Enertech Electrical, Inc. v. Mahoning County Commissioners Mahoning County Building Commission, Local 64 International Brotherhood of Electrical Workers, Intervenor-Appellee
Docket: 94-3601
Court: Court of Appeals for the Sixth Circuit; July 30, 1996; Federal Appellate Court
Enertech Electrical, Inc. (Enertech) appealed a district court's summary judgment in favor of Mahoning County regarding a bid dispute for the electrical contract on the Justice Center construction project. The court ruled that Enertech did not demonstrate a deprivation of a constitutionally protected property interest under 42 U.S.C. § 1983. The bidding process began on April 26, 1993, with the County publishing an employee handbook outlining a Project Labor Agreement (PLA) that all trade contractors were required to ratify. During a pre-bid meeting in May 1993, County representatives indicated that the PLA was still under negotiation, and no local bargaining representative for electricians had been selected. Enertech submitted its bid on June 15, 1993, but did not agree to the PLA, stating that its electricians' union was not a signatory and was negotiating its own collective bargaining agreement. Ultimately, the County had already designated the International Brotherhood of Electrical Workers (IBEW) Local 64 as the collective bargaining agent for the project, which influenced the court’s decision to affirm the summary judgment in favor of the County.
After modifications to the specifications of the electrical package, the County required a rebid, which Enertech submitted on August 12, 1993. The County identified Enertech as the lowest bidder but conditioned the contract on Enertech signing a Project Labor Agreement (PLA) and a collective bargaining agreement with IBEW Local 64, despite Enertech's previous objections. Enertech refused to sign the agreement with Local 64, proposing Local 573 instead. Following further correspondence where Enertech maintained its position, the company filed a § 1983 action claiming a deprivation of its constitutional right to the contract, abuse of discretion by County officials, and violations of the National Labor Relations Act (NLRA). Enertech sought a declaration of its status as the lowest bidder, claimed the PLA was illegal, requested an injunction against the County enforcing the PLA, and sought damages.
The district court denied Enertech's motion for a preliminary injunction, asserting an adequate legal remedy was available, leading the County to award the contract to the next lowest bidder. Enertech then amended its complaint to seek damages for lost profits. The district court allowed Local 64 to intervene as a defendant, while the County moved for dismissal or summary judgment, and Local 64 sought judgment on the pleadings or summary judgment. The court found no genuine issues of material fact and granted summary judgment for the County and Local 64. Enertech appealed.
In reviewing the summary judgment de novo, the court noted that Enertech had not pursued its substantive due process argument or its claim regarding the PLA's legality under the NLRA, leading to those issues being deemed abandoned. The court also planned to consider whether PLAs violate Ohio's competitive bidding statutes, rendering them void.
To succeed in a § 1983 claim, a plaintiff must show that the defendant acted under state law to deprive them of a constitutional right. A constitutionally protected property interest in a publicly bid contract can be established if a bidder was either awarded the contract and then deprived of it or if the County had limited discretion that it abused in awarding the contract. Enertech contends that the County improperly conditioned the contract award on the ratification of the Project Labor Agreement (PLA) and abused its discretion by denying the contract to Enertech, which submitted the lowest bid. However, under Ohio law, specifically § 307.90 of the Ohio Revised Code, contracts must be awarded to the "lowest and best bidder," allowing the County discretion to determine what constitutes the lowest and best bid, and not limited to the lowest price alone. Courts cannot intervene unless there is evidence of abuse of discretion or fraud. An abuse of discretion is characterized by an unreasonable, arbitrary, or unconscionable attitude. The County did not abuse its discretion by requiring PLA ratification, as it was intended to ensure labor harmony and govern project participants' rights and responsibilities. This requirement did not violate Ohio's competitive bidding policies aimed at preventing favoritism or fraud, and the inclusion of the PLA was consistent with the principles of open and honest competition in the bidding process. Thus, the County acted within its discretion in its decision-making.
Enertech failed to sign the Project Labor Agreement (PLA) and ratify the collective bargaining agreement with the selected union, which precluded it from being recognized as the lowest and best bidder for the contract. Consequently, the County was authorized to award the contract to the next lowest bidder. Enertech did not establish a constitutionally protected property interest in the contract, resulting in the proper granting of summary judgment for the defendants on the procedural due process claim.
Enertech also claimed that the County abused its discretion by conditioning the contract award on the adoption of Local 64's collective bargaining agreement, a requirement it argued was not disclosed before the bidding period. However, this issue was not preserved for appeal as Enertech failed to include it in its appellate briefs, leading to its abandonment.
On appeal, Enertech further asserted that project labor agreements violate Ohio's competitive bidding statutes, claiming that the County's incorporation of the PLA into the bidding process constituted an abuse of discretion and infringed on its property rights under § 1983. Enertech sought to have the legality of PLAs certified to the Ohio Supreme Court. Defendants contended that this argument was waived due to Enertech's failure to present it to the district court.
While both Enertech and amici curiae urged consideration of the legality of project labor agreements, the court declined, noting that it only addresses such issues if their resolution is unequivocal or if failing to do so would result in injustice. The court referenced a prior appellate decision indicating that Ohio law does not categorically prohibit project labor agreements, although the Ohio Supreme Court has not addressed the issue directly.
Ultimately, the court affirmed the district court's summary judgment against Enertech and denied its motion for certification to the Ohio Supreme Court.
