ALPHA PAINTING & CONSTRUCTION COMPANY, INC. v. DELAWARE RIVER PORT AUTHORITY OF THE COMMONWEALTH OF PENNSYLVANIA AND THE STATE OF NEW JERSEY

Filing 68

OPINION. Signed by Judge Noel L. Hillman on 8/10/17. (dd, )

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ALPHA PAINTING & CONSTRUCTION
COMPANY, INC.,
Plaintiff,

1:16-cv-05141-NLH-AMD
OPINION

v.
DELAWARE RIVER PORT AUTHORITY
OF THE COMMONWEALTH OF
PENNSYLVANIA AND THE STATE OF
NEW JERSEY,
Defendant.

APPEARANCES:
PETER J. TORCICOLLO
JENNIFER A. HRADIL
KEVIN W. WEBER
KAITLYN E. STONE
GIBBONS, PC
ONE GATEWAY CENTER
NEWARK, NJ 07102-5310
On behalf of Plaintiff
STEWART JOHN GREENLEAF
THOMAS J. ELLIOTT
ELLIOTT GREENLEAF PC
UNION MEETING CORPORATE CENTER V
925 HARVEST DRIVE
SUITE 300
BLUE BELL, PA 19422
On behalf of Defendant
HILLMAN, District Judge
After a four-day bench trial, on September 23, 2016, this
Court found that Defendant, Delaware River Port Authority, was
arbitrary, capricious, and unreasonable when it awarded Corcon

Inc., and not Plaintiff, Alpha Painting & Construction Company,
Inc., the Phase 2 contract to paint the Commodore Barry Bridge.
The Court held that DRPA’s determination to award Corcon the
contract was irrational because it arbitrarily deemed Alpha to
be a non-responsible bidder by violating its own procurement
rules to recraft Corcon’s bid into the lowest responsive and
responsible bid.

On the day the bids were received and opened

on June 16, 2016, Alpha was the lowest responsive, responsible
bidder for Contract CB-31-2016, and Corcon was not.

The Court

found that DRPA’s arbitrary and capricious actions over the next
two months flipped that result without any meaningful
justification or rational process.

(Docket No. 37 at 40.)

As a

result, the Court enjoined DRPA from proceeding on the contract
with Corcon, and directed DRPA to award the contract to Alpha,
which the Court found to be the lowest responsive and
responsible bidder in accordance with DRPA’s procurement rules.
(Id. at 42-43.)
DRPA appealed the Court’s decision to the United States
Court of Appeals for the Third Circuit.

On April 6, 2017, the

Third Circuit issued its judgment affirming this Court’s finding
that DRPA acted arbitrarily and capriciously in its contract
award process.

Alpha Painting & Construction Co. Inc. v.

Delaware River Port Authority of Pennsylvania and New Jersey,
853 F.3d 671, 674 (3d Cir. 2017).
2

The Third Circuit reversed,

however, this Court’s order directing that DRPA award the
contract to Alpha.

Id.

The Third Circuit vacated that part of

the decision and remanded the case “for the entry of a more
limited injunction” to enable Alpha to be “restored to
competition.”

Id.

At this Court’s direction, the parties submitted briefing
and participated in oral argument on how the case should proceed
consistent with the Third Circuit’s mandate. 1

The Court has

thoroughly considered the parties’ positions, the Third
Circuit’s Opinion, and the law governing the scope of a district
court’s jurisdiction following the entry of a mandate by the
appeals court.

For the reasons that follow, the Court finds

that a rebid on a new contract for Phase 2 of the Commodore
Barry Bridge painting project is consistent with the Third
Circuit’s mandate, and is the only fair and equitable result,
for the parties and the public.

1

The mandate was docketed in this Court on April 28, 2017, and
in accordance with Local Civil Rule 79.4, the Court entered an
Order implementing the mandate on May 8, 2017. According to a
briefing schedule agreed to by the parties, the supplemental
briefing concluded on June 20, 2017. Argument was held on July
26, 2017, and the parties were afforded until August 2, 2017 to
submit one final letter brief to the Court regarding the scope
of the modified injunction.
3

DISCUSSION
A.

