Delasoft, Inc. v. Ohio Dept. of Adm. Servs. , 2022 Ohio 3403 ( 2022 )

[Cite as Delasoft, Inc. v. Ohio Dept. of Adm. Servs., 2022-Ohio-3403.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Delasoft, Inc., :
Plaintiff-Appellant, :
No. 22AP-85
v. : (C.P.C. No. 19CV-6257)
Ohio Department of Administrative : (REGULAR CALENDAR)
Services et al.,
:
Defendants-Appellees.
:
D E C I S I O N
Rendered on September 27, 2022
On brief: Luther L. Liggett, Jr., for appellant.
Argued: Luther L. Liggett, Jr.
On brief: Dave Yost, Attorney General, Hilary R. Damaser,
Keith O'Korn, and Stephanie Slone, for appellees Ohio
Department of Administrative Services and former Director
Matt M. Damschroder. Argued: Keith O'Korn.
On brief: Taft Stettinius & Hollister LLP, and William J.
Beckley, for appellee BEM Systems, Inc.
On brief: Dave Yost, Attorney General, and L. Martin
Cordero, and Corrina V. Efkeman, for appellees Ohio
Department of Transportation and Director Jack Marchbanks.
APPEAL from the Franklin County Court of Common Pleas
SADLER, J.
{¶ 1} Plaintiff-appellant, Delasoft, Inc., appeals from judgments of the Franklin
County Court of Common Pleas granting motions to dismiss Delasoft's claims filed by
defendants-appellees the Ohio Department of Administrative Services ("ODAS"), Matthew
No. 22AP-85 2
Damschroder, the Ohio Department of Transportation ("ODOT"), Jack Marchbanks, and
BEM Systems, Inc. ("BEM") (collectively, "appellees"). For the reasons that follow, we
affirm.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} This appeal arises from Delasoft's challenge to the award of a state contract
to BEM. The facts related to the award and Delasoft's challenge are set forth in detail in
this court's decision on a prior appeal. Delasoft, Inc. v. Ohio Dept. of Adm. Servs., 10th
Dist. No. 19AP-761, 2020-Ohio-3558, ¶ 6-22. For purposes of this appeal, we will briefly
outline the relevant facts.
{¶ 3} In July 2018, ODAS issued a request for competitive sealed proposals ("RFP")
on behalf of ODOT seeking an online system for right-of-way and outdoor advertising
permits. The RFP described the system sought:
The objective of this Request for Proposal opportunity is to find
a commercial off the shelf (COTS) system (or develop an online
web-based permitting system if an existing software
application cannot be found) that can meet the department's
twofold needs: 1.) to purchase a web-based permitting system,
and which demonstrates the capabilities and resources
required to provide a next generation permit application
system for use by ODOT. And 2.) to provide a web-based
Outdoor Advertising Control System to support the permitting
process for signs and billboards for ODOT. The Contractor
must provide all requirements analysis, configuration,
installation and on-going maintenance.
(Req. for Proposal at 3, Ex. A to Compl.) The RFP provided that the initial term of the
contract was from the award date through June 30, 2019, and that the contract could be
renewed for up to five additional two-year terms, subject to appropriation of funds by the
General Assembly. The RFP was not a minority business enterprise ("MBE") set-aside
contract but included an "MBE Subcontractor Plan." Delasoft at ¶ 9.
{¶ 4} Of the entities that submitted bids, only BEM and Delasoft satisfied the
mandatory criteria in the RFP to have their bids scored. Id. at ¶ 11. The bids were scored
based on three metrics: (1) the technical proposal, (2) the cost cap, and (3) the MBE
subcontractor plan. Id. Delasoft received the higher score for its technical proposal and
BEM received the higher score for its cost cap. Id. BEM also received the higher score for
its proposed MBE subcontractor set-aside. BEM's bid indicated that 54 percent of its bid
No. 22AP-85 3
price would go to an MBE subcontractor, while Delasoft proposed a 17 percent MBE
subcontractor set-aside. Id. Ultimately, BEM received the higher total score and was
awarded the contract. Id.
{¶ 5} ODAS notified Delasoft, by letter on January 11, 2019, that its proposal had
not been selected. Id. at ¶ 17. In response to an inquiry, on February 5, 2019, ODAS
informed Delasoft that BEM had been awarded the contract as of January 14, 2019. Id.
