Waste Management of New Jersey, Inc. v. Morris County Municipal Utilities Authority

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2806-12T1
DOCKET NO. A-2808-12T1
WASTE MANAGEMENT OF NEW JERSEY,
INC., APPROVED FOR PUBLICATION
Plaintiff-Appellant, December 16, 2013
APPELLATE DIVISION
v.
MORRIS COUNTY MUNICIPAL UTILITIES
AUTHORITY, and SOLID WASTE SERVICES,
INC. d/b/a J.P. MASCARO & SONS,
Defendants-Respondents.
___________________________________________
COVANTA 4RECOVERY, L.P.,
Plaintiff-Appellant,
v.
MORRIS COUNTY MUNICIPAL UTILITIES
AUTHORITY, SOLID WASTE SERVICES, INC.
d/b/a J.P. MASCARO & SONS, and
WASTE MANAGEMENT OF NEW JERSEY, INC.,
Defendants-Respondents.
__________________________________________________________
Argued December 3, 2013 – Decided December 16, 2013
Before Judges Fisher, Espinosa and Koblitz.
On appeal from the Superior Court of New
Jersey, Law Division, Morris County, Docket
Nos. L-2627-12 and L-2868-12.
Maeve E. Cannon argued the cause for
appellant Waste Management of New Jersey,
Inc. (Hill Wallack, LLP, attorneys; Patrick
D. Kennedy, and Jamie G. O'Donohue, of
counsel; Ms. Cannon and Susan L. Swatski, of
counsel and on the brief).
Jeffrey J. Greenbaum argued the cause for
appellant Covanta 4Recovery, L.P. (Sills
Cummis & Gross, P.C., attorneys; Mr.
Greenbaum and Kenneth F. Oettle, of counsel
and on the brief).
Brent T. Carney argued the cause for
respondent Morris County Municipal Utilities
Authority (Maraziti, Falcon & Healey, LLP,
attorneys; Joseph J. Maraziti, Mr. Carney,
and Joanne Vos, of counsel and on the
brief).
Thomas P. Scrivo argued the cause for
respondent Solid Waste Services, Inc. d/b/a
J.P. Mascaro & Sons (McElroy, Deutsch,
Mulvaney & Carpenter, LLP, attorneys; Edward
B. Deutsch and Mr. Scrivo, of counsel and on
the brief).
The opinion of the court was delivered by
FISHER, P.J.A.D.
In this public bidding matter, we granted leave to appeal
the denial of an interlocutory injunction based solely on the
trial judge's determination that plaintiffs were not likely to
succeed on the merits. Because the judge mistakenly overlooked
his authority to impose interlocutory injunctive relief to
preserve the parties' positions and subject matter of the suit –
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even when there are legitimate doubts about plaintiffs'
likelihood of success – we reverse.
I
The record reveals that, on July 9, 2012, defendant Morris
County Municipal Utilities Authority (the Authority) issued a
public notice seeking sealed bids for a five-year contract to
operate the two Morris County solid waste transfer stations and
to provide related transportation and disposal services. The
request for bids mandated, among other things, that bidders
"[s]upply . . . the certified financial statement of the Bidder
and/or, if applicable, the Guarantor for each of the three (3)
recent fiscal years" (emphasis added). This request for bids
did not define what was meant by a "certified financial
statement," stating only that undefined terms were to be
afforded "the meaning normally ascribed to them in the trade,
profession or business with which they are associated."
The Authority received sealed bids in September 2012.
Plaintiff Covanta 4Recovery, L.P. (Covanta) submitted the lowest
bid ($131,004,000), defendant Solid Waste Services, Inc. d/b/a
J.P. Mascaro & Sons (Mascaro) submitted the second lowest bid
($134,380,000), and plaintiff Waste Management of New Jersey,
Inc. (Waste Management) submitted the third lowest bid
($137,952,000). The Authority determined that Mascaro submitted
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the lowest responsible bid, and the losing bidders objected,
arguing, among other things, that Mascaro included in its bid
package only two pages of uncertified "condensed financial
information" for the years ending March 31, 2010, 2011 and 2012.
Upon further consideration, public comment and the presentations
of the interested parties, as well as additional information
from Mascaro, the Authority again concluded Mascaro was the
lowest responsible bid.
