# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 4- 38 57

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Dem ie n C on st ru ct io n C o.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

O’ Fal lo n F ire Pro te ct io n Di st ric t

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of M is so ur i - St . Lou is

__ __ __ __ __ __
Su bm it te d: Sep te m

be r 23 , 20 15 Fil ed : Fe br ua ry

1, 2 01 6

__ __ __ __ __ __ Befo re RI LEY, Chi ef J ud ge , BYE and BENTON, Circu it Ju dg es

.

__ __ __ __ __ __ RILEY, Chi ef J ud ge

.

Dem ie n Co ns tru ct io n Co

. (Dem ie n) ap pe al s fro m th e di sm is sa l of it s co m pl ai nt
ag ai ns t th e O’ Fal lo n Fi re Pro te ct io n Dis tri ct (Dis tri ct ). See Fed

. R. Ci v. P. 12 (b )(6 ). Ch al le ng in g th e Dis tr i c t ’s d e c is io n no t to hi re Dem ie n fo r a co ns tru ct io n pr ojec t, Dem ie n al le ge s th e Dis tri ct v i o l at ed Dem ie n’s co ns ti tu ti on al rig ht s in th e bi dd in gpr oc es s. W it h ju r i sd ic ti on un de r 28 U.S.C. § 12 91
, we affi rm th e jud gm en t of th e

di st ric t co ur t. 1

I. BACKGRO UND
In th e sp rin g of 20 14
, th e Dis tri ct , a su bd iv is io n of th e st at e of Mi ss ou ri,

so li ci te d bi ds fo r th e co ns tru ct i o n of a ne w fir eh ou se

. Acco rd in g to Dem ie n, a
rep res en ta ti ve fro m th e Dis tri ct cal le d Dem ie n’s pr es id en t an d as ke d th e co m pa ny to

su bm it a bi d fo r th e g en eral work on th e fi reh ou se

.

The Dis tri ct pr ov id ed bi dd ers wit h an in vi ta ti on to bi d an d in st ru ct io ns to bi d, whi ch Dem ie n at ta ch ed to it s am en de d co m pl ai nt as ex hi bi ts

. The in st ru ct io ns to bi d 2
de cl are th at th e “ Owner res erv es rig ht to reject an y an d al l pr op os al s w he n su ch reject io n is in th e in te res t of Owner .” Und er th e he ad in g AW ARD OF CONTRACT, th e in st ru ct io ns ex pl ai n:

It is th e in te nt of th e Owner to award a co nt ract to th e lo wes t res po ns ib le bi dd er pr ov id ed th e bi d h a s be en su bm it te d in acco rd an ce wit h al l req ui rem en ts of th e bi dd in g do cu m en ts

. . . . The Owner res erv es rig ht
, ho wev er, to award Co nt ract in hi s be st in te res t, an d, th eref or e, res erv es rig ht to sel ect a Bi dd er o th er t ha n t he lo wes t.

The in st ru ct io ns al so in fo rm ed th e bi dd ers th at th e m os t rece nt pr in ti n g o f th e Rec om m en de d Gui de fo r Co m pe ti ti ve Bi dd in g Pro ced ur es an d Co nt ract Award s fo r Bu il d i n g Co ns tru ct io n, pu bl is he d by th e Am eri can In st it ut e of Arch it ect s, (AIA

The Hon or ab l e Jo hn A. Ro ss , Uni te d St at es Dis tri ct Ju dg e fo r th e East ern 1 Dis tri ct of M is so ur i.

Bec au se un de r F e d e r al Ru le of Ci vi l Pro ced ur e 10 (c) “ a writ te n in st ru m en t 2 th at is an ex hi bi t to a pl ead in g is a pa rt o f th e p le ad in g fo r al l p ur po se s,” o ur rul in g

“ on a m ot io n t o d is m is s u nd er Ru le 12 (b )(6 ) m ay co ns id er m at eri al s att ach ed to th e
co m pl ai nt .” Abe ls v. Farm ers Co m m od it ie s Co rp ., 25 9 F.3 d 91 0, 92 1 (8 th Ci r. 20 01 ).

