Amicus Curiae Brief — City of Lubbock, Texas v. Oscar Rendón Renda Contracting, Inc. (No. 06-965)

uh oe Supreme Court, U.S.

bn ae FILED

meses MAR 7 - 2007

Fi F LERK _}

In The

Supreme Court of the Gnited States

e

THE CITY OF LUBBOCK, TEXAS, and its MAYOR,

Petitioners,

v.

OSCAR RENDA CONTRACTING, INC.,

Respondent.

S

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

¢

BRIEF OF AMICI CURIAE, THE CITIES OF PEORIA,

ARIZONA, GARLAND, TEXAS, AND THE

LEAGUE OF ARIZONA CITIES AND

TOWNS IN SUPPORT OF PETITIONERS

+

STEPHEN MARK KEMP BRAD NEIGHBOR

City Attorney City Attorney

Counsel of Record CITY OF GARLAND, TEXAS

CYNTHIA ODOM City ATTORNEY'S OFFICE

Assistant City Attorney 200 N. Fifth Street

CITY OF PEORIA, ARIZONA 4th Floor

City ATTORNEY'S OFFICE P.O. Box 469002

8401 W. Monroe Street Garland, Texas 75046

Suite 280 Telephone: (972) 205-2380

Peoria, Arizona 85345 Facsimile: (972) 205-2389

Telephone: (623) 773-7330

Facsimile: (623) 773-7043 Davip R. MERKEL

General Counsel

LEAGUE OF ARIZONA

CITIES AND TOWNS

1820 W. Washington Street

Phoenix, Arizona 85007

Telephone: (602) 258-5786

Facsimile: (602) 253-3874

Altornevs for Amici Curiae

March 7, 2007

COCKLE LAW BRIEF PRINTING CO ‘S00, 225-6964

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TABLE OF CONTENTS

Page

REED COE FAs SETS LEU viccicenibvestatesetenatmemnenaanage ii

I. INTEREST OF AMICI CURIAE .............0:.008 1

II. SUMMARY OF THE ARGUMENT................. 2

Reda... JRGURD EEN EER sciducktdvnicanecenianvecinesdabagecaibaioeavee 4

A. THE FIFTH CIRCUIT'S DECISION EX-

PANDS POLITICAL PATRONAGE CASES

BEYOND ANYTHING CONTEMPLATED

BY THE FRAMERS OF THE CONSTI-

TUTION AND CERTAINLY BEYOND

I nsecrisesctiavennccqvtsannnvbiccsulivnnmaiies 4

B. BID-RELATED SPEECH IS A MATTER

OF STATE LAW AND SHOULD NOT BE

FEED scivceenservotisenninsmnitoeysenntnins 7

CFE RPE sicenccsnexbsiesunrnvsevemvondensadinecuabaiins 11

il

TABLE OF AUTHORITIES

Page

CASES

Aegis of Arizona, L.L.C. v. Town of Marana, 206

Ariz. 557, 81 P.3d 1016 (App. 2003)...........ssccccrccccseseseeees 8

Board of Comm’rs, Wabaunsee Cty. v. Umbehr, 518

IT Ti cicsrencvasodcheresweseeteesoveresesosoesceses 1, 2, 4, 5, 10

Brown v. City of Phoenix, 77 Ariz. 368, 272 P.2d 358

NTI itis cceiaicresddaccstevonsoetehoiereseceseoonenccererees 3

City of Scottsdale v. Deem, 27 Ariz. App. 480, 556

iin cas ccicttrstiesendeneevensotensooneannetees 9

Connick v. Myers, 461 U.S. 138 (1983) ...........ccccceceeeeees 6, 10

Garcetti v. Ceballos, 126 S.Ct. 1951 (2006)........... 3, 4, 7, 10

Grand Canyon Pipelines, Inc. v. City of Tempe, 168

Ariz. 590, 816 P.2d 247 (App. 1991)..........cccccerssseesseees 7,8

Leatherman v. Tarrant Cty. Narcotics Intelligence &

ES CRC ENEE SIE, BOO (1GDD) vreccesvcceccsevesovscevosseosousees 6

Memphis Community Sch. Dist. v. Stachura, 477

nee 10

Monroe v. Pape, 365 U.S. 167 (1961)... eceeseceeeeeeeeeee 8

O’Hare Truck Serv., Inc. v. City of Northlake, 518

TTT lish cuncidderdmrsvesduoivecserspetdcunessesenteeiave 2,5

Oscar Renda Contracting, Inc. v. City of Lubbock,

465 F.96 37S (GER Cie, 200G6)..ccccvcsecccescccescosccocsceces 1, 2, 3, 6

Pickering v. Bd. of Educ. of Twp. High School Dist.

