Court Opinion

ID: 9530846
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:04:13.05168+00
Date Added: 2024-06-11T13:28:15.919169
License: Public Domain

MR. JUSTICE CLARK, concurring: I concur in the result. I do not concur in the majority’s view that the opportunity to bid is not a protectable property interest necessitating minimal due process guarantees. The majority incorrectly characterizes plaintiff’s asserted property interest here as a “ ‘claim of entitlement’ to the future State contract involved herein” (77 Ill. 2d at 294). That is not the situation at all. Of course plaintiff is not entitled to a future State contract; but plaintiff’s claimed property interest, requiring due process protection, is the opportunity to bid — not entitlement to have the bid accepted. I agree that Bio-Medical Laboratories, Inc. v. Trainor (1977), 68 Ill. 2d 540, 546, and Gonzalez v. Freeman (D.C. Cir. 1964), 334 F.2d 570, 574, are not persuasive. However, Perkins v. Lukens Steel Co. (1940), 310 U.S. 113, 125, 84 L. Ed. 1108, 1114, 60 S. Ct. 869, 876, is also inappropriate. These three cases were all initially concerned with standing, which is not an issue here (and which encompasses a lower standard for determination). Moreover, Bio-Medical and Gonzalez both involved interruption of an existing or continuing relationship, which does not exist here (where the Illinois Department of Administrative Services (hereafter Department) annually invites bids to manufacture license plates and could reject any and all bids (Ill. Rev. Stat. 1977, ch. 127, par. 132.4)). Also, Gonzalez and Bio-Medical were not decided on the basis of due process. To determine whether due process guarantees are applicable to the circumstances here, as the majority correctly points out, the first step is to establish the existence of a protectable property interest. In Board of Regents v. Roth (1972), 408 U.S. 564, 577, 33 L. Ed. 2d 548, 561, 92 S. Ct. 2701, 2709, the Supreme Court stated: “Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law— rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.” (Emphasis added.) (Accord, e.g., Perry v. Sindermann (1972), 408 U.S. 593, 602 n.7, 33 L. Ed. 2d 570, 580 n.7, 92 S. Ct. 2694, 2700 n. 7; Bishop v. Wood (1976), 426 U.S. 341, 344, 48 L. Ed. 2d 684, 690, 96 S. Ct. 2074, 2077. See Mackey v. Montrym (1979), 443 U.S. 1, 61 L. Ed. 2d 321, 99 S. Ct. 2612.) Analysis of both Illinois statutory and common law compels the conclusion that a right to bid, or more precisely the right to an equal opportunity to bid, protected by due process if denied, exists. The Illinois Purchasing Act provides: “It is the purpose of this Act and is hereby declared to be the policy of the State that the principle of competitive bidding and economical procurement practices shall be applicable to all purchases and contracts by or for any State Agency.” (Ill. Rev. Stat. 1977, ch. 127, par. 132.2.) Again, it provides: “That all purchases, contracts and expenditure of funds shall be awarded to the lowest responsible bidder considering conformity with specifications, terms of delivery, quality and serviceability ***.” (Ill. Rev. Stat. 1977, ch. 127, par. 132.6(a).) The primary purpose of these provisions no doubt is to benefit the State; a secondary purpose, but no less important, is to permit anyone, who is responsible and qualified, to compete for a contract. (See Dement v. Rokker (1888), 126 Ill. 174, 194-97.) In the absence of statute, the State, of course, “could let contracts without competitive bidding.” (Inskip v. Board of Trustees (1962), 26 Ill. 2d 501, 512; Bohleber v. Carmi Township Hospital (1975), 30 Ill. App. 3d 969, 974.) Once a statute provides for competitive bidding, as does the Illinois Purchasing Act here, a prospective bidder may not simply be denied the opportunity to bid. On this basis, the instant case is distinguishable from Perkins v. Lukens Steel Co. (1940), 310 U.S. 113, 84 L. Ed. 1108, 60 S. Ct. 869, above, and distinct from the State’s rights under section 4 of the Illinois Purchasing Act: “Any and all bids may be rejected ***.” (Ill. Rev. Stat. 1977, ch. 127, par. 132.4.) Perkins held that the status of bidder does not result in an interest sufficient to challenge legitimate government regulations a prospective contractor must comply with; and section 4 does not compel the State