-2-gu id e) wou ld “ gu id e al l bi dd in g.” Acco rd in g to th e AIA gu id e, “ [t]he co nt ract sh ou ld

be award ed to th e lo wes t r e s po ns ib le bi dd er.” The AIA gu id e ad di ti on al ly st at es ,

“ The own er, by pr ov is io ns in th e in st ru ct io ns to bi dd ers

. . . typic al ly ret ai ns th e rig ht

to reject an y

an d a ll bi ds ,” so lo ng as r eject io n i s n ot “ us ed as a su bt erfu ge .”

On May 27
, 20 14
, th e Dis tr i c t a w a rd ed th e co nt ract to an ot he r ge ne ral

co nt ract or th at ha d su bm it t e d a hi gh er bi d th an Dem ie n’s. Dem ie n co nt en ds it

“ su bm it te d th e lo wes t res po ns ib le bi d” fo r th e co nt ract an d “ m et al l req ui rem en ts fo r

su bm it ti ng a bi d,” th us it sh ou ld ha ve be en award ed th e co nt ract

. Dem ie n su gg es ts th e Dis tri ct m

us t ha ve award ed th e co nt ract ba se d o n “ su rm is e, gu es swo rk
, or gu t feel in g.”

Dem ie n su ed th e Dis tri ct un de r 42 U.S.C. § 19 83
, al le gi ng th e Dis tri ct vi ol at ed
Dem ie n’s Fo ur te en th Am en dm en t du e pr oc es s rig ht s un de r th e U.S. Co ns t i t ut io n

. Dem ie n al so cl ai m ed th e Dis tri ct vi ol a t e d it s Fi rs t Am en dm en t rig ht s, Mi ss ou ri St at ut es sec ti on 32 1.2 20 (4 ), an d t he Mi ss ou ri C on st it ut io n. Th e Dis tri ct m ov ed to 3
di sm is s pu rs ua nt to Ru le 12 (b )(6 ) fo r fai lu re to st at e a cl ai m up on whi ch rel ie f co ul d be gr an te d, arg ui ng , am on g ot he r th in gs , Dem ie n la ck ed st an di ng to pu rs ue bo th th e fed eral co ns ti tu ti on al cl ai m s an d th e st at e la w cl ai m s an d di d no t po ss es s a le gi ti m at e cl ai m of en ti tl em en t to th e co nt ract

. The di st ric t co ur t de ci de d Dem ie n la ck ed

st an di ng , bu t al so co nc lu de d Dem ie n fai le d to st at e a cl ai m un de r th e Fo ur te en th
Am en d men t Due Pro ces s Cl au se an d ab an do ne d an y cl ai m un de r th e Fi rs t Am en dm en t. The di st ric t co ur t de cl in ed to ex erci se su pp le m en ta l ju ris di ct io n o ve r th e st at e la w cl ai m s, se e 28 U.S.C. § 13 67 (c)( 3)
, an d di sm is se d th os e cl ai m s wit ho ut
pr ejud ic e. Dem ie n ap pe al s on ly th e di sm is sa l of th e Fo ur te en th Am en dm en t an d Fi rs t Am en dm en t cl ai m s.

Thi s st at ut e pr ov id e s th at fir e pr ot ect io n di st ric ts sh al l be ab le to en te r in to 3

co nt ract s an d th at “ a no ti ce sh al l be pu bl is he d fo r bi ds on al l co ns tru ct io n or pu rch as e
co nt ract s for work or m at eri al or bo th ” whe n th e co nt ract “ in vo lv e[s ] an ex pe ns e of te n t ho us an d d ol la rs or m or e.” Mo . Rev . Sta t. § 32 1.2 20 (4 ).

