Rainier Dispatch v. Seattle Tacoma Intl Taxi Assoc. ( 2013 )

c0.y/lJ„OF APPEALS DiV
SlAit OF WASHINGTON
2013 MM 13 AH 8=32
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
RAINIER DISPATCH, LLC, a
Washington limited liability company, No. 67721-7-1
Plaintiff, DIVISION ONE
v.
PORT OF SEATTLE, a municipal
corporation;
Respondent, UNPUBLISHED OPINION
AIRPORT JOINT VENTURE FILED: May 13, 2013
RESPONSE PARTNERSHIP, LLC, an
unincorporated entity; CHECKER CAB
OF SEATAC CORPORATION, a
Washington corporation; ORANGE CAB
COMPANY, a Washington corporation;
PUGET SOUND DISPATCH, LLC d/b/a
YELLOW TAXI ASSOCIATION, a
Washington limited liability company,
Defendants,
and
SEATTLE-TACOMA INTERNA
TIONAL TAXI ASSOCIATION, a
Washington nonprofit association,
Appellant.
Becker, J. — This appeal involves the decision by the Port of Seattle to
award a five-year exclusive taxi concession at Sea-Tac International Airport to a
No. 67721-7-1/2
competitor of appellant Seattle-Tacoma International Taxi Association. Where a
request for competitive bids reserves to the issuing agency the right to negotiate
contract terms after selecting a bidder, and no competitive bidding statute
controls, a properly authorized contract is not ultra vires merely because some
contract terms differ from the original bid. We affirm the order of summary
judgment dismissing the Taxi Association's claims against the Port.
FACTS
In 1989, the Taxi Association obtained an exclusive concession for
providing on-demand taxi services at Sea-Tac airport. Twenty years later, the
Port sought competitive bids for the airport taxi concession. The Port issued a
request for proposals and received six responses. After evaluating the
proposals, port staff recommended approval of the bid by Puget Sound Dispatch
LLC d/b/a Yellow Taxi Association, commonly known as Yellow Cab. At a public
meeting on December 15, 2009, the port commission voted 4 to 1 in favor of
Yellow Cab.
In January 2010, before the Port and Yellow Cab signed the final contract,
the Taxi Association filed suit claiming the request for proposals was illegal and
requesting injunctions against any contract executed in reliance on it. The trial
court denied the injunction. The Taxi Association appealed. We affirmed.
Seattle-Tacoma Int'l Taxi Ass'n v. Port of Seattle (TaxiAss'n 1), noted at 156
Wn. App. 1025, review denied, 169 Wn.2d 1016 (2010). Later, we affirmed the
trial court's disbursement of a supersedeas bond of $144,000 posted by the Taxi
No. 67721-7-1/3
Association to compensate the Port in part for approximately $400,000 in
revenue the Port lost as a result of the Taxi Association's lawsuit. Seattle-
Tacoma Int'l Taxi Ass'n v. Port of Seattle (Taxi Ass'n 2), noted at 168 Wn. App.
1036(2012).
While these matters were on appeal, the Taxi Association filed cross
claims in a second lawsuit against the Port initiated by another unsuccessful
bidder. Those cross claims were dismissed on summary judgment. In this
appeal, the Taxi Association contends there are issues of fact bearing on the
legality of the port commission's December 2009 decision to award the taxi
concession to Yellow Cab, as well as the legality of the contract the Port
negotiated and entered with Yellow Cab in August 2010.
We review an order granting summary judgment de novo, engaging in the
same inquiry as the trial court. Marquis v. City of Spokane, 130 Wn.2d 97, 105,
922 P.2d 43 (1996). Summary judgment is appropriate where there is no
genuine issue of material fact and the moving party is entitled to judgment as a
matter of law. CR 56(c). We construe the evidence and inferences from the
evidence in favor of the nonmoving party—here, the Taxi Association. Marquis,
130Wn.2dat105.
OPEN PUBLIC MEETINGS ACT
The Taxi Association contends the award of the concession to Yellow Cab
was invalid because the Port violated the Open Public Meetings Act of 1971,
chapter 42.30 RCW, in reaching its decision. The Port contends this argument is
No. 67721-7-1/4
barred by res judicata. Also known as claim preclusion, res judicata bars
litigation of a claim that either was, or should have been, raised and litigated in a
former action. Loveridqe v. Fred Meyer, Inc., 125 Wn.2d 759, 763, 887 P.2d 898(1995). When the parties to two successive proceedings are the same and the
prior proceeding culminated in a final judgment, a matter "may not be relitigated,
or even litigated for the first time, if it could have been raised, and in the exercise
of reasonable diligence should have been raised, in the prior proceeding."
