Graham Construction Services, Inc. v. Rapid City, City of

Filing 12

ORDER denying 4 Motion for a temporary restraining order. Signed by U. S. District Judge Jeffrey L. Viken on 5/3/11. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
GRAHAM CONSTRUCTION
SERVICES, INC., a Minnesota
corporation,
Plaintiff,
vs.
CITY OF RAPID CITY,
Defendant.

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CIV. 11-5038-JLV

ORDER DENYING
PLAINTIFF’S MOTION FOR
A TEMPORARY
RESTRAINING ORDER

On April 29, 2011, plaintiff Graham Construction Services, Inc.,
(“Graham Construction”) filed a complaint (Docket 1) and motion for a
temporary restraining order. (Docket 4). After providing notice to defendant
City of Rapid City (“City” or “City Council”), the court held a hearing on
Graham Construction’s motion on May 3, 2011. Attorney Patrick Duffy
appeared on behalf of Graham Construction, and attorneys Jason Green and
Joel Landeen appeared on behalf of the City of Rapid City. At the hearing, the
parties presented no new evidence, but rather relied on their filed submissions.
The court carefully and thoroughly reviewed the record in this case and
considered the arguments presented at the hearing. The court makes the
following findings consistent with its oral findings made at today’s hearing:
1.

Under H & W Contracting, LLC v. City of Watertown, a
disappointed bidder may challenge an award of a public contract
in limited circumstances. 633 N.W.2d 167, 172 (S.D. 2001).

Because the City Council did not award the Jackson Springs
Water Treatment Plant Project to any bidder, but rather voted to
reject all bids and reopen the bid process, the exception articulated
in H & W Contracting does not apply to the facts of this case.
Absent an award of a public contract, Graham Construction does
not have standing to challenge the City Council’s interpretation
and application of South Dakota’s competitive bidding laws.
2.

Alternatively, even if Graham Construction had the requisite
standing, it has not satisfied its burden under Dataphase Systems,
Inc. v. C L Systems, Inc., 640 F.2d 109 (8th Cir. 1981) (en banc),1
to show injunctive relief should issue. Watkins Inc. v. Lewis, 346
F.3d 841, 844 (8th Cir. 2003) (noting injunctive relief is an

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When determining whether to grant or deny a motion for a temporary
restraining order, the court weighs four factors:
(1)
(2)
(3)
(4)

the threat of irreparable harm to the movant if injunctive relief is
not granted;
the state of the balance between this harm and the injury that
granting the injunction will inflict on other parties litigant;
the probability that the movant will succeed on the merits; and
the public interest.

Dataphase, 640 F.2d at 113. No single factor is dispositive, rather “all of the
factors must be considered to determine whether on balance they tip towards
granting injunctive relie[f].” Calvin Klein Cosmetics Corp. v. Parfums de Coeur,
Ltd., 824 F.2d 665, 667 (8th Cir. 1987) (citing Dataphase Systems, Inc., 640
F.2d at 113). However, the third factor–the probability of success on the
merits–is the most significant of all the factors. Minnesota Ass’n of Nurse
Anesthetists v. Unity Hosp., 59 F.3d 80, 83 (8th Cir. 1995); S & M
Constructors, Inc. v. Foley Co., 959 F.2d 97, 98 (8th Cir. 1992).
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extraordinary remedy and the burden is on the movant to show
relief should issue).
3.

The court finds Graham Construction will not suffer irreparable
harm if it does not obtain injunctive relief. “Bids on a public
contract do not give rise to any private right of enforcement until a
bid has been accepted.” Winter Brothers Underground Inc. v. City
of Beresford, 652 N.W.2d 99, 103 (S.D. 2002). Because Graham
Construction has no legally enforceable right to the contract simply
because it was the lowest responsible bidder, it will not suffer
irreparable harm if the City Council reopens the bid process for the
project.

4.

The court finds the balance of harm to the litigants weighs in favor
of denying injunctive relief. The harm to the City if enjoined from
proceeding with the bid process is significant. The City has a
substantial interest in maintaining the integrity of its bid process,
exercising its discretion to reject bids and solicit new bids, and
allowing a necessary public works project to move forward. The
harm to the City if injunctive relief should issue far outweighs any
alleged harm to Graham Construction if injunctive relief is not
granted.

5.

The court finds Graham Construction is not likely to succeed on
the merits of its claims. Absent an abuse of discretion, the City
Council may conduct its business in the manner it deems fit. See
id. at 105 n. 3 (“[P]ublic authorities are vested with wide latitude in
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determining which bids meet the qualification of lowest responsible
bidder. Courts cannot interfere in the exercise of this discretion
unless it clearly appears that the city authorities in whom such
discretion has been vested are abusing the discretion so vested in
them.”) (citations and internal quotations marks omitted). The
court finds the City Council did not abuse its discretion in
rejecting all proposed bids and reopening the bid process. The City
Council expressed concerns regarding the integrity of the bid
process, held two public hearings on the issue, and reached a
decision that was not arbitrary or capricious given the record
before it. As there is no likelihood of Graham Construction’s
success on the merits, this fact weighs in favor of denying
injunctive relief.
6.

The court finds the public interest weighs in favor of denying
injunctive relief. The public has a strong interest in maintaining
the integrity of the bid process and in allowing this significant
infrastructure project to go forward.

In accordance with the court’s findings, it is hereby
ORDERED that plaintiff’s motion for a temporary restraining order

(Docket 4) is denied.
Dated May 3, 2011.
BY THE COURT:
/s/ Jeffrey L. Viken__________________________
JEFFREY L. VIKEN
UNITED STATES DISTRICT JUDGE
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