Delasoft filed a "Notice of Protest" with ODAS on April 1, 2019, asserting BEM's bid did not
meet the requirements of the RFP regarding the MBE subcontractor plan. Delasoft's
protest requested that ODAS cancel the award to BEM and instead award the contract to
Delasoft. Id. ODAS denied Delasoft's protest on July 11, 2019.
{¶ 6} On August 2, 2019, Delasoft filed a complaint for declaratory and injunctive
relief against ODAS, ODOT, and BEM. Id. at ¶ 18. Delasoft sought a declaratory judgment
that the RFP process was illegal and temporary, preliminary, and permanent injunctions
prohibiting an award of the contract pursuant to the RFP. Id. The trial court conducted a
hearing on Delasoft's request for a temporary restraining order. The court denied the
temporary restraining order because Delasoft did not file an affidavit verifying its complaint
until after the hearing and because it found Delasoft failed to show a threat of irreparable
injury because any injury suffered from not being awarded the contract could be remedied
through monetary damages. Id. at ¶ 19. On the eve of a preliminary injunction hearing,
ODAS moved to dismiss for lack of subject-matter jurisdiction, asserting injunctive relief
was not available because the contract had been executed and work had begun. Id. at ¶ 21.
The trial court held the preliminary injunction hearing but adjourned for further briefing
on the motion to dismiss when ODAS renewed its motion at the close of Delasoft's case.
{¶ 7} On October 30, 2019, the trial court granted ODAS's motion to dismiss for
lack of subject-matter jurisdiction, concluding the claims were moot because Delasoft did
not act promptly after having notice of the circumstances of the contract award and
performance of the contract had begun. Id. at ¶ 22. Delasoft appealed, arguing the trial
court erred by dismissing for mootness because the contract was awarded using
unconstitutional racial criteria. Id. at ¶ 23. As explained more fully below, this court
concluded the record was insufficiently developed to determine whether the contract
should be analyzed under precedents involving public improvement contracts or those
No. 22AP-85 4
involving public contracts for goods and services. Id. at ¶ 1, 32. We sustained Delasoft's
second assignment of error in part and remanded to the trial court for further development
of the record. Id. at ¶ 46.
{¶ 8} On remand, Delasoft amended its complaint, adding a claim under Title 42,
Section 1983 of the United States Code for violation of its civil rights against Marchbanks,
the director of ODOT, and Damschroder, the director of ODAS. Pursuant to a motion from
ODAS and BEM to stay discovery, the trial court limited discovery to "evidence that is
relevant to whether the contract between BEM and ODAS was a public
improvement/construction type contract or a goods and services type contract." (Sept. 22,
2020 Decision & Entry at 6.) Appellees moved to dismiss the amended complaint, again
asserting the claims for injunctive relief were moot because performance of the contract
commenced before Delasoft filed suit, and the Section 1983 claim failed to state a claim
upon which relief could be granted.
{¶ 9} The trial court conducted an evidentiary hearing "on the subjects of:
(1) whether the contract or the renewal or modification of the contract between BEM and
the other Defendants is a goods and services contract and whether the public
improvement/construction analysis in Meccon, Inc. v. Univ. of Akron, 126 Ohio St.3d 231,
2010-Ohio-3297, 933 N.E.2d 231 applies; and (2) whether the contract between BEM and
the other Defendants can be shifted to Delasoft without burdening the taxpayers to recreate
BEM's work." (Feb. 16, 2021 Order at 1.) At the hearing, ODOT presented testimony from
three employees who had worked on the project with BEM, BEM presented testimony from
the director of its software business unit, and Delasoft presented testimony from its
executive vice president.
{¶ 10} Following the hearing, on September 22, 2021, the trial court issued a
decision ("the September decision") granting in part appellees' motions to dismiss for lack
of subject-matter jurisdiction because it concluded Delasoft's claims for declaratory
judgment and injunctive relief were moot. With respect to the Section 1983 claim, the trial
court converted the motions to dismiss to a motion for more definite statement under
Civ.R. 12(E) and permitted Delasoft to amend its complaint to clarify the Section 1983
No. 22AP-85 5
claim.1 Delasoft filed a second amended complaint; Marchbanks and Damschroder then
moved to dismiss the second amended complaint. The trial court granted Marchbanks' and
Damschroder's motions to dismiss in a decision issued on January 21, 2022 ("the January
decision"), concluding the second amended complaint failed to state a claim upon which
relief could be granted. Delasoft timely appealed from the January decision.