Sound Built Homes, Inc. v. Windermere Real Estate/S., Inc., 118 Wn. App. 617,
627-28, 72 P.3d 788 (2003).
In both proceedings, the Taxi Association filed claims against the Port for
the purpose of invalidating the Port's concession to Yellow Cab. This court's
decision in Taxi Ass'n 1 constituted a final judgment on the merits of the Taxi
Association's first lawsuit against the Port. See TaxiAss'n 1. at *7. The question
is whether the open meetings claims could and should have been raised in the
first lawsuit.
The Open Public Meetings Act of 1974 requires that all "meetings of the
governing body of a public agency shall be open and public and all persons shall
be permitted to attend any meeting of the governing body of a public agency."
RCW 42.30.030. Any action taken at a meeting that fails to comply with the Act
is "null and void." RCW 42.30.060(1). The Act defines "action" to include
deliberations, discussions, considerations, reviews, and evaluations of an issue
under consideration. RCW 42.30.020(3). The Taxi Association claims the Port
No. 67721-7-1/5
violated the Act (1) when a committee of port staff evaluated and scored the
proposals in private, (2) when commissioners failed to rescore the proposals
during the public meeting and thereby rested on the staff's privately generated
recommendations, and (3) when port commissioners discussed the taxi
concession privately in e-mails before the December 2009 public meeting.
The first two theories rested on information the Taxi Association already
possessed when it filed its first suit in January 2010. The Taxi Association knew
from early in the bidding process that port staff would be privately evaluating the
proposals. The Port openly disclosed the evaluation and scoring process to
prospective proposers, and identified the five members of the evaluation
committee. A few days before the December 2009 public meeting, the Port
wrote each bidder a letter stating that it had "completed its evaluation of the six
proposals" and attached a score sheet reflecting Yellow Cab as the winner. No
effort was made to hide the fact that port staff had evaluated the proposals during
private sessions.
The Taxi Association also knew by the conclusion of the December 2009
meeting that the commissioners, before voting to award the concession to Yellow
Cab, had not themselves rescored the six proposals during the public meeting. It
was apparent at the meeting that at least some of the commissioners felt
obligated to follow the privately generated recommendation of the staff evaluation
committee. One commissioner stated on the record at the December 2009
meeting: "I think it's dangerous to open the door to anything except doing what it
No. 67721-7-1/6
looks as if this has led us to, which is to approve the process." Another
commissioner remarked that because it appeared the competitive process had
been carried out in a legal fashion, "then I don't think for myself I have much
choice but to move ahead and approve the contract."
Because the Taxi Association knew by the end of the public meeting in
December 2009 that port staff had evaluated and scored the proposals during
private meetings and that the commissioners did not do their own scoring, these
two claims could have been raised in the first lawsuit as a basis for invalidating
the decision to award the concession to Yellow Cab. And these first two theories
are so closely related to the underlying transaction—the Port's competitive
bidding process—that they should have been raised in that lawsuit. See Sound
Built Homes, Inc., 118 Wn. App. at 629-32; cf Haves v. City of Seattle, 131
Wn.2d 706, 713, 934 P.2d 1179, 943 P.2d 265 (1997) (an action focused on the
city council's decision making process is distinct from a claim for money
damages).
The third theory is that port commissioners committed an open meetings
violation when they deliberated privately over e-mails in the weeks leading up to
the December 2009 meeting. This theory is based on information the Taxi
Association obtained through public records requests only after the decision in
the first lawsuit was already on appeal. It could not have been raised in that
lawsuit.
The Port contends the e-mails reflect only a discussion as to whether to
6
No. 67721-7-1/7
place the taxi concession on the meeting's agenda. But a reasonable jury could
find that the e-mails reveal the commissioners having substantive private
deliberations about the taxi concession, in violation of the Act's requirement that
all meetings be open. For example, in one e-mail, Commissioner Pat Davis
wrote that she and two other commissioners (a quorum of the five) "agree that
the commission cannot do anything about the outcome of the decision, because
it has gone through all the procedural and legal hoops. It is ripe for approval.
We cannot change the process, the elements, or the evaluation committee's
selection."
Nevertheless, even if the open meetings claim based on these e-mails is
not barred by res judicata, the claim does not warrant a trial. An action taken at a
private meeting is null and void under the Act. But a later final action taken in
compliance with the statute is not necessarily null and void. Org, to Pres. Aqric.
