Duit Construction Company Inc v. Bennett et al
OPINION AND ORDER dismissing Duit's FAHA and due process claims; denying Duit's 43 motion for reconsideration; and denying all remaining pending 26 29 36 motions as moot. Signed by Judge Kristine G. Baker on 03/30/2016. (rhm)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
DUIT CONSTRUCTION COMPANY, INC.
Case No. 4:13-cv-00458-KGB
SCOTT BENNETT, et al.
OPINION AND ORDER
Before this Court is plaintiff Duit Construction Company, Inc.’s (“Duit”) motion to
reconsider dismissal (Dkt. No. 43) and plaintiff’s brief regarding standing and related issues
(Dkt. No. 46). Defendants Scott Bennett, Frank Vozel, Emmanual Banks, Mike Sebren, Ralph
Hall, John Ed Regenold, John Burkhalter, Dick Trammel, Tom Schueck, and Robert S. Moore,
Jr. (collectively “Defendants”), in their representative capacities only, filed defendant’s postremand brief addressing Duit’s motion to reconsider and its brief regarding standing and related
issues (Dkt. No. 48). The Court denies Duit’s motion to reconsider dismissal and dismisses
Duit’s remaining Federal Aid Highway Act of 1956 (“FAHA”), 23 U.S.C. §§ 101 et seq., and
due process claims for the following reasons.
The facts underlying this action were set out in the decision of the Eighth Circuit Court of
Appeals in Duit Construction Company, Inc. v. Bennett, 796 F.3d 938 (8th Cir. 2015). Duit, an
Oklahoma highway contractor, entered into contracts with the Arkansas State Highway and
Transportation Department (“ASHTD”) to reconstruct and widen Interstate 30 between Little
Rock and Benton. During the construction, Duit encountered soil conditions that, it alleges,
differed materially from information provided by the ASHTD during the bidding process. The
ASHTD allegedly required Duit to engage in expensive and time-consuming “undercutting” to
remedy the conditions. Duit’s claims for compensation were denied by the ASHTD and, after a
hearing, by the Arkansas State Claims Commission (“Claims Commission”). Duit appealed to
the General Assembly, which affirmed the Claims Commission’s adverse decision. Duit then
commenced this 42 U.S.C. § 1983 action, suing officers of the ASHTD and the Arkansas State
Highway Commission in their official capacities and seeking prospective injunctive relief under
the exception to the State’s Eleventh Amendment immunity recognized in Ex parte Young, 209
U.S. 123 (1908). Duit’s complaint alleged ongoing violations of the Federal Aid Highway Act
of 1956 (“FAHA”), 23 U.S.C. §§ 101 et seq., and the Due Process and Equal Protection clauses
of the Fourteenth Amendment. Duit, in its complaint, seeks an injunction that would “enjoin
Defendants from accepting federal aid in connection with construction projects until . . . they
fully comply with the federally mandated differing site clause” which, under the FAHA, must be
included in all federal-aid highway construction contracts unless prohibited or otherwise
provided for by state law. See 23 U.S.C. § 112(e); 23 C.F.R. § 635.109.
Defendants moved to dismiss. This Court dismissed the FAHA claim because that statute
is enforced exclusively “through oversight by an executive agency.” Endsley v. City of Chicago,
230 F.3d 276, 281 (7th Cir. 2000). This Court dismissed Duit’s due process claim because
Duit’s interest in future highway contracts is not a protected property interest and because Duit’s
right to appeal claim denials to the Claims Commission and then to the General Assembly
satisfies the Fourteenth Amendment requirement of procedural due process. This Court denied
Defendants’ motion to dismiss Duit’s equal protection claim. Defendants appealed this Court’s
denial, and the Eighth Circuit Court of Appeals reversed, concluding that Duit lacks Article III
standing to bring its equal protection claim. Although Duit did not cross appeal this Court’s
rulings dismissing it’s FAHA and due process claims, the Eighth Circuit Court of Appeals
remanded with instructions that, “if the case proceeds as to Duit’s FAHA and due process
claims, the district court should address whether Duit has Article III standing to assert those
claims, and whether the Ex parte Young exception applies to the claims against these defendants,
before entering a final order.” Therefore, after the mandate issued, this Court instructed the
parties to brief the issues raised in the Eighth Circuit’s opinion. The parties have submitted their
respective briefs, and these issues are now before this Court.