II. ASSIGNMENTS OF ERROR
{¶ 11} Delasoft assigns the following as trial court error:
[1.] The trial court erred by procedurally failing to reach the
merits of a goods-and-services contract awarded using
unconstitutional racial criteria, declaring the case moot as in
a construction contract.
[2.] The trial court erred in dismissing for mootness a
challenge of an illegal public contract yet to be performed,
setting an impossible threshold to protest and thus evading
review.
[3.] The trial court erred by dismissing the claim of
discrimination by ignoring the overt facts pleaded.
III. STANDARD OF REVIEW
{¶ 12} The standard for dismissal of a complaint for lack of subject-matter
jurisdiction under Civ.R. 12(B)(1) is whether the complaint states any cause of action
cognizable in the forum. Delasoft at ¶ 25. We review de novo a trial court's decision
dismissing a case for lack of subject-matter jurisdiction. Id.{¶ 13} "A motion to dismiss under Civ.R. 12(B)(6) for failure to state a claim is
procedural and tests the sufficiency of the complaint." Modern Office Methods, Inc. v. Ohio
State Univ., 10th Dist. No. 11AP-1012, 2012-Ohio-3587, ¶ 9. A motion to dismiss for failure
to state a claim may be granted "if, after all factual allegations are presumed to be true and
all reasonable inferences are made in favor of the non-moving party, it appears beyond
doubt from the complaint that the plaintiff could prove no set of facts warranting the
requested relief." Id. We review de novo a decision dismissing for failure to state a claim
upon which relief can be granted. Id.1Delasoft appealed the September decision to this court, but we dismissed for lack of a final appealable order
because the September decision did not resolve the Section 1983 claim and lacked Civ.R. 54(B) language.
Delasoft, Inc. v. Ohio Dept. of Admin. Servs., 10th Dist. No. 21AP-531 (Nov. 4, 2021).
No. 22AP-85 6
IV. LEGAL ANALYSIS
A. Whether Delasoft's claims for declaratory judgment and injunctive
relief were moot
{¶ 14} In its first assignment of error, Delasoft argues the trial court erred by
concluding its claims for declaratory judgment and injunctive relief were moot because
performance under the contract had begun before Delasoft filed suit.
{¶ 15} As explained in our prior decision, when dealing with suits challenging the
award of public contracts, courts have recognized a distinction between public
improvement or construction contracts, where injunctive relief is not available to a
disappointed bidder once performance under the contract has begun, and contracts for
goods and services, where injunctive relief may be available after performance has begun.2
Delasoft at ¶ 4-5, 27-29. Thus, our prior decision framed the issue to be determined by the
trial court on remand:
If this case is controlled by the analysis used in Meccon and
Colosseo [USA, Inc. v. Univ. of Cincinnati, 1st Dist. No. C-
180223, 2019-Ohio-2026], Delasoft's request for injunctive
and declaratory relief would be moot because work under the
contract as renewed has begun. If it is controlled by our
analysis in Griffin [Industries, Inc. v. Ohio Dept. of Admin.
Servs., 10th Dist. No. 00AP-1139 (Aug. 2, 2001)], it would not
be moot because the contract could be shifted away from
prevailing bidder BEM if the law and the equities so indicated.
Id. at ¶ 30.
{¶ 16} Explaining the distinction between the Meccon/Colosseo analysis and the
Griffin analysis, the court explained that Griffin involved a contract to supply fuel oil and,
if the contract was found to have been improperly awarded, a different supplier could
deliver the next round "without replicating or depending on previous deliveries." Id. at ¶ 31.
Similarly, we noted that we had declined to extend the Meccon analysis to a case involving
a contract related to the lease and maintenance of multi-function printers but had "left the
2As recognized in our prior decision, bid preparation costs may be recoverable in a public improvement case
under Meccon even after work has commenced, but Delasoft does not seek to recover bid preparation costs in
this case. Delasoft at ¶ 31, 39.
