In the context of these statutory provisions and the litigation that produced the consent decree, the intent of paragraph 4 seems clear and unambiguous. Independent was concerned about being foreclosed from doing City and Authority work based on complaints about its conduct and contract performance. In the interest of settling the pending lawsuit, the City was willing to assure that there would be no foreclosure based on past conduct or performance. While it and the Authority were not willing to give the same assurance with respect to future contract performance, they were willing to commit to hearing Independent‘s side of the story regarding any alleged deficiency in its performance before foreclosing it from City and Authority work. Independent would be able to give its side in a hearing to be held in accordance with the Pennsylvania Local Agency Lаw. This reading of paragraph 4 gives the word “disqualified” its commonly understood meaning. “Disqualify,” according to Webster, means “to deprive of a power, right or privilege” or make “ineligible . . . for further competition because of violations of the rules,” Webster‘s Ninth New Collegiate Dictionary 366 (1990); Black defines “disqualify” as “to render ineligible.” Black‘s Law Dictionary 472 (6th ed. 1990).
Given this intent, we further think it clear that if Independent can prove its allegations, it will have established a violation of paragraph 4 of the consent decree. If the Sirabella
In reaching its contrary conclusion, the district court reasoned that (1) “debarred” in paragraph 2 was intended tо include only disqualifications for City work pursuant to the “formal procedure” spelled out in
Even assuming that “debarred” in paragraph 2 refers to a foreclosure from City work for a period of time for the reasons set forth in
Giving the word “disqualify” and the phrase “because of problems with future performances” in paragraph 4 their commonly understood meaning, we find paragraph 4 broad enough to include a blanket foreclosure of Independent from City or Authority work because of an overrun on a post-consent decree contract. Moreover, it seems to us that the stated causes for debarment under
III. The § 1983 Claims
A. The “Person” Requirement
Independent brought its equal protection and due process claims against the City and Authority under
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to be deprived of any rights, privileges, or immunities secured by the Constitution or laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
In support of its conclusion that the Authority “is not a ‘person’ within the meaning of section 1983,” Op. at 4, the district court cited Will v. Michigan Department of State Police, 491 U.S. 58 (1989). Will held that “neither a State nor its officials acting in their official capacities are ‘persons’ under § 1983.” Id. at 71. We cannot accept the district court‘s conclusion that Will compels a finding that the Authority is not a “person” under
In Will, the Court gave effect to the limitation expressed in Monell. Relying on the ordinary meaning of the term “person,” the legislative history of
The limitations that define the boundaries of the holdings in Monell and Will establish that the most important inquiry in determining whether a governmental entity is a “person” within the meaning of
- Whether the money that would pay the judgment would come from the state (this includes three ... factors--whether payment would come from the state‘s treasury, whether the agency hаs the money to satisfy the judgment, and whether the sovereign has immunized itself from responsibility for the agency‘s debts);
- The status of the agency under state law (this includes four factors--how state law treats the agency generally, whether the entity is separately incorporated, whether the agency can sue or be sued in its own right, and whether it is immune from state taxation); and
- What degree of autonomy the agency has.
873 F.2d at 659 (summarizing more detailed list of factors set forth in Urbano v. Board of Managers, 415 F.2d 247 (3d Cir. 1969), cert. denied, 397 U.S. 948 (1970)). See also Bolden, 953 F.2d at 814-16.
We have repeatedly held that the most important factor in determining whether an entity is an “arm of the State” for purposes of the Eleventh Amendment is “whether any judgment would be paid from the state treasury.” Fitchik, 873 F.2d at 659; see also Christy v. Pennsylvania Turnpike Comm‘n, 54 F.3d 1140, 1145 (3d Cir.), cert. denied, 116 S. Ct. 340 (1995); Bolden, 953 F.2d at 818; Urbano, 415 F.2d at 251. According to Pennsylvania‘s Municipal Authorities Act of 1945 (the “MAA“), under which the Authority is organized, the Authority “shall have no power ... to pledge the credit or taxing power of the Commonwealth of Pennsylvania ..., nor shall any of its obligations be deemed to be obligations of the Commonwealth ..., nor shall the Commonwealth ... be liable for the payment of principal or
The second factor, the Authority‘s status under state law, also appears to weigh against a finding that the Authority is an “arm of the State,” if less clearly. Like SEPTA, which we held in Bolden is a “person” under § 1983, 953 F.2d at 820, the Authority appears to exhibit some attributes not characteristic of an arm of the State and other attributes thаt are associated with the State. On the one hand, a municipal authority is “a body politic and corporate,”
On the other hand, municipal authorities have the power of eminent domain,
Like the first two, the third factor, the Authority‘s “degree of autonomy” from the state, seems to weigh against a finding that the Authority is an “arm of the State.” The provisions of the MAA afford the Authority a high degree of autonomy from the Commonwealth of Pennsylvania. For example, the members of the Board--which еxercises all of the Authority‘s powers--are appointed not by the State but by the governing body of the City of Pittsburgh, the incorporating municipality.