On October 23, 2012, Waste Management filed a verified
complaint and sought entry of an order to show cause. On
November 5, 2012, Covanta filed a similar complaint, which
included a claim that its bid should not have been rejected;
Covanta also sought entry of an order to show cause. The judge
heard argument on November 8, 2012, and, on November 15, 2012,
entered an order that: memorialized the Authority's consent not
to enter into a contract with Mascaro until the court ruled on
the applications for interlocutory injunctive relief; scheduled
the production of expert reports; and specified questions of
interest the experts were to address in their anticipated
testimony. Expert testimony was heard on November 29, 2012,
regarding, among other things, the meaning of the phrase
"certified financial statement."
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On December 12, 2012, the trial judge issued a written
opinion regarding the applications for interlocutory injunctive
relief. The judge concluded that Waste Management and Covanta
"failed to satisfy by clear and convincing evidence a likelihood
of success on the merits" and, consequently, he "need not
address the remaining Crowe[1] factors." An order denying relief
was entered the same day.
On December 21, 2012, the judge granted summary judgment
dismissing Covanta's complaint for reasons set forth in a
written opinion. That same day, Waste Management moved in this
court for leave to appeal the denial of its application for
interlocutory injunctive relief; Covanta similarly moved for
leave to appeal a short time later. Covanta also moved in the
trial court for reconsideration of the summary judgment entered
against it. On January 25, 2013, the judge granted the
reconsideration motion, reinstated certain portions of Covanta's
complaint, and permitted the joinder of two additional
plaintiffs.
Mascaro moved for summary judgment on January 17, 2013,
seeking a determination that its bid conformed to the
Authority's written requirements. That motion was argued in the
trial court on February 22, 2013. In the absence of any legal
1
Crowe v. De Gioia, 90 N.J. 126 (1982).
5 A-2806-12T1
impediment, Mascaro also began performing under the awarded
contract on January 28, 2013.
That was the status of the case when, on February 26, 2013,
another panel of this court granted Waste Management and
Covanta's pending motions for leave to appeal the denial of
interlocutory injunctive relief; the panel also stayed the
further performance of the Mascaro contract. The Authority
entered into an emergency contract with Mascaro on the same
terms as the awarded contract, with the exception that its
length was limited to the emergency's duration. Because we
granted leave to appeal, the trial judge was unable to rule on
Mascaro's summary judgment motion addressing the sufficiency of
its bid. See R. 2:9-1(a); Society Hill Condo. Ass'n, Inc. v.
Society Hill Assocs., 347 N.J. Super. 163, 177 (App. Div. 2002).
This is the current status of the litigation.
II
In light of what has already occurred in this case, as well
as the passage of time since we granted leave to appeal, it is
not surprising some parties seek our declaration whether the
trial judge's views of the meaning of "certified financial
statement" and the other bid requirements in dispute are correct
or incorrect. But the case is not presented in a posture that
would permit such a ruling. The trial judge – despite how one
6 A-2806-12T1
may wish to interpret his discussion about the meaning of the
phrase "certified financial statement" – held only that he did
not believe Covanta and Waste Management had clearly and
convincingly demonstrated a likelihood of success on the merits.
Such an expression is not the equivalent of an adjudication of
plaintiffs' claims, only an educated prediction about whether
plaintiffs are likely to succeed after a full exposition of the
merits.2 In short, the narrow question presented by this
interlocutory appeal is whether the trial judge mistakenly
exercised his discretion in denying interlocutory injunctive
relief. We conclude he did.
In summarizing the Supreme Court's oft-cited decision in
Crowe, supra, 90 N.J. at 132-34, we held in Waste Mgmt. of N.J.,
Inc. v. Union Cnty. Utils. Auth., 399 N.J. Super. 508, 519-20
(App. Div. 2008), that issuance of an interlocutory injunction
turns on whether "the movant has demonstrated a reasonable
probability of success on the merits; that a balancing of the
equities and hardships favors injunctive relief; that the movant
2
In alluding to its opposition to the pending summary judgment
motion, Waste Management contends the trial judge has yet to
hear all the evidence relevant to the meaning of "certified
financial statement." Because the judge's observations were
based on less than all the relevant evidence available, it would
be further inappropriate for us to view the judge's prediction
as a final adjudication and then proceed to determine whether we
agree or should otherwise defer to that "finding."
7 A-2806-12T1
has no adequate remedy at law and that the irreparable injury to
be suffered in the absence of injunctive relief is substantial
and imminent; and that the public interest will not be harmed."
In his written opinion, the trial judge correctly identified
these as the factors to be applied. In addition, the judge held
that each of these factors must be clearly and convincingly
demonstrated, a general principle we have previously recognized.