Standard for Determining Scope of Mandate on Remand

The Third Circuit has set forth the standard that a
district court must employ in determining the scope of a Third
Circuit’s remand mandate:
It is axiomatic that on remand for further proceedings
after decision by an appellate court, the trial court must
proceed in accordance with the mandate and the law of the
case as established on appeal.
A trial court must implement both the letter and
spirit of the mandate, taking into account the appellate
court's opinion and the circumstances it embraces.
“Where the reviewing court in its mandate prescribes
that the court shall proceed in accordance with the opinion
of the reviewing court, such pronouncement operates to make
the opinion a part of the mandate as completely as though
the opinion had been set out at length.” In the absence of
specific directions, the question as to what further
proceedings can be had consistent with the opinion of the
appellate court must be determined from the nature of the
case and the pertinent statutory provisions. The mandate
and the opinion must be considered together in their
entirety with particular reference to the issues
considered. From the proposition that a trial court must
adhere to the decision and mandate of an appellate court
there follows the long-settled corollary that upon remand,
it may consider, as a matter of first impression, those
issues not expressly or implicitly disposed of by the
appellate decision. A trial court is thereby free to make
any order or direction in further progress of the case, not
inconsistent with the decision of the appellate court, as
to any question not settled by the decision. . . .
“[U]upon a reversal and remand for further consistent
proceedings, the case goes back to the trial court and
there stands for a new determination of the issues
presented as though they had not been determined before,
pursuant to the principles of law enunciated in the
appellate opinion, which must be taken as the law of the
case.”
4

Bankers Trust Co. v. Bethlehem Steel Corp., 761 F.2d 943, 949-50
(3d Cir. 1985) (internal citations omitted).
B.

Analysis
1.

How should Alpha be “restored to competition”?

The Third Circuit agreed with this Court’s finding that
DRPA arbitrarily and without any rational basis declared Alpha
as “not responsible,” and that DRPA treated Alpha and Corcon
unequally because DRPA should have deemed Corcon to be “not
responsible” for the same reason it rejected Alpha for being
“not responsible.”

Alpha, 853 F.3d at 686.

The Third Circuit

further agreed with this Court that DRPA acted arbitrarily and
without any permissible basis in DRPA guidelines when it
adjusted Corcon’s bid so that it would become the lowest bidder.
Id. at 687.

The Third Circuit also noted that neither Alpha nor

Corcon could be deemed “not responsive” because that
determination was not made as to either bidder within the
guidelines’ 10-day window, and because both bidders could have
been deemed “not responsive” by failing to provide the required
documentation.

Id. at 685.

After making these findings, this Court determined that
the proper remedy for DRPA’s arbitrary and capricious conduct
was to enjoin DRPA from awarding the contract to Corcon and
direct DRPA to award the contract to Alpha.

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This Court

determined that there was no need to start the bidding process
over because such a remedy would be adverse to the public good
and unfair to Alpha.

(Docket No. 37 at 42.)

This Court further

found that Alpha was fully capable and qualified to perform the
work required under the contract, it was ready to mobilize
immediately, and it was the lowest responsive and responsible
bidder in accordance with DRPA’s procurement rules.

(Id.)

In reviewing this Court’s decision to enjoin the DRPA from
awarding the contract to Corcon and ordering DRPA to award the
contract to Alpha, the Third Circuit restated the three factors
a court should consider when an agency’s decision has been found
to lack any reasonable basis: (1) the practical considerations
of efficient procurement of supplies for continuing government
operations, (2) the public interest in avoiding excessive costs,
and (3) the bidder's entitlement to fair treatment through
adherence to statutes and regulations.

Alpha, 853 F.3d at 688-

89 (citing Sea-Land Serv., Inc. v. Brown, 600 F.2d 429, 434 (3d
Cir. 1979)).

The Third Circuit agreed with this Court’s finding

as to the first factor – that rebidding would not result in the
efficient procurement of the bridge painting project, which at
that point had been delayed by several months due to the
litigation.

Id. at 689.

The Third Circuit also agreed with

this Court’s finding as to the third factor – that since Alpha
did not receive fair treatment by DRPA failing to follow its
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guidelines, Alpha would suffer irreparable harm if DRPA was not
enjoined from proceeding.

Id.

The Third Circuit noted that the

second factor was largely neutral because of the small gap
between Alpha’s and Corcon’s bids.

Id.

Thus, the Third Circuit agreed with this Court that
injunctive relief was a proper remedy, but the Third Circuit
found that this Court went too far in directing DRPA to award
the contract to Alpha.

The Third Circuit found that because

DRPA failed to conduct any meaningful responsibility
determination as to Alpha, it was uncertain what the
responsibility inquiries would have revealed if DRPA had
followed its procurement rules.

Id.

