Opinion ID: 1694377
Heading Depth: 1
Heading Rank: 1

Heading: Exclusivity of Statutory Remedies

Text: Section 41-16-31, Ala.Code 1975, is part of Article 2, Competitive Bidding on Public Contracts Generally, within Title 41, Chapter 16. That section provides: Any taxpayer of the area within the jurisdiction of the awarding authority and any bona fide unsuccessful bidder on a particular contract shall be empowered to bring a civil action in the appropriate court to enjoin execution of any contract entered into in violation of the provisions of this article. Article 3, Competitive Bidding on Contracts of Certain State and Local Agencies, etc., provides for bidding on contracts let by municipalities, school boards, and other entities. It is very similar to Article 2, and includes § 41-16-61, which is identical to § 41-16-31. These Articles are commonly known as the Competitive Bid Law. See, e.g., Crest Construction Corp. v. Shelby County Bd. of Educ., 612 So.2d 425, 431-32 (Ala.1992). The defendants cite cases from this Court as holding that §§ 41-16-31 and 41-16-61 provide the only remedy for allegations that the State or another public body has entered into a contract in violation of the Competitive Bid Law. However, none of those cases addressed a tort action alleging intentional wrongful conduct by individuals involved in the bidding process. City of Montgomery v. Brendle Fire Equipment, Inc., 291 Ala. 216, 279 So.2d 480 (1973), was an action against the City of Montgomery for an injunction against the City's entering into contracts in the future in violation of the Competitive Bid Law. The Court reversed the circuit court's injunction, holding: The statute makes available the equitable remedy of an injunction on a `particular contract.' This wording does not contemplate enjoining future contractual arrangements. Also the statute provides for enjoining the `execution' of any contract which is violative of [Title 55,] Chapter 22 [Code 1940 (Recompiled 1958) (now Title 41, Chapter 16)], not the formation of contracts to be made in the future which may run afoul of Chapter 22. To interpret the statute as Brendle suggests would unduly strain the construction of unambiguous language and provide a remedy not intended by the legislature. 291 Ala. at 220, 279 So.2d at 484 (emphasis in original). In Jenkins, Weber & Associates v. Hewitt, 565 So.2d 616 (Ala.1990), a disappointed bidder had brought an action pursuant to Ala. Code 1975, § 41-16-1 et seq., the Alabama Competitive Bid Law. Id., at 617. The Court held:  City of Montgomery [ v. Brendle Fire Equipment, 291 Ala. 216, 279 So.2d 480 (1973),] established the remedy pursuant to Title 55, § 515 [now § 41-16-31], as one for injunctive relief. Jenkins, Weber's complaint, as amended three times, did not seek injunctive relief pursuant to § 41-16-31, but rather claimed monetary damages. We find nothing in the legislative history of § 41-16-31 nor in the cases interpreting that statute that allows an unsuccessful bidder to sue for monetary damages. In Urban Sanitation Corp. v. City of Pell City, 662 F.Supp. 1041, 1044 (N.D.Ala.1986), a federal district court interpreting that statute stated: `There is no indication in this statute, however, that an unsuccessful bidder has any right or expectancy to insist upon the award of a contract. To the contrary, the statute is carefully crafted to limit the remedy to enjoin[ing] execution of any contract entered into in violation of the provisions of this article. When the statute is unambiguous, its expressed intent must be given effect and there is no room for construction.' (Citation omitted.) Jenkins, Weber contends that the decision not to award it the contract was arbitrary and capricious, and it relies on White v. McDonald Ford Tractor Co., 287 Ala. 77, 248 So.2d 121 (1971); International Telecommunications Systems v. State, 359 So.2d 364 (Ala.1978); Arrington v. Associated General Contractors of America, 403 So.2d 893 (Ala.1981), cert. denied, 455 U.S. 913, 102 S.Ct. 1265, 71 L.Ed.2d 453 (1982); and Mobile Dodge, Inc. v. Mobile County, 442 So.2d 56 (Ala.1983). However, those cases dealt with injunctive relief and do not control this case, because