See id. at 520; McKenzie v. Corzine, 396 N.J. Super. 405, 414
(App. Div. 2007); see also S&R Corp. v Jiffy Lube Int'l, Inc.,
968 F.2d 371, 374 (3d Cir. 1992). The judge then determined
that plaintiffs' failure to convince him of the likelihood of
success on their claims required denial of interlocutory
injunctive relief without consideration of the other factors.
This conclusion was erroneous because it overlooks a court's
authority to impose interlocutory restraints regardless of
doubts about the movants' likelihood of success.
To explain, we first consider what is meant when it is said
a movant's right to an interlocutory injunction "must be clearly
and convincingly demonstrated." Waste Mgmt., supra, 399 N.J.
Super. at 520. In this regard, we consider whether the legal or
equitable principles upon which the claim is based are doubtful
or unsettled, see Accident Index Bureau, Inc. v. Male, 95 N.J.
Super. 39, 50 (App. Div. 1967), aff’d o.b., 51 N.J. 107 (1968),
8 A-2806-12T1
app. dis., 393 U.S. 530, 89 S. Ct. 872, 21 L. Ed. 2d 754 (1969),
or whether the material facts are in dispute, Anders v.
Greenlands Corp., 31 N.J. Super. 329, 338 (Ch. Div. 1954), or
both.
In the matter at hand, the basis for the claim that a
publicly-advertised contract should not be awarded to a bidder
who has failed to meet material bid requirements or who has
provided insufficient financial information, is not doubtful but
well-established. See Meadowbrook Carting Co. v. Island Heights
Borough, 138 N.J. 307, 313-15 (1994). Instead, here, the judge
correctly recognized the likelihood-of-success factor was
governed by whether there was a factual dispute about the
meaning of the bid requirements and the sufficiency of the
financial information provided. The judge, having been
persuaded to Mascaro and the Authority's position after hearing
testimony from the parties' experts, determined that plaintiffs
had not clearly and convincingly shown they were likely to
succeed. Because the judge reached this conclusion after
considering the credibility and demeanor of the experts, we deem
it appropriate – despite plaintiffs' forceful contentions to the
contrary – to defer to the judge's observations about the
strength of the parties' positions. Again, that merely means
that, for the purpose of considering whether injunctive relief
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was properly denied, we assume the accuracy of the judge's
prediction about plaintiffs' likelihood of success.
Such an observation, however, does not end the matter. As
Judge Clapp explained many years ago, the reason we consider
whether a movant's right to injunctive relief is clear
"doubtless lies in the fact that an interlocutory injunction is
so drastic a remedy." Gen. Elec. Co. v. Gem Vacuum Stores,
Inc., 36 N.J. Super. 234, 236 (App. Div. 1955). But our courts
have also long recognized "there are exceptions, as where the
subject matter of the litigation would be destroyed or
substantially impaired if a preliminary injunction did not
issue." Id. at 237 (citing Naylor v. Harkins, 11 N.J. 435, 446
(1953); Christiansen v. Local 680 of Milk Drivers, 127 N.J. Eq.
215, 219-20 (E. & A. 1940); Haines v. Burlington Cnty. Bridge
Comm'n, 1 N.J. Super. 163, 174 (App. Div. 1949)). That is, "a
court may take a less rigid view" of the Crowe factors and the
general rule that all factors favor injunctive relief "when the
interlocutory injunction is merely designed to preserve the
status quo." Waste Mgmt., supra, 399 N.J. Super. at 520. See
also Brown v. City of Paterson, 424 N.J. Super. 176, 183 (App.
Div. 2012). The power to impose restraints pending the
disposition of a claim on its merits is flexible; it should be
exercised "whenever necessary to subserve the ends of justice,"
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and "justice is not served if the subject-matter of the
litigation is destroyed or substantially impaired during the
pendency of the suit." Christiansen, supra, 127 N.J. Eq. at
219-20.
This less rigid approach, for example, permits injunctive
relief preserving the status quo even if the claim appears
doubtful when a balancing of the relative hardships
substantially favors the movant, or the irreparable injury to be
suffered by the movant in the absence of the injunction would be
imminent and grave, or the subject matter of the suit would be
impaired or destroyed. See, e.g., Naylor, supra, 11 N.J. at 446(holding that the plaintiffs "were justly entitled to have the
defendants restrained from taking affirmative action which might
destroy their status and the subject of the litigation, and this
was so notwithstanding the doubts expressed that they will
ultimately prevail"); Christiansen, supra, 127 N.J. Eq. at 219-
20 (noting that pendente lite restraints are appropriate if "the
subject-matter of the litigation [would otherwise be] destroyed
or substantially impaired during the pendency of the suit, and
thus the court loses the faculty of fully vindicating such right
and of remedying such wrong as may be revealed on final
hearing"); Hamilton Watch Co. v. Benrus Watch Co., Inc., 206
F.2d 738, 742 (2d Cir. 1953) (recognizing that an interlocutory
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injunction "serves as an equitable policing measure to prevent
the parties from harming one another during the litigation" and
"to keep the parties, while the suit goes on, as far as possible
in the respective positions they occupied when the suit began").
