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Rochester City Lines Co. v. City of Rochester

Court of Appeals of Minnesota

May 15, 2017

Rochester City Lines Co., Relator,
v.
City of Rochester, et al., Respondents, First Transit, Inc., Respondent.

         City of Rochester

          Gary A. Van Cleve, Rob A. Stefonowicz, Bryan J. Huntington, Larkin Hoffman Daly & Lindgren Ltd., Minneapolis, Minnesota; and Steven A. Diaz (pro hac vice), Law Office of Steven A. Diaz, Washington, D.C. (for relator)

          John M. Baker, Monte A. Mills, Katherine M. Swenson, Greene Espel PLLP, Minneapolis, Minnesota (for respondents City of Rochester and Justin L. Templin)

          Charles K. Maier, Richard C. Landon, Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota (for respondent First Transit)

          Considered and decided by Kirk, Presiding Judge; Schellhas, Judge; and Bratvold, Judge.

         SYLLABUS

         A best-value competitive bidding process and any contract awarded through that process are rendered unreasonable, arbitrary, or capricious, in violation of the rule announced in Griswold v. Ramsey County, 242 Minn. 529, 65 N.W.2d 647 (1954), by a provision in the request for proposals that creates an appearance of bias.

          OPINION

          SCHELLHAS, Judge.

         On this certiorari appeal, relator challenges the denial of its protest to a request for proposals for the operation of municipal public transit services. Because the request for proposals includes a provision that creates an impermissible appearance of bias, we reverse.

         FACTS

         For decades, relator Rochester City Lines Co. (RCL) operated fixed-route public transit services in respondent City of Rochester under a series of noncompetitive contracts with the city. In 2011, the Federal Transit Administration (FTA) informed the city that, to continue to receive federal funding for public transit, the city must use a competitive bidding process to award future contracts for the operation of its public transit services.

         The city accordingly issued a request for proposals (RFP) to operate its fixed-route public transit services for the period from July 1, 2012, to December 31, 2016 (2012 RFP). RCL and respondent First Transit Inc. (First Transit) were among the four companies that submitted proposals in response to the 2012 RFP. In February 2012, while the city was still receiving proposals, RCL sued the city in connection with the 2012 RFP (2012 RFP litigation). In April 2012, pending the 2012 RFP litigation, the city awarded the 2012 contract to First Transit. In June 2012, RCL amended its complaint in the 2012 RFP litigation, adding First Transit as a named defendant and adding a Griswold claim against the city.[1] In July 2012, First Transit began operating fixed-route public transit services in the city under the 2012 contract.

         In June 2013, the district court entered summary judgment against RCL on each of its claims in the 2012 RFP litigation. This court affirmed. Rochester City Lines, Co. v. City of Rochester, 846 N.W.2d 444, 449 (Minn. App. 2014), review granted (Minn. June 17, 2014). On August 19, 2015, the supreme court affirmed in part, reversed in part, and remanded for further proceedings on RCL's Griswold claim. Rochester City Lines, Co. v. City of Rochester, 868 N.W.2d 655, 665 (Minn. 2015) (RCL I), cert. denied, 136 S.Ct. 849 (2016). RCL's Griswold claim is scheduled for court trial on May 22, 2017.

         On June 21, 2016, as the 2012 contract neared its end, the city issued an RFP to operate its fixed-route and paratransit public transit services for the period from January 1, 2017, to December 31, 2021 (2016 RFP). The 2016 RFP provides a process by which a potential bidder may raise "protests of or relating to" the 2016 RFP prior to submitting a proposal (pre-bid protest). The 2016 RFP also names respondent Justin L. Templin, whom the city appointed as Special Assistant City Attorney, as the "Moderator of the RFP process" (the moderator) and establishes that the moderator is authorized to make "the final decision . . . at the City level" on any pre-bid protest. An August 18, 2016 addendum to the 2016 RFP[2] names each of the city's four public-transit administrators as members of the committee tasked with evaluating proposals received in response to the 2016 RFP (2016 evaluation committee). Five of the eight members of the 2016 evaluation committee previously served as members of the committee that evaluated proposals received in response to the 2012 RFP (2012 evaluation committee).

         On August 22, 2016, RCL brought to the moderator a pre-bid protest, challenging several provisions of the 2016 RFP and requesting relief in the form of revisions to the RFP and debarment of First Transit.[3] The moderator denied RCL's protest on August 26. The 2016 evaluation committee then began its evaluation of the four proposals received in response to the 2016 RFP, including bids by RCL and First Transit. On September 22, RCL petitioned this court for a writ of certiorari, naming the city and the moderator in his official capacity as respondents (city respondents) and seeking review of the moderator's denial of its pre-bid protest. First ...


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