Source: https://casetext.com/case/xtl-nh-3
Timestamp: 2019-04-25 18:07:34+00:00

Document:
XTL-NH, Inc. v. New Hampshire State Liquor Commission and Exel, Inc.
The Petitioner, XTL-NH, Inc. ("XTL"), has brought an action against the Respondents, the New Hampshire State Liquor Commission (the "Commission") and Exel, Inc. ("Exel"), arising out of XTL's unsuccessful bid for a liquor warehousing contract. The Commission awarded the contract to Exel, another bidder. XTL alleges that the bidding process by which the contract was awarded to Exel was unlawful under New Hampshire competitive bidding law. XTL now moves for leave to amend its Petition for a second time. The Commission and Exel object, arguing that XTL is simply attempting to re-characterize claims that that have already been dismissed. For the reasons stated in this Order, the Petitioner's Motion to Amend is DENIED.
The following summary of facts is taken from the Court's Order on the State's Motion for Summary Judgment, entered on July 16, 2014. The Court considered the evidence in the light most favorable to XTL, with all reasonable inferences therefrom, as required by New Hampshire law. Sintros v. Hamon, 148 N.H. 478, 480 (2002).
On November 20, 2012, the Commission awarded Exel a 20 year contract for warehousing services. The contract was the result of a bidding and evaluation process conducted entirely by the Commission pursuant to RSA 21-I:18. XTL contends that it was the highest scored bidder that also met all of the Commission's Requests for Proposal (the "RFP"). XTL took no exception to the RFP, had the lowest price for the first 30 months of the contract, and was the most automated bidder. Nevertheless, the Commission ranked XTL second in its bidder scoring hierarchy; XTL's overall score was 2.24 points less than Exel's overall score.
After XTL exhausted its administrative remedies in an attempt to overturn the Commission's award to Exel, it brought this Petition. The Commission moved for summary judgment on the ground that the Commission was cloaked with sovereign immunity, which barred the action against it. In an Order dated July 16, 2014, this Court denied the Commission's Motion for Summary Judgment in part, finding that the Petitioner could maintain an action for money damages based on the theory of promissory estoppel, and granted it in part, concluding that sovereign immunity precluded the Petitioner's claim for equitable relief.
XTL-NH seeks to amend its Amended Petition to correct the perceived procedural deficiency that its equitable relief claims are barred by sovereign immunity. It therefore seeks to re-characterize Count I as a request for declaratory and injunctive relief and a writ of mandamus.
(Mot. Amend. ¶ 8.) It argues that it should be permitted to amend by characterizing the Court's Order of July 16, 2014 as purely procedural in nature. (Id. ¶ 7.) XTL misapprehends the Court's Order.
RSA 514:9 permits amendment "upon such terms as the court shall deem just and reasonable." Indeed, it is well settled that New Hampshire law allows for liberal amendment of pleadings. See, e.g., Bel Air Assocs. v. N.H. Dept. of Health & Human Servs., 154 N.H. 228, 236 (2006) ("[T]his court allows liberal amendment of pleadings unless the changes surprise the opposite party, introduce an entirely new cause of action, or call for substantially different evidence."). However, when the proposed amendments are futile, and will not cure the defect in the petition, those amendments should be denied. Sanguedolce v. Wolfe, 164 N.H. 644, 648 (2013).
N. Or, in the alternative to Prayer for Relief (M), after a final hearing, mandating that NHSLC, Chairman Mollica, and Commissioner Milligan rebid the warehousing contract using an RFP and competitive bidding process that complies with New Hampshire law and that utilizes a new, impartial Evaluation Committee.
New Hampshire courts lack subject matter jurisdiction to hear an action against the State unless the legislature has "prescribe[d] the terms and conditions on which it consents to be sued, and the manner in which the suit shall be conducted." Sousa v. State, 115 N.H. 340, 342 (1975). Under RSA 491:8, jurisdiction has been conferred upon the superior court "to enter judgment against the state of New Hampshire founded upon any express or implied contract with the state." However, the statute has been interpreted to limit relief to suits seeking money damages; it contains no reference to redress in equity.
Although the plaintiffs amended their original petition for protective injunction to one for declaratory judgment, the requested relief remained essentially the same. As the trial court stated, "[R]egardless of how the petitioners have styled their suit in equity . . . [they] are effectively proceeding upon the theory that they are entitled to specific performance of promised employment for life . . . . [S]uch a promise is not enforceable in equity by specific performance or injunctive relief," or, may we add, by declaratory judgment.
Lorenz, 152 N.H. at 636 (emphasis supplied).
As the New Hampshire Supreme Court held in Lorenz, a plaintiff cannot circumvent the State's sovereign immunity by the simple expedient of seeking equitable relief. The New Hampshire Supreme Court has explicitly recognized that an invitation to bid on a public contract is not an offer, and the bid itself is an offer that creates no right until it is accepted. Marbucco Corp. v. City of Manchester, 137 N.H. 629, 632-33 (1993). A bidder's reasonable reliance on a public entity's promise to award a contract the lowest responsible bidder that submits required information by the stated deadline may entitle a bidder to damages under a theory of promissory estoppel. Id. (citing RESTATEMENT (SECOND) OF CONTRACTS § 90 (1979)). A disappointed bidder asserting a promissory estoppel claim is generally limited to damages sustained by justifiable reliance on the promise to conduct a fair bidding process. Marbucco Corp., 137 N.H. at 634. Only if a disappointed low bidder complies with all requirements of the bid instructions, but is deprived of the contract through some conduct of the awarding authority tantamount to bad faith, may the bidder recover lost profits.
This Court has already held that the State's sovereign immunity is not impliedly waived by New Hampshire's competitive bidding statute. Order, July 16, 2014, at 9-10. It is apparent that the purpose of the proposed amendment is simply to add claims for a declaratory judgment and injunctive relief in order to obtain damages for lost profits for breach of contract, even though (1) XTL never had a contract with the State and (2) even though this Court has already ruled that any claim for damages based on a violation of the competitive bidding laws is barred by sovereign immunity. The relief XTL seeks is nothing more than the lost profit damages that the Court has already held it may not recover, other than through a claim of promissory estoppel coupled with bad faith. In sum, the proposed amendment fails for the same reason that the claims in Lorenz failed; "the State has not consented to be sued in equity for the claims presented by the Plaintiff." Lorenz, 137 N.H. at 636.
It follows that since the proposed amendment would be futile, the Petitioner's Motion to Amend must be DENIED.

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