We have thus far discussed only the most significant inquiry identified by Will and Monell, i.e., whether an entity is an “arm of the State” for Eleventh Amendment purposes. Will also
First, although the term “person” in common usage does not include the “sovereign,” Will, 491 U.S. at 64, the term does refer to “bodies corporate and politic,” meaning “corporations, both private and public (municipal).” Id. at 70. Because the Authority is expressly identified under the MAA as a “body politic and corporate,”
Second, the Will Court also recognized that “in enacting § 1983, Congress did not intend to override well established immunities under the common law.” 491 U.S. at 67. Therefore, because the sovereign immunity to which States are entitled was a well-recognized principle of the common law at the time
It would be premature to express an opinion on the result that the required weighing process should produce. A record must first be developed and the parties permitted to comment upon it. We hold only that the Authority may be a person within the meaning of
B. The Equal Protection Claim
Having concluded that it was error to dismiss the
Standing is “an essential and unchanging part of the case-or-controversy requirement of Article III” of the Constitution. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). In order to satisfy the standing requirement, a party must demonstrate (1) an “injury in fact” which is both “concrete and particularized” and “actual or imminent“; (2) a causal relationship between the injury and thе challenged conduct such that the injury “fairly can be traced to the challenged action of the defendant“; and (3) a likelihood that the injury will be redressed by a favorable decision. Northeast Fla. Chapter of Assoc‘d Gen. Contractors of America v. City of Jacksonville, 508 U.S. 656, 663 (1993) (citations omitted). At this stage in the proceeding, we look to the plaintiff‘s complaint to determine whether these requirements for standing have been met.
A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses. ... A party may also state as many separate claims or defenses as the party has, regardless of consistency ....
This Rule permits inconsistency in both legal and factual allegations, see, e.g., Babcock & Wilcox Co. v. Parsons Corp., 430 F.2d 531, 536 (8th Cir. 1970); Dugan v. Bell Telephone of Pa., 876 F. Supp. 713, 722 (W.D. Pa. 1994); 5 Wright & Miller, Federal Practice & Procedure § 1283, at 533 (1990), and has been interpreted to mean that a court “may not construe [a plaintiff‘s] first claim as an admission against another alternative or inconsistent claim.” Henry v. Daytop Village, 42 F.3d 89, 95 (2d Cir. 1994); Molsbergen v. United States, 757 F.2d 1016, 1019 (9th Cir.), cert. dismissed, 473 U.S. 934 (1985). This is especially the case in circumstances in which proving the plaintiff‘s alternative claims may require “complex inquiries into the parties’ intent.” Henry, 42 F.3d at 95.
The district court here failed to afford Independent the privilege of asserting alternative and inconsistent claims. Independent‘s complaint alleges, inter alia, two inconsistent claims: First, Independent claims that the Authority and the City disqualified it from Authority work, per the instruction in the Sirabella memorandum, in violation of the 1986 consent decree. In connection with this claim, Independent claims that
Independent‘s equal protection claim does allege facts satisfying all of the requirements of standing. The complaint alleges an injury in fact (the rejection of Independent‘s bids); causation (that the rejection resulted, according to the Authority, from Independent‘s inability to meet satisfactorily the Authority‘s MBE/WBE Utilization Requirements)7; and
Turning from standing to the issue of whether Independent has stated a claim on which relief could be granted, we conclude that it has. Independent‘s complaint alleges that the Authority has established MBE/WBE Utilization Requirements which require that all bidders on certain contracts provide with their bids a “utilization plan” that identifies the portion of work under the contract that will be subcontracted to “certified” minority- or women-owned firms. According to the complaint, bids that do not meet the MBE/WBE utilization goals are rejected. Finally, the complaint alleges that the MBE/WBE Utilization Requirements were not established to remedy past discrimination or passive participation in discrimination by the City or Authority against minority- or women-owned construction companies. These allegations support an equal protection claim under City of Richmond v. J.A. Croson Co., 488 U.S. 468 (1989), in which the Supreme Court held that a race-based MBE utilization program was unconstitutional because it was not narrowly tailored to remedy specific discrimination or “passive participation” in discrimination by the enacting governmеnt unit.8 See also
C. The Due Process Claims
Independent further alleges that the Authority deprived it of property without procedural or substantive due process when it disqualified Independent and rejected its bids on the Water Line Contract, the Grandview Avenue Project and the Sewer Improvement Contract. The property interest of which it was allegedly deprived was an interest in these contracts created by Pennsylvania statutes requiring that public contracts be awarded to the lowest responsible bidder.
