# Northwest Infrastructure LLC v. City of Portland

> District Court, D. Oregon · December 14, 2021

URL: https://www.frixlaw.com/law-library/cases/10394267

## Case

- **Court:** District Court, D. Oregon
- **Decided:** December 14, 2021
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10394267

## How later opinions describe it (automated extraction)

- holding a Title VII defendant need not show it hired an individual more qualified than the plaintiff
- finding Engquist unlikely to apply outside the context of public employment
- finding that corporate agents do not act within the scope of employment if their “sole purpose is one that is not for the benefit of the corporation” (emphasis added)

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

NORTHWEST INFRASTRUCTURE
LLC,
Case No. 3:21-cv-00843-MO
Plaintiff,
OPINION AND ORDER
Vv.
CITY OF PORTLAND, et al.,

Defendants.

MOSMAN, J.,
This matter comes before me on two motions to dismiss: one from Prosper Portland [ECF
the other from the City of Portland [ECF 13]. For the reasons given below, I GRANT Prosper
Portland’s motion to dismiss and DENY the City’s motion as moot.
BACKGROUND
Plaintiff Northwest Infrastructure LLC is an Oregon company that provides general
contracting services. Starks Decl. [ECF 2] Ex. 1 [hereinafter Compl.] 4 6. It brings this action
alleging defendants unlawfully interfered with its bid on a government contract. /d. ] 59-118.
Among those defendants is the Portland Development Commission, also known as Prosper
Portland, a government agency that oversees public bidding on behalf of the city of Portland,
Oregon. Also listed as defendants are the City of Portland, four named Prosper employees, and
five unnamed Prosper employees.

1—OPINION & ORDER

Northwest Infrastructure’s allegations stem from a request for proposals (“RFP”) issued by
Prosper in February 2020. Compl. 4 16. This RFP solicited bids from public contractors on a
contract (“the Contract”) to demolish United States Postal Service facilities and treat surrounding
soil that had been contaminated. /d. After the deadline for submissions passed, Prosper assembled
an evaluation committee to determine which company would receive the Contract. Jd. JJ 18, 24.
This evaluation committee awarded the Contract to NW Demolition, one of Northwest
Infrastructure’s competitors. /d. § 24. However, upon discovering NW Demolition’s bid was based
in part on incorrect information, Prosper convened a second evaluation committee. /d. { 27. The
second evaluation committee conducted a thorough selection process, requesting new proposals
from NW Demolition and Northwest Infrastructure, interviewing representatives from each
contractor, and holding multiple committee meetings. /d. {J 29-33. The committee translated its
findings into scores for the two bidders: NW Demolition received a score of 614 and Northwest
Infrastructure received a score of 615. Jd. ¥ 34.
Now months into its decision-making process, the second evaluation committee sent an
email informing the bidders that the committee would reconvene to “rediscuss” the project given
the proximity in scores. /d. J 38. Despite reconvening, the second evaluation committee’s scores
remained unchanged. /d. § 41. Shortly thereafter, Prosper disbanded the second evaluation
committee and formed a third evaluation committee. /d. § 42. This evaluation committee decided
to award the Contract to NW Demolition. /d. § 44. However, following challenges from Northwest
Infrastructure, Prosper decided to cancel the RFP entirely, awarding the contract to neither bidder.
Id. ¥§ 51-55.
Northwest Infrastructure alleges six claims for relief arising from Defendants’ participation
in the decision to award the Contract to NW Demolition. /d. 59-118. The claims are as follows:

2 —OPINION & ORDER

(1) a 42 U.S.C. § 1983 substantive due process claim; (2) a § 1983 procedural due process claim;
(3) arace-based § 1983 equal protection claim; (4) a “class-of-one” § 1983 equal protection claim;
(5) a 42 U.S.C. § 1981 claim; and (6) an intentional interference with economic relations claim.
Claim One through Claim Five are against the City and Prosper (jointly, “Municipal Defendants”).
Claim Six is against Daniel Spero, Nick Joanna, Kimberly Branam, Elise Hendrickson, and Does
1-5 Gointly, “Individual Defendants”).
Prosper and Individual Defendants move to dismiss all claims. Prosper Mot. to Dismiss
[ECF 7] at 8. The City joins this motion, but also moves to dismiss itself from the case on separate
grounds. Portland Mot. to Dismiss [ECF 13] at 3.
LEGAL STANDARD
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure
to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A pleading that offers only “labels
and conclusions” or “‘naked assertion[s]’ devoid of ‘further factual enhancement’” will not
suffice. /d. (quoting Twombly, 550 U.S. at 555, 557). While the plaintiff does not need to make
detailed factual allegations at the pleading stage, the allegations must be sufficiently specific to
give the defendant “fair notice” of the claim and the grounds on which it rests. Erickson v. Pardus,
551 U.S. 89, 93 (2007) (per curiam) (citing Twombly, 550 U.S. at 555).
DISCUSSION
I. Consideration of External Documents
As a preliminary matter, Prosper asks that I consider two external documents in evaluating
its motion to dismiss: the RFP it issued in February 2020, Starks Decl. [ECF 8] Ex. A [hereinafter

3 — OPINION & ORDER

“RFP” and relevant sections from the Local Contracting Review Board Administrative Rules
(“LCRB”), Starks Decl. [ECF 8] Ex. B [hereinafter “LCRB”].
Generally, review on a motion to dismiss is limited to the complaint itself. Ifa court relies
on materials outside the pleadings to make its ruling, it must treat the motion as one for summary
judgment. Fed. R. Civ. P. 12(d); United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003). But
the court may “consider certain materials—documents attached to the complaint, documents ~

incorporated by reference in the complaint, or matters of judicial notice—without converting the
motion to dismiss into a motion for summary judgment.” Jd. at 908-09; see also Durning v. First
Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987).
A document is incorporated by reference if the complaint “refers extensively to the
document or the document forms the basis of the plaintiff's claims.” Ritchie, 342 F.3d at 908. And
courts may take judicial notice of facts that are “not subject to reasonable dispute,” including “the
records and reports of administrative bodies.” /d. at 908 (internal quotations omitted).
The complaint references the RFP repeatedly. See, e.g, Compl. J] 4-5, 11, 16-21, 23-25,
4546, 55-56, 70, 82-83, 90, 101-02, 116. The LCRB is mentioned but a couple of times. Id. JJ
17, 53. However, as an administrative record, the content of the LCRB is not currently in dispute.
Indeed, Northwest Infrastructure does not object to my consideration of them for the purposes of
this motion. Pl.’s Resp. to Prosper Mot. to Dismiss [ECF 9] at 2. As such, I may consider both
the RFP and LCRB for the purposes of this motion.

1. Though it does not challenge the LCRB’s authenticity for the purposes of this motion,
Northwest Infrastructure reserves its right to challenge the application and validity of the copy of
the LCRB provided by Prosper following discovery. Resp. to Prosper Mot. to Dismiss [ECF 9] at
2.

