H Group Construction, LLC v. City of Lafollette

01/28/2019

IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

October 16, 2018 Session

H GROUP CONSTRUCTION, LLC v. CITY OF LAFOLLETTE

Appeal from the Circuit Court for Campbell County

No. 15554 John D. McAfee, Judge

No. E2018-00478-COA-R9-CV

The unsucessful bidder for certain municipal construction projects filed this action

against the municipality, alleging, inter alia, that the municipality had violated its own

competitive bidding ordinances and engaged in unlawful restraint of trade. The trial

court granted summary judgment in favor of the municipality with regard to all claims

except the bidder’s claim for damages for violation of the municipal ordinances and

common law restraint of trade. In this interlocutory appeal, we have been asked to

determine whether a cause of action exists against a governmental entity for common law

restraint of trade and whether a bidder has a private right of action for damages against

the municipality for alleged violations of municipal bidding ordinances. We determine

that the municipality maintains sovereign immunity concerning any purported claim of

common law restraint of trade. We further determine that because a petition for writ of

certiorari would be the sole method of review of the City’s contract award, unsuccessful

bidders are not authorized to bring a private cause of action for monetary damages for an

alleged violation of the municipality’s competitive bidding ordinances. Accordingly, we

reverse the trial court’s denial of the municipality’s motion for summary judgment and

remand this matter to the trial court for entry of summary judgment in favor of the

municipality.

Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Circuit Court

Reversed; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL

SWINEY, C.J., and CHARLES D. SUSANO, JR., J., joined.

Benjamin K. Lauderback and Brian R. Bibb, Knoxville, Tennessee, for the appellant,

City of LaFollette.

David H. Dunaway, LaFollette, Tennessee, for the appellee, H Group Construction, LLC.

OPINION

I. Factual and Procedural Background

H Group Construction, LLC (“HGC”) filed a complaint in the Campbell County

Circuit Court (“trial court”) on October 22, 2013, against the City of LaFollette (the

“City”). HGC averred that in September 2012, the City had solicited and received bids

for construction and roofing projects for certain buildings owned by the City. HGC

submitted one bid for the entire project “based on information otherwise provided by [the

City] through its agents, servants, and employees.” According to HGC, it had ultimately

submitted the lowest total bid. HGC asserted that after advertising the projects for bid as

a “package,” the City subsequently decided to solicit separate bids for each of the three

building projects rather than accepting HGC’s bid.

HGC claimed that when the projects were separately rebid, the City awarded two

of the three projects to Dixie Roofing, Inc. (“Dixie”), despite the fact that “agents,

servants, and/or employees of [Dixie] had previously been employed as the construction

manager for these projects.” For the third project, involving the City Hall building, HGC

purportedly submitted a bid of $312,964.80 while Dixie submitted a bid of $467,013.46.

According to HGC, the project was awarded to Dixie even though HGC had submitted a

significantly lower bid. HGC thus asserted in its complaint that the City and Dixie had

entered into “an arrangement, contract, agreement, or a combination of arrangement

between them with a view to lessen or which tends to lessen full and free competition in

the State of Tennessee . . . in violation of T.C.A. Section 47-25-101 and T.C.A. Section

47-25-102.” HGC averred, inter alia, that the City’s actions constituted an illegal

restraint of trade and breach of contract. HGC also claimed that the City had violated the

Tennessee Consumer Protection Act (“TCPA”), the City’s charter, and Tennessee’s

Municipal Purchasing Law. HGC sought a declaratory judgment and an award of

damages.

On May 13, 2014, HGC amended its complaint to add specific allegations

concerning purported unfair and deceptive practices employed by the City in violation of

the TCPA. HGC also added assertions concerning the specific ordinances that it alleged

had been violated by the City. HGC further instituted a claim for punitive damages

pursuant to the TCPA.

The City subsequently filed an answer, denying all allegations of liability. The

City asserted several affirmative defenses, including applicability of the Tennessee

Governmental Tort Liability Act. Thereafter, on November 2, 2016, HGC filed a third

amended complaint, which contained additional allegations regarding the alleged

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unlawful actions taken by the City concerning the bids. The City again filed an answer

denying HGC’s allegations of wrongdoing.

On August 31, 2017, the City filed a motion for summary judgment, positing that

there were no genuine disputes of material fact and that the City was entitled to judgment

as a matter of law. The City argued that no private right of action existed for monetary

damages for violation of Tennessee’s Municipal Purchasing Law or the City’s municipal

ordinances. The City similarly argued that no cause of action existed in Tennessee

against a governmental entity for common law restraint of trade. The City further

contended that the parties did not have a contract, such that there could be no breach of

contract, and that no promises were made or breached by the City. Finally, the City

asserted governmental immunity as a defense.1 The City attached to the motion an

affidavit from the former City Administrator, Jimmy Jeffries, as well as minutes from

various LaFollette City Council meetings. The City also attached a statement of

undisputed material facts.

