Date: 06-16-2007

Case Style: Marco Outdoor Advertising, Inc. v. Regional Transit Authority and Clear Channel Outdoor, Inc.

Case Number: 05-30875

Judge: E. Grady Jolly

Court: United States Court of Appeals for the Fifth Circuit on appeal from the Eastern District of Louisiana (Orleans Parish)

Plaintiff's Attorney: Unknown

Defendant's Attorney: Unknown

Description:

This cause arises under 42 U.S.C. § 1983. Marco Outdoor Advertising, Inc., ("Marco") contends that the Regional Transit Authority ("RTA") deprived it of property without due process of law when, in violation of the Louisiana Public Bid Law, La. R.S. § 38:2211, et seq. ("Public Bid Law"), RTA arbitrarily awarded an advertising contract ("Contract") to an inferior bidder, Clear Channel Outdoor, Inc. ("Clear Channel"). The district court held that because the Public Bid Law does not apply to this Contract, the state had created no property right in favor of prospective bidders such as Marco,1 and consequently, Marco, having no protected property interest, had failed to state a constitutional due process claim. The district court therefore dismissed the case for lack of federal question jurisdiction.

The issue presented and argued by the parties, both at trial and on appeal, is whether the Public Bid Law applies to this Contract (thereby creating a property interest), a difficult and unclear claim under Louisiana law. Marco contends that it applies; RTA and Clear Channel contend that it does not. We find it unnecessary to decide this question because we hold that, even assuming the Public Bid Law applies and creates a property interest in this Contract, Louisiana state courts provide an adequate procedural remedy for the alleged deprivation.2 We therefore AFFIRM the dismissal of Marco's complaint for failure to state a federal claim.

I.

On August 6, 2004, RTA initiated Request for Proposals No. 2004-015, under which it sought sealed bids from advertising contractors for proposals that would generate revenue for RTA by placing advertisements on RTA's vehicles, transit shelters, and transit benches. RTA received bids from six contractors, including Marco and Clear Channel. The parties dispute whose bid is financially superior, that is, which will generate more advertising revenue for RTA. On May 24, 2005, in response to Marco's inquiries, RTA informed Marco that RTA planned to award the Contract to Clear Channel two days later on May 26.

Marco took action, however, and on May 25, Marco filed this 42 U.S.C. § 1983 suit against RTA in federal district court. Marco sought an injunction preventing RTA from awarding the Contract to Clear Channel and a writ of mandamus ordering RTA to award the Contract to Marco. In the district court and on appeal, Marco argues that its bid is financially superior to Clear Channel's bid, and that under the Public Bid Law, RTA must award the Contract to Marco, which allegedly submitted the best bid. Marco maintains that under the Public Bid Law, it has a property right protected by the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. This constitutional question is the sole basis for federal question jurisdiction. Although no injunction was issued, the bidding process apparently came to a halt.

On August 23, 2005, following a two-day bench trial, the district court dismissed Marco's complaint for lack of jurisdiction. The district court concluded that the Public Bid Law did not apply to the Contract, and accordingly, that RTA was not required to award the Contract to the most favorable bidder. Therefore, even if Marco submitted the best bid, it had no right under state law to receive the Contract and thus no property right in receiving the Contract. Consequently, Marco could not claim a deprivation of a constitutionally-protected property right by the RTA. Because the federal question basis of its law suit was eliminated, the district court dismissed for lack of jurisdiction. Marco now appeals.

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Because an unsuccessful bidder may seek an immediate injunction through a summary proceeding, and because the injunction may enjoin the execution of the contract, the injunction prevents the deprivation "of any significant property interest" and is therefore an adequate pre-deprivation remedy. See McKesson, 496 U.S. at 36-37.7 The summary proceeding, together with RTA's announcement of the contract award, satisfies the elements of the due process prong of the Due Process Clause that are at issue in this case.

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Outcome: We thus conclude: We assume for the purposes of deciding this appeal that the Public Bid Law applies to Marco’s bid and that Marco has properly alleged a property interest in the right to receive the Contract; nevertheless, we conclude that Marco’s procedural due process claim fails. The Public Bid Law explicitly authorizes Marco to seek state court injunctive relief to enjoin RTA from awarding the contract to Clear Channel. For the reasons given, we hold that Marco has failed to show that it has been denied due process of law provided in the Fourteenth Amendment. Accordingly, the judgment of the district court dismissing the case for failure to state a federal claim is AFFIRMED.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None