—OPINION & ORDER

IL. Claims One and Two: The Due Process Claims
Prosper argues Northwest Infrastructure’s due process claims should be dismissed because
Northwest Infrastructure did not have a constitutionally protected interest in the Contract it bid on.
Prosper Mot. to Dismiss [ECF 7] at 11-20. Prosper also contends that dismissal of the procedural
due process claim is appropriate because Northwest Infrastructure does not allege it was deprived
of its ability to protest Prosper’s decision not to award it the Contract. Jd. at 20-21. Because I find
that Northwest Infrastructure did not have a protected property interest in the Contract, I need not
address Prosper’s procedural argument.
A. Public Contracts as Protected Property Interests
A successful claim under the Due Process Clause of the Fourteenth Amendment must
allege the plaintiff was deprived of a constitutionally protected interest Brewster v. Bd. of Educ.
of Lynwood Unified Sch. Dist., 149 F.3d 971, 982 (9th Cir. 1998); Nunez v. City of Los Angeles,
147 F.3d 867, 874 (9th Cir. 1998). Prosper argues that federal and Oregon law preclude an
unsuccessful bidder from acquiring a protected property in a public contract. Prosper Mot. to
Dismiss [ECF 7] at 13-20. In turn, Northwest Infrastructure contends it has alleged a sufficient
“reasonable expectation of entitlement.” Pl.’s Resp. to Prosper Mot. to Dismiss [ECF 9] at 9
(quoting Wedges/Ledges of Cal. Inc. v. City of Phx., 24 F.3d 56, 62 (9th Cir. 1994)). I agree with
Prosper.
Property interests originate not from the Constitution itself, but from “an independent
source such as state law.” Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972). Whether
a state law creates a protected property interest depends on the level of deference that law gives to
the decisionmaker in determining who receives the government benefit. Doyle v. City of Medford,
606 F.3d 667, 672 (9th Cir. 2010) (citing Jacobson v. Hannifin, 627 F.2d 177, 180 (9th Cir. 1980)).

5 — OPINION & ORDER

No entitlement exists when the decisionmaker has broad authority in deciding whether to dole out
a benefit. Allen v. City of Beverly Hills, 911 F.2d 367, 370 (9th Cir. 1990). But an entitlement may
exist if the statute contains “particularized standards or criteria.” Doyle, 606 F.3d at 673 (internal
quotations omitted).
B. Prosper’s Discretion in Awarding the Contract
The Oregon Public Contracting Code expresses broad goals and criteria in evaluating bids.
For example, the Code emphasizes the need to “promote efficient use of state and local government
resources” and “allow impartial and open competition.” ORS 279A.015. These subjective
standards are not the kind of “particularized standards or criteria” that form the basis of an
entitlement. Doyle, 606 F.3d at 673 (internal quotations omitted).
Likewise, the RFP gave significant discretion to Prosper in determining whether to award
the Contract. The RFP explains that Prosper would award the Contract to the “highest-ranked
responsive and responsible proposer” based on scores in several subjective categories, such as
work experience and references. RFP at 21—22. Critically, the RFP allowed Prosper to modify
significant aspects of the selection process, empowering Prosper to request additional proposals,
interviews, and modify scores it had given previously. /d. Prosper even had authority to modify or
even cancel the RFP itself. Jd. at 11 (“Prosper Portland, in its sole discretion, reserves the right to
modify any matter contained in this RFP; cancel or suspend this RFP or reject any or all proposals
received in response to this RFP....”). Accordingly, the RFP did little to constrain Prosper’s
discretion in deciding to whom it should award the Contract, indicating no entitlement exists.
Allen, 911 F.2d at 370.

6 — OPINION & ORDER □

C. Prosper’s Discretion After Determining the Highest-Ranked Responsive and
Responsible Proposer
Northwest Infrastructure argues that Oregon law and the RFP deprived Prosper of its
discretion after the second selection committee gave Northwest Infrastructure the highest bidding
score. Pl.’s Resp. to Prosper Mot. to Dismiss [ECF 9] at 11. Under ORS 279€.410(8), a contracting
agency must award a government contract to “the responsible proposer whose proposal is
determined in writing to be the most advantageous to the contracting agency.” The RFP contains
a similar provision, stating that Prosper would “award the Contract to the highest-ranked
responsive and responsible proposer.” RFP at 22. In Northwest Infrastructure’s interpretation, once
Prosper determined that Northwest Infrastructure was responsive, responsible, and the highest-
ranked proposer, Prosper’s discretion vanished, and awarding the contract to Northwest
Infrastructure became mandatory. Pl.’s Resp. to Prosper Mot. to Dismiss [ECF 9] at 12.
To support its position, Northwest Infrastructure cites to Pataula Elec. Membership Corp.
y. Whitworth, 951 F.2d 1238 (11th Cir. 1992). In Pataula, the Eleventh Circuit held that a bidder
had a protected interest in a Georgia public works contract after the relevant state agency
determined it was the “lowest responsible bidder.” Jd. at 1242. There, the relevant state law
required the agency to award the contract to whichever entity it determined was the lowest
responsible bidder. Jd. Pursuant to that law, the Eleventh Circuit found that the lowest responsible
bidder determination conferred a protected property interest upon that bidder. Jd. at 1242-43.
However, Pataula’s scope is limited. In Circa Ltd. y. City of Miami, 79 F.3d 1057, 1061—
62 (11th Cir. 1996), the Eleventh Circuit refused to apply Pataula when the contracting agency
retained discretion to reject “any proposal” and “refuse to execute any contract at all” after making
its initial evaluations. Thus, Pataula is merely an application of the general rule in identifying