The Third Circuit

concluded that even though this Court was presented with
evidence that supported Alpha’s capability to complete the
project, it was an impermissible substitution of judgment to
deem Alpha “responsible” and award it the contract.

Id.

In making that determination, the Third Circuit discussed a
case raised by Alpha in the appeal: Ulstein Maritime Ltd. v.
United States, 833 F.2d 1052 (1st Cir. 1987).

Id. at 690.

The

Third Circuit noted that in Ulstein, the court concluded that
“but for” the violations of the applicable guidelines, “‘one of
the other bidders’” would have received the award, but unlike in
this case, the court did not award the contract to “‘any
specific plaintiff,’” and instead it ordered the Navy to
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“‘review the bids previously received and to award the contract
to the next low, responsive and responsible bidder’” because it
was “‘possible,’” upon remand, that “‘[the plaintiffs] may be
rejected for defects in . . . responsibility, leading to the
award of the contract to a higher bidder or to no bidder at
all.’”

Id. (quoting Ulstein, 833 F.2d at 1058).

The Third

Circuit found that Ulstein, “far from lending support for the
directed award here,” “‘merely un[did] the illegal agency
actions and instruct[ed] the agency to proceed with the
procurement which [was] in progress.’”

Id. (quoting Ulstein,

833 F.2d at 1058).
The Third Circuit concluded that Ulstein “counsels in favor
of a more limited injunction, the goal of which, in the
circumstances of this case, should be to undo the illegal action
and return Alpha to competition.”

Id. (citing Delta Data Sys.

Corp. v. Webster, 744 F.2d 197, 206–07 (D.C. Cir. 1984) (“[T]he
main objective of our effort at framing a [bidding violation]
remedy is to assure that the government obtains the most
advantageous contracts by complying with the procedures. . . .
Putting the disappointed bidder in the economic position it
would have occupied but for the error is normally the best
approach to this result.”); BCPeabody Constr. Servs., Inc. v.
United States, 112 Fed. Cl. 502, 514 (2013) (ordering agency to
restore apparent-low-bidder to competition for contract and
8

requiring agency to “reevaluate [the] proposals”); Beta
Analytics Int'l, Inc. v. United States, 75 Fed. Cl. 155, 159
(2007) (“A reevaluation restores to a victim of arbitrary and
capricious procurement activity its substantial chance to
receive the contract award.”)).

The Third Circuit concluded:

DRPA arbitrarily removed Alpha from contention for the
Phase 2 contract. Accordingly, Alpha should be restored to
competition and DRPA should evaluate Alpha's bid and
affirmatively determine, per its guidelines, whether Alpha,
the lowest bidder, is a “responsible” contractor. We
therefore will vacate the portion of the District Court's
order directing DRPA to award CB-31-2016 to Alpha and
remand to the District Court for it to fashion a more
limited injunction consistent with this opinion.
Id.
Thus, the posture of the contract bid process as a result
of the Third Circuit’s decision is that Alpha is the lowest
bidder with the determination of whether it was “responsible”
still outstanding, while Corcon is the second lowest bidder with
a suspect responsibility review.

See id. at 685-86 (pointing

out that Corcon failed to submit three years of EMF scores, and
observing that DRPA guidelines mandate responsibility inquiries
such as contacting references, performing public searches or
news searches, and assessing certifications, and the record is
devoid of any indication that these inquiries were done for
Alpha or Corcon).
There are three paths available to proceed from here: (1)
DRPA can perform responsibility assessments on Alpha and Corcon
9

and decide between only those two companies which will be
awarded the Phase 2 contract; (2) DRPA can reevaluate the bids
as if it were the day the all the bids were opened – that is,
DRPA resets the clock back to June 16, 2016 at 2:30 p.m. when it
accepted and opened the seven bids submitted for Contract No.
CB-31-2016, and properly follow its procurement rules to
evaluate the responsiveness and responsibility of all the
bidders; or (3) DRPA cancels Contract No. CB-31-2016 and issues
an Invitation for Bids for a new Phase 2 contract.
Which path to choose depends on how the Third Circuit’s
direction that Alpha be “returned to competition” is
interpreted.

DRPA and Alpha disagree on what the Third Circuit

means by “restored to competition.”

DRPA argues that its

reevaluation of the bids should be limited to Alpha and Corcon,
with its responsibility assessment conducted on both Alpha and
Corcon, and from there DRPA will determine which company is the
lowest responsive and responsible bidder, which will be
completed within 90 days of the parties submitting updated
information.

In contrast, Alpha argues that the contract should

be a complete do-over, with the contract posted for a totally
new rebidding process.