On December 8, 2017, HGC filed a response to the City’s summary judgment

motion, as well as a response to the statement of undisputed material facts. The trial

court conducted a hearing on the motion on December 14, 2017. On January 18, 2018,

the trial court entered an order granting the motion in part and denying it in part. The

court noted that HGC’s remaining claims consisted of: (1) common law restraint of

trade, (2) violations of the municipal purchasing statutes, (3) violations of the City’s

competitive bidding and purchasing ordinances, (4) breach of contract, (5) promissory

estoppel, and (6) a request for equitable or declaratory relief.2

By its order, the trial court granted summary judgment in favor of the City with

regard to HGC’s claims of promissory estoppel, breach of contract, equitable or

declaratory relief, and violations of Tennessee’s Municipal Purchasing Law. The court

denied summary judgment, however, concerning HGC’s claims of common law restraint

of trade and violation of the City’s own ordinances related to the competitive bidding

process. The court specifically found that “common law restraint of trade is a viable

claim that can be raised against governmental entities in the State of Tennessee.” The

court further found:

1

In its memorandum submitted in support of the motion for summary judgment, the City also claimed

that HGC had performed a previous roofing job for the City and that its work had been “irresponsible and

unprofessional.” The City thus argued that it had no obligation to accept HGC’s bid, even it if

represented the lowest price, because HGC was viewed as an “unreliable” contractor that did not comply

with the project specifications.

2

The parties do not dispute that the trial court had previously dismissed some of HGC’s original claims

although no order of dismissal appears in the appellate record.

3

[T]he [City’s] arguments that governmental entities cannot be sued under

the common law for violations of restraint of trade are without merit. This

Court acknowledges it has previously dismissed [HGC’s] Tennessee Trade

Practices Act claim against the [City] at an earlier stage of this litigation.

However, this Court now holds that governmental entities in the State of

Tennessee can be sued for restraint of trade violations under the common

law and that, accordingly, [HGC’s] lawsuit under that theory may proceed

forward. The Court further finds that the veil of immunity does not extend

itself to cover governmental entities for violations of restraint of trade

under the common law. This Court further finds that even though the

bidding process was for roofing services and not goods, a cause of action

exists in Tennessee for a restraint of trade of services under a common law

theory of restraint of trade.

The trial court also found that a “private cause of action exists to allow [HGC] to

proceed in its claim against the City for the City’s purported violations of its own

competitive bidding ordinances.” The court rejected the City’s argument that the

appropriate remedy would be a petition for a writ of certiorari review. The court

therefore directed that the remaining claims would proceed to trial, “that being whether

the [City] restrained trade under common law principles against [HGC] and/or whether

the [City] committed an actionable offense against [HGC] by violating its own

competitive bidding purchasing ordinances and whether a remedy exists for [HGC] to

recover under such a claim.”

On February 13, 2018, following entry of the trial court’s order denying summary

judgment with regard to certain claims, the City filed a motion seeking permission to file

an interlocutory appeal with this Court. The trial court granted permission for an

interlocutory appeal by order dated March 9, 2018, certifying the issues for appeal as

those listed below. This Court similarly granted permission for an interlocutory appeal

on May 17, 2018.

II. Issues Presented

As this Court has previously explained, “[f]or interlocutory appeals, the only

issues that can be raised are those certified in the trial court’s order granting permission

to seek an interlocutory appeal and in the appellate court’s order granting the

interlocutory appeal.” Heatherly v. Merrimack Mut. Fire Ins. Co., 43 S.W.3d 911, 914

(Tenn. Ct. App. 2000). Therefore, this appeal presents the following issues for our

review, as certified by the trial court:

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1. Whether a cause of action for the common law tort of restraint of

trade exists against a governmental entity in Tennessee, and if so,

whether that cause of action can be maintained against a

governmental entity in a case dealing with the provision of services

rather than goods.

2. Whether the ordinances governing competitive bidding for the City

of LaFollette authorize unsuccessful bidders to bring a private right

of action for money damages for violation of their terms and/or

whether a petition for a writ of certiorari review is the sole remedy.

III. Standard of Review

The grant or denial of a motion for summary judgment is a matter of law;

therefore, our standard of review is de novo with no presumption of correctness. See Rye

v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250 (Tenn. 2015); Dick

Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671 (Tenn. 2013)

(citing Kinsler v. Berkline, LLC, 320 S.W.3d 796, 799 (Tenn. 2010)). As such, this Court

must “make a fresh determination of whether the requirements of Rule 56 of the

Tennessee Rules of Civil Procedure have been satisfied.” Rye, 477 S.W.3d at 250. As

our Supreme Court has explained concerning the requirements for a movant to prevail on

a motion for summary judgment pursuant to Tennessee Rule of Civil Procedure 56:

We reiterate that a moving party seeking summary judgment by attacking

the nonmoving party’s evidence must do more than make a conclusory

assertion that summary judgment is appropriate on this basis. Rather,

Tennessee Rule 56.03 requires the moving party to support its motion with

“a separate concise statement of material facts as to which the moving party

contends there is no genuine issue for trial.” Tenn. R. Civ. P. 56.03. “Each

fact is to be set forth in a separate, numbered paragraph and supported by a

specific citation to the record.” Id. When such a motion is made, any party

opposing summary judgment must file a response to each fact set forth by

the movant in the manner provided in Tennessee Rule 56.03. “[W]hen a

motion for summary judgment is made [and] . . . supported as provided in

[Tennessee Rule 56],” to survive summary judgment, the nonmoving party

“may not rest upon the mere allegations or denials of [its] pleading,” but

must respond, and by affidavits or one of the other means provided in

Tennessee Rule 56, “set forth specific facts” at the summary judgment

stage “showing that there is a genuine issue for trial.” Tenn. R. Civ. P.