to accept a bid. Here, however, plaintiff, or any prospective bidder, under section 10.1 of the Illinois Purchasing Act (Ill. Rev. Stat. 1977, ch. 127, par. 132.10 — 1), would not even be permitted to acquire the status of bidder (Perkins) and would be prevented from submitting a bid (which can then be rejected). Several older cases of this court have held that the statutory requirement of competitive bidding “necessarily implies equal opportunity to and freedom in all whose interests or inclinations might thus impel them to compete at the bidding.” (Dement v. Rokker (1888), 126 Ill. 174, 196. Accord, Holden v. City of Alton (1899), 179 Ill. 318, 324, and Callaghan & Co. v. Smith (1922), 304 Ill. 532, 540-41.) The opportunity to bid on a government contract, therefore, is a property right, protected from unfair competition and interference by the State without due process. By implication, the State’s argument that plaintiff has not been permanently debarred, or that section 10.1 does not effect such a result, is mistaken. The State asserts that the bid for only a single contract was rejected, thus implying plaintiff should try again “next year.” The record establishes that one reason the bid was rejected was section 10.1, set out in full in the majority opinion (77 Ill. 2d at 292). Section 10.1’s language is: “No person or business entity shall be awarded a contract ***.” The language used is in the nature of a universal denial with no time period or limitation on such preclusion set out. It is true, as plaintiff maintains, that section 10.1 (Ill. Rev. Stat. 1977, ch. 127, par. 132.10 — 1) provides for no notice and hearing or other recourse. However, a statute, constitutionally defective in this respect, may be cured by administrative regulations. (Bell v. Burson (1971), 402 U.S. 535, 542-43, 29 L. Ed. 2d 90, 96, 91 S. Ct. 1586, 1591; accord, Pollion v. Lewis (N.D. Ill. 1971), 332 F. Supp. 777, 778-79.) The Department’s “Purchasing Rules and Regulations Covering Procurement of Commodities, Equipment, Printing, Purchases from Small Businesses, and Guidelines for Procurement of Printing Paper, Stationery and Envelopes” (hereafter Rules) provides for “Rights to Appeal”: “Any decision rendered by the Procurement Division, Department of General Services [now Department of Administrative Services] pursuant to these Purchasing Rules and Regulations may be appealed to the Director of General Services by filing with him a written statement setting forth all the facts and circumstances together with the basis for making such appeal.” (Rules, pt. I, sec. 28.) (Plaintiff did not pursue this appeals route.) Whether this “appeal” is sufficient for due process purposes must be subjected to analysis. Plaintiff denies the Rules’ section 28 appeal is sufficient as a “hearing,” denies it is adequate because it occurs subsequent to a decision of debarment, and denies it is even correctly applicable to the instant case because the decision here was pursuant, at least partially, to section 10.1 of the Illinois Purchasing Act rather than wholly pursuant to the Rules. United States Supreme Court decisions, primarily in this decade (beginning with Goldberg v. Kelly (1970), 397 U.S. 254, 25 L. Ed. 2d 287, 90 S. Ct. 1011), have shown a propensity towards requiring “some kind of hearing *** at some time before a person is finally deprived of his property interests.” (Wolff v. McDonnell (1974), 418 U.S. 539, 557-58, 41 L. Ed. 2d 935, 952, 94 S. Ct. 2963, 2975.) What kind of hearing, its nature or the extent of its proceedings has not been clarified by that court. Indeed, the decisions, except in applying their rationales to the facts before them, have been vague, even tolerantly inconsistent — perhaps of necessity given the multitude of circumstances in which due process attaches. (E.g., contrast Wolff v. McDonnell (1974), 418 U.S. 539, 41 L. Ed. 2d 935, 94 S. Ct. 2963, Mitchell v. W. T. Grant Co. (1974), 416 U.S. 600, 40 L. Ed. 2d 406, 94 S. Ct. 1895, and Arnett v. Kennedy (1974), 416 U.S. 134, 40 L. Ed. 2d 15, 94 S. Ct. 1633, with Goldberg v. Kelly (1970), 397 U.S. 254, 25 L. Ed. 2d 287, 90 S. Ct. 1011, Boddie v. Connecticut (1971), 401 U.S. 371, 28 L. Ed. 2d 113, 91 S. Ct. 780, and Mathews v. Eldridge (1976), 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893. See Friendly, Some Kind of Hearing, 123 U. Pa. L. Rev. 