Opinion ID: 1195345
Heading Depth: 3
Heading Rank: 3

Heading: With Respect To Carl's Protest In The Remand Hearing, Carl Has Received All the Relief to Which It Is Entitled Under CARL I And The Code.

Text: Next, Carl makes several arguments regarding the types of relief available under the Code. Specifically, Carl contends that this court has the authority to (1) terminate the contract, (2) appoint a receiver to supervise the next round of requests for proposals, (3) disqualify Ameritech from bidding on the library automation services contract in the future, and (4) award Carl its attorneys' fees and costs in the instant appeal. For the following reasons, we reject each of these contentions.
Carl argues that, [b]ased upon the policy concerns raised in CARL I, the Court should find that the integrity of the Procurement Code is protected only by the termination of the unlawful Ameritech contract. As previously explained, the Library and Ameritech terminated the contract prior to the remand hearing. Having determined that the contract has already been terminated and that the Hearings Officer correctly determined that the issue was moot, there is no need for this court to terminate the contract yet again.
Carl next argues that this court should appoint a receiver to oversee the subsequent procurement of the new automation systems. In particular, Carl contends that, [g]iven [the Library's] practice of manipulating the Procurement Code, the Court cannot be assured that it will carry out and comply with the Court's instructions on any subsequent remand of this protest. To ensure compliance with its instructions, the Court should appoint a receiver to supervise the solicitation of the new automation system. The temporary appointment of a receiver would not displace the role of the State Librarian or of the policy decisions of [the Library]. [The Library] would decide what type of functions they desire and the objectives they wish to achieve in an automation system. The receiver would simply oversee the procurement and carry out the functions, which would normally be handled by a procurement officer. In support of its request for a receiver, Carl relies heavily upon Judge Rotenberg Educational Center, Inc. v. Commissioner of the Department of Mental Retardation, 424 Mass. 430, 677 N.E.2d 127 (1997) [hereinafter, Judge Rotenberg ]. In Judge Rotenberg, the Massachusetts Supreme Judicial Court upheld the appointment of a receiver to oversee the State Department of Mental Retardation after that department was held in contempt for violating a settlement agreement pertaining to the treatment of patients at a facility for disabled persons. The Judge Rotenberg court began its analysis of the receivership issue by explaining that [a] receivership must be thoroughly justified on the facts, is always to be considered a remedy of `last resort,' and therefore is not often applied in practice. Judge Rotenberg, 677 N.E.2d at 149 (internal quotation marks and citation omitted). The Judge Rotenberg court then listed the extraordinary factors justifying the appointment of a receiver in that case. Specifically, the court had determined that the State Department of Mental Retardation had: (1) repeatedly violated [a] settlement agreement; (2) interfered with court-authorized treatment orders; (3) bypassed the court-appointed monitor; and (4) knowingly misled the judge. See id. at 150 (footnote omitted). None of the extraordinary circumstances listed in Judge Rotenberg are present in the instant appeal. First, although it is true that this court determined that former State Librarian, Bartholomew Kane, executed the Ameritech contract in bad faith, CARL I, 85 Hawai`i at 451, 946 P.2d at 21, Kane has been replaced by a new State Librarian, who, on the current record, has not engaged in any bad faith conduct. Second, the procedural posture of the instant appeal differs markedly from that in Judge Rotenberg, where the department, after repeated violations of a settlement agreement and court orders, refused to acknowledge any wrongdoing in [a] contempt action. Judge Rotenberg, 677 N.E.2d at 150. Here, the new State Librarian specifically acknowledged, [b]ased on [her] own analysis of the Protest,... that the best way to resolve the Protest lies in turning a corner away from the original request for proposals that led to the current [Library] contract with [Ameritech], and starting fresh with a new competitive procurement of automation services. Contrary to Carl's contentions, by terminating the contract according to its terms, the Library did not violate this court's orders on remand. In sum, the extraordinary circumstances that justified the appointment of a receiver in Judge Rotenberg are simply absent in the present appeal. We therefore reject Carl's request for the appointment of a receiver to supervise the Library's next Request for Proposals.