-3-II

. DISCUSS IO N

A. Arti cl e II I St an di ng In li gh t of th e di st ric t co ur t’s ho ld in g, we fir st m us t ad dr es s st an di ng

. See U.S. Co ns t. ar t. III , § 2 , cl. 1 ; Io wa Leag ue of Ci ti es v. EPA, 71 1 F.3d 84 4, 8 69 (8t h C ir. 20 13 ). If Dem ie n do es no t ha ve Arti cl e III st an di ng to su e th e Dis tri ct , “ we ha ve no

su bjec t m at te r juri sd ic ti on ov er th e su it .” Id

. W e rev ie w th e ex is t e nc e of su bjec t

m at te r juri sd ic ti on de no vo

. See ABF Frei gh t Sy s., In c. v. In t’l Bh d. o f Te am st ers , 64 5 F.3 d 95 4, 95 8 (8 th Ci r. 20 11 ). The ba si c req ui rem en ts of Arti cl e III st an di ng , th e

“ ‘irred uc ib le co ns ti tu ti on al m in im um ,’ ” are th at a pl ai nt iff m us t de m onstr at e: (1 ) “ ‘an in jury in fact ,’ ” th at is “ ‘con cret e an d act ua l o r i mm i n e nt ,’ ” (2 ) th at th e in jury be

“ ‘fairl y tra ceab le ’” to th e “ ‘con du ct of th e de fen da nt ,’ ” an d (3 ) “ ‘a li ke li ho od th at th e
req ue st ed rel ie f wil l red res s th e a ll eg ed in jury.’ ” Mi ll er v. Red woo d Tox ic ol og y Lab
., In c., 68 8 F.3 d 92 8, 93 3- 34 (q uo ti ng St eel Co

. v. Ci ti zen s fo r a Bet te r Env ’t, 52 3 U.S. 83
, 10 2

- 0 3 ( 1 9 98 )). W e ha ve no pr ob le m co nc lu di ng Dem ie n ha s st an di ng

un de r Arti cl e III. See Met ro

. Exp res s Serv s., In c. v. C i t y o f Kan sa s Ci ty, 23 F.3 d 13 67
, 13 69 -7 0 (8 th Ci r. 19 94 ); cf. W il co x Elec
., In c. v. FAA, 11 9 F.3 d 72 4, 72 8 (8 th Ci r. 19 97 ); Mi de as t Sy s. & Ch in a Ci vi l Co ns tr. Sai pa n Jo in t Ven tu re, In c. v. Hod el
, 79 2 F .2d 11 72 , 11 76 (D.C. Cir . 19 86 ).

Alt ho ug h it di d no t sp eci fic al ly m en ti on Arti cl e III, th e di st ric t co ur t co nc lu de d
Dem ie n “ ha s no t m et it s bu rd en to es ta bl is h st an di ng to ch a l l e n g e th e award of th e

co nt rac t a t i s su e.” The pa rti es , fo ll owi ng th e di st ric t co ur t, ad dr es s st an di ng by di sc us si ng th e ap pl ic at io n of ou r a n a l y si s in Met ro po li ta n Exp res s Serv ic es , I nc . v

. Ci ty of Kan sa s Cit y , whi ch als o d eal t wi th un su cces sf ul bi dd ers trying to ch al le ng e th e al le ge dl y un fai r award of a go ve rn m en t co nt ract

. See Met ro ., 23 F.3 d at 13 68 -6 9. 4

Alt ho ug h it do es no t affe ct ou r de ci si on , we no te a pa ne l of th e Mi ss ou ri Co ur t 4 of Ap p e a l s , East ern Dis tri ct , ha s co nc lu de d Met ro po li ta n was wro ng ly de ci de d. By rn e & Jo ne s Ent ers ., In c. v. Mo nr oe Ci ty R-1 Sch

. Dis t., No. ED 10 15 88
, 20 14 W L 58 47 59 6, at *5 (Mo

. Ct

. App

. Nov

. 12
, 20 14 ). In By rn e & Jo ne s, th e Mi ss ou ri co ur t di sa gr eed wit h de ci si on s fro m th e W es te rn an d So ut he rn Dis tri ct s of th e Mi ss ou ri

-4-Bu t th at an al y si s ad dr es se d st an di ng un de r Mi ss ou ri st at e la w, no t Arti cl e III. Id

. at 5
13 70

. Bec au se th is is a fed eral qu es ti on cas e wit h Arti cl e III st an di ng , a nd is no t a di ve rs it y cas e li ke Met ro po li ta n, we ne ed no t co ns id er whe th er Dem ie n wou ld ha ve
st an di ng to su e u nd er Mi ss ou ri s ta te law.