56.06. The nonmoving party “must do more than simply show that there is

some metaphysical doubt as to the material facts.” Matsushita Elec. Indus.

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Co., 475 U.S. at 586, 106 S. Ct. 1348. The nonmoving party must

demonstrate the existence of specific facts in the record which could lead a

rational trier of fact to find in favor of the nonmoving party. If a summary

judgment motion is filed before adequate time for discovery has been

provided, the nonmoving party may seek a continuance to engage in

additional discovery as provided in Tennessee Rule 56.07. However, after

adequate time for discovery has been provided, summary judgment should

be granted if the nonmoving party’s evidence at the summary judgment

stage is insufficient to establish the existence of a genuine issue of material

fact for trial. Tenn. R. Civ. P. 56.04, 56.06. The focus is on the evidence

the nonmoving party comes forward with at the summary judgment stage,

not on hypothetical evidence that theoretically could be adduced, despite

the passage of discovery deadlines, at a future trial.

Rye, 477 S.W.3d at 264-65 (emphasis in original). Pursuant to Tennessee Rule of Civil

Procedure 56.04, the trial court must “state the legal grounds upon which the court denies

or grants the motion” for summary judgment, and our Supreme Court has instructed that

the trial court must state these grounds “before it invites or requests the prevailing party

to draft a proposed order.” See Smith v. UHS of Lakeside, Inc., 439 S.W.3d 303, 316

(Tenn. 2014).

IV. Common Law Restraint of Trade

The City argues that the trial court erred by denying its motion for summary

judgment concerning HGC’s claim of common law restraint of trade. The City asserts

that Tennessee does not recognize such a claim. HGC posits that a cause of action for

common law restraint of trade does exist and that Tennessee has recognized this type of

claim for over one hundred years. Without making a determination regarding whether a

cause of action for common law restraint of trade exists in Tennessee, we determine the

dispositive issue to be whether the City maintains sovereign immunity from such a claim

in any event.

The first question certified by the trial court asks whether a “cause of action for

the common law tort of restraint of trade exists against a governmental entity in

Tennessee” (emphasis added). Governmental entities in Tennessee possess sovereign

immunity from suit except “in such manner and in such courts as the Legislature may by

law direct.” See Tenn. Const. art. I, § 17; see also Davidson v. Lewis Bros. Bakery, 227

S.W.3d 17, 19 (Tenn. 2007); Metro. Gov’t of Nashville & Davidson Cty. v. Allen, 415

S.W.2d 632, 635 (Tenn. 1967).

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The trial court found that “the veil of immunity does not extend itself to cover

governmental entities for violations of restraint of trade under the common law.” We

respectfully disagree. As this Court has previously explained:

The doctrine of sovereign immunity has been part of the common

law of Tennessee for well over a century and provides that suit may not be

brought against a governmental entity unless that governmental entity has

consented to be sued. Hawks v. City of Westmoreland, 960 S.W.2d 10, 14

(Tenn. 1997) (citing Lucius v. City of Memphis, 925 S.W.2d 522, 525

(Tenn. 1996)). The doctrine originated in feudal notions of the divine right

of kings, as the king “‘was at the very pinnacle of the power structure and

was answerable to no court[.]’” Id. (quoting Cooper v. Rutherford County,

531 S.W.2d 783, 786 (Tenn. 1975) (Henry, J., dissenting)). The

longstanding rule of sovereign immunity is embodied in the Tennessee

Constitution, which provides, “Suits may be brought against the State in

such manner and in such courts as the Legislature may by law direct.”

Tenn. Const., Art. I, § 17. In addition, Tennessee Code Annotated section

20-13-102(a) provides, “No court in the state shall have any power,

jurisdiction or authority to entertain any suit against the state . . . with a

view to reach the state, its treasury, funds or property, and all such suits

shall be dismissed[.]” In the context of sovereign immunity, “‘[t]he State’

includes ‘the departments, commissions, boards, institutions and

municipalities of the State.’” Davidson v. Lewis Bros. Bakery, 227 S.W.3d

17, 19 (Tenn. 2007) (quoting Metro. Gov’t of Nashville & Davidson County

v. Allen, 220 Tenn. 222, 415 S.W.2d 632, 635 (Tenn. 1967)) (emphasis

added).