No. 22AP-85 7
door to doctrinal extension ajar" in that case. Id. at ¶ 34 (describing Modern Office
Methods).3
{¶ 17} The court further explained that "[b]y contrast, Meccon, Colosseo, and others
in their line address situations, with construction as a quintessential example, in which one
task substantially builds on what has been done before and in which a shift of providers
inevitably would burden taxpayers with significant extra cost beyond the costs associated
with any one bid." Id. at ¶ 31. The court noted that "the extent to which another provider
could step in without the additional burden to the taxpaying public forestalled by the
construction-like, hard to unwind, 'public improvement' contracts line of cases * * * [was]
not readily apparent from the record as presented to [it]." Id. at ¶ 38.
{¶ 18} At the hearing on remand, the parties stipulated that the contract was "a
contract for supplies and services procured pursuant to Revised Code 125.071, not a public
improvement contract procured pursuant to Chapter 153." (Mar. 16, 2021 Tr. at 8.) In the
September decision, the trial court concluded the contract "has some similarity to a
construction contract in that the software and underlying code, while considered by BEM
as a commercial off-the-self product (COTS), are the building blocks of the project, and are
also the proprietary and intellectual property of BEM." (Sept. 22, 2021 Decision at 5-6.)
The court noted, however, that the annual contract renewals for maintenance and support
were "dissimilar from a typical construction or public works contract where the work is
normally completed within a certain time-period and the contract is fulfilled and
terminated." (Sept. 22, 2021 Decision at 6.) Ultimately, the trial court concluded that
although the contract was for goods and services rather than public improvements, the
"configured off the shelf computer program and database constructed" under the contract
was analogous to a construction project subject to Meccon analysis. (Sept. 22, 2021
Decision at 11-12.) The court reasoned that Delasoft could not step into BEM's shoes to
complete the remainder of the contract without access to BEM's proprietary source code,
which was merely licensed to the state under the contract and would not be accessible to
3After our decision in Delasoft, this court also declined to apply Meccon to a case involving a disappointed
bidder that had been denied a municipal vehicle towing contract. Speed Way Transp., L.L.C. v. Gahanna,
10th Dist. No. 20AP-239, 2021-Ohio-4455, ¶ 37-38. Under the facts in that case, the court also noted that
even if Meccon applied, the disappointed bidder would not be eligible to recover bid-preparation damages
because it did not promptly seek injunctive relief. Id. at ¶ 38.
No. 22AP-85 8
Delasoft. Therefore, the court concluded Delasoft could not complete the remainder of the
contract without duplicating BEM's prior efforts. The trial court concluded that, under a
Meccon analysis, Delasoft's claims for declaratory judgment and injunctive relief were moot
because performance of the contract commenced before Delasoft filed suit. We review that
conclusion de novo.
{¶ 19} Our prior decision noted that the key factor in the Meccon-type cases was
whether "one task substantially builds on what has been done before and in which a shift
of providers inevitably would burden taxpayers with significant extra cost beyond the costs
associated with any one bid." Delasoft at ¶ 31.
{¶ 20} At the hearing on remand, Kevin Courtney, director of BEM's software
business unit, described the process involved in configuring its system to meet ODOT's
requirements:
So the first step that we go through is what we call our
requirements gathering phase and that's where we meet with
the customer. We understand exactly what the customer's
requirements are, and that would include the number of
permits that they have, the work flows that they have, the roles
that they have within their organization, and we built this
platform so that it is -- we call it "data driven." That means that
you don't have to make software customizations, but rather you
go out and you make configuration changes. We, also, at that -
- during the requirements gathering, we understand if there are
other systems that we need to integrate into.
***
[S]o we gather all of that information. We generally will come
back with a deliverable that's a design deliverable, and it will
describe any changes that we make to the screens, the system.
And then it will describe the work flows from end to end so that
the customer can then look at it and say, Oh, here's my RFP
requirements. And then this is the manifestation of what I'm
going to get. And then they can say, We approve that. We sign
off on it, and then, please, go out and configure it. The
configuration process -- so that process might last anywhere
from one to three months, depending on the speed that the
customer can operate at, as well as the size of the project and
how many systems there are.