B. Mot io n to Dis m is s Deci di ng Dem ie n ha s sa ti sf ie d Arti cl e III st an di ng , we no w co ns id er whe th er Dem ie n ha s st at ed a cau se of act i on un de r § 19 83 ba se d on vi ol at io ns of th e Fo ur te en th Am en dm en t an d th e Fi rs t Am en dm en t as in co rp or at ed un de r th e Fo ur te en th . See Fed . R. Civ . P. 12 (b )(6 ).

1. Sta nda rd o f Rev ie w We rev ie w de no vo whe th er a co m pl ai nt st at es a cau se of act io n. S e e , e

. g

. , P a c k a rd v. Darv eau , 75 9 F.3 d 89 7, 90 0 (8 th Ci r. 20 14 ). Fed eral Ru le of C i v i l
Pro ced ur e 8( a)(2 ) req ui res a cl ai m fo r rel ie f to co n ta in “ a sh or t an d pl ai n st at em en t of th e cl ai m sh owi ng th at th e pl ead er is en ti tl ed to rel ie f.” To su rv iv e a Ru le 12 (b )(6 )

m ot io n to di sm is s, th e “ co m pl ai nt m us t co nt ai n su ffi ci en t fact ua l m at te r” th at “ al lo ws th e co ur t to dr aw th e reas on ab le in fe r e n c e t ha t th e de fen da nt is li ab le fo r th e

m is co nd uc t al le ge d.” Ash cro ft v. Iq ba l, 55 6 U.S. 66 2, 67 8 (2 00 9)

. Und er ou r rev ie w,

we m us t “ ‘accep t[] as tru e al l fact ua l al le ga ti on s,’” bu t we are “ ‘not bo un d to acce pt

Co ur t of App eal s, bo th of whi ch ha ve rel ie d on Met ro po li ta n to d e t e r m in e an
un su cces sf

ul b i d d e r ha s st an di ng un de r Mi ss ou ri la w to ch al le ng e th e award of a
co nt ract un de r cert ai n c i r cu m st an ces

. See id

. at *5 -6 ; Bran nu m v. Ci ty of Po pl ar Bl uf f, 43 9 S.W .3d 82 5, 83 0 ( M o

. C t

. App

. 20 14 ); Pu b. Co m m c’n Serv s., In c. v. Si m m on s, 40 9 S.W .3d 53 8, 54 6- 47 (Mo . C t. Ap p. 2 01 3)

. In Feb ru ary 2 01 5, By rn e & J on es was t ran sf

erre d t o t he Mi ss ou ri S up rem e Co ur t.

In Met ro po li ta n we no te d ne it he r th e di st ric t co ur t no r th e pa rti es ha d 5 di sc us se d Arti cl e III st an di ng bu t, wit ho ut fu rth er di sc us si on , su m m ari ly co nc lu de d

we were “ sa ti sf

ie d th at Met ro po li ta n ha d st an di ng un de r Arti cl e III.” Met ro ., 23 F.3 d at 13 70

.
-5-as tru e a l eg al co nc lu si on co uc he d a s a fact ua l al le ga ti on .’ ” Cart on v. Gen . Mo to rs

Accep ta nc e Co rp ., 61 1 F.3 d 45 1, 45 4 (8 th Ci r. 20 10 ) (q uo ti ng McAd am s v. McC or d, 58 4 F .3d 11 11 , 11 13 (8t h C ir. 2 00 9) ).

2. Firs t Am endment
In it s res po ns e to th e Dis tri ct ’s m ot io n to di sm is s, Dem ie n di d no t ad dr es s th e Dis tri ct ’s a rg um en t th at Dem ie n fa il ed to st at e a cl ai m un de r th e Fi rs t Am en dm en t,

an d so th e di st ric t cou rt con cl ud ed Dem ie n aba nd on ed it s Fi rs t Am en dm en t clai m s. Bec au se we ag ree Dem ie n has ab an do ne d i ts cla im s u nd er t he Fir st Am en dm en t b y fai li ng to arg ue th em be fo re th e di st ric t co ur t, we ne ed no t co ns id er Dem ie n’s Fi rs t Am en dm en t arg um en ts on ap pe al

