Opposition Brief — Cleveland Construction Construction Construction, Inc. v. City of Cincinnati, Ohio (No. 08-601)

FILED

\Y Y DEC 1- 2008 |

No. 08-601 — LOFRGEGE THE CLERK

In the

Supreme Court of the United States

CLEVELAND CONSTRUCTION, INC.,

Petitioner,

Vv.

CITY OF CINCINNATI,

Respondent.

On Petition for a Writ of Certiorari to the

Supreme Court of Ohio

BRIEF IN OPPOSITION

JOHN P. CurP

City SOLICITOR

Mary FRANCES CLARK

Counsel of Record

RICHARD GANULIN

ASSISTANT CITy SOLICITORS

Room 214, City HALL

801 PLum STREET

CINCINNATI, OH 45202

(513) 352-3328

(513) 352-1515 rax

mary .clark@cincinnati-oh.gov

December 1, 2008 Counsel for Respondent

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

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QUESTION PRESENTED

I. WHETHER THIS COURT SHOULD EXERCISE

JURISDICTION WHEN THE SUPREME COURT OF

OHIO, APPLYING LONG-ESTABLISHED

PRINCIPLES, DENIED THE PETITIONER’S CLAIM

TO A CONSTITUTIONALLY PROTECTED

PROPERTY INTEREST IN A PUBLIC CONTRACT

AWARDED UNDER A DISCRETIONARY “LOWEST

AND BEST BID” STANDARD.

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TABLE OF CONTENTS

QUESTION PRESENTED .................... i

po gt rar li

TABLE OF AUTHORITIES ................. . ii

STATEMENT OF THE CASE ................ 1

REASON FOR DENYING THE PETITION ..... 2

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TABLE OF AUTHORITIES ‘

| CASES

Board of Pardons v. Allen,

; SD kc iw ccccccoecbensee 6

: Board of Regents of State Colleges v. Roth, !

: SR a a 3 :

Greenholtz v. Nebraska Penal Inmates, i

) a EE Se ale A ae 6 .

Kentucky Dep’t of Corrections v. Thompson,

se ano a vekv enews eee bee 5

A

Town of Castle Rock, Colorado v. Gonzalez, ;

| ee a's ow beh oe wwe oe 3,5 ;

1

STATEMENT OF THE CASE

Cleveland Construction, Inc. (“Cleveland

Construction”), ignoring the very broad “lowest and

best bid” discretion reserved to City of Cincinnati

(“City”) purchasing officials throughout the Cincinnati

Municipal Code and bid-specific materials (reviewed

by the Supreme Court of Ohio and applied to deny

Cleveland Construction’s procedural due process

claim), instead erroneously asserts to this Court that

the basis for the “claimed violation of its constitutional

procedural due process rights is that the City had no

discretion under the City code to award to any bidder

other than Cleveland if it awarded the contract on the

basis of the bidders [sic] meeting the subcontracting

requirement of the SBE program.”

In addition to basing its claim on an erroneous

assertion of law and fact, Cleveland Construction

weaves irrelevant equal opportunity aspects of the

City’s procurement system into its Petition for Writ of

Certiorari. Those equal opportunity provisions that

relate to the City’s efforts to discourage discrimination

against minority-owned and women-owned

subcontractors are relevant to, and discussed in, the

City’s own Petition for Writ of Certiorari separately

pending before this Court.” Those equal opportunity

provisions do not, however, have any bearing on

’ Petition for Writ of Certiorari p. 9 (emphasis added).

? Case No. 08-580, presenting equal protection questions to this

Court.

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Cleveland Construction’s procedural due process

questions presented to this Court.’

Instead, as the Supreme Court of Ohio recognized,

the City required that bidders for the Convention

Center drywall contract reserve 35 percent of the

project for small business subcontractors. The bidders

knew that failure to satisfy the 35 percent requirement

could result in rejection of a bid. By its own

admission, Cleveland Construction failed to meet the

35 percent requirement and therefore was not awarded

the drywall contract.‘

REASON FOR DENYING THE PETITION

This Court Should Not Exercise Jurisdiction In A

Case Where The Petitioner Cannot Establish The

Existence of A Constitutionally Protected Property

Interest Because The Awarding Of A Contract Under

A Discretionary Public Procurement System Does Not

Create A Legitimate Claim of Entitlement To That

Contract.

* The City required that bidders for the Convention Center

drywall contract comply with race-neutral and gender-neutral

small business subcontracting percentages. The City only

requested good-faith efforts by bidders to meet the separate

availability estimates for minority-owned and women-owned

subcontractors. In any event, the trial court concluded that the

City had not applied its equal opportunity requirements to deny

Cleveland Construction the drywall contract. App. 88a. Rather,

the trial court correctly concluded, and the Supreme Court of Ohio

also recognized, that Cleveland Construction was denied the

drywall contract because it failed to reserve 35 percent of the work

for small business subcontractors. App. 86a.

