Opinion ID: 796144
Heading Depth: 4
Heading Rank: 1

Heading: Plaintiff's constitutional standing

Text: 15 In order to assert constitutional standing, Plaintiff must show that it suffered an injury-in-fact that is cognizable by this Court. Lujan, 504 U.S. at 560, 112 S.Ct. 2130. The district court improperly approached this question by applying an inapplicable body of law in addressing the question of Plaintiff's standing; and, additionally, by conflating the standing analysis for Plaintiff's claims with the merits of its due process claim. 16 The district court's conclusion that Plaintiff lacks standing seems to be based on two grounds. First, the district court held that because Plaintiff does not allege a legally protectable interest, Plaintiff does not have standing. This conclusion improperly grafts the standing inquiry onto the merits of Plaintiff's due process claim. The fact that Plaintiff has no legal right to bid on the contract at issue, and therefore, has not suffered the invasion of a protected liberty or property interest, has no bearing on the question of standing. As the Supreme Court clarified in Data Processing, a plaintiff need not have a legal right, or a right protected by the law of property, contract, tort, or statute, to suffer injury-in-fact. 397 U.S. at 153, 90 S.Ct. 827. Stripped to its essence, the district court's conclusion is simply that Plaintiff does not allege a violation of an interest protected by the Due Process Clause. While this argument goes toward the merits of Plaintiff's due process claim, it does not affect the standing inquiry. 17 The district court further based its conclusion that Plaintiff did not have standing to bring its claims upon the improper characterization of Plaintiff as a disappointed bidder. The court determined that as a disappointed bidder, Plaintiff was unable to assert standing. In coming to this conclusion, the district court relied upon several cases for the proposition that a disappointed bidder has no standing to sue. See United of Omaha Life Ins. v. Solomon, 960 F.2d 31 (6th Cir.1992); Kasom v. City of Sterling Heights, 600 F.Supp. 1555 (E.D.Mich.1985); Malan Construction Corp. v. Board of County Road Comm'rs, 187 F.Supp. 937 (E.D.Mich.1960). 18 The law concerning whether a disappointed bidder is conferred standing in a federal court has been the source of a fair amount of confusion. In the interest of clarity, we will begin with a discussion of the general law in this area. 19 In Perkins v. Lukens Steel Co., the Supreme Court expressly addressed whether a disappointed, or unsuccessful, bidder has standing to seek relief in federal court. The Court held that a disappointed bidder for a federal government contract did not have standing to sue the federal government for violations of bidding rules contained in the Public Contracts Act. 310 U.S. 113, 125-26, 132, 60 S.Ct. 869, 84 L.Ed. 1108 (1940). The Court reasoned that no legal rights of [plaintiffs] were shown to have been invaded or threatened and that neither the damage nor loss of income in consequence of the action of the Government, which is not an invasion of a legally recognized right, is itself a source of the legal rights in the absence of constitutional legislation recognizing it as such. Id. at 125, 60 S.Ct. 869. 20 Since that ruling, the impact of Lukens Steel has been eroded by the passage of the APA. Increasingly more courts have come to view the APA as proof of congressional intent to create private rights in contracting with the government. These courts have reasoned that this congressional intent supplanted the Supreme Court's previous ruling and conferred standing upon disappointed bidders. See B.K. Instrument, Inc. v. United States, 715 F.2d 713, 722-23 (2d Cir.1983); Airco, Inc. v. Energy Research & Dev. Admin., 528 F.2d 1294, 1296 (7th Cir.1975); Armstrong & Armstrong, Inc. v. United States, 514 F.2d 402, 403 (9th Cir.1975); Merriam v. Kunzig, 476 F.2d 1233, 1242 (3d Cir. 1973); William F. Wilke, Inc. v. Department of Army, 485 F.2d 180, 182-83 (4th Cir.1973); Scanwell Laboratories., Inc. v. Shaffer, 424 F.2d 859, 865-67 (D.C.Cir. 1970). 21 Unlike those circuits, this Court has declined to depart from Lukens Steel in its entirety. Instead, we have held that the APA represents an exception to the general rule that disappointed bidders do not have standing. Where there is proof of congressional intent to confer standing upon a disappointed bidder, this Court will recognize such standing. However, it remains the law in this Circuit that where the APA or similar legislation that expresses a congressional intent to create standing does not apply, a disappointed bidder does not have standing before this Court. As we explained in Cincinnati Electronics Corp. v. Kleppe, 22 Rather, we view the present case as dealing with an exception recognized in Lukens Steel, 310 U.S. at 125, 60 S.Ct. 869 . . . where Congress has by `constitutional legislation' recognized the legal right of a bidder for government contracts to benefit from the policy of granting a fair share of such contracts to small business concerns. Standing is conferred by Section 10 [of the APA] only when a relevant statute indicates a congressional intent that the person or firm seeking review comes within the zone of interests sought to be regulated or protected. Absent such a congressionally created exception, the general rule of Perkins v. Lukens Steel, supra, that a disappointed bidder has no legally enforceable right against the government's award of a procurement contract retains its validity. 23 509 F.2d 1080, 1085-86 (6th Cir.1975); see also Hoke v. Tennessee Valley Auth., 854 F.2d 820, 825 (6th Cir.1998) (discussing Kleppe ). 