Opinion ID: 2600500
Heading Depth: 3
Heading Rank: 2

Heading: Exclusive Remedy Provision

Text: Alaska's State Procurement Code [7] sets out legal and contractual remedies for state procurement disputes in article 8, which is codified as AS 36.30.550-36.30.699. The key provision in article 8 at issue in this case is AS 36.30.690, which states: Notwithstanding AS 44.77 or other law to the contrary, AS 36.30.560-36.30.699 and regulations adopted under those sections provide the exclusive procedure for asserting a claim against an agency arising in relation to a procurement under this chapter. The exclusive procedure adopted by the code permits only one narrow administrative channel for obtaining relief and allows only a single, limited remedy: The code requires offerors to seek administrative review of a procurement officer's actions by appealing to the commissioner of administration, whose final decision may then be appealed to the superior court; [8] and when a disappointed offeror prevails, the code expressly limits the offeror's award of damages to reasonable. . . proposal preparation costs. [9] In Bowers Office Products, Inc. v. University of Alaska, we recognized that these provisions create[] an exclusive remedy for `interested parties' protesting the state's award of a purchasing contract. [10] Alaska's Code of Civil Procedure confirms and reinforces the procurement code's exclusive remedy provisions by preserving the state's sovereign immunity from liability in any civil action arising from a procurement dispute. Although AS 09.50.250 generally waives the state's right to claim sovereign immunity as to persons having a contract, quasi-contract, or tort claim against the state, the statute carves out an exception for procurement cases, providing, A person who may bring an action under AS 36.30.560-36.30.695 may not bring an action under this section except as set out in AS 36.30.685.
J & S's complaint against the department unquestionably amounts to a claim against an agency arising in relation to a procurement under AS 36.30.690; and J & S indisputably qualifies as [a] person who may bring an action under AS 36.30.560-36.30.695. Because these provisions unambiguously apply to J & S and allow only a narrow form of administrative redress, they appear to directly bar J & S from pursuing its contract and tort claims against the department. Indeed, J & S offers no persuasive basis to avoid this conclusion. It suggests that the procurement code's remedies may be inadequate, and should not be applied, because its complaint alleges bad faith and deliberate misconduct. But we rejected similar arguments when we limited an unsuccessful bidder's remedy against the state to bid preparation costs in King v. Alaska State Housing Authority. [11] In King, we held that an agency impliedly contracts to give bids it solicits fair and honest consideration. [12] Adopting the rule in Heyer Products Co. v. United States, [13] we recognized that subjective bad faith on the part of procuring officials causes the state to breach its implied contract with the bidder. [14] We discussed how an unlimited damages remedy would subject the state to excessive litigation arising out of the procurement process, impede the right of the department to reject any and all bids, and force the public to pay twice, once for a bad procurement and a second time to compensate the wronged bidder, [15] and ultimately held that bid preparation costs were the only damages properly available to the bidder from the state. [16] Accordingly, we conclude that the superior court correctly dismissed J & S's complaint against the department on the ground that the exclusive remedy provision barred the claims.
The same conclusion does not necessarily hold true with respect to J & S's claims against Tomter. As indicated above, the exclusive remedy provision and the corresponding immunity statute apply to a claim against an agency [17] and to a claim against the state, [18] but do not expressly bar claims against individuals. [19] Insofar as J & S makes claims against Tomter as a procurement officer acting within the course and scope of his duties, then, the exclusive remedy provision would appear to bar the complaint. But on the other hand, to the extent that J & S's complaint might be seen as an individual action against Tomter for deliberate and bad faith misconduct that falls outside the scope of his proper duties, then it might not be fair to characterize the complaint as a claim against the state or to dismiss it as barred by the exclusive remedy provision. On its face, the complaint does not restrict J & S's claims against Tomter to actions he took in his official capacity. And neither the department nor Tomter cites any authority that would support automatically extending the exclusive remedy provision to conclusively bar, as claims against an agency, all procurement-related complaints accusing individual public officials of engaging in deliberate acts of misconduct. Nor does our decision in King v. Alaska State Housing Authority compel such a sweeping extension. King did not consider whether a bidder could sue an individual official in tort for acting in bad faith outside the scope of his duties; rather, it only considered the consequences to the state of breaching its implied contractual duty of good faith to a bidder. Although we recognized that a promise of honest and fair consideration of bids can reasonably be implied in the public contract context, we emphasized the exclusive remedy provision's importance as a counterweight to the extra responsibility the government bears as it contracts. [20] Yet this rationale loses much of its force when a bidder claims deliberate misconduct occurring outside the course of an official's usual duties and seeks damages from the individual rather than from the state. To be sure, we recognize that allowing officials to be sued individually for intentional misconduct occurring under color of law might entail certain risks, such as discouraging proper as well as improper state action and encouraging efforts to evade the exclusive remedy provision. Yet we think that in the procurement context, as in other areas involving official misconduct, we can best address concerns like these using the traditional legal framework governing official immunity, rather than by artificially extending a limitation expressly drawn to apply only to claims against state agencies rather than against individual officials. In determining the scope of official immunity for discretionary acts done within the scope of an official's authority, we generally seek to balance the public's interest in efficient, unflinching leadership and the interests of the injured parties by considering three factors: (1) The nature and importance of the function that the officer performed to the administration of government. . .; (2) The likelihood that the officer will be subjected to frequent accusations of wrongful motives and how easily the officer can defend against these allegations; and (3) The availability to the injured party of other remedies or other forms of relief. . . . [21] When dealing with core duties and vital functions, the balance sometimes favors applying a rule of absolute immunity. [22] But the balance more typically requires qualified immunity, which only protects public officials from acts done in good faith. [23] In the procurement context, it seems likely that state officials would be entitled to absolute immunity against suits alleging impropriety in the performance of certain core functions, such as evaluating and scoring subjective components of competing offers. For present purposes, however, we need not resolve the issue. Here, the superior court dismissed J & S's complaint against Tomter on the sole ground that the action was barred by the exclusive remedy provision. The court did not rely on official immunity or undertake the balancing analysis necessary to determine if Tomter should be deemed absolutely immune or only immune if he acted in good faith. On appeal, the parties provide no meaningful briefing on this issue. But since J & S expressly alleges that Tomter acted in bad faith and engaged in a course of deliberate misconduct  potentially including illegal actions  it seems apparent that Tomter would be entitled to dismissal on grounds of official immunity only if he established circumstances affording him the right to claim absolute immunity. Tomter has shown no such circumstances, and we are unprepared to say as a matter of law that J & S could prove no set of facts under which Tomter would be unprotected by absolute immunity. [24] Accordingly, dismissing the individual claim against Tomter as barred by the exclusive remedy provision does not appear to be justified.