Alpha also argues that even if the

contract is not rebid, DRPA’s evaluation should be limited to
only responsive bidders, of which Corcon was not one.
DRPA counters that a rebid is improper because (1) Alpha
10

argued against a rebid when it filed its case against DRPA last
year, (2) this Court found that a rebid did not serve the public
interest, and (3) the Third Circuit affirmed that finding.
Alpha responds that the passage of time has changed the
nature of the proper remedy to cure DRPA’s arbitrary and
capricious conduct, and points out that the original procurement
process from the release of the specifications to the board’s
approval of the contract took just as long, or even shorter
than, DRPA’s proposed reevaluation process.

Alpha further

points out that the DRPA procurement manual permits the DRPA to
reject all bids for a contract and begin the bidding process
anew.
The Third Circuit specifically held that the proper remedy
for DRPA’s conduct is to “undo the illegal action and return
Alpha to competition.”

Alpha, 853 F.3d at 690.

Despite DRPA’s

view that it is only required to perform a more thorough
responsibility assessments on Alpha and Corcon as a remedy for
its “illegal action,” the process to “undo” DRPA’s illegal
action cannot be to resume the current contract bid review
process that was fatally flawed – and illegal - from the start.
The Third Circuit offered several reasons why this Court’s
modified injunction should not follow DRPA’s plan.
First, the Third Circuit’s decision cannot be read to
contemplate that Corcon would be considered for an award of the
11

contract under the previously administered process.

The Third

Circuit pointed out DRPA’s eventual award of the contract to
Corcon was illegal and irrational, and that DRPA had gone out of
its way to award the contract to Corcon and not Alpha.
853 F.3d at 687.

Alpha,

Additionally, with regard to DRPA’s unequal,

more-favorable treatment afforded to Corcon, the Third Circuit
observed that not only did DRPA treat Corcon better than Alpha,
id. at 686, DRPA did not try to “explain away the suggestive
timing” of Corcon’s bid modification, which this Court found was
merely a pretext to ensure that Corcon was awarded the contract,
id. at 686-87.

The Third Circuit further found DRPA’s argument

that its guidelines expressly permitted DRPA to reduce Corcon’s
bid to “border[] on the frivolous,” and the “decision to modify
Corcon’s bid appeared out of thin air.”

Id. at 687.

When the

Third Circuit ultimately found that “DRPA's actions def[ied]
reasonable explanation,” that observation was specifically
directed at DRPA’s minimal consideration of Alpha’s bid in
contrast to DRPA’s “out of its way” help to make Corcon’s bid
satisfy DRPA’s responsive and responsibility factors.

Id.

Simply performing a more detailed safety analysis of Alpha will
not “undo” the unilateral and illegal corrections to Corcon’s
bid, which DRPA appears to argue should stand.

DRPA’s

insistence that the bid process now be limited to just Alpha and
Corcon is just another, and the most recent, example of an
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unexplained and continuing preference for Corcon which is
inconsistent with the factual findings of this Court and the
Third Circuit’s Opinion as a whole.

This Court is as perplexed

by the position as much now as it was at the time of our
original decision.
Second, even though DRPA argues that the Third Circuit
rejected a rebid as a remedy (Docket No. 66 at 1), the Third
Circuit did not explicitly make that finding.

The Third Circuit

affirmed this Court’s decision that rebidding did not satisfy
the first Sea-Land factor since rebidding, as of September 2016,
was not efficient for continuing government operations.

But,

the consideration of first Sea-Land factor has changed with the
passage of time.

What constituted efficiency only a few weeks

after DRPA awarded the contract to Corcon is very different from
what is efficient a year later.
The Third Circuit did not state that a direction to rebid
the contract would have been erroneous if this Court had so
ordered that remedy in September 2016, and the Third Circuit did
not state that rebidding would be improper on remand.

DRPA

rules expressly permit DRPA to declare a contract cancelled and
create a new IFB, and the Third Circuit has explicitly directed
DRPA to follow its own guidelines.

Moreover, we find it

disheartening that after the decision of two courts sharply
criticizing its lack of transparency and procurement practices
13

that a public agency would not respond by voluntarily redoing
the process those two courts found illegal in meaningful ways.
Third, the only way DRPA’s illegal action can be undone is
if Corcon’s bid is considered as it was submitted, and not
“recalculated” by DRPA.

See Alpha, 853 F.3d at 687 (“The

District Court correctly concluded that DRPA lacked the
authority to modify Corcon's bid. On August 9, 2016, Alpha was
still the lowest bidder.”).