24 Thus, this Circuit has recognized the passage of the APA as an exception to the general rule in Lukens Steel, not as a legislative rejection of it. Therefore, unless a party brings a suit under the APA or similar legislation which evinces a congressional intent to create a grounds for standing for a disappointed bidder, this Court will not confer standing upon disappointed bidders. Kleppe, 509 F.2d at 1085-86. 25 Because Plaintiff in the present case does not rely on the APA or any similar legislation, it would, as the district court held, be improper to grant Plaintiff standing as a disappointed bidder. This conclusion, however, does not end the standing discussion. While the district court properly held that Plaintiff did not have standing as a disappointed bidder, it neglected to address Plaintiff's assertion that it is not, in fact, a disappointed bidder because it never actually submitted a bid. Instead, Plaintiff contends that its standing arises from the fact that it was not afforded an adequate opportunity to submit a proposal in an open bidding process. Therefore, Plaintiff argues, it has suffered the necessary injury-in-fact to assert standing without relying on the disappointed-bidder theory. 26 We are persuaded that Plaintiff cannot be characterized as a disappointed bidder because Plaintiff never actually submitted a bid. See Nat'l Fed'n of Fed. Employees v. Cheney, 883 F.2d 1038, 1053-54 (D.C.Cir.1989) (concluding that since neither the appellant nor its members ever submitted a bid, it was not a disappointed bidder in a procurement contract case). Therefore, the district court's focus on cases addressing the standing of a disappointed bidder was misplaced. Plaintiff need only allege a cognizable injury-in-fact and show that the rights it seeks to have protected fall within the zone of interest of the constitutional guarantees being invoked in order to have standing. 27 Defendant's refusal to allow Plaintiff to bid on the contract allegedly caused it to suffer an economic injury, since it precluded Plaintiff from being considered for a lucrative contract. This Court has explicitly held that such an economic injury is sufficient to confer standing upon a party. Owen of Georgia, Inc. v. Shelby County, 648 F.2d 1084, 1089 (6th Cir.1981). The district court improperly distinguished Owen of Georgia on the basis that it involved Tennessee instead of Michigan law. However, the proposition that economic injury of a prospective bidder constitutes an injury-in-fact is not derived from Tennessee law. In fact, this Court expressly stated in that case that in coming to this conclusion it was not looking to Tennessee law, but rather, to the United States Supreme Court. Specifically, we held 28 Even looking beyond Tennessee law to the recent restrictive decisions of the Supreme Court we would find that Owen would have standing. As a prospective, and here the low bidder for Shelby County business, Owen clearly has economic interests at stake which give it standing. Its injury in fact is loss of business and profits which is fairly traceable to the defendants acts or omissions. Village of Arlington Hts. v. Metropolitan Housing Dev. Corp., 429 U.S. 252, 261, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977). 29 Owen of Georgia, 648 F.2d at 1089. Further, several of our sister circuits have also held that a prospective bidder's economic interest in a proposal on which it was not allowed to bid constitutes injury-in-fact for the purposes of standing. See, e.g., Image Carrier Corp. v. Beame, 567 F.2d 1197, 1201 (2d Cir.1977) (As prospective bidders for City business, appellees clearly have economic interest at stake sufficient to give them standing.). Plaintiff's economic injury is well-recognized as sufficient to support standing. 30 Contrary to Defendant's argument, the fact that Plaintiff is a non-profit organization does not undermine the theory that Plaintiff's economic injury is an injury-in-fact. The Supreme Court has already rejected this argument. See Vill. of Arlington Heights v. Metro. Hous. Dev., 429 U.S. 252, 262, 97 S.Ct. 555, 50 L.Ed.2d 450 (1977) (holding that a non-profit organization had standing based upon an economic injury). Defendant further argues that Plaintiff must submit evidence of this economic injury in order to avoid summary judgment. This argument is also unconvincing. While Lujan does state that [i]n response to a summary judgment motion . . . the plaintiff can no longer rest on such `mere allegations,' but must `set forth' by affidavit or other evidence `specific facts,' to support its allegations, the Court was referring to a situation where the facts behind a plaintiff's injury were contested. 504 U.S. at 561, 112 S.Ct. 2130. The Court went on to explain: Since [standing is] not a mere pleading requirement but rather an indispensable part of the plaintiff's case, each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof. Id. According to the Federal Rules of Civil Procedure, a plaintiff need not supply an affidavit setting forth facts unless those facts are actually contested. Fed.R.Civ.P. 56(e). Defendant has not contested that Plaintiff may have suffered economic injury, but instead has argued that such an injury does not constitute injury-in-fact within the meaning of Article III. Since we have held that Plaintiff's claim, if proven, would constitute an injury-in-fact, there is nothing more for Plaintiff to prove in order to show that it has standing. 31 In addition to alleging an injury-in-fact, Plaintiff has no trouble meeting the other two requirements of constitutional standing: Plaintiff's injury is traceable to the actions of Defendant; and it is possible, instead of merely speculative, that Plaintiff can succeed on its claims. Lujan, 504 U.S. at 560, 112 S.Ct. 2130. 32