* Petition for Writ of Certiorari p. 8.

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This Court long ago established the basis for

determining whether an individual or entity has a

constitutionally protected property interest justifying

procedural due process protections. Just as the

Supreme Court of Ohio described in its decision,”

Cleveland Construction first had to establish that it

had a constitutionally protected property interest in

the drywall contract before it could claim a violation of

procedural due process rights. By reference to Board

of Regents of State Colleges v. Roth,® the Supreme

Court of Ohio accurately stated that “it is well settled

that a constitutionally protected property interest

exists only when a claimant has ‘more than an

abstract need or desire for it. [The claimant] must

have more than a unilateral expectation of it. [The

claimant] must, instead, have a legitimate claim of

entitlement to it.”” Further quoting Town of Castle

Rock, Colorado v. Gonzalez,® the Supreme Court of

Ohio emphasized that a “benefit is not a protected

entitlement if government officials may grant or deny

it in their discretion.”

° App. 5a.

° 408 U.S. 564, 569-70 (1972).

” App. 5a (quoting Roth, 408 U.S. at 577). Cleveland Construction

acknowledges that the Roth case “must be the starting point in

any analysis of whether a property interest subject to due process

protection under the Fourteenth Amendment has been created.”

Petition for Writ of Certiorari p. 17 (citing Roth, 408 U.S. at 577).

* 545 U.S. 748, 756 (2005).

® App. 5a.

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Therefore, Cleveland Construction wildly

exaggerates when it represents to this Court: “The

decision of the Supreme Court of Ohio sets a

dangerous precedent, and one that is at odds with the

constitutional jurisprudence of this Court delineating

when property interests protected by due process

arise.” In fact, contrary to Cleveland Construction’s

assertion, the decision of the Supreme Court of Ohio

-precisely followed this Court’s long-existing precedents

establishing the standard for determining whether a

partys interest in a public benefit is a mere

expectation or is an entitlement.

The fallacy in Cleveland Construction’s property

interest argument is best exposed by its own

concession. Cleveland Construction frames its first

question presented as “[w]hether a state scheme of

competitive bidding . . . may give rise to a property

interest protected by due process.”"* Cleveland

Construction acknowledges in its Petition that it only

reaches its argument “ifthe City proceeded to make an

award of the drywall contract under the circumstances

that it did... .””” Constitutionally protected property

interests are determined ex ante. Where the

government retains broad discretion whether, and

how, to even proceed, the party seeking the benefit

only has, at best, an expectation of receiving that

benefit. “Jf the City proceeded ... .” means, ex ante,

that the bidders for the Convention Center drywall

work did not, as a matter of law, have a legitimate

© Petition for Writ of Certiorari pp. 14-15.

"' Id. at i (emphasis added).

Id. at 17 (emphasis added).

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claim of entitlement to that contract. Each bidder

merely had an expectation that perhaps it might be

the successful bidder. However, the City had reserved

discretion whether, and how, to proceed with the

contract award. Even Cleveland Construction, quoting

Town of Castle Rock v. Gonzales, conceded: “[A]

benefit is not a protected entitlement if government

officials may grant or deny it in their discretion.”

Therefore, on the one hand, Cleveland Construction

admits (just as the Supreme Court of Ohio expressed

in detail) that the City’s “lowest and best bid”

purchasing system and the specific bid materials for

the Convention Center drywall contract allowed the

City to decide “if” it was even going to proceed, and

further admits that if government officials retain

discretion whether to proceed, an expected benefit is

not a protected entitlement. On the other hand,

Cleveland Construction suggests to this Court that the

decision of the Supreme Court of Ohio “sets a

dangerous precedent” even though that decision

simply recognized the very broad “lowest and best bid”

discretion reserved to City officials and drew the

obvious legal conclusion.

By reference to protected liberty interest cases,"

Cleveland Construction fallaciously argues that even

though the City had very broad discretion under its

“lowest and best bid” procurement system (including

the discretion to reject any and all bids for any reason),

‘8 Td. at 18 (quoting Castle Rock, 545 U.S. at 756 (citing Kentucky

Dep't of Corrections v. Thompson, 490 U.S. 454, 462-63 (1989))).

Td. at 18-20.

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if City discretion was circumscribed by specific

standards, and if Cleveland Construction had to be

considered for the drywall contract notwithstanding

application of the specific standards, then it has a

constitutionally protected property interest. The

fallacy in Cleveland Construction’s argument is that

the City’s “lowest and best bid” purchasing system did

not require that Cleveland Construction be considered,

or even that any bidder be considered, for the drywall

contract. In Greenholtz v. Nebraska Penal Inmates”

and Board of Pardons v. Alien, the parole release

liberty cases discussed by Cleveland Construction in

its Petition, the incarcerated individuals had a right to

be reviewed for parole, albeit subject to a scheme that

contained standards to be applied by officials. In

contrast, the City’s “lowest and best bid” purchasing

system does not, ex ante, confer any right upon a

bidder to be considered for a City contract. City

officials did not have to consider any bids since they

reserved the right to reject any and all bids for any

reason. Cleveland Construction’s analogy to the parole

release liberty cases fails.