Those who do not possess Article III standing may not litigate claims in the courts of the
United States. Valley Forge Christian Coll. v. Americans United for Separation of Church &
State, Inc., 454 U.S. 464, 475–76 (1982). As the Eighth Circuit observed, Duit must assert an
equal protection claim that “is the sort of Article III case or controversy to which federal courts
are limited.” Duit, 796 F.3d at 940 (quoting Calderon v. Ashmus, 523 U.S. 740, 745 (1998)
(quotation omitted)). To establish Article III jurisdiction, Duit must demonstrate standing to
assert this claim against Defendants. Id. (citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332,
352 (2006)). Standing requires (1) an injury that is concrete and particularized and actual or
imminent, not conjectural or hypothetical; (2) that the injury be fairly traceable to the challenged
action of the defendant; and (3) that it is likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision. Id. (citing Turkish Coalition of Am., Inc. v. Bruininks,
678 F.3d 617, 621 (8th Cir. 2012) (quotations omitted)).
Here, Duit has not sued the Claims Commission or its members and fails to allege that
Defendants influenced, or had the authority and ability to influence, the Claims Commission’s
adjudication of contractor claims against the State. The Eighth Circuit concluded that this failure
was fatal to Duit’s claim that it was denied equal protection under the law because it was
purportedly treated differently by the Claims Commission. Duit also fails to meet the threshold
standing requirements for its FAHA and due process claims.
With regard to its FAHA claim, Duit contends that during performance of the work, the
ASHTD discovered a soil condition that was materially different from that which could have
been anticipated based upon the disclosures contained in the construction contract (Dkt. No. 1, ¶
28). Duit alleges that the ASHTD did not inform Duit of the discovery of these differing site
conditions (Id.). Duit contends that ASHTD required the expensive undercutting work, despite
the fact that Duit provided other options (Id., ¶ 29). As a result, Duit alleges it encountered
substantial delays and disruptions; incurred millions of dollars in additional, un-reimbursed costs
to complete the work required by the contracts; and filed claims with the Resident Engineer
under each contract (Id., ¶ 39). Duit alleges that ASHTD’s Resident Engineer denied its claims
and that ASHTD’s Chief Engineer denied the claims as well. Only after those denials by
ASHTD employees did Duit present its claim to the Claims Commission (Id., ¶ 40). Duit
contends that it is the ASHTD’s policy to include a detailed disclaimer that shifts the risk of
unfavorable subsurface conditions to the contractor, contrary to the purpose of the FAHA. Duit
requests that this Court enter an injunction prohibiting ASHTD from accepting any federal
funding until it complies with Duit’s interpretation of the FAHA. Thus, Duit alleges in its
complaint that, with respect to its FAHA claim at least, ASHTD is the party that is violating the
FAHA, not the Claims Commission, and requests relief directed against ASHTD, not against the
“Past exposure to illegal conduct does not in itself show a present case or controversy
regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.”
City of Los Angeles v. Lyons, 461 U.S. 95, 102 (1983) (quoting O’Shea v. Littleton, 414 U.S. 488
(1974)). The equitable remedy of injunctive relief is unavailable absent a showing of irreparable
injury, a requirement that cannot be met where there is no showing of any real or immediate
threat that the plaintiff will be wronged again—a “likelihood of substantial and immediate
irreparable injury.” Id. at 111 (quoting O’Shea, 414 U.S., at 502). Here, the speculative nature
of Duit’s claim of future injury leads this Court to conclude that Duit has not established this
requirement, thereby barring its request for equitable relief. Duit’s alleged injury stems from two
contracts voluntarily executed in 2002 and completed long ago. In its complaint, Duit contends
only that it may do business with the State of Arkansas in the future. Defendants contend that
Duit has not bid on a project in Arkansas since 2002 (Dkt. No. 48, at 17). Further, as Defendants
point out, putting aside the conjectural nature of Duit’s sole allegation about future business and
assuming that Duit opted to bid again on a project in Arkansas, there is a speculative chain of
events that would have to occur before Duit would face the prospect of future injury like that it
complains of here (Dkt. No. 48, at 16). This Court agrees that Duit’s complaint is based on a
series of “contingent future events that may not occur as anticipated, or indeed may not occur at
all.” Texas v. United States, 523 U.S. 296, 300 (1998).