Lands v. Adams County (OPAL), 128 Wn.2d 869, 883-84, 913 P.2d 793 (1996).
In OPAL, the trial court found two out of three county commissioners discussed
in private how they would vote on an issue at an upcoming meeting. OPAL, 128
Wn.2d at 881-82. The Supreme Court deemed the private discussions
"irrelevant because the final vote occurred in a proper, open public meeting."
OPAL, 128 Wn.2d at 883. The private discussion was minimal, and because
there was extensive opportunity for the opposing parties to provide input at the
public meeting, the Supreme Court did not accept the appellant's
characterization of the public meeting as one "in which formal action is merely
No. 67721-7-1/8
summary approval of decisions made in numerous and detailed secret
meetings." OPAL, 128 Wn.2d at 884; see also Euqster v. City of Spokane, 118
Wn. App. 383, 423, 76 P.3d 741 (2003) (no violation where private meetings
were followed by public meeting which included "a great deal of public comment,
both for and against the project," with much of the opposing comment coming
from the plaintiff), review denied, 151 Wn.2d 1027 (2004).
The court may grant a summary judgment motion if, from all the evidence,
reasonable minds could reach but one conclusion. Heath v. Uraqa. 106 Wn.
App. 506, 513. 24 P.3d 413 (2001), review denied, 145Wn.2d 1016(2002). The
Taxi Association contends a reasonable mind could perceive the public meeting
as merely a ceremony concealing that the final decision had already been
reached in earlier private deliberations. The record does not support that view.
At the public meeting, the port commission engaged in lengthy consideration of
the taxi concession. For about two hours, the commissioners heard
presentations by port staff, reviewed documents, took 31 public comments
(including 26 comments from representatives of the Taxi Association), and
debated the matter on the record. A reasonable juror could not fail to conclude
that before the commission took final action, the Taxi Association was, like the
appellants in OPAL, given a full opportunity to express its views in a public
meeting that was genuinely open.
PORT'S AUTHORITY TO NEGOTIATE CONTRACT
The Taxi Association contends the contract the Port negotiated with
8
No. 67721-7-1/9
Yellow Cab is a nullity because it was ultra vires.
Ultra vires acts are those done wholly without legal authorization or in
direct violation of existing statutes. Metro. Park Dist. v. State, 85 Wn.2d 821,
825, 539 P.2d 854 (1975). They are characterized as void "on the basis that no
power to act existed, even where proper procedural requirements are followed."
S. Tacoma Way, LLC v. State. 169Wn.2d 118, 123, 233 P.3d 871 (2010); see
also Haslund v. City of Seattle. 86 Wn.2d 607, 622, 547 P.2d 1221 (1976) ("An
ultra vires act is one performed without any authority to act on the subject.").
Whether an action is ultra vires is a question of law we review de novo. Dept. of
Transp. v. Marine Emps. Comm'n, 167 Wn. App. 827, 835, 274 P.3d 1094(2012).
The request for proposals stated that the successful bidder would be
required to enter an exclusive contract with the Port, "substantially in the form" of
a sample agreement that was attached. After the commission voted to award
Yellow Cab the concession, the Port and Yellow Cab privately negotiated the
contract terms. Changes were made to a number of items in the sample
agreement.
The Taxi Association argues the final contract terms changed so much
that they represent a material departure from what Yellow Cab promised to offer
the Port in its original bid and from what the Port promised—by means of the
terms of its request for proposals—to demand from any successful bidder. One
new term required the Port to take into consideration Yellow Cab's "good faith
No. 67721-7-1/10
efforts" before terminating the contract on the basis of a failure to meet deadhead
reduction goals. Another new term was an overall emergency exit clause
excusing Yellow Cab from being found in breach if the impediment to
performance was "due to causes that are unforeseeable, beyond its reasonable
control, and without its fault or negligence." The Taxi Association also finds fault
with terms regarding the green fleet requirement, the five minute wait
requirement, the overall size of the fleet, and the number of dual-licensed
vehicles. The Taxi Association argues that these terms render the contract void
because the Port lacked authority to add them.
