New Orleans Rosenbush Claims Service, Inc. v. City of New Orleans, 641 So. 2d 545

New Orleans Rosenbush Claims Service, Inc. v. City of New Orleans

641 So. 2d 545 | La. Ct. App. | 1994

Lead Opinion

PLOTKIN, Judge.

| iDefendant City of New Orleans (City) appeals a trial court judgment granting an injunction and issuing a writ of mandamus in favor of plaintiff New Orleans Rosenbush Claims Service, Inc. (Rosenbush). For the reasons set forth below, we reverse.

Rosenbush was one of four companies submitting bids to provide “administrative services” for the City’s self-funded workers’ compensation program for a one-year period beginning May 1, 1993 and ending April 30, 1994, pursuant to a request for bids, proposal FTC-#2618. The bid proposal contained the following provision:

The Department of Finance, Bureau of Purchasing, reserves the right to reject any and all bids and to waive any informal-ities.

Because two of the four bids received by the City in response to bid proposal FTC- # 2618 were disqualified, Rosenbush’s bid of $425,869.60 became the lowest bid. However, on May 17, 1993, the City sent a letter containing the following statement to Rosen-bush and to Crawford & Co., the other remaining bidder:

|2We desire to reject all bids because we have determined that the contract should be awarded as a Professional Service Agreement, pursuant to the City’s RFP Policy and because we desire to open the scope of service under the RFP Policy, both of which are in the best interest of the City.

In response to this letter, Rosenbush filed a petition for preliminary and permanent injunction preventing the City from taking any steps to award a contract for administrative services of the City’s workers’ compensation program pursuant to a new bid proposal, and seeking a writ of mandamus requiring the City to award the contract to Rosenbush pursuant to bid proposal FTC-# 2618. The trial court ruled in favor of Rosenbush, issuing both the injunction and the writ of mandamus. The City has appealed.

Because we find that the trial court judgment was in error under the applicable jurisprudence regarding a bidding authority’s *546right to reject all bids, we reverse the trial court judgment.1 This court has previously held in HTW Transportation Co., Inc. v. New Orleans Aviation Board, 527 So.2d 339 (La.App. 4th Cir.1988), writs denied 532 So.2d 121, 532 So.2d 122, and 532 So.2d 129 (La.1988), that the courts of this state have no authority to require a bidding authority to accept the low bid on a project when the bidding authority has reserved the right to reject any and all bids, as the City has here. Id. at 343.

Rosenbush claims that the result in HTW was in error under the 1982, 1983, and 1990 amendments to the State Public Bid law, which restrict an awarding agency’s discretion to require “just cause” for thé rejection of the lowest responsible bidder. LSA-R.S. 38:2214. Rosenbush claims that that provision of the public bid law requires just cause for rejection of bids, even if the bidding authority decides to reject all bids.

However, that argument was specifically rejected by this court in HTW Transportation Co., which acknowledged the “just cause” requirement imposed by the 1982 and 1983 amendments, but nevertheless found that requirement inapplicable when the bidding authority decided to reject all bids.2 527 So.2d at 342. Furthermore, that princi-plejahas been adopted by the Louisiana Fifth Circuit Court of Appeal which recently rejected the exact argument made by Rosen-bush here, stating as follows:

Although [the] discretion [to reject bidders] has been limited by the 1982 and 1983 amendments to the public bid law requiring “just cause” for the rejection of the lowest responsible bidder, where the advertisement allows for the rejection of all bids, “just cause” is not required to reject all bids and readvertise the project.

Starlight Homes, Inc. v. Jefferson Parish Council, 632 So.2d 3, 4 (La.App. 5th Cir.1994), writ denied 637 So.2d 462 (La.1994).

Accordingly, the trial court judgment granting the injunction and issuing the mandamus in favor of Rosenbush is reversed. Rosenbush’s suit is dismissed at its cost.

REVERSED.

. Although the City makes a number of arguments for reversal of the trial court judgment, we will discuss only one of those arguments, since our decision on that issue makes consideration of the other arguments Unnecessary.

. The 1990 amendments do not change the provision in any manner significant to this appeal.

Rehearing

ON REHEARING

PER CURIAM.

liOn rehearing, plaintiff Rosenbush Claims Service argues strenuously that this court’s holding in HTW Transportation Co. v. New Orleans Aviation Board, 527 So.2d 339 (La.App. 4th Cir.), writ denied 532 So.2d 121, 532 So.2d 122, and 532 So.2d 1129 (La.1988) cited in this case for the proposition that the defendant City of New Orleans may reject all bids without citing any just cause, is incorrect.

After reconsideration, we reaffirm our holding both in the instant case and in HTW Transportation Co. The plaintiffs argument is based solely on its contention that the recent amendments to LSA-R.S. 38:2214(B), which now provides that a “public entity may reject any and all bids for just cause,” limit a public entity’s right to reject all bids to situations where the entity can articulate “just cause” for doing so. We disagree with this argument. Although the existence of “just cause” is obviously one reason for rejecting all bids, there is no indication that the amendments were intended to restrict a public entity’s right to reject all bids for other reasons.

This interpretation is supported by LSA-R.S. 38:2215(A), which, requires the public entity to act within 30 days of receipt of bids to either “award said contract to the lowest responsible bidder or reject all bids.” This court has previously interpreted this provision to require that the public entity reject all bids if it fails to award a contract within the 30-day [2period specified. Bill Roberts, Inc. v. City of New Orleans, 485 So.2d 988, 990 (La.App. 4th Cir.1986). This interpretation was made subsequent to the 1991 and *5471992 amendments to LSA-R.S. 38:2214. The Louisiana Fifth Circuit Court of Appeal has also found that LSA-R.S. 38:2215 gives public entities the right to reject all bids without just cause, especially where the contract, as in this case, reserves the right to do so. See Thigpen Construction Co. v. Parish of Jefferson, 560 So.2d 947, 953 (La.App. 5th Cir.1990).

We note that in the instant case, the City of New Orleans rejected the two remaining qualified bidders some six. weeks after the bids were submitted. Since the City failed to award any contract within the 30-day period specified by LSA-R.S. 38:2215, the pertinent jurisprudence from this circuit mandated that the City do exactly what it did — that is, reject all bids. Thus, our reversal of the trial court judgment is correct for that reason also.

We have considered the cases from the Louisiana first and second circuit courts of appeal which interpret the 1991 and 1992 amendments to LSA-R.S. 38:2214(B) to require “just cause” to reject all bids. However, as pointed out by the opposition to the application for rehearing in this case, the second circuit case addresses that issue only in a footnote and then only in dicta. Terral Barge Line, Inc. v. Port Commission, 577 So.2d 787, 791 (La.App. 2d Cir.1991). We acknowledge that the first circuit case, Pittman Construction Co. v. Parish of East Baton Rouge, 493 So.2d 178 (La.App. 1st Cir.), writ denied 493 So.2d 1206 (La.1986) is directly contrary to the result reached by this court. Since we are not bound by the decisions of any of the other circuit courts, we decline to adapt our opinion to agree with Pittman Construction Co.

However, we do delete our order dismissing all of Rosenbush’s claims. Since we are only reversing a judgment granting a preliminary injunction, the case is remanded to the trial court for further proceedings.