Once that -- once that's completed, then we can move forward
with the development activities, which include configuring the
software to meet those requirements. Then we go through
No. 22AP-85 9
several rounds of internal testing. We go through what we call
"initial unit testing." It's where we make sure all the pieces
work from our configuration and developers. Then after we do
that, then we go through something called "quality assurance
testing." That's to make sure when the developers said it would
work, that it really does work. Then we go through what we call
"end-to-end testing," or user-acceptance testing, or systems
testing, there's lots of different names. That's where we
actually -- that's where we actually ensure that the system does
meaningful, viable work and that it meets the customer's needs.
After we complete our testing phase, then we work with the
customer to set up what we call "user-acceptance testing."
***
At the end of that process, and throughout that process, there
may be some items that are identified. If there are bugs or
problems, we fix them. If there are requests for enhancement
or additional functionality, we note them and then they'll go on
to some enhancement list going on into the future. And then
we bring that to closure. And then we request to the customer
that they sign off on that. And then that deliverable becomes
complete. There may be some documents that go along with
that.
Then we move into the final stage, which is we go through
training. And, again, there's a training planning process. Then
there's a training execution process. And then there's some
post-training time where we support -- where we support the
users.
(Mar. 16, 2021 Tr. at 234-38.)
{¶ 21} The progressive nature of the work Courtney described is also reflected in the
way the "deliverable" tasks under the contract were designated and in the invoices BEM
submitted to ODOT. Courtney testified that by August or September 2019, Delasoft had
"completed all of the requirements that we were headstrong into — into configuration,
development, and testing" and that around 3,000 hours had been put into the project by
that time. (Mar. 16, 2021 Tr. at 241.) Similarly, Wendi Snyder, the statewide utilities and
program manager in ODOT's office of real estate, who managed the right-of-way permit
process, testified "[t]here's a lot of configuration that had to be done for [ODOT] because
there's 15 different types of permits." (Mar. 16, 2021 Tr. at 31.) Snyder estimated ODOT
employees had spent "200 to 500" hours consulting with BEM by the time Delasoft filed
No. 22AP-85 10
suit. (Mar. 16, 2021 Tr. at 118.) As of July 2019, BEM had completed the first task of the
project and ODOT had approved payment of that invoice in August 2019.
{¶ 22} This evidence indicates that BEM began with "off-the-shelf" software, but the
discovery, design, development, and implementation processes to adapt that software to
ODOT's requirements were analogous to a construction-type project, with one task
substantially building on the prior tasks, and where a shift in providers would involve
significant additional burden. Although the parties agree it was a goods-and-services
contract, the software system in this case was different from the fuel oil in Griffin, the multi-
function printers in Modern Office Methods, or the towing services in Speed Way.
{¶ 23} Delasoft argues its claims should not have been deemed moot because at the
time the complaint was filed BEM had only completed the discovery phase, which
constituted four percent of the contract. However, the cost of the discovery phase
constituted almost ten percent of the "deliverable" tasks under the contract. Courtney also
testified that BEM was proceeding with other phases of the project at the time Delasoft filed
suit. The Meccon decision stated that under the Supreme Court of Ohio's precedent, "once
the public-improvement work commences or is completed, the rejected bidder will not be
able to perform the public contract even if the bidder demonstrates that its bid was
wrongfully rejected." Meccon at ¶ 12. The Meccon decision specifically referred to the point
at which work "commences," not once some minimum threshold of work had been
completed.
{¶ 24} Delasoft also argues the trial court erred by concluding it could not provide
continuing service and maintenance under the contract renewals because the software was
proprietary. Delasoft argues that, under the contract arising from the RFP, the state owns
the source code for the software used in the program, citing a provision of the RFP stating
that the state owns all custom work produced under the RFP. Appellees argue BEM's
source code is proprietary and assert that the state does not own the source code under the
contract.
{¶ 25} The trial court considered ownership of the source code in the context of
determining whether Delasoft could be substituted for BEM and complete the remaining
portions of the contract. Notably, Delasoft's original complaint and amended complaints
did not request that the contract be awarded to it. Rather, Delasoft's original complaint
No. 22AP-85 11
requested an injunction prohibiting the award of the contract and the amended complaints
requested termination of the contract and prohibition of continued performance.4 Despite
Delasoft not requesting such relief, when considering whether the Meccon analysis should
be applied, our prior decision raised the question of whether Delasoft could be substituted
for BEM during the contract renewal period. See Delasoft at ¶ 38 ("In short, the extent to
which another provider could step in without the additional burden to the taxpaying public
forestalled by the construction-like, hard to unwind, 'public improvement' contracts line of
cases (if, for example, a contemplated contract renewal for 2021, or 2023, or 2025, or 2027
were sought to be enjoined as arising from an illegal initial contract) is not readily apparent
from the record as presented to us."). Thus, in considering this question, the trial court was
considering an issue raised in our prior decision.
