Asphalt Paving Systems, Inc. v. Anderson Columbia and State of Florida, Department of Transportation

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D18-2035
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ASPHALT PAVING SYSTEMS, INC.,
Appellant,
v.
ANDERSON COLUMBIA and STATE
OF FLORIDA, DEPARTMENT OF
TRANSPORTATION,
Appellees.
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On appeal from the Department of Transportation.
Mike Dew, Secretary.
February 18, 2019
B.L. THOMAS, C.J.
Asphalt Paving Systems, Inc. appeals the Florida Department
of Transportation’s final order denying a petition for agency review
of the Department’s decision to preclude a challenge to a purported
“supplemental agreement” which was not subject to competitive
bidding. Asphalt Paving asserts that the well-pled allegations of
its petition established standing and entitled it to a formal hearing
pursuant to section 120.57(1), Florida Statutes. We agree and
reverse.
Facts
In 2016, the Department published a notice seeking bid
proposals for a maintenance contract for the highways in the
Department’s District 3 area. The bid solicitation specified that
the work included the maintenance of “rumble strips,” or raised
lines along the edges of roads that make a distinct noise on impact,
designed to warn drivers about speed restrictions or the roadway’s
edge. Appellee Anderson Columbia was the only bidder on the
maintenance contract, and the Department executed a contract
with Anderson Columbia.
Due to numerous public complaints regarding the noise
generated by the rumble strips, the Department decided to fill the
strips. The Department entered into an agreement with Anderson
Columbia, calling for the repair of the Mahan Drive rumble strips
by “microsurfacing.” The Department did not publish a bid
solicitation for this work.
Asphalt Paving filed an amended petition with the
Department under section 120.57(1), Florida Statutes, requesting
that the microsurfacing work be removed from the maintenance
contract and submitted for public bidding. Asphalt Paving stated
that the work is of the type that Asphalt Paving routinely engages
in, and if the Department had solicited public bids on the work,
Asphalt Paving would have bid on it. Asphalt Paving alleged that
the work was required to be publicly bid, as it did not qualify as
the subject of a “supplemental agreement” under section
337.11(9)(b), Florida Statutes, because the microsurfacing did not
relate to the original contract. Asphalt Paving asserted that the
Department’s interpretation of section 337.11(9), Florida Statutes,
was contrary to legislative intent mandating public bidding for the
benefit of the taxpayers.
The Department dismissed Asphalt Paving’s request for a
formal hearing. In its final order, the Department stated that
Asphalt Paving’s amended petition did not provide information
sufficient to establish how its substantial interests would be
affected by agency action, and therefore Asphalt Paving had not
demonstrated standing for a formal hearing under section
120.57(1), Florida Statutes. The Department stated that its
decision to supplement the original contract was done in
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accordance with section 337.11(9), Florida Statutes, and therefore
Asphalt Paving’s “alleged potential economic injury [was]
insufficient to afford standing under the injury in fact analysis.”
Analysis
“Whether a party has standing to bring an action is a question
of law that is to be reviewed de novo.” Mid-Chattahoochee River
Users v. Fla. Dep’t of Entvl. Prot., 948 So. 2d 794, 796 (Fla. 1st DCA
2006). “To establish entitlement to a section 120.57 formal
hearing, one must show that its ‘substantial interests will be
affected by proposed agency action.’” Fairbanks, Inc. v. State, Dep’t
of Transp., 635 So. 2d 58, 59 (Fla. 1st DCA 1994); §§ 120.52(13)(b);
120.57, Fla. Stat. (2018). “This, in turn, requires a showing that
(1) the proposed action will result in injury-in-fact which is of
sufficient immediacy to justify a hearing; and (2) the injury is of
the type that the statute pursuant to which the agency has acted
is designed to protect.” Id. (citing Agrico Chem. Co. v. Dep’t of
Envtl. Regulation, 406 So. 2d 478 (Fla. 2d DCA 1981).