“Under both the common law doctrine and the constitutional

provision, ‘governmental entities may prescribe the terms and conditions

under which they consent to be sued, . . . including when, in what forum,

and in what manner suit may be brought.’” Sneed v. City of Red Bank,

Tenn., 459 S.W.3d 17, 23 (Tenn. 2014) (quoting Cruse v. City of Columbia,

922 S.W.2d 492, 495 (Tenn. 1996)). Our state constitution specifically

empowers the legislature—not the judiciary—to waive the protections of

sovereign immunity. Hughes v. Metro. Gov’t of Nashville & Davidson

Cnty., 340 S.W.3d 352, 360 (Tenn. 2011); Mullins v. State, 320 S.W.3d

273, 283 (Tenn. 2010). “The General Assembly undoubtedly has control

over the ‘manner . . . and courts’ in which suits against governmental

entities may be pursued.” Estate of Bell v. Shelby Cnty. Health Care Corp.,

318 S.W.3d 823, 837 (Tenn. 2010).

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The “traditional construction” of Tennessee’s constitutional

provision regarding sovereign immunity “is that suits cannot be brought

against the State unless explicitly authorized by statute.” Colonial Pipeline

Co. v. Morgan, 263 S.W.3d 827, 849 (Tenn. 2008) (emphasis added). In

other words, “‘legislation authorizing suits against the state must provide

for the state’s consent in ‘plain, clear, and unmistakable’ terms.’” Mullins,

320 S.W.3d at 283 (quoting Northland Ins. Co. v. State, 33 S.W.3d 727,

731 (Tenn. 2000)). Courts will not find a waiver of sovereign immunity

“‘unless there is a statute clearly and unmistakably disclosing an intent

upon the part of the Legislature to permit such litigation.’” Davidson, 227

S.W.3d at 19 (quoting Scates v. Bd. of Comm’rs of Union City, 196 Tenn.

274, 265 S.W.2d 563, 565 (1954)).

Bratcher v. Hubler, 508 S.W.3d 206, 208-09 (Tenn. Ct. App. 2015).

One example of such a statute is the Governmental Tort Liability Act (“GTLA”),

which was codified in 1973 and governs tort claims against cities and other local

government agencies, providing for specific circumstances when sovereign immunity is

removed. See Tenn. Code Ann. §§ 29-20-201 to -408 (2012 & Supp. 2018); Lucius v.

City of Memphis, 925 S.W.2d 522, 525 (Tenn. 1996). As our Supreme Court has

previously explained:

The GTLA reaffirms, and actually extends, the doctrine of local

governmental immunity by abolishing the common law distinction between

governmental and proprietary functions. The relevant portion of the GTLA

broadly declares:

Except as may be otherwise provided in this chapter, all

governmental entities shall be immune from suit for any

injury which may result from the activities of such

governmental entities wherein such governmental entities are

engaged in the exercise and discharge of any of their

functions, governmental or proprietary.

Tenn. Code Ann. § 29-20-201(a) (2012). The GTLA then removes

governmental immunity in limited circumstances for certain enumerated

injuries. Id. § 29-20-202(a) (immunity removed for injuries resulting from

the negligent operation of a motor vehicle or other equipment by an

employee in the scope of employment); id. § 29-20-203(a) (immunity

removed for injuries caused by a defective, unsafe, or dangerous condition

on a public roadway or sidewalk); id. § 29-20-204(a) (immunity removed

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for injuries caused by dangerous or defective conditions associated with

public structures or improvements); id. § 29-20-205 (immunity removed for

injuries caused by the negligence of governmental employees with certain

exceptions); see also Lucius, 925 S.W.2d at 525 (discussing the GTLA

generally); Cruse, 922 S.W.2d at 496 (same).

Sneed v. City of Red Bank, 459 S.W.3d 17, 25 (Tenn. 2014) (other internal citations

omitted).

Notably, the GTLA does not remove governmental immunity for claims based on

common law restraint of trade. In fact, this Court has been unable to locate any statutory

provision that removes sovereign immunity for such a claim. Therefore, in the absence

of a legislative enactment “clearly and unmistakably disclosing an intent upon the part of

the Legislature to permit such litigation,” sovereign immunity remains. Bratcher, 508

S.W.3d at 208-09 (quoting Davidson, 227 S.W.3d at 19).

HGC contends that sovereign immunity does not shield the City from liability in

this matter because “statutes and ordinances requiring competitive bidding impose upon

the government an implied obligation to consider all bids honestly and fairly as a matter

of contract law, not as a matter of tort law.” We disagree with HGC’s contention.

HGC’s purported claim of common law restraint of trade, if such a cause of action exists,

would sound in tort rather than contract law because by asserting such a claim, HGC

sought damages for the breach of a duty independent of any contract between the parties.

As this Court has previously explained:

Tort is defined as a private or civil wrong or injury; a wrong

independent of contract; a violation of a duty imposed by general law or

otherwise upon all persons occupying the relation to each other involved in

a given transaction; a violation of some duty owing to plaintiff, and

generally such duty must arise by operation of law and not by mere

agreement of the parties. Black’s Law Dictionary, Fourth Edition, p. 1660.