{¶ 26} The relevant clauses in the RFP relating to ownership provided that the state
owns all "custom work" produced or developed under the contract resulting from the RFP,
including any "software modifications, customizations, extensions, integrations, interfaces,
and documentation." (Req. for Proposal at 37, Ex. A to Compl.) The RFP further provided
that "[f]or custom work that include custom materials such as software, scripts, or similar
computer instructions developed for the State, the State is entitled to the source material."
(Req. for Proposal at 38, Ex. A to Compl.)
{¶ 27} Another provision of the RFP addressed "commercial material," which was
defined in relevant part as "anything that the Contractor or a third party has developed at
private expense, is commercially available in the marketplace, subject to intellectual
property rights, and readily copied through duplication." (Req. for Proposal at 38, Ex. A to
Compl.) The RFP further provided that for "commercial software," defined as commercial
material that was software, the state would have certain specified rights, including the right
to use, copy, modify, adapt, or combine the software with other software. (Req. for Proposal
at 38-39, Ex. A to Compl.) In its written closing statement, ODAS asserted that BEM's
source code fell under the "commercial software" clause of the RFP and, therefore, the state
did not own the software but instead had limited rights to use it.
4 In its brief on appeal, Delasoft reiterated that it "never demanded award of the contract in its prayer for
relief." (Appellant's Brief at 25.)
No. 22AP-85 12
{¶ 28} Courtney testified that BEM's software platform, referred to as PAECETrak,
was commercial off-the-shelf software that had been developed over a period of 15 years at
an estimated cost of $5 to $7 million. He explained that within the platform, BEM did not
make software customizations, "but rather you go out and you make configuration changes"
to meet the needs of customers. (Mar. 16, 2021 Tr. at 235.) On cross-examination,
Courtney testified about ownership of the work BEM had performed under the contract
with ODAS:
Q. Who owns the work that BEM did for the State?
A. It says that the State owns all custom software -- all custom
work. We provide a software platform that we configure. So
we are not making custom software. We run one piece of
software across the footprint of all of our customers and we are
able to configure it. Except I will -- limited to software
modifications, customizations, extensions, integrations. We
have integrated into ODOT's MyODOT system. We have
integrated into ODOT's payment gateway system.
(Mar. 16, 2021 Tr. at 275-76.) Courtney denied that BEM wrote unique customized
software for the ODOT project, testifying "we don't customize. We configure." (Mar. 16,
2021 Tr. at 277.)
{¶ 29} Delasoft's executive vice president, Jay West, testified that BEM's source code
would not be needed for Delasoft to assume internet hosting of ODOT's online permit
system. When asked whether Delasoft would need access to BEM's source code to conduct
support and maintenance under the contract renewals, however, West admitted "[y]ou
would need to know the software on that and be able to fix when they arise or do any feature
enhancement down the road." (Mar. 18, 2021 Tr. at 324.) West testified Delasoft would
be capable of upgrading the ODOT system "[i]f we had the proper software." (Mar. 18, 2021
Tr. at 325.)
{¶ 30} Based on the evidence presented at the hearing, we cannot conclude the trial
court erred by finding that the BEM software was proprietary and not owned by the state,
as part of the trial court's larger analysis of whether Meccon should be applied to Delasoft's
claims for injunctive relief.
{¶ 31} Appellees have established that development of the online permitting system
for ODOT was a situation where "one task substantially builds on what has been done
before and in which a shift of providers inevitably would burden taxpayers with significant
No. 22AP-85 13
extra cost beyond the costs associated with any one bid." Delasoft at ¶ 31. Therefore,
notwithstanding the fact that this was a goods-and-services contract, on the facts of this
case the trial court did not err by applying Meccon and concluding that Delasoft's claims
for declaratory judgment and injunctive relief were moot because performance under the
contract commenced before Delasoft sought relief. Contrary to Delasoft's claims, however,
we do not conclude that Meccon would apply to all goods-and-services contracts and our
conclusion is limited to the specific circumstances in this case.