205, Will Cty., 391 U.S. 563 (1968) .......c.ccccrccscccsessesccccees 6

Rutan v. Republican Party of Ill., 497 U.S. 62

iil

TABLE OF AUTHORITIES — Continued

Page

Urban Elec. Servs., Inc. v. Brownwood Indep. Sch.

Dist., 852 S.W.2d 676 (Tex. App. 1993) .........sccseeesereceeeees 7

The Yadin Co., Inc. v. City of Peoria, 2007 WL

ES CEP LG, SU Bra I reeciitarstishcensnnnsetinieaiipasicialseenonan 1

CONSTITUTION

7d NIE, CII, Bin ccoicscnitietcnsaicdilcssiialecancnaniianeladeiaiceess passim

STATUTES

GE AS SB Be eiciccctiviavinisivenniicshiatbilindiatinavigiicidenintpiacbaiiatiiinin 9

ARIZ. REV. STAT. ANN. §§ 34-201 ef Seq...........ccccecereeeeeserenees 7

ARIZ. REV. STAT. ANN. §§ 41-2501 ef seq. .............ccseeeeeeeseeees 7

RULES

Pris. Bis: CART re Same docicictensncasenbncnsicnaiienaaceiatadeiaeniadsialaemaih 6

SI: CIR Biya o tncanscsnnincadevccncbbiabaiiaiiacdipiaiaditaiiiaginidiadiaamias 1

CODES

PEORIA, ARIZ., CITY CODE, ch. 2 §§ 301-327 (1992)............. 7

TEX. Loc. Gov’T CODE ANN., § 252.043(d)(1) (Vernon

De. BOT OE CG, sciticccscicissccesbitintiiniltietietinaiaiageetedpiibeliahies 7

I. INTEREST OF AMICI CURIAE

The cities of Peoria, Arizona, and Garland, Texas, and

the League of Arizona Cities and Towns, submit this

amicus curiae brief in support of Petitioners, the City of

Lubbock, Texas and its Mayor. The League represents

ninety incorporated Arizona cities and towns who all have

an interest in the outcome of this Petition.’ Peoria and

Garland are two of thousands of other cities throughout

the country, actually or potentially affected by the Fifth

Circuit Court of Appeal’s decision in Oscar Renda. Con-

tracting, Inc. v. City of Lubbock.’ In that decision, the Fifth

Circuit unnecessarily and improvidently enlarged this

Court’s decision in Umbehr’ to create a new class of First

Amendment claimants — disappointed bidders for munici-

pal contracts who have no on-going commercial relation-

ship with the municipality.

Peoria has already been negatively impacted by the

Fifth Circuit’s decision as evidenced by The Yadin Com-

pany v. City of Peoria.‘ In Yadin, relying upon Oscar

* This Court’s Rule 37.4 allows the cities of Peoria, Arizona, and

Garland, Texas, to submit this brief through their authorized law

officers without obtaining consent from the parties. The League of

Arizona Cities and Towns is authorized to file this brief by virtue of

letters of consent from all parties that were filed with the Clerk of

Court. Sup. CT. R. 37.2. Amici curiae represent that this brief was not

authored in whole or in part by counsel for any party, and that no

person or entity other than the amici curiae, their members, or their

counsel made a monetary contribution to the preparation or submission

of this brief. Sup. Cr. R. 37.6.

* 463 F.3d 378 (5th Cir. 2006).

* Board of Comm'rs, Wabaunsee Cty. v. Umbehr, 518 U.S. 668

(1996).

* The Yadin Co., Inc. v. City of Peoria, 2007 WL 63611, at *3-5 (D.

Ariz. Jan. 8, 2007).

2

Renda, the District Court of Arizona found that a bidder

who complained about its competitor’s performance under

a municipal towing contract stated a First Amendment

claim when it was not awarded the contract during the

next bid cycle. These decisions, predicated upon the First

Amendment patronage cases, evidence Justice Scalia’s

prescience when dissenting in Umbehr he declared the

floodgates to litigation now open to commercial claims that

previously did not invoke First Amendment protection.’

Amici curiae are interested in this case because as a

result of it they face liability for First Amendment claims

whenever they go out for bid. If allowed to stand, the

reasoning of the Fifth Circuit will federalize the vast

arena of procurement law that has, until now, appropri-

ately been a matter of state law.