This Court also concludes that the relief Duit seeks—an injunction to prohibit the funding
of highway projects in Arkansas with federal funds—would not serve to redress any alleged
ongoing harm. For these reasons, the Court concludes Duit lacks standing to pursue its FAHA
Next, this Court examines Duit’s standing to bring its due process claim. That Duit’s
complaint is based on a series of “contingent future events that may not occur as anticipated, or
indeed may not occur at all,” thwarts Duit’s standing to assert its due process claim, just as it
thwarts Duit’s standing to assert its FAHA claim. Texas, 523 U.S. at 300. As with its equal
protection claim, Duit’s due process claim also focuses on the decision of the Claims
Commission, not the decisions or actions of the ASHTD. For instance, Duit alleges that the
Claims Commission violated Duit’s due process rights by granting $100,000 to an Arkansas
contractor after finding that the ASHTD had failed to provide sufficient information in its bid
package so that the claimant and other bidders could more adequately prepare their bids for
submission but refused to make the same finding in Duit’s case. This alleged conduct is not
fairly traceable to any named defendant. For these reasons, this Court concludes that Duit does
not have standing to pursue its due process claim.
Ex parte Young Doctrine
As the Eighth Circuit observed, though they are distinct jurisdictional requirements,
“there is a common thread between Article III standing analysis and Ex parte Young analysis.”
Cressman v. Thompson, 719 F.3d 1139, 1146 n.8 (10th Cir. 2013). Under Ex parte Young, state
officials may be sued in their official capacities for prospective injunctive relief when the
plaintiff alleges that the officials are acting in violation of the Constitution or federal law.
Missouri Child Care Ass’n v. Cross, 294 F.3d 1034, 1037 (8th Cir. 2002). In addition, the
named state official “must have some connection with the enforcement” of the challenged
statute. Ex parte Young, 209 U.S. at 157 (emphasis added).
This Court determined that Duit’s complaint seeks prospective injunctive relief. Indeed,
the only relief Duit seeks is an injunction preventing the ASHTD from accepting federal
highway aid. Duit contends that the named defendants have responsibilities that are “directly
related to Duit’s injuries and a favorable decision in this lawsuit will cause them to redress that
injury” (Dkt. No. 46, at 5).
Duit makes clear that the State of Arkansas assented to the
provisions of the Federal Aid Highway Act. Ark. Code Ann. § 27-65-113. Duit also argues that
the ASHTD Director, who is a named defendant here, is the chief executive officer of the
ASHTD, is subject to the approval of the State Highway Commission, and has direct and full
control and management of the affairs relating to the state highways. Ark. Code Ann. § 27-65122.
Further, Duit maintains that the State Highway Commission, the chairman and vice
chairman of which are named defendants, is vested with broad powers and duties by Arkansas
statute, including the power to let all contracts for the construction, improvement, and
maintenance of the roads comprising the state highway system and to comply fully with the
provisions of the federal aid acts. Ark. Code Ann. § 27-65-107. Duit argues the Commission
may enter into contracts or agreements with the United States Government relating to the survey,
construction, improvement, and maintenance of roads under the provisions of any congressional
Because of this, the Court determines that the named defendants have some connection to
the challenged statute, but this Court concludes that they do not have a connection with the
enforcement of the challenged statute so as to survive the Ex parte Young analysis. Ex parte
Young, 209 U.S. at 157. This Court concludes, for the reasons explained in its initial Order, that
the Federal Highway Administration has the power to enforce the challenged statute and to
impose the relief Duit seeks here (Dkt. No. 24). Therefore, this Court concludes that Duit’s
FAHA claim fails the Ex parte Young analysis.