Jenkins, Weber sought monetary damages rather than injunctive relief. We, therefore, conclude that the summary judgment in favor of the defendants was proper, because Jenkins, Weber failed to state a claim cognizable under Code § 41-16-31. Id., 617-18 (footnote omitted). As can be seen from the above quotation, Jenkins, Weber did not bring a tort action alleging intentional wrongful conduct, but instead attempted to state a claim cognizable under Code § 41-16-31. In Crest Construction Corp. v. Shelby County Bd. of Educ., 612 So.2d 425, 431-32 (Ala.1992), the Court rejected an argument that a disappointed bidder should be allowed to recover bid preparation expenses. Again, the action simply alleged that the county board had violated the Competitive Bid Law by declaring one other than the plaintiff to be the lowest responsible bidder, even though the board had prequalified the plaintiff. No issue as to intentional tortious conduct was presented. In Tectonics, Inc. v. Castle Construction Co., 496 So.2d 704 (Ala.1986), the Court answered a certified question asking whether it would use the federal `Small Business Act as a standard in determining fraud, unjust enrichment or interference with a business relationship,' in a suit brought by the second lowest and unsuccessful bidder against the lowest and successful bidder on a government contract, 496 So.2d at 704. The Court recited the fact that the plaintiff Tectonics had not challenged the determination that the defendant Collins Company, Inc., was a small business and therefore was entitled to bid on the contract at issue. The Court then stated: For this Court to allow Tectonics to maintain an action now in state court would be to nullify the federal government's determination that Collins was a small business. Id., at 705 (emphasis in original). The Court continued: Moreover, the Court has refused to confer a state cause of action in favor of an unsuccessful bidder on a municipal procurement: `The provision for letting the contract to the lowest responsible bidder is for the benefit of the public and does not confer on a bidder any right enforceable at law or in equity. ...' (Emphasis added.)  Townsend v. McCall, 262 Ala. 554, 558, 80 So.2d 262, 265 (1955). In light of this pronouncement in Townsend and in light of the fact that the Small Business Act is a federal law which does not confer a federal cause of action in favor of an unsuccessful bidder, this Court sees absolutely no logic in interpreting the Small Business Act to allow a state cause of action. This Court would not use the Small Business Act as a standard in determining fraud, unjust enrichment, or interference with a business relationship in a suit brought by the second lowest and unsuccessful bidder against the lowest and successful bidder on a government contract. 496 So.2d at 705-06 (emphasis in Tectonics ). Because the certified question simply asked whether the Court would use the Small Business Act as a standard in assessing the described tort claims, the Court's reference to Townsend v. McCall, 262 Ala. 554, 558, 80 So.2d 262, 265 (1955), was purely dictum. Townsend was an action to enjoin the execution of a contract, and it does not address the question whether injunctive relief is the exclusive remedy in such cases. Urban Sanitation Corp. v. City of Pell City, 662 F.Supp. 1041 (N.D.Ala.1986), quoted in Jenkins, Weber & Associates, supra, presented a question whether the Competitive Bid Law created a property right that would support an action by an unsuccessful bidder under 42 U.S.C. § 1983. The court found no such property right. Of the above cases, only the federal action underlying the certified question answered in Tectonics involved a claim alleging intentional torts. Four Justices dissented, with an opinion by Justice Adams, expressing the opinion that the Small Business Act's definitions and determinations should be allowed as evidence in regard to the state causes of action, even though that Act did not create a standard in the sense of creating a cause of action based on that law. The dissenters expressed the opinion that the claims of fraud, unjust enrichment, and interference with business relations are indeed