{¶ 32} Accordingly, we overrule Delasoft's first assignment of error.
B. Whether Delasoft's claims were capable of repetition, yet evading
review
{¶ 33} In its second assignment of error, Delasoft asserts the trial court erred by
dismissing its injunctive relief claims as moot because the claims are capable of repetition
yet evading review.
{¶ 34} "The 'capable of repetition, yet evading review' doctrine is an exception to the
general rule against deciding moot issues that applies when (1) the challenged action is too
short in duration to be fully litigated before its expiration, and (2) there is a reasonable
expectation that the complaining party will be subjected to the same action in the future."
Munroe Falls v. Chief, Div. of Mineral Resources Mgt., 10th Dist. No. 10AP-66, 2010-Ohio-
4439, ¶ 6. "[T]he capable-of-repetition doctrine applies only in exceptional circumstances."
State v. Jama, 10th Dist. No. 17AP-569, 2018-Ohio-1274, ¶ 10.
{¶ 35} This court previously declined to apply the capable-of-repetition doctrine in
a construction case appeal that was rendered moot because the disappointed bidder failed
to obtain a stay of execution of the trial court's judgment or an injunction pending appeal.
TP Mechanical Contractors, Inc. v. Franklin Cty. Bd. of Commrs., 10th Dist. No. 08AP-
108, 2008-Ohio-6824, ¶ 20. In that case, the disappointed bidder had been rejected
because the county commissioners determined it did not satisfy quality contracting
standards related to compliance with prevailing wage laws. Id. at ¶ 10. The disappointed
bidder argued its appeal should not be dismissed as moot because there was a reasonable
probability it would be subjected to the same actions and effectively eliminated from
bidding on future county contracts. Id. at ¶ 21. This court noted that "even if [the
disappointed bidder] is subjected to the same actions on a future bid, it would not
necessarily be precluded from obtaining review of these same issues, as long as a timely
No. 22AP-85 14
stay of execution or injunction pending appeal is obtained." Id. at ¶ 22. See also State ex
rel. Grendell v. Geauga Cty. Bd. of Commrs., __Ohio St.3d__, 2022-Ohio-2833, ¶ 13
("Judge Grendell cannot meet the first prong of the [capable-of-repetition] test because,
were the county to fail to process one of his future appointment applications, he would have
time to seek judicial review."); State ex rel. Burkons v. Beachwood, __Ohio St.3d__, 2022-
Ohio-748, ¶ 17 ("Burkons cannot satisfy the first prong of the [capable-of-repetition] test:
if he were to be the target of a future prosecution by Scalise, he would have time to seek
judicial review.").
{¶ 36} Delasoft argues use of the MBE program as part of the scoring of the RFP was
unconstitutional and that if its claims are deemed moot because performance of the
contract had commenced before it filed suit, this same scenario could occur again if the
MBE program is incorporated into other requests for proposals. As in TP Mechanical,
however, Delasoft would not necessarily be precluded from challenging the
constitutionality of a similar request for proposal in a future case if it timely sought
injunctive relief before performance under the contract commenced. In this case, the MBE
subcontractor component was set forth in the RFP; therefore, Delasoft was on notice of the
allegedly unconstitutional scoring system before submitting its bid. Delasoft was notified
on February 5, 2019, that BEM had been awarded the contract but waited nearly two
months before filing a protest with ODAS and nearly six months before filing a lawsuit
seeking injunctive relief. In the meantime, the project kickoff meeting between ODOT and
BEM was held on February 14, 2019, and, by July 2019, BEM had completed the first
deliverable task of the project and was proceeding with other tasks.5 Under these
circumstances, because Delasoft was aware of the allegedly unconstitutional scoring
component before submitting its bid but waited nearly six months after learning it had not
been awarded the contract to seek injunctive relief, Delasoft fails to establish that the
capable-of-repetition exception to the mootness doctrine applies to this case.