7—OPINION & ORDER

protected property interests: there, Georgia law cabined the state agency’s discretion, so the bidder
acquired a protected property interest. See Doyle, 606 F.3d at 673. But when a government
decisionmaker retains its broad authority—as the Miami contracting commission did in Circa after
it received scoring recommendations—there is no protected property interest. See Allen, 911 F.2d
at 370.
The RFP framework here echoes Circa, not Pataula. Here, Prosper maintained significant
discretion after the second evaluation committee assigned its scores. Under the RFP, Prosper could
still modify its evaluations, reject proposals, or cancel the RFP in its entirety, even after settling
on scores for the proposals. RFP at 11-12. And though Oregon law generally requires a contracting
agency to award public contracts to the highest-scoring proposer, ORS 279C.410(8), it allows
contracting agencies to modify that standard in their requests for proposals, ORS 279C.410(5).
Even mote, after officially announcing the highest-ranked proposer, Oregon law gives contracting
agencies discretion to terminate negotiations upon finding that “an impasse has been reached in
negotiations.” Jd. At bottom, the second evaluation committee’s assignment of scores did little to
reduce Prosper’s broad discretion under Oregon law and the RFP.
Because I find that neither Oregon law nor the RFP imposed significant restrictions on
Prosper’s decision-making, Northwest Infrastructure cannot show a protected property interest in
the Contract. Accordingly, I DISMISS Northwest Infrastructure’s Due Process claims with
prejudice.
WI. Claim Four: The Class of One Claim
Northwest Infrastructure’s fourth claim alleges Prosper discriminated against it as a class
of one. Compl. J] 87-94. Under this theory of equal protection, an individual acting under color
of law cannot treat individuals differently without a rational basis for doing so. Village of

8 — OPINION & ORDER

Willowbrook v. Olech, 528 U.S. 562, 564 (2000). Prosper moves to dismiss on several grounds,
including that class-of-one claims should fail as a matter of law in the context of public contract
bidding under Engquist v. Or. Dep’t of Agric., 553 U.S. 591 (2008). Northwest Infrastructure
argues Prosper misunderstands Engquist. Though I decline to make a categorical rule that class-
of-one claims cannot survive in the public contracting context, I agree with Prosper that Engquist
precludes a class-of-one claim in this case.
A. Engquist and Its Progeny
In Engquist, the Supreme Court concluded that “the class-of-one theory of equal protection
does not apply in the public employment context.” 553 U.S. at 598. The Court drew a distinction
between state action that involved merely the enforcement of objective standards and acts “which
by their nature involve discretionary decisionmaking based on a vast array of subjective,
individualized assessments.” Jd. at 603. The former, the Court explained, are classifications that
are expected to apply “‘without respect to persons.’” Jd. at 602 (quoting 28 U.S.C. § 453). But in
the latter category, disparate treatment is expected because “treating like individuals differently is
an accepted consequence of the discretion granted.” Jd. at 603. With this background in mind, the
Court determined that the state’s role as an employer fell into the latter category. Jd. at 604-06.
Specifically, the Court found employment decisions to be “often subjective and individualized,
resting on a wide array of factors that are difficult to articulate and quantify.” Jd. at 604.
Following the rationale of Engquist, several circuit courts have dismissed class-of-one
claims in contexts where the state actor has broad discretion. See Caesars Mass. Mgmt. Co. v.
Crosby, 778 F.3d 327 (1st Cir. 2015) (casino licensing); Flowers v. City of Minneapolis, 558 F.3d
794 (8th Cir. 2009) (police investigative decisions); United States v. Moore, 543 F.3d 891, 901
(7th Cir. 2008) (prosecutorial discretion); Douglas Asphalt Co. v. Qore, Inc., 541 F.3d 1269 (11th