All the allegations in Asphalt Paving’s amended petition are
assumed to be factually correct: “In determining whether a party
has standing to seek a formal administrative hearing, the
allegations contained in the party's petition must be taken as
true.” Mid-Chattahoochee, 948 So. 2d at 796; see also Hospice of
Palm Beach County, Inc. v. State, Agency for Health Care Admin.,
876 So. 2d 4, 5 (Fla. 1st DCA 2004) (holding that “[i]n determining
whether [the appellant] had standing, the allegations contained in
its petition must be taken as true”); Ybor III, Ltd. v. Florida
Housing Finance Corp., 843 So. 2d 344, 346 (Fla. 1st DCA 2003)
(holding that allegations in appellant’s petition for section 120.57
hearing should be “taken as true for purposes of appellate review”).
Section 337.11(9)(b), Florida Statutes, provides criteria for
work that may be permitted through a “supplemental agreement”
to an existing contract, rather than bid publicly as a new contract.
Asphalt Paving alleged that the work was required to be procured
through public bidding, and the work did not meet the criteria of
section 337.11(9)(b), Florida Statutes. Asphalt Paving relies on
this court’s decision in Keystone Peer Review Org., Inc. v. State,
Agency for Health Care Admin., 26 So. 3d 652 (Fla. 1st DCA 2010)
for the proposition that, because Asphalt Paving alleged that the
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microsurfacing was subject to public bidding, it established
standing.
In Keystone, the Agency for Health Care Administration
awarded a contract for health services to a vendor after publishing
a request for information without publicly bidding the contract. 26
So. 3d at 653. Keystone responded to the request for information
but was not awarded the contract, and filed a protest and petition
challenging the award and requesting a hearing pursuant to
section 120.57(1), Florida Statutes. Id. The agency denied
Keystone’s request for a formal hearing, stating that the contract
fell within a statutory exemption to competitive bidding, and
therefore Keystone did not have standing to protest the agency’s
award of the contract. Id. However, Keystone had alleged in its
petition that the contract was subject to public bidding. Id at 654.
This court stated that it was required to accept Keystone’s
allegations that the contract did not qualify for an exemption from
the public bidding, and therefore the allegations were sufficient to
demonstrate standing. Id.
Appellees argue that Asphalt Paving’s argument that the
exemption under section 337.11(9)(b), Florida Statutes does not
apply asserts only a legal conclusion that cannot establish
standing. However, this court in Keystone agreed with the
appellant’s assertion that “a factual dispute exists as to whether
the contract is exempt from the competitive bidding process.” 26
So. 3d at 653. (emphasis added). Here, as in Keystone, Asphalt
Paving’s amended petition alleged that the microsurfacing did not
meet the statutory criteria for a public bidding exemption. That
assertion, taken as true, establishes an injury that affects Asphalt
Paving’s substantial interests and establishes a material factual
dispute, which establishes Asphalt Paving’s standing and entitles
it to a formal hearing under to section 120.57(1), Florida Statutes.
Keystone, 26 So. 3d at 654.
We reverse the Department’s final order dismissing Asphalt
Paving’s petition for lack of standing. We remand with directions
that the Department refer the petition for a formal hearing to
determine whether the work “could not reasonably have been
contemplated or foreseen in the original Plans and Specifications,”
and therefore was exempt from public bidding. This determination
will require the resolution of factual and legal questions regarding
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the nature of the work involved and the application of section
337.11(9)(b), Florida Statutes.
REVERSED and REMANDED.
JAY, J., and LONG, JR., ROBERT E., ASSOCIATE JUDGE, concur.
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Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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Scott Widerman of Widerman Malek, PL, Melbourne; John F.
Palladino and Amy R. Weintrob of Hankin Sandman Palladino &
Weintrob, Atlantic City, NJ, for Appellant.
W. Robert Vezina III and Megan S. Reynolds of Vezina, Lawrence
& Piscitelli, P.A., Tallahassee; Eduardo S. Lombard of Radley Law
Firm, Tallahassee; Zeb Cheshire, General Counsel, Anderson
Columbia Co., Inc., Lake City, for Appellee Anderson Columbia.
Marc A. Peoples, Assistant General Counsel, Florida Department
of Transportation, Tallahassee, for Appellee Florida Department of
Transportation.
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