Since a tort is defined as a civil wrong independent of contract, it

may be accurately stated that all civil wrongs are either contractual or

tortious.

Burris v. Hosp. Corp. of Am., 773 S.W.2d 932, 935 (Tenn. Ct. App. 1989).

One of the many claims asserted by HGC in this action was a breach of contract

claim. The trial court properly granted summary judgment to the City concerning HGC’s

breach of contract claim based upon its finding that the parties herein did not have a valid

9

contract that could be breached. We agree with the trial court’s determination that no

contract existed between the parties and therefore conclude that any claim based in

contract law has been properly addressed. HGC cannot revive such a claim by

attempting to frame its purported claim of common law restraint of trade as a matter of

“contract law.”

The City retains sovereign immunity against tort claims for which immunity has

not been removed by the legislature. Accordingly, we reverse the trial court’s denial of

summary judgment in favor of the City concerning any purported claim of common law

restraint of trade.

V. Private Cause of Action for Violation of City Ordinances

The trial court found that a private cause of action existed that would allow HGC

to sue the City, seeking damages for violations of the City’s own competitive bidding

ordinances. In its January 18, 2018 order, the trial court stated in pertinent part:

The Court further finds that a private cause of action exists to allow

[HGC] to proceed in its claim against the City for the City’s purported

violations of its own competitive bidding ordinances. While the Court

withholds ruling on whether those ordinances actually were violated or

whether they establish a remedy for [HGC] due to a violation of those same

ordinances, the Court does find that a private right of action exists for an

aggrieved bidder who did not receive a bid if the City’s competitive bidding

ordinances were violated. This Court finds that the [City’s] argument that

the appropriate remedy available to [HGC] for a failure of the City to

follow its own ordinances would be a petition for writ of certiorari review

is unavailing. This Court holds and finds that while a petition for writ of

certiorari review may be an adequate remedy, a bidder may also sue a

governmental entity in the State of Tennessee for damages under a separate

and private cause of action due to a city’s failure to follow its ordinances.

The City argues that no such private cause of action exists and that the only review of the

City’s decision available to HGC would be by writ of certiorari. Upon our careful review

of this issue, we agree with the City.

As this Court has previously explained with regard to the question of whether

municipal ordinances create a private right of action for damages:

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The Court can find no better analysis than that provided by U.S. District

Court Judge Bernice Donald, who considered the same issue and wrote the

following:

Under Tennessee law, when a plaintiff asserts an

injury that involves an alleged statutory violation, it is

incumbent upon the court to determine whether the statute in

question provides the plaintiff with a cause of action. Petty v.

Daimler/Chrysler Corp., 91 S.W.3d 765, 768 (Tenn. Ct. App.

2002). In other words, the mere fact that a statute has been

allegedly violated and some person harmed, does not

automatically give rise to a private cause of action for

monetary relief in favor of that person. Local 3-689, Oil,

Chemical & Atomic Int’l Union v. Martin Marietta Energy

Sys., 77 F.3d 131, 136 (6th Cir. 1996). In construing the

statutory section at issue, the Court is “not privileged to create

[a private right of action] under the guise of liberal

interpretation of the statute.” Premium Finance Corp. of Am.

v. Crump Ins. Serv. of Memphis, Inc., 978 S.W.2d 91, 93

(Tenn. 1998). Rather, it is the legislative body that has the

authority to create legal rights and interests and no right of

action can be brought until there is legislative authority for

that right of action. Id.; Hogan v. McDaniel, 204 Tenn. 235,

319 S.W.2d 221, 225 (Tenn. 1958). As a result, the burden of

proving the existence of a private right of action lies with the

plaintiff. Premium Finance, 978 S.W.2d at 93 (citing Ergon,

Inc. v. Amoco Oil Co., 966 F. Supp. 577, 585 (W.D. Tenn.

1997)).

Relying on Ergon, this Court noted recently that

Tennessee courts have utilized the standard set forth by the

United States Supreme Court to determine whether a statute

implies a private right of action. Matthews v. Storgion, 335 F.

Supp. 2d 878, 890 (W.D. Tenn. 2004). In that case, the Court

observed that “[t]he touchstone of the analysis is legislative

intent: whether the legislature intended in passing the statute

to provide a private right of action.” Id. (quoting Ergon, 966

F. Supp. at 583). The factors to consider include whether “1)

the plaintiff is a member of the class intended to benefit from

the statute, 2) there is any indication of a legislative intent to

create a private right of action under the statute, and 3) a

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private cause of action is consistent with the underlying

purposes of the legislation.” Id.

Under the above test, the court must first look to the

language of the statutory section for guidance. Id. (citing

Ergon, 966 F. Supp. at 584). As stated by the Court in Ergon,

“unless the legislative intent to create a private right of action

‘can be inferred from the language of the statute, the statutory

structure, or some other source, the essential predicate for

implication of a private remedy simply does not exist.’”