viable causes of action under Alabama law. 496 So.2d at 707-08. The majority opinion held only that This Court would not use the Small Business Act as a standard in determining fraud, unjust enrichment, or interference with a business relationship in a suit brought by the second lowest and unsuccessful bidder against the lowest and successful bidder on a government contract. Id., at 706. Although the language referring to Townsend v. McCall, 262 Ala. 554, 558, 80 So.2d 262, 265 (1955), implied that the action would not lie, the majority did not definitively express the opinion that the federal court should dismiss the claim. Upon full consideration of the question, we hold that an action such as this one, alleging intentional wrongful conduct by persons involved in the bidding process, is not necessarily barred by the potential availability of injunctive relief pursuant to Ala.Code 1975, §§ 41-16-31 and 41-16-61. The remedy of injunctive relief provides no sanctions against intentional wrongful conduct by individuals involved, and we see no reason why such individuals should be shielded from responsibility for such intentional wrongful conduct. Injunctive relief is seldom granted in actions alleging violations of the Competitive Bid Law. Compare Crest Constr. Corp. v. Shelby County Bd. of Educ., 612 So.2d 425 (Ala.1992); Steeley v. Nolen, 578 So.2d 1278 (Ala.1991); Horne Wrecker Service, Inc. v. City of Florence, 567 So.2d 1285 (Ala.1990); Advance Tank & Constr. Co. v. Arab Water Works, 910 F.2d 761 (11th Cir.1990) (applying Alabama law); Hospital Systems, Inc. v. Hill Rom, Inc., 545 So.2d 1324 (Ala.1989); McCord Contract Floors, Inc. v. City of Dothan, 492 So.2d 996 (Ala.1986); J.F. Pate Contractors v. Mobile Airport Authority, 484 So.2d 418 (Ala.1986); Mobile Dodge, Inc. v. Mobile County, 442 So.2d 56 (Ala.1983); International Telecommunications Systems v. State, 359 So.2d 364 (Ala.1978); White v. McDonald Ford Tractor Co., 287 Ala. 77, 248 So.2d 121 (1971); Townsend v. McCall, 262 Ala. 554, 80 So.2d 262 (1955); Mitchell v. Walden Motor Co., 235 Ala. 34, 177 So. 151 (1937); and Carson Cadillac Corp. v. City of Birmingham, 232 Ala. 312, 167 So. 794 (1936), all denying injunctive relief, with Kennedy v. City of Prichard, 484 So.2d 432 (Ala.1986), and Arrington v. Associated General Contractors of America, 403 So.2d 893 (Ala.1981), cert. denied, 455 U.S. 913, 102 S.Ct. 1265, 71 L.Ed.2d 453 (1982), both granting injunctive relief. While it is appropriate to create a restrictive standard for interfering with the normal progress of government works, the statements in the cases discussed above indicating that the injunctive remedy is the only remedy for violation of the Competitive Bid Law were not intended to create a license for persons to commit fraud and other intentional torts. Even the potential availability of injunctive relief does not necessarily protect the defrauded party, because the intentional tort may not support the granting of injunctive relief. This case illustrates the likelihood that the statutory provision for injunctive relief will prove ineffective to prevent wrongful conduct. Spring Hill quoted to Smith Electric a price of $114,597 for the substation. Smith Electric included this price as part of its proposal to Sumlin Construction that it would perform as the electrical subcontractor for the sum of $792,850. Sumlin Construction was the low bidder on the Pier C project, bidding $9,431,348. A court would be reluctant to enjoin an entire project based on a complaint by a supplier of materials worth only a little more than 1% of the value of the entire project. Nevertheless, if Spring Hill's evidence is viewed most favorably to Spring Hill's allegations and all reasonable inferences in support thereof are drawn, it appears that the defendants may have intentionally defrauded Spring Hill and interfered with its business. For the foregoing reasons, we hold that an action alleging intentional wrongful conduct by persons involved in a bidding process is not subject to a summary judgment solely on the basis that the injunctive relief afforded by §§ 41-16-31 and 41-16-61 is the sole remedy for violations of the Competitive Bid Law.