Il, SUMMARY OF THE ARGUMENT

The Free Speech Clause of the Constitution does not

imbue speech incident to the public bid process with First

Amendment protection. And there is no need to constitu-

tionalize this speech. The conditions for and procedures by

which bid-related speech exists are comprehensively

regulated by state and local procurement laws that entitle

the bidder to fair consideration. The policies promoted by

procurement laws are for the public’s benefit, not for the

* “Depending upon which of today’s cases one chooses to consider

authoritative, it has either (O’Hare [Truck Serv., Inc. v. City of North-

lake, 518 U.S. 712 (1996)]) thrown out vast numbers of practices that

are routine in American political life in order to get rid of a few bad

apples; or (Umbehr) with the same purpose in mind subjected those

routine practices to endless, uncertain, case-by-case, balance-all-the-

factors-and-who-knows-who-will-win litigation.” Umbehr, 518 U.S. at

711. (Scalia, J., dissenting).

3

commercial gain or satisfaction of an individual bidder.’

The goal is selection of the lowest most responsible bidder.

The relationship between a bidder and a city is limited,

albeit intense, during the bid process. Thereafter, there is

no relationship between the bidder and city unless the

bidder is successful and gains the contract.

The Fifth Circuit’s decision in Oscar Renda expanding

First Amendment rights to bid-related speech should be

reversed. The decision is wrong as a matter of law. It fails

to recognize the opportunities for abuse occasioned by

expanding First Amendment rights to bid-related speech.

It will have the effect of embroiling cities and towns in

wasteful litigation and will be used to intimidate govern-

ment procurement officers and employees. The decision

will eviscerate reasonable procurement practices and

policies currently in place for the protection of the public,

and will “federalize” what have always been, and should

remain, local commercial disputes.

An analysis of bid-related speech finds no foothold in

the First Amendment patronage cases. Bid-related speech

is, in fact, more closely aligned with the type of speech

present in Garcetti v. Ceballos.’ There, this Court focused

on whether Ceballos was speaking as a citizen for First

Amendment purposes or whether the speech was made

pursuant to his official duties. Because Ceballos’ speech

resulted from his official duties, the First Amendment was

not implicated. Similarly, bidders do not speak as citizens.

Their bid-related speech is made for an official government

* See, e.g., Brown v. City of Phoenix, 77 Ariz. 368, 373, 272 P2d

358, 361 (1954).

* 126 S.Ct. 1951 (2006).

+

purpose and the speech is intent upon obtaining a finan-

cial benefit for the bidder. For these reasons, as in

Garcetti, no First Amendment right is implicated. Un-

doubtedly, this is why the Court in Umbehr limited its

holding, finding that bidders or applicants with no on-

going commercial relationship with the government fall

outside the scope of the decision.

Moreover, the opportunity for mischief by those who

should be unsuccessful in obtaining public contracts is

another important reason for holding fast in refusing to

extend First Amendment protection to bidders for govern-

ment contracts.

lil. ARGUMENT

A. THE FIFTH CIRCUIT’S DECISION EX-

PANDS POLITICAL PATRONAGE CASES

BEYOND ANYTHING CONTEMPLATED BY

THE FRAMERS OF THE CONSTITUTION

AND CERTAINLY BEYOND REASON

This Court has recognized the wisdom in limiting the

reach of First Amendment patronage cases to those who are

engaged in an on-going commercial relationship with the

government, that is, to those who should be treated like

employees when recognized indicia of patronage are present."

Yet, even the current reach of First Amendment patronage

cases was decried in spirited dissents to Rutan,’ Umbehr”

* Umbehr, 518 U.S. 668 (1996).

* Rutan v. Republican Party of Ill., 497 U.S. 62 (1990) (Scalia, J.,

dissenting).

* 518 U.S. 668 (Scalia, J., dissenting).

5

and O’Hare." And for reasons set forth in these dissents, it

is unwarranted and unwise to extend the First Amend-

ment’s reach beyond the limits previously established.

The Fifth Circuit’s expansion of First Amendment

rights creates new causes of action never intended to be

recognized under Umbehr. The limiting language of

Umbehr is express and unambiguous: “Finally, we em-

phasize the limited nature of our decision today.

Because Umbehr’s suit concerns the termination of a pre-

existing commercial relationship with the government, we

need not address the possibility of suits by bidders or

applicants for new government contracts who cannot rely

on such a relationship” (emphasis added).” The Court is

firm that its decision does not extend to mere bidders and

applicants for city contracts who have no on-going com-

mercial relationship with the city. Thus, no liberty interest

attaches to communications between mere bidders and the

government regarding the bid process. The bidder is free

to say what it wants in order to gain the contract. The

government is free to discuss matters relating to the

contract with the bidder and can legitimately investigate

information submitted via documents or speech.