1267, 1274 (1975) (hereafter Friendly).) What the Supreme Court has consistently said is that the process due or procedural requisites for a hearing may vary according to the government function and interest involved, the private interest affected by the government action, and the nature of the proceedings; due process in one case may not be satisfactory in another. (Wolff v. McDonnell (1974), 418 U.S. 539, 560, 41 L. Ed. 2d 935, 953, 94 S. Ct. 2963, 2977; Bella. Burson (1971), 402 U.S. 535, 540, 29 L. Ed. 2d 90, 95, 91 S. Ct. 1586, 1589; Boddie v. Connecticut (1971), 401 U.S. 371, 378-79, 28 L. Ed. 2d 113, 119, 91 S. Ct. 780, 786; Goldberg v. Kelly (1970), 397 U.S. 254, 263, 25 L. Ed. 2d 287, 296, 90 S. Ct. 1011, 1018.) Due process “ ‘is not a technical conception with a fixed content unrelated to time, place and circumstances’ ” but “ ‘is flexible and calls for such procedural protections as the particular situation demands.’ ” (Mathews v. Eldridge (1976), 424 U.S. 319, 334, 47 L. Ed. 2d 18, 33, 96 S. Ct. 893, 903.) According to Mathews, this necessitates “consideration of three distinct factors: first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.” 424 U.S. 319, 335, 47 L. Ed. 2d 18, 33, 96 S. Ct. 893, 903. See Friendly, 123 U. Pa. L. Rev., 1278; and K. Davis, Administrative Law of the Seventies 266-68 (1976). The private interest affected here, of course, is plaintiff’s right to have the opportunity to bid. As is clear from the cases above, the importance of the right affected has a bearing on the adequacy of the hearing available. Plaintiff’s right is not in the nature of a deprivation of personal or real property; nor is it a deprivation of liberty; nor is plaintiff’s right to do business interfered with. (There is, of course, no “right” to State contracts (Ill. Rev. Stat. 1977, ch. 127, par. 132.4; Gonzalez v. Freeman (D.C. Cir. 1964), 334 F.2d 570, 574).) Plaintiff undoubtedly would not discourage anyone from perceiving its loss of the right to present a bid as a loss of a $10 million contract. However, the loss is strictly only the prevention of participation in competition (for bids), the outcome of which is uncertain. The right which plaintiff possesses then is only to compete with others for a contract. It has no expectation of receiving the contract. If the bidder is notified by letter, as here, that its bid is denied pursuant to section 10.1 of the Illinois Purchasing Act, the result is the loss of only that contract for that year — before a party may avail itself of section 28 of the Rules. If the Department has erred, section 28 provides the mechanism for correction. If the Department has not erred, the bidder is debarred permanently. I believe the deprivation here is much less severe than deprivation involving loss of livelihood, liberty or profession (Goldberg, Wolff and Bell respectively). The “risk of an erroneous deprivation” (Mathews v. Eldridge (1976), 424 U.S. 319, 335, 47 L. Ed. 2d 18, 33, 96 S. Ct. 893, 903), pursuant to section 10.1 of the Illinois Purchasing Act and under the Rules’ section 28 “hearing” is minimal. Supreme Court decisions in this decade do not dictate the type of hearing and extent of proceedings required. Judge Friendly of the Second Circuit United States Court of Appeals has written: “The term ‘hearing,’ like jurisdiction,’ is ‘a verbal coat of too many colors.’ Professor Davis has defined it as ‘any oral proceeding before a tribunal.’ Broad as that definition is, it may not be broad enough. Although the term ‘hearing’ has an oral connotation, I see no reason why in some circumstances a ‘hearing’ may not be had on written materials only.” (Friendly, 123 U. Pa. L. Rev. 1267, 1270.) Section 28 is just such a circumstance, since the risk of error is not great. I appreciate the concern about the margin of error, but disagree that the margin is substantial, and note that section 28 allows for just such margin of error. First of all, the conviction or admission of guilt would be a matter of public record. Second, the Department would have access to bidding documents and corporate charters to lessen the possibility of error. Third, whatever denial of association between the corporation and guilty party and roles played by either, whatever extenuating circumstances, whatever explanation or justification a debarred bidder wishes to present