Carl next contends that, [i]n CARL I, the Court recognized the authority of the Hearings Officer to disqualify an offending vendor to remedy a violation of the Procurement Code. In support of its argument that the Hearings Officer could have, and should have, disqualified Ameritech from bidding on future Library contracts, Carl quotes the following language: [T]he Hearings Officer... could ... have ordered the cancellation of the solicitation and precluded Ameritech from submitting a proposal on any subsequent solicitation based on the same specifications[.] CARL I, 85 Hawai`i at 450, 946 P.2d at 20. Putting aside the fact that this court cannot know whether the Library's next Request for Proposals will involve the same specifications, Carl's contention, at best, misapprehends this court's statements in CARL I and, at worst, misrepresents them. In CARL I, this court repeatedly noted that Carl's remedies were limited by the fact that the Library had executed the contract with Ameritech. Immediately prior to the language Carl quotes supra, this court stated that,  [h]ad the contract not been executed, the relief Carl seeks[, which included the potential disqualification of Ameritech from submitting a proposal,] would have been available.  CARL I, 85 Hawai`i at 450, 946 P.2d at 20. We went on to explain, however, that [b]ecause the contract had already been executed, ... even if the Hearings Officer or this court agreed that Ameritech's proposal should not have been considered, the only remedy available is ratification or termination of the contract pursuant to HRS § 103D-707, not the award of the contract to CARL as the only responsive, qualified bidder. Id. (Emphasis added). Thus, this court did not hold, as Carl contends, that, under the circumstances of this case, the unfair advantage [can] only [be] resolved by precluding the offending vendor from bidding on the solicitation. Even aside from this court's holding that Carl's remedies were limited to ratification or termination, Carl's request that this court debar Ameritech at this stage of the proceedings presents other problems as well. As Ameritech contends in its answering brief, it would be inappropriate for this court to debar Ameritech at this time. HRS § 103D-710(a) provides jurisdiction to review a final decision of a hearings officer under section 103D-709. HRS § 103D-712 provides that [r]equests for judicial review under section 103D-710 shall be filed in the supreme court within ten calendar days after the issuance of a written decision by the hearings officer under section 103D-709.  The written decision that the hearings officer has the authority to make under HRS § 103D-709 is whether the determinations of the chief procurement officer ... were in accordance with the Constitution, statutes, [and] regulations[.] HRS § 103D-709(f). In the instant case, the chief procurement officer has not even addressed, let alone determined, the existence of causes sufficient to support debarment of Ameritech as provided under HRS § 103D-702. [19] Nor has there been a proceeding or decision under HRS § 103D-709 to consider the State's failure to act under HRS § 103D-702. [20] Thus, there is no written decision on the subject of Ameritech's debarment which this court can review. See HRS § 103D-712(b). For the reasons discussed supra, we reject Carl's attempts, in the instant appeal, to disqualify Ameritech from bidding in the Library's next Request for Proposals.
Finally, Carl requests that this court award Carl its attorney fees [sic] and costs in his judicial review, because [a]ll of the attorney's fees and costs incurred by CARL were the direct result of the unjustified and illegal acts and conduct of [the Library] and the Attorney General. Because the facts permeating the instant appeal differ markedly from the facts that justified the imposition of attorneys' fees and costs [21] in CARL I, we reject Carl's request. Initially, it should be noted that Carl seeks only costs associated with appeal No. 21919. However, unlike this court's award of bid preparation costs in CARL I, HRS § 103D-701(g) [22] does not authorize the award of costs associated with an appeal. To determine whether the costs associated with a litigant's appeal should be awarded, this court looks to Hawai`i Rules of Appellate Procedure (HRAP) Rule 39 (1995). HRAP 39 states that  if a judgment is affirmed ..., costs shall be taxed against the appellant ... unless otherwise ordered. (Emphases added.) Because we affirm the September 24, 1998 decision of the Hearings Officer, Carl would not be entitled to recover its costs under HRAP 39. With respect to Carl's attorneys' fees, this court, in CARL I, explained the test to be used in determining whether to grant a successful bidder's request for such fees: [B]ecause the legislature has failed to provide any statutory remedy for bad faith conduct on the part of the purchasing agency, and because requiring the protestor to bear the financial burden of enforcing the Code under these circumstances undermines the purposes of the Code, we hold that a protestor is entitled to recover its attorney's fees incurred in prosecuting its protest if: (1) the protestor has proven that the solicitation was in violation of the Code; (2) the contract was awarded in violation of HRS § 103D-701(f); and (3) the award of the contract was in bad faith. CARL I, 85 Hawai`i at 460, 946 P.2d at 30 (citation omitted). Thus, this court awarded Carl its attorneys' fees based on the recognition that the Code had a built-in disincentive for an aggrieved participant to pursue a protest past the agency stage once the contract ha[d] been awarded. Id. Although the built-in disincentives of the Code still exist, they are not implicated by the facts of the instant appeal. Here, Carl is not challenging the award of a contractit is challenging the fact that the Library and Ameritech, rather than the Hearings Officer, terminated the previously-awarded contract. At base, Carl seeks, among other things, to have this court impose certain conditions on the contract termination. Inasmuch as Carl achieved the only remedy to which it was entitled on remandtermination of the contractthe equities that justified the imposition of attorneys' fees in CARL I do not exist. Recognizing that this case falls outside the rubric of CARL I, the default American rule applies. As this court recently observed: Normally, pursuant to the American Rule, each party is responsible for paying his or her own litigation expenses. This general rule, however, is subject to a number of exceptions: attorney's fees are chargeable against the opposing party when so authorized by statute, rule of court, agreement, stipulation, or precedent.... [T]his court has applied the exception where the wrongful act of the defendant causes the plaintiff to litigate with a third party. Fought & Co., Inc. v. Steel Engineering and Erection, Inc., 87 Hawai`i 37, 50-51, 951 P.2d 487, 500-01 (1998) (citation omitted). Under the circumstances of the instant appeal, the Code does not authorize the recovery of Carl's attorneys' fees, and Carl has not cited any additional statute, rule of court, agreement, stipulation, or precedent that would justify such an award. See id. at 51, 951 P.2d at 501. In sum, under the circumstances of this case, Carl is not entitled to recover its (1) costs under HRAP 39 or (2) attorneys' fees under the exceptional rule announced in CARL I. Accordingly, we reject Carl's request for costs and attorneys' fees associated with the prosecution of its current appeal in 21919.