OPINION & ORDER

Cir. 2008) (public contracting). In addressing the same question presented by this case, the
Eleventh Circuit noted “‘obvious’ similarities between government employees and government
contractors,” namely that “‘absent contractual, statutory, or constitutional restriction, the
government is entitled to terminate [employees and contractors] for no reason at all.’” Douglas
Asphalt, 541 F.3d at 1274 (quoting Bd. of Cnty. Comm’rs v. Umbehr, 518 U.S. 668, 674 (1996)).
When declining to extend the Engquist rationale to new settings, circuit courts generally
do so only after finding “objective constraints” limited state action in that context. Hanes v. Zurick,
578 F.3d 491, 495 (7th Cir. 2009) (police investigative decisions); see also Analytical Diagnostic
Labs, Inc. v. Kusel, 626 F.3d 135, 142-43 (2d Cir. 2010) (clinical laboratory licensing); but see
Franks v. Rubitschun, 312 F. App’x 764, 766 n.3 (6th Cir. 2009) (finding Engquist unlikely to
apply outside the context of public employment).
Though the circuit courts have interpreted Engquist with varying degrees of stringency,
compare Flowers, 558 F.3d 794 (finding Engquist precludes class-of-one claims based on police
investigatory decisions), with Hanes, 578 F.3d 491 (finding Engquist does not preclude class-of-
one claims based on police investigatory decisions), the cases form a spectrum when read together.
In a given context, the more discretion the government has, the less appropriate a class-of-one
claim will be. Conversely, when government discretion is constrained by law, a class-of-one claim
is more fitting.
B. Whether the RFP Precludes a Class-of-One Claim
With this sliding scale in mind, I am reluctant to hold—as the Eleventh Circuit did in
Douglas Asphalt—that class-of-one claims are unrecognizable in the public contracting context as
a matter of law. However, given the immense discretion Oregon law and the RFP gave to Prosper,
I find a class-of-one claim inappropriate here. Indeed, the RFP required Prosper to award the

10 — OPINION & ORDER

Contract “based on a vast array of subjective, individualized assessments,” such as the quality of
each bidder’s references, interview performance, and commitment to diversity. Engquist, 553 U.S.
at 603; RFP at 21-22. Moreover, in the same way the State of Oregon had discretion to terminate
its employees at will in Engquist, Prosper had the ability to terminate the RFP whenever it wanted.
Engquist, 553 U.S. at 606; RFP at 11-12. Though some public contracting regimes may limit
government discretion in such a way as to allow the formation of a class of one, this is not one of
them.
Northwest Infrastructure asserts that Prosper lost its discretion when the second evaluation
committee awarded Northwest Infrastructure with the highest score. Pl.’s Resp. to Def.’s Mot. to
Dismiss [ECF 9] at 30—31. In Northwest Infrastructure’s view, the RFP obligated Prosper to award
it the Contract as the highest-ranked proposer. See RFP at 22. Yet, as I explained previously,
Prosper had significant discretion in its operation of the RFP and maintained that discretion after
the second evaluation committee calculated its scores. See ORS 279C.410(5); RFP at 11-12, □□□
22.
I find that a class-of-one claim is a “poor fit” for the facts of this case. Engquist, 553 U.S.
at 605. As a result, 1 DISMISS Northwest Infrastructure’s class-of-one claim with prejudice.
IV. Claim Three: The § 1983 Racial Discrimination Claim
Prosper moves to dismiss Northwest Infrastructure’s 42 U.S.C. § 1983 equal protection
race discrimination claim. Prosper claims that Northwest Infrastructure has failed to allege proof
of discriminatory intent and that its claim therefore cannot stand. Prosper Mot. to Dismiss [ECF
7 at 21. Northwest Infrastructure asserts it has alleged sufficient proof to withstand a motion to
dismiss. Pl.’s Resp. to Prosper Mot. to Dismiss [ECF 9] at 21~25. I agree with Prosper.