Ergon, 966 F. Supp. at 584 (quoting Thompson v. Thompson,

484 U.S. 174, 179, 108 S. Ct. 513, 98 L. Ed. 2d 512, (1988)).

In the present case, neither the Charter nor the City Ordinance

provisions at issue explicitly provide for a private cause of

action for individual monetary relief or retroactive

promotions for an alleged violation of these provisions.

There is no enforcement mechanism specifically set forth in §

250.1 of the Charter or § 9-3 of the City Ordinances. See

Premium Finance, 978 S.W.2d 93 (finding no private right of

action, in part, where the statute at issue imposed a specific,

mandatory duty but provided no enforcement mechanism for

the duty).

Additionally, the respective Articles in which these

sections exist do not provide for any method of enforcing the

provisions § 250.1 of the Charter or § 9-3 of the City

Ordinances. See Charter, Art. 34; Memphis Code of

Ordinances, Art. 9. Finally, there is nothing explicit or

implicit in either provision that indicates any intent to provide

a private right of action for monetary relief or retroactive

promotions to enforce these provisions. Cf. Pratt v. Smart

Corp., 968 S.W.2d 868, 872-73 (Tenn. Ct. App. 1997)

(finding that the Medical Records Act authorized a private

cause of action by reason of the fact that it allowed for

recovery of “actual damages” for willful or reckless

violations). Thus, the language of the Charter and City

Ordinance provisions does not support a private right of

action for monetary relief or retroactive promotions.

Accordingly, although the Court has found Defendant

to be in violation of the City Charter and Ordinances in its

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administration of the 2000 process, the Court finds that the

remedies Plaintiffs seek are unavailable under the city laws.

Johnson v. City of Memphis, Nos. 00-2608 DP, 04-2017 DP, 04-2013 DA,

2006 WL 3827481, at *17-18 (W.D. Tenn. Dec. 28, 2006).

Gillespie v. City of Memphis, No. W2007-01786-COA-R3-CV, 2008 WL 2331027, at *9-

11 (Tenn. Ct. App. June 5, 2008).

The ordinances at issue herein provide a procedure for the solicitation and

acceptance of competitive bids for the City’s purchase of goods and services.3 The

ordinances further provide guidelines for the City’s determination of the “lowest

responsible bidder,” which include consideration of the bidder’s experience and the

“quality of performance of previous contracts or services.” The ordinances do not

explicitly provide for a private cause of action for individual monetary damages, and no

legislative intent to create such a cause of action can be inferred from the language used.

See id. at *10. Furthermore, although the ordinances impose a duty on the City to solicit

and consider competitive bids according to the provided guidelines, the ordinances

provide no enforcement mechanism for that duty. See id. We accordingly conclude that

the municipal ordinances at issue do not provide HGC with a private right of action for

monetary damages for an alleged violation of the ordinances’ provisions.

The City argues that HGC’s sole remedy for any alleged violation of the

competitive bidding ordinances was via a writ of certiorari. The issue of whether a writ

of certiorari is the exclusive remedy for an allegation of violation of competitive bidding

ordinances has been previously addressed by this Court in Duracap Asphalt Paving Co.

Inc. v. City of Oak Ridge, No. E2017-02414-COA-R3-CV, 2018 WL 4236501, at *3

(Tenn. Ct. App. Sept. 6, 2018), wherein this Court explained:

The appropriate mechanism to challenge the action of a

governmental board or body depends on the nature of the function that is at

issue. The essential question posed is “whether the inferior tribunal, board

or officer exercised a legislative or an administrative function.” McCallen

v. City of Memphis, 786 S.W.2d 633, 638 (Tenn. 1990) (citing Fallin v.

Knox Cnty. Bd. of Comm’rs, 656 S.W.2d 338, 341 (Tenn. 1983)). As this

3

Although the full texts of the ordinances do not appear in the record, they have been submitted to this

Court as an appendix to the City’s brief, and the City has asked this Court to take judicial notice thereof.

HGC made no objection to our consideration of the ordinances in its responsive brief and, in fact, also

attached a copy of the purchasing ordinances. Accordingly, this Court may take judicial knowledge of

and review such duly enacted ordinances. See Tenn. R. Evid. 202(b)(3); Davis Grp. (MC), Inc. v. Metro.

Gov’t of Nashville & Davidson Cty., 912 S.W.2d 178, 181 (Tenn. Ct. App. 1995).

13

Court has explained, “[i]n the former case, an action for declaratory

judgment is appropriate, while in the latter case, a petition for common law

writ of certiorari is the proper method by which to challenge an

administrative decision.” Kiger v. Nixon, 1996 WL 512031, at *5 (Tenn.

Ct. App. Sept. 11, 1996) (citing McCallen, 786 S.W.2d at 639).

Distinguishing a legislative action from an administrative action[FN] can be

done by focusing on whether the action taken makes new law or executes

one already in existence. McCallen, 786 S.W.2d at 639 (citation omitted).