And this makes perfect sense. Otherwise, unlimited

mischief is capable under the guise of a constitutional

liberty interest. For example, suppose a city’s after school

program requests bids for an administrator. An entity

fictionally referred to as “Boylove” submits a bid. Boylove,

who is the low bidder, is known to publish sexually explicit

information about young boys and advocates sexual

" 518 U.S. 712 (Scalia, J., dissenting).

* Umbehr, 518 U.S. at 685.

6

relations between men and boys. It is not selected and

sues, claiming retaliation. Or imagine that a city is in

the process of purchasing new computers. A managerial

employee of a company submitting a bid also lives in the

city. This employee has previously complained about his

council member’s inaction regarding improvements to a

city park in his neighborhood. The company is not chosen

for the contract. It sues, alleging it was not chosen because

of its employee’s previous complaints.

The Fifth Circuit’s broad analysis of “public concern”

speech, focusing upon something as elusive as “legitimate

news interest,” suggests that both of these examples are

clothed with the indicia of First Amendment protection.

Infusing bid-related speech with this protection assures

innumerable challenges by bidders testing the constitu-

tional viability of their speech and associational interests.

Once a First Amendment violation is alleged, the

government will undoubtedly challenge the sufficiency of

the allegations. This challenge, however, will be difficult to

mount via a Rule 12(b)(6) motion.“ With no heightened

pleading requirement,” coupled with a requirement to

balance the speech and the government’s interest,”° summary

judgment will be the fertile ground for decision making.

Therefore, until the factual dispute wends its way through

the summary judgment stage, there is no finality to the

contract process. And the citizens of the governmental entity

” Oscar Renda, 463 F.3d at 382.

* Fed. R. Civ. P. 12(b)(6).

* See Leatherman v. Tarrant Cty. Narcotics Intelligence & Coord.

Unit, 507 U.S. 163, 168 (1993).

See Pickering v. Bd. of Educ. of Twp. High School Dist. 205, Will

Cty., 391 U.S. 563 (1968); Connick v. Myers, 461 U.S. 138 (1983).

simply wait, or they run the risk of paying twice for the

project if an unsuccessful bidder sits upon a running

statute of limitations.

The scenarios are endless and point out the impossi-

bility of regulating, through the courts or elsewhere, all of

the various speech and associational interests that can

and will be litigated if a First Amendment right exists in

bid-related speech. Because the speech is private in nature

and relates only to a specific and limited governmental

need, it is not speech that is protected by the First

Amendment.”

B. BID-RELATED SPEECH IS A STATE LAW

MATTER AND SHOULD NOT BE FEDER-

ALIZED

The bid process in most states and cities is regulated

by laws known as Procurement Codes.” The Fifth Circuit’s

decision will effectively eviscerate procurement practices

and policies currently in place for the public’s protection.

While Procurement Codes exist to benefit the public, a

bidder does have certain rights and remedies recognized

by these statutory schemes. While no recognized property

interest may exist in the bid itself,” an aggrieved bidder

” See Garcetti, 126 S.Ct. 1951 (2006).

" See, e.g., ARIZ; Rev. STaT. ANN. §§ 34-201 et seg. and 41-2501

et seq.; PEORIA, ARIz., Crry Cope, ch. 2, §§ 301-327 (1992); Tex. Loc.

Gov’T CODE ANN., § 252.043(d)(1) (Vernon Supp. 2005) et seq.

* See, e.g., Grand Canyon Pipelines, Inc. v. City of Tempe, 168 Ariz.

590, 593, 816 P.2d 247, 250 (App. 1991); Urban Elec. Servs., Inc. v.

Brownwood Indep. Sch. Dist., 852 S.W.2d 676, 677 (Tex. App. 1993).

8

can challenge the bid process and result if it believes the

government has acted arbitrarily.”

The Fifth Circuit’s decision, however, thwarts the

procurement process and the public purposes it fosters. A

bidder need only claim that it was retaliated against for

exercising its right to free speech and the normal pro-

curement process and procedures become secondary,

sidestepped in favor of federal question jurisdiction.

This “federalization” of speech in the highly competi-

tive world of public bidding is unwarranted and unwise.

Disappointed bidders and sore losers will claim that things

they said before or during the bid process are constitutionally

protected. Some bidders will accuse public employees who

oversee the bid process of violating their constitutional rights

in order to strike a fear of litigation to gain an advantage in

the bid process itself. Sometimes words alone will intimidate

public employees, causing deference to be given the com-

plaining commercial party and resulting in the recommenda-

tion of the most obstreperous competitor.