11— OPINION & ORDER

To state a claim of disparate treatment—be it under the equal protection clause, Title VIL,
or § 1981—~a plaintiff must allege the defendant acted with discriminatory intent. Gay v. Waiters’
& Dairy Lunchmen’s Union, Loc. No. 30, 694 F.2d 531, 537 (9th Cir. 1982); Flores v. Pierce, 617
F.2d 1386, 1389 (9th Cir. 1980). A successful discrimination action must demonstrate a prima
facie case under the burden-shifting test established by McDonnell Douglas Corp. v. Green, 411
U.S. 792 (1973). But because McDonnell Douglas dictates an “evidentiary standard, not a pleading
requirement,” a plaintiff need not meet the McDonnell Douglas burden-shifting test at the motion-
to-dismiss stage. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 510 (2002) (“The prima facie case
under McDonnell Douglas...is an evidentiary standard, not a pleading requirement.”); Austin v.
Univ. of Or., 925 F.3d 1133, 1136-37 (9th Cir. 2019). Instead, a plaintiff need only make
“sufficient, nonconclusory allegations plausibly linking” the adverse action taken by defendant to
the plaintiff's protected class. Austin, 925 F.3d at 1138. Yet, as a “tool to assist plaintiffs,” I find
McDonnell Douglas helpful in determining whether Northwest Infrastructure has met its burden
to allege discriminatory intent. Costa v. Desert Palace, Inc., 299 F.3d 838, 855 (9th Cir. 2002) (en
banc), aff'd, 539 U.S. 90 (2003); see also PI.’s Resp. to Prosper Mot. to Dismiss [ECF 9] at 21-25
(asserting the complaint alleges facts that could support an inference of discrimination under
McDonnell Douglas).
Translating the McDonnell Douglas framework to the context of public contracting, a
bidder may establish a prima facie case of discrimination by showing (1) that it is owned by an
individual or group of a protected class; (2) it placed a qualifying bid on a public contract; (3) its
bid fit the decisionmaker’s criteria for selection better than the bid actually awarded the contract;
and (4) the decisionmaker awarded the contract to a different bidder owned by an individual or
group not of the plaintiffs protected class. See T & S Serv. Assocs., Inc. v. Crenson, 666 F.2d 722,

12 — OPINION & ORDER

725 (1st Cir. 1981) (crafting a modified McDonnell Douglas framework for the public bidding
context); see also Tex. Dep’t of Cmty. Affs. v. Burdine, 450 U.S. 248, 258-59 (1981) (holding a
Title VII defendant need not show it hired an individual more qualified than the plaintiff).
The complaint meets the first two elements. It alleges that Northwest Infrastructure has
been certified as a minority business, Compl. 4 6, and that Northwest Infrastructure made a
qualifying proposal under the RFP. Jd. 4 4, 27.
As to the third element, the complaint alleges that Northwest Infrastructure’s proposal fit
the RFP evaluation criteria better than NW Demolition’s because it received a higher score from
the second evaluation committee. Jd. 34. Though Northwest Infrastructure’s score was only one
point higher than NW Demolition’s, that single point nevertheless indicates that Northwest
Infrastructure’s proposal better fit the selection criteria than NW Demolition’s. In a discrimination
action, ““[t]he question is not whether [the plaintiff] in the abstract had better qualifications than
the other candidates,’” but rather “‘[t]he question is whether the other candidates are more
qualified with respect to the criteria that [the defendant] actually employs.’” Coleman v. Quaker
Oats Co., 232 F.3d 1271, 1285 (9th Cir. 2000) (quoting Cotton v. City of Alameda, 812 F.2d 1245,
1249 (9th Cir. 1987)). As alleged in the complaint, the proposal submitted by Northwest
Infrastructure met Prosper’s criteria better than any other proposal. Accordingly, the complaint has
met the third element of the McDonnell Douglas framework.
However, the complaint crumbles at the fourth element. The complaint alleges Northwest
Infrastructure’s primary competition—N W Demolition—lacked certification demonstrating it was
a “small and disadvantaged minority business.” Compl. § 25. But it does not allege that NW
Demolition was a white-owned business, or of any other class different from its own.