. See Jo se ph v. All en , 71 2 F.3 d 12 22
, 12 26 (8 th Ci r. 20 13 ) (fai li ng to op po se an is su e be fo re th e di st ric t co ur t res ul ts in waiv er of th e is su e

on ap pe al ). W e al so ob se rv e Dem ie n ha s no t m ad e an y sp eci fic al le ga ti on on ap pe al
reg ard in g h ow t he Dis tri ct vi ol at ed Dem ie n’s Fi rs t Am en dm en t ri gh ts

.

3. Four teen th Am endment Due Pro ces s Cl au se To st at e a cl ai m un de r th e Fo ur te en th Am en dm en t Due Pr oc es s Cl au se , Dem ie n

m us t ha ve al le ge d it was de pr iv ed of a pr ot ect ed in te res t wit ho ut du e pr oc es s of la w. See, e.g ., Barn es v. Ci ty of Om ah a, 57 4 F

. 3 d 10 03
, 10 05 -0 6 (8 th Ci r. 20 09 ).
Pro te ct ed in te res ts un de r th e Due Pro ces s C la us e are th os e to whi ch a pe rs on ho ld s

a “ le gi ti m at e cl ai m of en ti tl em en t, ” an d st em fro m “ in de pe nd en t so ur ce[s ] su ch as
st at e la w.” Bd. o f Reg en ts of S ta te Co ll s. v . Rot h, 4 08 U.S. 56 4, 5 77 (19 72 ).

Unl es s Dem ie n can de m on st rat e it he ld a va li d pr op ert y in te res t un de r Mi ss ou ri la w in th e su bjec t co nt ract , we m us t affi rm th e di st ric t co ur t’s di sm is sa l of Dem ie n’s
Fo ur te en th Am en dm en t cl ai m

. See L & H S an it at io n, In c. v. Lak e Ci ty S a n it at io n, In c., 76 9 F.2 d 51 7, 52 4 (8 th Ci r

. 19 85 ) (h ol di ng “ th e di st ric t co ur t di d no t err in di sm is si ng ap pe ll an ts ’ § 19 83 cl ai m ch al le ng in g th e ci ty’ s al le ge dl y arb it rary award of th e co nt ract fo r fai lu re to st at e a cl a i m be cau se [n on e of th e pl ai nt iff s] ha d a
pr ot ect ed pr op ert y in te res t un de r [s ta te ] la w”). “ Und er Mi ss ou ri la w an un su cces sf ul

-6-bi dd er on a co ns tru ct io n pr ojec t ha s no pr op ert y rig ht in th e co nt ract .” Han te n v. Sch

.

Dis t. of Ri ve rv ie w Gard en s, 18 3 F.3 d 79 9, 80 8 (8 th Ci r. 19 99 ); se e al so St at e ex rel

. Mi d- Mo

. Lim es to ne , In c. v. Co un ty of Cal la way , 96 2 S.W .2d 43 8, 44 1 (Mo

. Ct

. App

. 19 98 ). “ [W] he re a pu bl ic bo dy res erv es th e rig ht to reject an y an d al l bi ds ,” a reject ed bi dd er ha s “ no ve st ed in te res t or pr op ert y rig ht ” in th e co nt ract

. La Mar Co ns tr. Co

.
v. Hol t Ct y ., R-II Sch

. Dis t., 54 2 S

. W. 2 d 5 68
, 57 0 (Mo

. Ct

. App

. 19 76 ). Here, th e Dis tri ct ’s in vi ta ti on to bi d cl earl y ad vi se d “ [t]he [Dis tri ct ]

. . . res erv es rig ht to se le ct

a Bi dd er ot he r th an th e lo wes t” an d “ res erv es rig ht to reject an y an d a ll pro po sa ls .”
No reject ed b i d de r ga in ed a pr op ert y rig ht in th e award of th e co nt ract

. See id .; cf.
Town of Cas tl e Ro ck v. Gon zal es , 54 5 U.S. 74 8, 75 6 (2 00 5) (s ta ti ng “ a be ne fit is no t

a pr ot ect ed en ti t l e men t if go ve rn m en t of fic ia ls m ay gr an t or de ny it in th ei r di sc ret io n” ).