Indeed, the Supreme Court of Ohio emphasized the

broad discretion in the City’s procurement system:

In awarding contracts, the city retains broad

discretion to accept and reject bids generally.

Cincinnati Municipal Code 321-43 states that

“(tlhe City purchasing agent, City manager, or

any other duly authorized contracting officer

'® 442 U.S. 1(1979).

© 482 U.S. 369 (1987).

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may reject any bid for any reason or all bids for

no reason if acceptance of the lowest and best

bid is not in the best interests of the City.””’

The Supreme Court of Ohio added:

In this case, the city’s bid package, which

contained the invitation to bid and the bidding

requirements, similarly reserved the right of the

city to “reject any and all bids or parts of any

bid * * * and not award a contract” and to

“consider all elements entering into the

question of determining the responsibility of the

bidder.”

And:

The documents also stated that “[a]ny bid which

is incomplete * * * or whica contains * * *

irregularities of any kind, may be cause for

rejection of [the] bid.” The invitation to bid also

informed potential bidders that they “will be

subject. to the provisions of the City of

Cincinnati * * * Small Business Enterprise

Program. Failure of a bidder to comply with

these requirements may be cause for rejection of

the bid.”

Conclusively distinguishing the nature of the City’s

broad discretion in the case at bar from the type of

'” App. 6a.

" -2.

9 Id. at Ga-7a.

—

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discretion described in the parole release liberty cases

presented by Cleveland Construction, the Supreme

Court of Ohio held:

Clearly, the Cincinnati Municipal Code and the

bidding documents are united in emphasizing

the city’s broad discretion to grant or deny

contracts. In fact, the city is not required to

award a contract at all if it is dissatisfied with

any of the submitted bids.”

Finally: “Given the extensive discretion of the city in

considering bids, Cleveland Construction had no

property right in the drywall contract at issue in this

721

case.

The concurring opinion in the Supreme Court of

Ohio added:

State law mandates only that public contracts of

this magnitude be awarded to the “lowest and

best bidder.” R.C. 735.05. The Cincinnati

Municipal Code also requires the city to select

the “lowest and best bidder,” but provides the

city with broad discretion to “reject any bid for

any reason.” Cincinnati Municipal Code 321-37

and 321-43. In addition, the city’s bid package

gave the city broad discretion to reject a bid.”

Id. at Ta.

2) Id. at 9a.

72 Id. at 10a-1la.

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Cleveland Construction further argues to this

Court that since the City purchasing agent “may”

consider, when determining the lowest and best bid,

information concerning compliance with the City’s

equal opportunity and non-discrimination program

and “may” make an award subject to a cost limitation,

somehow this discretionary consideration transforms

Cleveland Construction’s bid into an entitlement.

Cleveland Construction provides to this Court that

“may” is defined in the City’s procurement code as

“nermissive.”” The Supreme Court of Ohio recognized

that “may is always used as a permissive term” in the

Cincinnati Municipal Code.“ The Supreme Court of

Ohio concluded that even assuming arguendo that the

City violated its own code by awarding the Convention

Center drywall contract to the successful bidder, this

hypothetical violation did not mean that Cleveland

Construction was entitled to the contract.” After all,

Cleveland Construction was not awarded the contract

because Cleveland Construction’s bid did not satisfy

the 35 percent small business subcontracting

requirement.”

Cleveland Construction separately argues, for the

first time in this case, that the City’s alleged violation

* Petition for Writ of Certiorari p. 4.

* App. 8a.

* Id. at 9a.

* The City’s 35 percent small business subcontracting

requirement for the Convention Center drywall work is different

from the City’s equal opportunity and non-discrimination

program.

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of its equal protection rights ipso facto constitutes a

violation of Cleveland Construction’s procedural due

process rights. This argument is unprecedented and

insupportable and should be rejected.

CONCLUSION

The Supreme Court of Ohio correctly applied

constitutional due process principles to determine that

Cleveland Construction has no _ constitutionally

protected property interest in a City contract awarded

under the “lowest and best” bid standard. Neither

Cleveland Construction nor any other bidder has a

legitimate claim of entitlement to a contract awarded

under the City’s discretionary procurement system.

Therefore, this Court should decline jurisdiction in this

case.

Respectfully submitted,

John P. Curp

City Solicitor

Mary Frances Clar’

Counsel of Record

Richard Ganulin

Assistant City Solicitors

Room 214, City Hall

801 Plum Street

Cincinnati, OH 45202

(513) 352-3328

(513) 352-1515 Fax

mary.clark@cincinnati-oh.gov

Attorneys for Respondent