“In order to qualify as an administrative, judicial, or quasi-judicial act, the

discretionary authority of the government body must be exercised within

existing standards and guidelines.” Id.

[FN]

The term “administrative” is frequently used interchangeably in

case law with “judicial” or “quasi-judicial.” McCallen, 786 S.W.2d at 638

(citation omitted).

In Duracap, the plaintiff asphalt company had filed suit against the City of Oak

Ridge following the plaintiff’s unsuccessful bid on a street resurfacing project. See

Duracap, 2018 WL 4236501, at *1. The plaintiff sought declaratory relief, damages, and

certiorari review. Id. The trial court treated the plaintiff’s complaint as a petition for

common law writ of certiorari, determining that such was the proper method for review

of the city’s decision concerning the bid award. Id. at *2. The trial court accordingly

dismissed all other claims invoking the original jurisdiction of the court as being

improperly joined to the petition for writ of certiorari. Id. The Duracap trial court

subsequently dismissed the petition for writ of certiorari due to the plaintiff’s failure to

comply with the statutory and constitutional verification requirements concerning a writ

of certiorari. Id.

On appeal to this Court, the Duracap plaintiff asserted that the trial court had erred

by dismissing the plaintiff’s claims for declaratory and equitable relief upon concluding

that the only relief for any alleged violations of the city’s competitive bidding ordinances

would be through a common law writ of certiorari. Id. This Court determined that

because the decision to award the project had been made “within the confines of existing

law in light of pre-defined standards” (the city’s municipal code) and therefore executed

law already in existence, the decision was properly characterized as administrative or

quasi-judicial rather than legislative.4 Id. at *4. As such, this Court determined that

“common law certiorari was the proper vehicle for review.” Id. at *8. The Duracap

Court affirmed the trial court’s dismissal of the plaintiff’s additional claims. Id.

4

As previously explained, a legislative action is one that “makes new law.” See Duracap, 2018 WL

4236501, at *3.

14

In the case at bar, it is undisputed that the City had a municipal code in place that

defined the standards by which bids would be submitted, reviewed, and accepted. In fact,

HGC relies upon the existence of the City’s competitive bidding ordinances for its

contention that a private right of action exists for an alleged violation thereof. The

difficulty with HGC’s claim, however, is that because the City’s decision was made

“within the confines of existing law in light of pre-defined standards” (the City’s

ordinances concerning competitive bidding) and therefore executed law already in

existence, the decision must be properly characterized as administrative or quasi-judicial

rather than legislative. See Duracap, 2018 WL 4236501, at *4. As such, pursuant to this

Court’s decision in Duracap, as well as previous decisions, a common law writ of

certiorari is the only method of review of such a decision. See id. at *8; Johnson v.

Metro. Gov’t for Nashville Davidson Cty., 54 S.W.3d 772, 774 (Tenn. Ct. App. 2001)

(explaining that the common law writ of certiorari “is the only mechanism by which a

court may review” administrative decisions); Anderson v. Metro. Dev. & Hous. Agency,

No. M2012-01789-COA-R3-CV, 2013 WL 3941079, at *5 (Tenn. Ct. App. July 26,

2013) (determining that a common law writ of certiorari was the only method to

“adjudicate claims brought by parties aggrieved by the orders or judgments of public

bodies.”). See also State v. Farris, No. W2017-00438-COA-R3-CV, 2018 WL 1225746,

at *8 (Tenn. Ct. App. Mar. 9, 2018), perm. app. denied (Tenn. July 19, 2018) (“[W]hen a

board is performing an administrative or quasi-judicial function, review under the

common law writ of certiorari is appropriate.”).

HGC relies on this Court’s decision in Browning-Ferris Indus. of Tenn., Inc. v.

City of Oak Ridge, 644 S.W.2d 400, 402 (Tenn. Ct. App. 1982), for its assertion that a

private right of action exists against a governmental entity for an alleged violation of its

competitive bidding ordinances. However, as this Court explained in Duracap:

[W]e have no quarrel with the holding in [Browning-Ferris] that an

aggrieved low bidder had standing to sue the City for its failure to comply

with competitive bidding requirements. However, we would note that the

Browning-Ferris court did not contemplate the propriety, or lack thereof, of

review by writ of certiorari, as both the Anderson and Duckworth decisions

acknowledge. See Duckworth Pathology Grp., Inc. [v. Reg’l Med. Center

at Memphis], [No. W2012-02607-COA-R3-CV,] 2014 WL 1514602, at *7

[(Tenn. Ct. App. Apr. 17, 2014)] (noting that the issue before this Court in

Browning-Ferris was “limited to standing, and there was no discussion of

subject matter jurisdiction or the possibility of proceeding via a petition for

certiorari”); Anderson, 2013 WL 3941079, at *4 n.2 (“Our opinion in

Browning-Ferris contains no indication that the question of jurisdiction was

ever raised at any point in the course of that litigation.”). Certainly,

therefore, Browning-Ferris does not stand for the proposition that

15

challenges to this particular municipality’s competitive bid processes must

be pursued by declaratory judgment as opposed to through a writ of

certiorari. That particular question was not specifically entertained.