Dem ie n accu se s th e di st ric t co ur t o f ig no rin g Met ro po li ta n, Pu bl ic Co m m un ic at io ns Serv ic es , I nc . v . S im m on s, 4 09 S.W .3d 53 8 (Mo . C t. App . 2 01 3)
,
an d St at e ex rel

. Mi d- Mi ss ou ri Lim es to ne , cas es Dem ie n co nt en ds “ es ta bl is h th e rig ht of an un su cces sf

ul bi dd er to br in g su it if th e award of th e bi d w a s d on e un fai rly.”
W hi le th es e cas es de m on st rat e an un su c ces sf ul bi dd er m ay ha ve st an di ng un de r Mi ss ou ri la w to ch al le ng e th e award of a co nt ract , no ne gr an t a pr op ert y rig ht to th e lo wes t bi dd er, an d, fu rth erm or e, “ [s ]tan di ng to br in g a st at e co ur t cl ai m of de pr iv at io n of pr op ert y rig ht s do es no t es ta bl is h a pr ot ect ed pr op ert y in te res t,” Kim Co ns tr. Co.

v. Bd

. of Trus te es of Mu nd el ei n, 14 F.3 d 12 43
, 12 49 (7 th Ci r. 19 9 4 )

. See al so Met ro ., 23 F.3 d at 13 71 ; Si m m on s, 40 9 S. W. 3 d at 54 6; St at e ex rel

. Mi d- Mo

. Lim es to ne , 96 2 S.W .2d at 44 1 (d ecl ari ng “ un su cces sf ul bi dd ers ” d o n o t h av e

“ pr iv at e, pe cu ni ary in te res ts whi ch th e la w wil l re co gn iz e an d e nf or ce”)

.

Fi na ll y , we are un pe rs ua de d by Dem ie n’s at te mp t s to crea te a bi nd in g ob li ga ti on fro m la ng ua ge in th e AIA gu id e an d th e in vi ta ti on to bi d. Bec au se th e AIA
gu id e sa id th e co nt ract “ sh ou ld ” be award ed to th e lo wes t bi dd er, Dem ie n arg ue s th e

-7-Dis tri ct was ob li ga te d to award th e co nt ract to Dem ie n. As th e Dis tri ct su gg es ts , th e

in vi ta ti on an d AIA g ui de m erel y st at e th e Dis tri ct m ay

acce pt th e lo wes t b id , “ bu t

. . . do es n’t ne ed to .” Dem ie n tri es to fin d am bi gu i t y i n t h e AIA gu id e an d th e in vi ta ti on to bi d, m ai nt ai ni ng pr in ci pl es of co nt ract la w de m an d we co ns tru e an y

am bi gu it y ag ai ns t th e Dis tri ct

. Bu t ru le s of co nt ract ua l in te rp ret at io n are in ap pl ic ab le he re be cau se Dem ie n an d th e Dis tri ct ne ve r en te red in to a co nt ract

. See St at e ex rel

. Jo hn so n v. Sev ie r, 98 S.W .2d 67 7, 67 9 (Mo

. 19 36 ) (d et erm in in g an ad ve rti se m en t

so li ci ti ng bi ds to a pu bl ic pr ojec t “ ‘w as n o t a n of fer of a co nt ract , bu t an of fer to

rece i v e pr op os al s fo r a co nt ract ’” (q uo ti ng And ers on v. Bd

. of Pu b. Sch
., 27 S.W

. 61 0, 6 12 (Mo . 18 94 ))).

In su m , Dem ie n fai le d to al le ge th e Dis tri c t d e p r i v ed Dem ie n of an y

en ti tl em en t, an d so it fai le d to st at e a c l a i m un de r th e Fo ur te en th Am en dm en t Due
Pro ces s C la us e.

II I. CONCLUSI ON Fo r th e fo reg oi ng reas on s, we affi rm th e di st ric t co ur t’s di sm is sa l of Dem ie n’s

co m pl ai nt

.

__

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-8-