See, e.g., Balogh v. Lombardi, No. 14-3603,
2016 WL 929358, at *7 (8th Cir. Mar. 11, 2016) (concluding that while the connection between
the official and the challenged statute does not need to be primary authority to enforce the
challenged law, the Ex parte Young exception to sovereign immunity does not apply when the
state official has no authority to enforce the challenged law).
As for Duit’s due process claim, this Court concludes that Duit’s due process claim fails
the Ex parte Young analysis. Duit fails to demonstrate that this claim can be brought against
these defendants. See DamilerChrysler Corp., 547 U.S. at 352. The only relief Duit seeks—an
injunction to prohibit the funding of highway projects in Arkansas with federal funds—would
not serve to redress any alleged ongoing harm from a purported due process violation. Duit’s
passing reference to due process in its complaint does not make clear its primary due process
concern, but its recent filings indicate that Duit’s primary concern is the absence of judicial
review (Dkt. No. 1, ¶ 71; Dkt. No. 44, at 5; Dkt. No. 46, at 7 ̶ 8). It is unclear how the relief Duit
seeks here would remedy this concern. Duit fails to explain how ASHTD and its officers would
be able to override the Claims Commission process, which is rooted in Arkansas law. See Ark.
Code Ann. § 19-10-211; Ark. Const., Art. 5, § 20. As the Eighth Circuit Court of Appeals
recognized, “it is totally speculative whether the only relief requested in the complaint—an
injunction preventing defendants from accepting federal highway aid—would have any effect on
the practices of the Claims Commission, a separate Arkansas government entity.
speculation is insufficient to satisfy this element of standing.” Duit, 796 F.3d at 941.
Motion For Reconsideration
Even if Duit did have standing and survived the Ex parte Young analysis, this Court
would deny Duit’s motion to reconsider its prior order dismissing Duit’s FAHA and due process
claims. In its motion, Duit requests that this Court reconsider its ruling dismissing its FAHA
claim in the light of the Supreme Court’s holding in Armstrong v. Exceptional Child Center, Inc.,
135 S. Ct. 1378 (2015). Even if Armstrong applies here, pursuant to Armstrong, when a
statutory enforcement scheme displays an intent to foreclose the availability of equitable relief,
the statute does not create a private cause of action. Here, this Court concludes the FAHA
evidences such an enforcement scheme.
Rather than supporting reconsideration as Duit
contends, Armstrong bolsters this Court’s conclusion that enforcement of the FAHA lays with
the Secretary of Transportation and not with Duit as a private litigant. Therefore, the Court
denies Duit’s motion for reconsideration of this Court’s Order dismissing its FAHA claim.
Likewise, if Duit has standing to maintain its due process claim and survives the Ex parte
Young analysis, this Court denies Duit’s motion for reconsideration of this Court’s order
dismissing its due process claim. Because Duit’s motion for reconsideration does not set forth
any additional argument regarding its due process claim, this Court adopts the analysis set forth
in its prior Order (Dkt. No. 24).
This Court concludes that Duit lacks standing to pursue its FAHA claim and that Duit’s
FAHA claim fails the Ex parte Young analysis. Alternatively, the enforcement scheme in the
FAHA displays an intent to foreclose the availability of equitable relief. Therefore, this Court
denies Duit’s motion to reconsider the prior Order dismissing Duit’s FAHA claim (Dkt. No. 43).
The Court also concludes that Duit does not have standing to pursue its due process claim and
that Duit’s due process claim fails the Ex parte Young analysis. Alternatively, this Court denies
Duit’s motion for reconsideration (Dkt. No. 43).
In sum, this Court dismisses Duit’s FAHA and due process claims and denies Duit’s
motion for reconsideration (Dkt. No. 43). The Court denies all remaining pending motions as
moot (Dkt. Nos. 26, 29, 36).
It is so ordered this 30th day of March, 2016.
Kristine G. Baker
United States District Judge
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