More often, litigation will follow a bid award. While it

is not unusual to have bid protests, the Fifth Circuit’s

decision has changed the rules of the game. Whereas

generally there is a requirement to exhaust administrative

remedies” and the government’s decision will be upheld

unless found to be arbitrary and capricious, this will no

longer be true. There is no requirement to exhaust admin-

istrative remedies prior to bringing a § 1983 lawsuit.”

” See, e.g., Grand Canyon Pipelines, Inc., 168 Ariz. at 593.

" See, e.g., Aegis of Arizona, L.L.C. v. Town of Marana, 206 Ariz.

557, 567, 81 P.3d 1016, 1026 (App. 2003).

* Monroe v. Pape, 365 U.S. 167, 183 (1961).

9

Moreover, the standard of review will no longer be

whether the government acted arbitrarily and capri-

ciously, a standard adopted to protect the public interest. A

lesser standard of review will make federal litigation an

attractive option for complaining and litigious bidders.

Federalizing bid-related speech also sets the stage for

claims by unsuccessful bidders who should be debarred or

rejected for legitimate policy reasons. As a practical

matter, a bidder’s litigation history is a matter of interest

to contracting parties. A city should be allowed to consider

whether a company is more proficient at suing its custom-

ers than in performing the work it was contracted to do.

Nevertheless, relevant litigation history may become too

difficult and cumbersome an evaluative standard to use

when the uttering of a few words can transform this

standard into the basis for a First Amendment claim.

Federalizing bid-related speech also ushers in incon-

sistency and introduces ambiguity to the procurement

process. Applying the First Amendment to bid-related

speech upsets historical damages limitations and provides

an additional incentive for transforming disappointed

bidders into Constitutional plaintiffs.

While state law limits the damages recoverable in

contract actions,” bidders bringing First Amendment

claims will assert that these limitations do not apply to

§ 1983 litigation.“ This Court has found that compensa-

tory damage components of tort law apply to § 1983

* See, e.g., City of Scottsdale v. Deem, 27 Ariz. App. 480, 482, 556

P.2d 328, 330 (1976).

* 42 U.S.C. § 1983.

10

claims.” Uncertainty regarding damage claims makes it

impossible for government to realistically assess risk when

it goes out to bid, and it transforms budgets for projects or

services to mere guesswork. Applying the First Amend-

ment to bid-related speech translates into what this Court

recognized and warned against in Connick that “virtually

every remark — and certainly every criticism directed at a

public official — would plant the seed of a constitutional

case.””

As a result, the government, not unlike Pavlov’s dog,

will attempt to reduce liability claims by avoiding speech

to the maximum extent possible during the bid process.

This does not promote the public interest, nor does it make

for good contractual partners. The Court was mindful of

this at the time it limited the reach of the First Amend-

ment in Umbehr.

The First Amendment’s protections do not extend to

bid-related speech. Nor should they. Any rule to the

contrary would, in the words of Garcetti, “commit state

and federal courts to a new, permanent, and intrusive role,

mandating judicial oversight of communications between

and among... ” [in this case, commercial bidders and

government employees in the course of official business}.”

* Memphis Community Sch. Dist. v. Stachura, 477 U.S. 299, 305-

06 (1986).

* 461 U.S. 138, 149 (1983).

*” 196S.Ct. at 1961.

11

IV. CONCLUSION

Amici curiae respectfully request this Court reverse

the judgment of the court of appeals.

Respectfully,

OFFICE OF THE CITY ATTORNEY

CITY OF PEORIA, ARIZONA

8401 W. Monroe Street

Suite 280

Peoria, Arizona 85345

Telephone: (623) 773-7330

Facsimile: (623) 773-7043

STEPHEN MARK KEMP

City Attorney

Counsel of Record

CYNTHIA ODOM

Assistant City Attorney

OFFICE OF THE CITY ATTORNEY

CITY OF GARLAND, TEXAS

200 N. Fifth Street

4th Floor

P.O. Box 469002

Garland, Texas 75046

Telephone: (972) 205-2380

Facsimile: (972) 205-2389

BRAD NEIGHBOR

¢ City Attorney

LEAGUE OF ARIZONA

CITIES AND TOWNS

1820 W. Washington Street

Phoenix, Arizona 85007

Telephone: (602) 258-5786

Facsimile: (602) 253-3874

DAVID R. MERKEL

General Counsel

Attorneys for Amici Curiae