The district court dismissed Independent‘s procedural due process claim on the ground that Pennsylvania law provided a post-deprivation remedy that afforded all the “due process” required by the Fourteenth Amendment. According to the district court, the post-deprivation remedy, of which Independent had attempted to avail itself, consisted of “a judicial procedure for unsuccessful bidders to challenge whether a local contracting authority has violated a bidder‘s rights under the Municipal Authority Act.” Op. at 7-8. The district court apparently reached this conclusion based on a statement in the Authority‘s Motion to Dismiss that there was a pending state action between the parties. On appeal, however, the parties agree that Pennsylvania law in fact provides no such procedure. Nonetheless, the Authority and the City argue that the district court‘s dismissal of Independent‘s procedural due process claim should be affirmed on the alternative ground that their actions did not deprive Independent of any property interest protected by the due process clause.
To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have mоre than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.
Id. at 577 (emphasis added). Finally, the Court identified the sources to which courts should look to determine a plaintiff‘s “entitlement” to a claimed property interest. Property interests, the Court declared, “are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law.” Id.
According to the teachings of Roth, therefore, Independent may not pursue its procedural due process claims against the City and Authority unless “an independent source such
Although Pennsylvania‘s competitive bidding statutes require that public contracts be awarded to the lowest responsible bidder,
As Independent stresses, the law of this circuit recognizes that “an entitlement may exist for a benefit sought but not yet obtained if state law limits the exercise of discretion by the state official responsible for conferring the benefit.” Midnight Sessions, Ltd. v. City of Phila., 945 F.2d 667, 679 (3d Cir. 1991) (citing Winsett v. McGinnes, 617 F.2d 996, 1007 (3d Cir. 1980) (in banc), cert. denied, 449 U.S. 1093 (1981)). Relying on this authority, Independent urges that the limitations placed on the Authority‘s discretion by the competitive bidding laws rendered Independent “entitled” to receive the contracts for which it was the low bidder as soon as it submitted its low bids and the Authority decided to award the contracts. Midnight Sessions and Winsett are inapposite here,
Finally, we turn to Independent‘s substantive due process claim. Although the Third Circuit has recognized that a governmental deprivation that comports with procedural due process may still give rise to a substantive due process claim “upon allegations that the government deliberately and arbitrarily abused its power,” Midnight Sessions, 945 F.2d at 683 (citing Bello v. Walker, 840 F.2d 1124, 1129-30 (3d Cir.), cert. denied, 488 U.S. 851, and cert. denied, 488 U.S. 868 (1988)), we have also held that a substantive due process claim grounded in an arbitrary exercise of governmental authority may be maintained only where the plaintiff has been deprived of a “particular quality of property interest.” DeBlasio v. Zoning Bd. of Adjustment, 53 F.3d 592, 600 (3d Cir. 1993); see also Homar v. Gilbert, 89 F.3d 1009, 1021 (3d Cir. 1996); Reich v. Beharry, 883 F.2d 239, 244 (3d Cir. 1989) (“[I]n this circuit at least, not all property interests worthy of procedural due process protection are protected by the concept of substantive due
We will leave for another day definition of the precise contours of the “particular quality of property interest” entitled to substantive due process protection. We have no difficulty in concluding that the property interest alleged to have been infringed here, which we have concluded is not entitled to procedural due process protection, is not the sort of “fundamental” interest entitled to the protection of substantive due process. Accordingly, we conclude that Independent has failed to state either a procedural due process claim or a substantive due process claim upon which relief can be granted.
IV. Conclusion
We will reverse the judgment of the district court and remand for further proceedings consistent with this opinion.
Notes
The provisions of Subchapter B of Chapter 5 (relating to practice and procedure of local agencies) and Subchapter B of Chapter 7 (relating to judicial review of local agency action) shall be known and may be cited as the “Local Agency Law.”