5 We further note that Delasoft failed to seek a stay of the trial court's ruling pending its prior appeal.
Generally, in construction-related cases, if an unsuccessful bidder seeks to enjoin construction but fails to
obtain a stay pending judicial resolution of its claims and construction commences, the action will be
dismissed as moot. See State ex rel. Gaylor, Inc. v. Goodenow, 125 Ohio St.3d 407, 2010-Ohio-1844, ¶ 11; TP
Mechanical at ¶ 20. Although Delasoft disputed whether the contract in this case should be analogized to a
construction contract, it was clear that the trial court had applied the Meccon analysis and yet Delasoft failed
to seek a stay pending appeal. Thus, work under the contract continued during the pendency of the prior
appeal.
No. 22AP-85 15
{¶ 37} Accordingly, we overrule Delasoft's second assignment of error.
C. Whether the trial court erred by dismissing Delasoft's Section 1983 claims
{¶ 38} In its third assignment of error, Delasoft argues the trial court erred by
dismissing its Section 1983 claim. Delasoft asserts its complaint, which alleged that the
employees involved in the RFP process acted under the direct supervision and control of
Marchbanks or Damschroder, was sufficient under the notice pleading standard to state a
claim for relief. Appellees argue Delasoft failed to allege any direct involvement by
Damschroder or Marchbanks in development of the RFP or scoring of the submitted
proposals. Moreover, appellees claim Damschroder and Marchbanks had no direct
personal involvement in development of the RFP or scoring of the submitted proposals
because those events occurred before they assumed office. Appellees argue Damschroder's
involvement was limited to signing the contract, which previously had been signed by BEM,
on his first day in office. Delasoft claims that signing the contract was sufficient for
Damschroder to be liable under Section 1983.
{¶ 39} "Section 1983 will not support a claim based on a respondeat superior theory
of liability." Polk Cty. v. Dodson, 454 U.S. 312, 325 (1981). See also Boler v. Early, 865
F.3d 391, 417 (6th Cir.2017) (citing Dodson); Kinney v. Ohio Dept. of Admin. Servs., 30
Ohio App.3d 121, 122 (10th Dist.1986) ("[T]he theory of respondeat superior is not
applicable in Section 1983 actions."). "[T]he liability of supervisory personnel must be
based upon more than the mere right to control employees." Kinney at 122. " 'There must
be a showing that the supervisor encouraged the specific incident of misconduct or in some
other way directly participated in it.' " Doe v. Claiborne Cty., 103 F.3d 495, 511 (6th
Cir.1996), quoting Bellamy v. Bradley, 729 F.2d 416, 421 (6th Cir.1984). See also Sexton
v. Cernuto, 18 F.4th 177, 185 (6th Cir.2021) (citing Doe).
{¶ 40} In the second amended complaint, Delasoft alleged that "all public employees
involved in the preparation, review, and decisions for the RFP and Work at issue acted
pursuant to the direct supervision and control of" Damschroder or Marchbanks. (Second
Am. Compl. at ¶ 69.) The second amended complaint alleged the "improper,
discriminatory, and unconstitutional use of the MBE Program as applied" violated
Delasoft's civil rights. (Second Am. Compl. at ¶ 70.) The second amended complaint
further alleged Damschroder and Marchbanks knew the MBE program was
No. 22AP-85 16
unconstitutional and failed to consider a race-neutral alternative to the MBE program.
Beyond these general allegations, however, the complaint did not assert any direct
participation by Damschroder or Marchbanks in the creation or scoring of the RFP. Thus,
the second amended complaint failed to allege any encouragement or direct participation
in the alleged denial of civil rights by Damschroder or Marchbanks. Presuming the
allegations in the second amended complaint to be true, at most the complaint would
establish that Damschroder or Marchbanks supervised or controlled the employees who
created and scored the RFP. That is insufficient to establish liability under Section 1983.
See, e.g., Broyles v. Corr. Med. Servs., 478 Fed. Appx. 971, 977 (6th Cir.2012) (holding that
general allegations of failure to supervise and train employees were insufficient to establish
Section 1983 liability). Compare Boler at 417 (declining to dismiss Section 1983 claims
against former directors and supervisors because the plaintiffs' allegations concerned the
directors individual conduct and participation in alleged violations of the plaintiffs' due
process rights).
{¶ 41} Accordingly, we overrule Delasoft's third assignment of error.
V. CONCLUSION
{¶ 42} For the foregoing reasons, we overrule Delasoft's three assignments of error
and affirm the judgments of the Franklin County Court of Common Pleas.
Judgments affirmed.
KLATT and McGRATH, JJ., concur.
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