Duracap, 2018 WL 4236501, at *4. We agree with the Duracap Court’s analysis and

conclude that the Browning-Ferris decision, although providing that an unsuccessful

bidder had standing to sue the City for its alleged failure to comply with competitive

bidding requirements, “did not contemplate the propriety, or lack thereof, of review by

writ of certiorari.” See id.; see also Duckworth Pathology Grp., Inc. v. Reg’l Med. Ctr. at

Memphis, No. W2012-02607-COA-R3-CV, 2014 WL 1514602, at *7 (Tenn. Ct. App.

Apr. 17, 2014); Anderson, 2013 WL 3941079, at *4 n.2.

HGC also relies on this Court’s opinion in Metropolitan Air Research Testing

Authority, Inc. v. Metropolitan Government of Nashville & Davidson County, 842

S.W.2d 611, 617-18 (Tenn. Ct. App. 1992), wherein this Court similarly explained that

an unsuccessful bidder would have standing to bring an action against a city for an

alleged violation of the city’s competitive bidding requirements. In Metropolitan Air, the

plaintiff was an unsuccessful bidder for a contract for the city’s vehicle inspection

program. Id. at 614. The bidder filed suit against the city, asserting that the contract

award should be set aside because the successful bidder’s proposal did not meet the bid

specifications and because the city’s selection process violated the Sunshine Law. Id.

The trial court dismissed the bidder’s claims, and the bidder appealed. Id.

On appeal in Metropolitan Air, this Court held that the bidder had standing to

assert both a Sunshine Law claim and also a claim based on the alleged violation of the

city’s competitive bidding requirements. Id. at 615. With regard to the claim alleging a

violation of the city’s competitive bidding ordinances, this Court explained:

For many years, the courts held that unsuccessful bidders did not

have standing to challenge the award of a public contract because they had

no right to contract with the government. That view is now giving way to a

growing number of decisions permitting suits for declaratory or equitable

relief by prospective or disappointed bidders who have been aggrieved by a

refusal to award a public contract to the lowest responsible qualified bidder.

Id. at 616 (internal citations omitted). This Court further elucidated:

[A]n increasing number of courts recognize that unsuccessful bidders have

standing to vindicate the public’s interest in competitive bidding. However,

in the absence of a statute, an unsuccessful bidder’s standing extends only

16

to equitable or declaratory relief to ensure enforcement of required

competitive bidding procedures.

Id. at 617 (internal citations omitted) (emphasis added). We accordingly conclude that

although this Court in Metropolitan Air, as in Browning-Ferris, did not analyze the

specific question of whether the sole remedy for an alleged violation of the city’s bidding

ordinances was via common law writ of certiorari,5 the Metropolitan Air Court did

clearly indicate that in the absence of a statute, an unsuccessful bidder’s standing extends

only to “equitable or declaratory relief to ensure enforcement of required competitive

bidding procedures.” See id.

In the instant matter, the trial court dismissed HGC’s claim for equitable or

declaratory relief, finding such claim to be non-justiciable because no equitable or

declaratory relief was available to HGC. The propriety of that action is not before us for

interlocutory review. The issue presented to this Court is “whether the ordinances

governing competitive bidding for the City authorize unsuccessful bidders to bring a

private right of action for money damages for violation of their terms and/or whether a

petition for a writ of certiorari review is the sole remedy.” In accordance with the

precedent analyzed above, we determine that unsuccessful bidders are not authorized by

the municipal ordinances to bring a private cause of action for monetary damages for an

alleged violation of the City’s competitive bidding ordinances and that a petition for writ

of certiorari is the sole method of review of such an alleged violation. We therefore

reverse the trial court’s denial of summary judgment to the City on this issue.

VI. Conclusion

For the foregoing reasons, we reverse the trial court’s denial of the City’s

summary judgment motion. We remand this matter to the trial court for entry of

summary judgment in favor of the City concerning HGC’s claims. Costs on appeal are

taxed to the appellee, H Group Construction, LLC.

________________________________

THOMAS R. FRIERSON, II, JUDGE

5

The action in Metropolitan Air was filed on August 8, 1990, following the city’s award of the contract to

another bidder on June 26, 1990. See Metro. Air, 842 S.W.2d at 615. Therefore, the action was filed

within sixty days as required for a writ of certiorari. See Tenn. Code Ann. § 27-9-102 (2017). However,

the opinion does not indicate whether writ of certiorari review was sought. See generally Metro. Air, 842

S.W.2d at 613-21; Duckworth, 2014 WL 1514602, at *6 (“Throughout [Metropolitan Air], however, there

was no mention of petitions for certiorari or whether such a petition would be an appropriate way of

challenging the award of a public contract.”). This Court ultimately affirmed the trial court’s dismissal of

the bidder’s claims because the bid submitted by the bidder was not in accordance with the city’s

specifications. See Metro. Air, 842 S.W.2d at 621.

17