Ignorance of the Law Excuses no one, according to the venerable legal principle. But, a Pennsylvania appeals court recently ruled that unfamiliarity with the facts is no big deal.
The city of Easton, Pa., invited bids for curbside collection and disposal of residential municipal waste. The city selected the low bidder, Republic Services of New Jersey LLC, doing business as Raritan Valley Disposal (Raritan). In October 2006, Easton officials approved a contract slated to begin on Jan. 1, 2007.
Due to a vacancy in the city controller position, the contract was not signed promptly. When the paperwork was finally completed, Raritan was tardy in submitting its performance bond.
Invoking the “sanctity … of the municipal bidding process,” John Nieuwkerk, a city resident and property owner, filed a lawsuit — for himself and similarly situated taxpayers — to nullify the contract with Raritan and direct the city to either award the contract to a “responsive” bidder or reject all bids. He also sought an injunction, alleging that Raritan's performance bond was untimely and defective.
At a hearing on the injunction, Nieuwkerk explained that he became the plaintiff after hearing secondhand that J.P. Mascaro & Sons had lost out on a contract that the city had unfairly awarded. He and his brother-in-law agreed to “help [Mascaro] with this.”
After hearing testimony on alleged irregularities in the bidding and awarding of the contract, the trial court denied the injunction, but ruled that Nieuwkerk had sufficient legal interest to bring the action.
The trial judge referred to Nieuwkerk as a “straw party … used by the real party in interest [Mascaro] … to bring this action.” Although he “essentially knows nothing about the [facts] of the litigation … accept[ing] as true information that was supplied to him … by counsel for [Mascaro] … under Pennsylvania law … this does not prevent [him] from establishing standing,” the trial court concluded.
The lower court further ruled that factors over which the city had exclusive control contributed to Raritan's delay in submitting the bond and, granting deference to the city, that both the timing and sufficiency of the bond complied with state law and the bid documents.
On appeal, the Commonwealth Court of Pennsylvania agreed. “[D]isappointed bidders … do not have standing to challenge the bidding process,” the court said. However, residents do, the court added.
Because the bidding process could otherwise go unchallenged — since the winning bidder isn't likely to sue — “taxpayers are in the best position to challenge bid award improprieties,” the court said. “[Not having] a thorough knowledge of the complaint was of no moment.”
As for Raritan's belated filing of the bond, “Easton was not harmed, and it would not be practical for Easton and its taxpayers to pay higher rates for trash collection because Raritan failed to strictly comply …,” the court concluded. “[T]he deviation from the requirements was not so material as to require rejection of the contract.”
[Nieuwkerk v. City of Easton and Republic Services of New Jersey, LLC, No. 545 C.D. 2007 (Pa.Cmwlth. Jan. 30, 2008)]
The legal editor welcomes comments from readers. Contact Barry Shanoff via e-mail: [email protected].
The columnist is a Rockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.