In that posture, Corcon is not the

lowest bidder, and it may only win the contract if Alpha is
deemed – again – to be “not responsible.”

Far from un-doing

DRPA’s actions, it would accomplish the very same prohibited act
that precipitated this action in the first place.

That is not

equity.
At this juncture, the only way to fully rectify the illegal
actions of DRPA is to start from scratch with a new IFB for the
Phase 2 contract.

That course would permit DRPA to properly

follow its procurement rules and provide a transparent and
thorough bid review and award process.

It would also ameliorate

the effects of the year-long delay of the litigation process on
labor and material costs, as well as other considerations, such
as updated safety assessments for all bidders.
Moreover, no option other than rebidding the Phase 2
contract satisfies the Sea-Land factors.

Starting over from the

beginning will take as long as DRPA’s proposal, it will ensure
14

that the winning bidder is the actual lowest bid offered by a
responsible contractor, and it will help ensure that all bidders
are treated fairly from the bid opening to the awarding of the
contract.

In that way, consistent with the mandate, Alpha will

be restored to competition without fear.

So too will Corcon

which can, along with any other interested bidders, resubmit its
bid and be treated equally under the existing procurement rules
without favor.
Therefore, the Court will issue a modified injunction that
directs DRPA to cancel the current Phase 2 contract and issue a
new Invitation for Bids for a revised Phase 2 contract, which
shall be, in all respects, in compliance with DRPA’s procurement
rules and the law.
2.

May Alpha proceed on the claims this Court
dismissed as moot?

In resolving Alpha’s motion for a preliminary and permanent
injunction, the Court dismissed as moot Counts II, III, and IV
of Alpha’s complaint, which alleged violations of Alpha’s due
process rights, New Jersey’s Open Public Meetings Act, N.J.S.A.
10:4-6 to -21, and Pennsylvania’s Sunshine Act, 65 Pa. Cons.
Stat. 701 to 716. (Docket No. 40.)

In its Opinion, the Court

noted that it would not opine on those claims because the facts
that Alpha presented to prove such violations supported the
Court’s conclusion that DRPA acted arbitrarily and capriciously.

15

(Docket No. 47 at 42-43 n.34.)
DRPA argues that Alpha is barred from renewing these claims
now that the case has been remanded because they were dismissed
with prejudice and Alpha did not appeal that determination.
Contrary to DRPA’s representation, however, those claims were
not dismissed with prejudice.

Instead, the Court dismissed them

as moot because of the remedy afforded to Alpha on it success on
its claim that DRPA acted arbitrarily and capriciously.

Now

that the Third Circuit has reversed that determination and
remanded the matter for further consideration, the claims are no
longer moot.

Moreover, when a district court dismisses a claim

as “moot,” that dismissal is jurisdictional - not a
determination on the merits - and the dismissal therefore is
considered “without prejudice.”

Korvettes, Inc. v. Brous, 617

F.2d 1021, 1024 (3d Cir. 1980) (explaining that “[t]he label
‘with prejudice’ attached to the dismissal of a claim signifies
that the dismissal is an adjudication of the merits and hence a
bar to further litigation of the claim,” but where the district
court dismisses the claim on a jurisdictional point - the
mootness of the controversy – such a “dismissal for lack of
jurisdiction is plainly not a determination of the merits of a
claim,” and instead the dismissal is “without prejudice”)
(citing Fed. R. Civ. P. 41(b))(other citation omitted).
Finally, “a district court’s dismissal without prejudice is not
16

ordinarily a final order unless the applicable statute of
limitations would not permit the re-filing of the claims.”

Core

Communications, Inc. v. Verizon Pennsylvania, Inc., 493 F.3d
333, 337 (3d Cir. 2007).
Accordingly, because the Court has regained jurisdiction
over the action, and the dismissal of Counts II, III, and IV is
not considered an adjudication on the merits, the Court will
afford Alpha leave to file an amended complaint if it wishes to
proceed with any viable claims it may have against DRPA.
CONCLUSION
For the foregoing reasons, the Court’s modified injunction
to restore Alpha to competition in compliance with the Third
Circuit mandate will direct DRPA to cancel the current Phase 2
contract and issue a new Invitation for Bids for a revised Phase
2 contract.

Alpha shall have 30-days to file an amended

complaint to reassert the claims that the Court previously
dismissed as moot.
An appropriate Order will be entered.

Date: August 10, 2017
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

17