Moreover, we have recognized the important role the public
interest plays when implicated, as here, and have held "that
courts, in the exercise of their equitable powers, 'may, and
frequently do, go much farther both to give and withhold relief
in furtherance of the public interest than they are accustomed
to go when only private interests are involved.'" Waste Mgmt.,
supra, 399 N.J. Super. at 520-21 (quoting Virginian Ry. Co. v.
Sys. Fed'n, 300 U.S. 515, 552, 57 S. Ct. 592, 601, 81 L. Ed.
789, 802 (1937)).
Ultimately, on appellate review, the question is whether
the grant or denial of interlocutory injunctive relief emanated
from the trial judge's exercise of sound judicial discretion.
See N.J. State Bar Ass'n v. Northern N.J. Mortgage Assocs., 22
N.J. 184, 194 (1956); Waste Mgmt., supra, 399 N.J. Super. at
520. This standard "defies precise definition" when we question
whether "there are good reasons for an appellate court to defer
to the particular decision at issue." Flagg v. Essex Cnty.
Prosecutor, 171 N.J. 561, 571 (2002). This narrow inquiry
requires consideration of the trial judge's explanation as well
12 A-2806-12T1
as the legal grounds upon which the decision was based. Our
Supreme Court has observed that an abuse of discretion has
occurred when a decision was "'made without a rational
explanation, inexplicably departed from established policies, or
rested on an impermissible basis.'" Ibid. (quoting Achacoso-
Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260,
1265 (7th Cir. 1985)); see also US Bank Nat'l Ass'n v.
Guillaume, 209 N.J. 449, 467-68 (2012).
Here, the judge made observations, after hearing expert
testimony, that plaintiffs were not likely to succeed on the
merits and, to be sure, those factual observations are entitled
to deference at this stage.3 But the judge's examination of the
matter mistakenly ended there. He did not balance the relative
hardships; he did not consider the irreparable injury that would
follow the injunction's denial; he did not examine whether the
denial of interlocutory relief would impair or destroy the
3
We hasten to describe the limitations of our deference. The
judge made no findings on the pivotal factual issues, and our
expression of deference should not be interpreted as an
agreement with the judge's view of the facts or his
identification or application of the governing legal principles.
We express no view of the merits nor predict what may occur on
appeal once the issues are finally adjudicated in the trial
court. We are reviewing only the sufficiency of a prediction
not a finding of fact. Indeed, the trial judge is similarly
unbound even to his own prior prediction. See, e.g., Univ. of
Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830, 1834, 68
L. Ed. 2d 175, 180 (1981).
13 A-2806-12T1
subject matter of the suit; and he did not weigh the detrimental
impact on the public if a lucrative contract were to be given to
a potentially unqualified party before a challenge to the
bidding process could be fully and finally adjudicated. These
circumstances weighed heavily in favor of interlocutory
injunctive relief here, and the judge's failure to consider
these other Crowe factors constitutes an abuse of discretion
warranting our intervention notwithstanding the deference owed
to the judge's prediction of the likelihood of success.
III
We recognize that the trial judge had effectively managed
the case and that it had rapidly advanced to a point where a
final disposition may not have been far off when we granted
leave to appeal. That is, even if the summary judgment motion
still pending does not result in a final disposition, we gather
the trial of any remaining disputed issues would occur in the
very near future. Accordingly, although such circumstances
might ordinarily warrant a remand to the trial judge for
reconsideration of his denial of injunctive relief following a
review and application of the other Crowe factors, we are
satisfied the record fully supports injunctive relief and – to
avoid causing any further delay in the case's final adjudication
14 A-2806-12T1
– we will simply direct that the restraints imposed by our prior
order remain in place.
The trial court order of December 12, 2012, which denied
interlocutory injunctive relief, is reversed. Our order of
February 26, 2013, which was designed to preserve the status quo
as it existed when suit was commenced, shall remain in place –
with the additional condition that Mascaro may continue to
perform under the emergency contract – pending the entry of
final judgment in the trial court. We do not retain
jurisdiction.
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