Fourth Circuit Finds Declaratory Judgement Suit Not Premature Even Though Protest Procedure Specified

In 2014, the Regional Transit Authority (RTA) in New Orleans sought a contract to renovate one of their facilities and issued an Invitation for Bid. The sole bid from Landis Construction Company, LLC, was cancelled for being over budget. The RTA then issued a second Invitation for Bid, for which Landis was again the sole bidder. After being told by the RTA that their Invitation for Bid would be accepted, Landis was not awarded the contract, despite the second bid having been within budget. Furthermore, Landis was offered no explanation of the RTA’s rationale for doing so. After a third Invitation for Bid was issued by the RTA, Landis filed, suit pursuant to La. R.S. 38:2220.1, seeking an injunction prohibiting the RTA from soliciting a bid a third time and a writ of mandamus ordering award of the contract to Landis with a change order for the cost of delay in awarding the contract, in addition to a declaratory judgment declaring violation of the Louisiana Public Bid Law by the RTA. Landis contends that the RTA violated Louisiana Public Bid Law by failing to award the contract within forty-five (45) days of the opening bid.

The RTA responded by filing an exception of prematurity, claiming that, before filing suit, Landis had not followed the protest procedure set forth in the bid documents, which the district court upheld. Moreover, the court denied Landis’s preliminary injunction, writ of mandamus, and declaratory judgment on the basis of prematurity. On appeal, Landis’s request for preliminary injunction and mandamus were dismissed as moot due to the RTA awarding the contract to Landis subsequent to trial. Therefore, the Court took up the no cause of action issue sua sponte and dismissed the claim.

Additionally on appeal, Landis asserted that the district court erred in granting the exception of prematurity for not exhausting administrative remedies outlined in the protest procedures as part of the Invitation for Bid, and the Fourth Circuit Court agreed. In this case, the issue raised was whether the district court appropriately applied the administrative exhaustion doctrine. The district court granted the RTA’s exception of prematurity on the basis that Landis had not exhausted all administrative remedies set forth in the bidding document. However, Landis invoked La.R.S. 38:2220.1 to support their claims as a private entity, as opposed to an aggrieved bidder, and did not seek any relief under La.R.S. 38:2220. Therefore, the appellate court found Landis was not bound by the protest procedure, and the ruling of the district court on this issue was reversed.

 

Russel W. Wray is a partner in the firm of Wray & Pierce, L.L.P., in Baton Rouge, Louisiana. Questions or comments can be directed to Mr. Wray at russwray@wraylaw.com.

© Russel W. Wray 2016