to the Director could be adequately and competently done in the “written statement” permitted by the Rules’ section 28. Beyond this I do not see what a hearing of the nature urged by plaintiff, or additional or substitute safeguards, would accomplish. (See People ex rel. Scott v. Illinois Racing Board (1973), 54 Ill. 2d 569, 577-78, where a statute, permitting summary disqualification for a harness racing license on the basis of pending criminal charges, was construed; the license applicant was found to be “clearly disqualified.”) I perceive the government’s interest to be substantial. The State is concerned with efficiently and effectively making its purchases. Necessarily, delaying the award of a bid, pending a hearing to determine whether a bidder should be permanently debarred, makes no sense because the State must expedite the award on behalf of the public. Moreover, the State should keep public funds free from any impropriety, even the appearance of impropriety. Additional or substitute proceedings would add administrative and financial burdens which are unwarranted and unnecessary. Application of the Mathews test sustains the sufficiency of the Rules ’ section 2 8 hearing or appeal. Plaintiff also argues that the hearing is required before a right is permanently deprived and cites Fuentes v. Shevin (1972), 407 U.S. 67, 32 L. Ed. 2d 556, 92 S. Ct. 1983. As the circumstances exist here, I disagree. First, since a bidder’s interest in getting a contract is no greater than another bidder’s interest in a given competiton for the manufacture of one year’s license plates and since the State may reject any and all bids, including the lowest bid, there is no harm in holding the Rules’ section 28 appeal subsequent to the rejection of the bid. Second, as noted above, the margin of error is limited. Third, later Supreme Court cases have qualified the “requirement” of holding a hearing before the deprivation of a right. Mitchell v. W. T. Grant Co. (1974), 416 U.S. 600, 611, 40 L. Ed. 2d 406, 415, 94 S. Ct. 1895, 1902, held that a “hearing must be had before one is finally deprived” of a property interest (emphasis added). Postponement of an inquiry is not violative of due process where an ultimate determination will be had. (Judge Friendly’s opinion in Frost v. Weinberger (2d Cir. 1975), 515 F.2d 57, 66-68, is essentially in accord. Accord, K. Davis, Administrative Law of the Seventies 268-72 (1976). Contra, Mattern v. Weinberger (3d Cir. 1975), 519 F.2d 150.) Barry v. Barchi (1979), 443 U.S. 55, 65, 61 L. Ed. 2d 365, 375, 99 S. Ct. 2642, 2649, noted that where a State’s interest is substantial, and so long as a party’s interest is not “baselessly compromised,” a post-suspension hearing on the deprivation of a property interest can pass constitutional muster. Plaintiff contends, too, that the Rules’ section 28 is applicable only where the decision made by the Department is “pursuant to these Purchasing Rules.” Because here the decision to reject was, at least partially, pursuant to section 10.1 of the Illinois Purchasing Act, section 28’s appeal route is unavailable, plaintiff maintains. We find that argument involves semantics at best, frivolity at worst. All decisions, apropos of the purchase of commodities and equipment on behalf of the State, are made pursuant to the Rules. This is clear from the statute requiring promulgation of the Rules: “All purchases, contracts or other obligation or expenditure of funds by any State agency shall be in accordance with rules and regulations governing such State agency procurement practices and procedures which it shall promulgate and publish in sufficient number for distribution to persons interested in bidding on purchases or contracts to be let by such State agency.” (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 127, par. 132.5.) The rejection of a bid, even on the basis of section 10.1 of the Illinois Purchasing Act, is a decision apropos of the purchase of commodities and equipment on behalf of the State. The language of section 17 of the Rules, “Grounds for Rejection of Bids,” is not exclusive (especially subsections (a) and (c)). For these reasons I am able to concur in the result of the majority’s opinion but not in the reasoning. Plaintiff had a protectable property interest (which it should not lose without benefit of due process).