13 OPINION & ORDER

Prosper contends that Northwest Infrastructure also fails to meet this fourth element
because Prosper canceled the Contract before awarding it to NW Demolition. Reply to Prosper
Mot. to Dismiss [ECF 14] at 14-15. But the complaint alleges that Prosper canceled the Contract
in fear that it would have to award the Contract to Northwest Infrastructure if the administrative
challenges it mounted were successful. Compl. 55-56. Such a remedial measure would itself
support an inference of discrimination, indicating that Prosper would rather cancel the contract
entirely than award it to Northwest Infrastructure.
Nevertheless, because Northwest Infrastructure has failed to allege that NW Demolition is
not of its protected class, I find Northwest Infrastructure has not pled facts giving rise to an
inference of discrimination under an adapted McDonnell Douglas framework.
Nor do I find that Northwest Infrastructure has alleged facts that would support an
inference of discrimination through other means. Northwest Infrastructure contends that it has
done so, listing off several ways in which Prosper appeared to favor NW Demolition. Pl.’s Resp.
to Prosper Mot. to Dismiss [ECF 9] at 23—24. But it fails to point to any facts that would indicate
that race was the reason for such disparate treatment. Instead, Northwest Infrastructure points to a
quote from Kelly Haines, a member of the second evaluation committee who believes Prosper
acted with racial bias against Northwest Infrastructure. Compl. § 40. Yet this statement alone
cannot support an inference of discrimination—a witness’s subjective commentary on facts is not
itself a factual allegation.
Because Northwest Infrastructure has failed to make any nonconclusory allegations to
support an inference of discrimination, I DISMISS its § 1983 racial discrimination claim. But
because I find that Northwest Infrastructure could support such an inference with a clearer
allegation that NW Demolition was not of its protected class, the dismissal is without prejudice.

14— OPINION & ORDER

V. Claim Five: The § 1981 Claim
Northwest Infrastructure brings a claim under 42 U.S.C. § 1981, alleging Prosper impaired
its right to contract on the basis of race. Compl. {[] 95—110. However, like a § 1983 action, a § 1981
action, requires the plaintiff to establish an inference of intentional discrimination. Indeed, actions
brought under § 1981, § 1983, and Title VII all follow the same standards to prove intentional
discrimination. Gay, 694 F.2d at 537 (9th Cir. 1982); Cota v. Tucson Police Dep’t, 783 F. Supp.
458, 471 (D. Ariz. 1992). As such, my finding that Northwest Infrastructure had not alleged
intentional discrimination to support its § 1983 race discrimination claim precludes a finding of
intentional discrimination for its § 1981 claim. Consequently, I DISMISS Northwest
Infrastructure’s § 1981 claim without prejudice.
VI. Claim Six: The Intentional Interference Claim
Northwest Infrastructure’s final claim is that Individual Defendants intentionally interfered
with its contract with Prosper. Compl. 111-118. Under Oregon common law, a claim for
intentional interference with economic relations must allege “(1) the existence of a professional or
business relationship..., (2) intentional interference with that relationship, (3) by a third party, (4)
accomplished through improper means or for an improper purpose, (5) a causal effect between the
interference and damage to the economic relationship, and (6) damages.” McGanty v. Staudenraus,
901 P.2d 841, 844 (Or. 1995). Prosper moves to dismiss, contending Northwest Infrastructure has
failed to meet the third McGanty element, among others. Prosper Mot. to Dismiss [ECF 7] at 33—
38. Again, Prosper has the better argument.
The third element of an intentional interference with economic relations requires the
plaintiff to show that the alleged interference was perpetrated “by a third party.” McGanty, 901
P.2d at 844. When a plaintiff alleges defendants interfered with a contract between the defendants’