The Taxi Association does not dispute that the Port's chief executive
officer enjoyed statutory authority to privately negotiate and enter into contracts
for the airport taxi concession. The Port's chief executive officer exercised this
authority for 20 years by entering taxi concession contracts with the Taxi
Association. Municipal airport commissions are authorized by statute to "grant
concessions" at the airport "by private negotiation and under such terms and
conditions that seem just and proper" to the commission. RCW 14.08.120(5). A
port district commission is authorized to "delegate" to the managing official of the
district "such administerial powers and duties of the commission as it may deem
proper for the efficient and proper management of port district operations." RCW
53.12.270. The Port of Seattle Commission has, by resolution, delegated to the
chief executive officer of the Port of Seattle the authority "to prepare, negotiate,
and manage" all aspects of contracts needed "in order to conduct the Port's
10
No. 67721-7-1/11
business."
The Taxi Association contends that when the Port committed itself to a
competitive bidding process and issued the request for proposals, it gave up the
authority to negotiate terms with the successful bidder. We disagree. The
request for proposals explicitly reserved the Port's discretion to negotiate the
terms of the contract after the concession was awarded. It declared this
discretion in no uncertain terms: "The Port has the right to negotiate fees and
other terms it deems approphate for the benefit of the Port and the traveling
public." (Emphasis added.) Each bidder, including the Taxi Association, was
required to attach to its proposal a certification agreeing to this reservation of
rights. At the meeting in December 2009, one commissioner clarified on the
record that the purpose of the commission's vote on the taxi concession would
be to authorize the chief executive officer "to go forward and negotiate the
contract." The meeting minutes reflect the commission's expectation that the
selected provider and the Port's chief executive officer would "negotiate in good
faith" as to the deadheading issue in particular.
In short, the Port had authority to negotiate the contract and the extent of
its authority was made clear to all concerned. The Taxi Association's
protestations of surprise are not credible. Internal e-mails between Taxi
Association representatives and the consultant who prepared the Taxi
Association's proposal demonstrate a full awareness and anticipation of further
negotiations between the Port and the winning bidder. In one e-mail, the
11
No. 67721-7-1/12
consultant cautioned against the Association's decision to propose a low figure
on a key revenue item and then "take their chances with . . . negotiations down
the line." The consultant ultimately conceded that he could "see the wisdom" in
the Taxi Association's "desire to get the contract and then iron out the details."
(Emphasis added.) The consultant remarked that the request for proposals
created certain complexities that would make "negotiation more important than
ever."
This is not a case like those cited by the Taxi Association, where a
competitive bidding law prevents negotiation after a bid is selected because the
terms of the winning bid must be incorporated directly into the final contract.
See, e.g., Dep't of Lottery v. Gtech Corp., 816 So.2d 648, 652 (Fla. Dist. Ct. App.
2001) (observing that Florida's competitive bidding statute "envisions finalizing an
agreement by turning the winning proposal into a contract") (emphasis added),
review dismissed as improvidentlv granted by 822 So.2d 1243 (2002).
This was a competitive bidding process not governed by a binding statute,
and the rules are not so strict. In such a case, "while it is true that all who submit
proposals must be treated fairly, there is no legal requirement that a final contract
must conform to the original RFP." 10 Eugene McQuillin, The Law of Municipal
Corporations § 29:33, at 476 (3d ed. 2009). Because the Port's chief executive
officer was "generally authorized" to negotiate contract terms with the winning
bidder, the shifting of terms as a result of negotiations could not render the
contract ultra vires. See S. Tacoma Way, 169 Wn.2d at 123 ("If... the State
12
No. 67721-7-1/13
was generally authorized to sell the surplus property, its act of doing so was not
ultra vires.").
Despite the absence of a binding statute, the Taxi Association contends
the request for proposals filled this gap by creating a binding framework. The
Taxi Association points to section 8 of the request for proposals, which reserved
to the Port a broad right of free negotiation in the event that the Port deemed
none of the bids acceptable:
In the event that, in the Port's sole determination, there is not an
acceptable response, the Port reserves the right to enter into direct
contract negotiations with any party it chooses and on such terms
and conditions as shall then be acceptable to the Port,
notwithstanding any provisions of this RFP.
The Taxi Association argues this language had the inverse effect of prohibiting
free negotiation in the event the Port determined there was an acceptable
response. This interpretation does not withstand scrutiny. Section 8 guaranteed
the Port a specific right to "reject" all proposals if none were acceptable. Nothing
in that section limited the Port's right to accept a proposal and freely negotiate
contract terms with the successful bidder. The first line of section 8 declared the
Port's right to "accept or reject any or all proposals in their entirety or in part."