15—OPINION & ORDER

employer and the plaintiff, the defendants do not constitute a third party if their allegedly tortious
actions were within “the course and scope” of their employment. Jd. at 845-47.
Individual Defendants are all Prosper employees.2 Compl. §§ 10-14. Northwest
Infrastructure argues that Individual Defendants’ actions against it were not within the course and
scope of their employment because they “were motivated by the improper purpose of
discriminating against Northwest Infrastructure” rather than an “intention to serve their employer.”
Resp. to Prosper Mot. to Dismiss [ECF 9] at 32 (citing Compl. 113, 115).
Yet despite these bare conclusions, the complaint contains no allegations that could support
an inference that any of the Individual Defendants acted with an improper motive, let alone that
such animus was their sole motivation. See Boers v. Payline Sys., Inc., 918 P.2d 432, 435 (Or.
1996) (finding that corporate agents do not act within the scope of employment if their “sole
purpose is one that is not for the benefit of the corporation” (emphasis added)). Therefore, the
complaint fails to allege that Individual Defendants were third parties to a contract between
Northwest Infrastructure and Prosper. Accordingly, I DISMISS Northwest Infrastructure’s
intentional interference with economic relations claim without prejudice.
VU. City of Portland’s Motion to Dismiss
The City of Portland moves to dismiss itself from the case, arguing it was not involved in
any of the disputed facts. Portland Mot. to Dismiss [ECF 13] at 3. Northwest Infrastructure asserts
the City is liable under Monell v. Department of Social Services of City of New York, 436 U.S. 658
(1978). Pl.’s Resp. to Portland Mot. to Dismiss [ECF 18] at 3. Under Monell, a municipal entity

2. Northwest Infrastructure says that the Doe Defendants are entirely unknown and may be
individual or corporate entities. Compl. □ 14. However, because the Doe Defendants are listed as
defendants for only the intentional interference with economic relations claim, I consider them as
part of the Individual Defendants.

16 —OPINION & ORDER

may be held liable for a constitutional violation when it directs or ratifies an unconstitutional
action. Jd. at 690. Though such a theory may apply to the City, the complaint does not allege that
the City directed Prosper to discriminate against Northwest Infrastructure, or even that it approved
of such discrimination after-the-fact. See generally, Compl. Without more specific allegations
against the City, the complaint does not support a Monell claim. My granting of Prosper’s motion
to dismiss technically moots the City’s motion, but I instruct Northwest Infrastructure that any
future pleading must contain more specific allegations against the City or else it will be dismissed
as a defendant.
CONCLUSION
For the reasons given above, I GRANT Defendant Prosper Portland’s Motion to Dismiss
[ECF 7] and DISMISS Claims One, Two, and Four from Plaintiff Northwest Infrastructure LLC’s
complaint with prejudice. I DISMISS Claims Three, Five, and Six with leave to amend. I DENY
the City of Portland’s Motion to Dismiss [ECF 13] as moot. Northwest Infrastructure’s deadline
to file an amended complaint is January 12, 2022.

IT IS SO ORDERED.
DATED this day of December, 2021.
MAW (Me Wee
MICHAEL W. MOSMAN
United States District Judge

17—OPINION & ORDER

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10394267. Public record. Not legal advice.