The Taxi Association points out that section 8 prohibited the Port from
modifying or waiving particular requirements as to one bidder without doing the
same for all bidders:
During the evaluation process, if the Port determines that a
particular requirement may be modified or waived, then the
requirement(s) will be modified or waived for all Proposers and all
proposals will be re-evaluated in light of the change.
13
No. 67721-7-1/14
This provision, however, is irrelevant to the negotiation phase. It applied only
during "the evaluation process," before the concession was awarded. It did not
require the Port to go back and rescore all six proposals each time the
negotiation phase produced a change in the contract terms.
The Taxi Association argues the Port's reservation of its right to freely
negotiate "for the benefit of the Port and the traveling public" restricted the Port
from agreeing to any contract revision that was favorable to Yellow Cab. This
argument misunderstands the basic meaning of a "negotiation." A negotiation is
a "consensual bargaining process." Black's Law Dictionary 1136 (9th ed.
2009). Some back and forth, and some lessening of certain strictures as to one
or both parties, is to be expected. By reserving its right to negotiate, the Port
reserved its right to modify terms to the benefit of either party, not merely to
impose unilaterally upon the successful bidder stricter terms than those the
bidder originally contemplated.
CONSTITUTIONAL THEORIES OF ULTRA VIRES ACTION
The Taxi Association argues the Yellow Cab contract was ultra vires for
the additional reason that it violated the Taxi Association's due process rights
and was an unconstitutional gift of public funds.1
1See Wash. Const, art. 8, § 7 ("No county, city, town or other municipal
corporation shall hereafter give any money, or property ... to or in aid of any individual,
association, company or corporation."); art. 2, § 25 ("The legislature shall never grant
any extra compensation to any public officer, agent, employee, servant, or contractor,
after the services shall have been rendered, or the contract entered into.").
14
No. 67721-7-1/15
The due process theory lacks merit. To begin with, the Taxi Association
did not possess a constitutionally protected property interest in receiving the
concession. In Washington, "a bidder on a public works contract has no
constitutionally protected property interest in being awarded a government
contract." Quinn Const. Co.. LLC v. King County Fire Prot. Dist. No. 26. 111 Wn.
App. 19, 32, 44 P.3d 865 (2002).
Nor did the Taxi Association have a protected property interest in the
procedures the Port followed in dealing with bidders. See Olim v. Wakinekona.
461 U.S. 238, 250 & n.12, 103 S. Ct. 1741, 75 L Ed. 2d 813 (1983) ("Process is
not an end in itself. Its constitutional purpose is to protect a substantive interest
to which the individual has a legitimate claim of entitlement.") The Taxi
Association concedes that the Port followed proper procedures through to the
selection of a presumed candidate and obtained Commission approval for that
candidate. Briefof Appellant at 31. The Taxi Association's argument is that the
Port violated certain procedures during the contract negotiation phase.
This argument fails because there were no prescribed procedures to be
followed during the negotiation phase. The request for proposals reserved the
Port's discretion to negotiate the contract terms after awarding the concession.
The section 8 language requiring the Port to give equal treatment to each bidder
in modifying or waiving certain requirements applied exclusively during "the
evaluation process," not during the negotiation phase. The Taxi Association
plainly understood that a period of negotiation would be available to the winning
15
No. 67721-7-1/16
bidder. During the negotiation phase, any procedural guarantees set forth in
section 8 or elsewhere in the request for proposals no longer applied.
The gift of public funds theory likewise lacks merit. The Taxi Association
cites no authority for the notion that a gift of public funds results when a final
contract differs in some way from a proposed bid. Nothing bound the Port to hold
Yellow Cab to each of its original proposal terms during the negotiation phase.
The Taxi Association argues the contract was effectively a gift to Yellow
Cab because "all of the contract revisions plainly accrued to Yellow Cab's benefit
alone, with no gains to the Port, the traveling public, or the taxpayers." Brief of
Appellant at 37. Because the question of relative benefits implicates agency
discretion, it is not clear that it would be a proper question for a jury. In any
event, many of the supposed "benefits" to Yellow Cab—such as the deferred
deadlines for meeting certain fleet requirements—were direct results of the
litigation delays caused by the Taxi Association. The Taxi Association cannot be
permitted to cause a delay and then cry foul when a competitor is incidentally
benefited by revisions made necessary by the delays.
We conclude the Port's decision awarding the concession to Yellow Cab
was not invalid, the contract was not ultra vires, and neither action is subject to
being voided.
16
No. 67721-7-1/17
Affirmed.
%*£<&£,
WE CONCUR:
•ZsrStvss.^ F\.(Z\^
f
17