decision on motion to dismiss sde v. transportation commissioner 6-30-11

8/6/2019 Decision on Motion to Dismiss SDE v. Transportation commissioner 6-30-11

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J u d ic ia l D l8 tr 1 c t o f N e w H e lv e nSUPERIOR COURTFLLEDJ U N 29 2 0 1 1

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OCKET NO. CV 106015417 SUPERIOR COURTDE INTERCHANGE JOINTENTURE JUDICIAL DISTRICT OF NEW HAVEN

AT NEW HAVEN

STATE OF CONNECTICUTOMMISSIONER OFRANSPORTATION

JUNE 29,2011

MEMORANDUM OF DECISION RE MOTION TO DISMISS (#125)On November 12,2010, the plaintiff, SDE Interchange Joint Venture, filed a four-

count amended complaint against the defendant, State of Connecticut Commissioner ofTransportation. Only Count Four remains.' The operative complaint alleges that on orabout October 13,2010, the defendant accepted a bid from 0&G Industries, Inc. (0&G) and other co-venturers of 0& G for the State of Connecticut Department ofTransportation's (DOT) project for the reconstruction of the 1-91 and 1-95 Interchange, inviolation of General Statutes 31-57b. The plaintiff further alleges that the defendantimproperly accepted 0& G's bid notwithstanding the fact that 0& G had received 139

1 The court granted the defendant's Motion to Dismiss Counts 1 through 3 on December21,2010.

CH IEF CLERK'S OFFICE


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illful and/or serious violations by the United States Occupational Health and Safetydministration (OSHA) which the plaintiff claims to be outstanding, unresolved and

The plaintiff argues that General Statutes 31-57b prohibits the defendant fromwarding the construction contract to 0& G and/or any entity in which 0& G maintainsan ownership interest. Count Four of the amended complaint, the last surviving claim,seeks a declaratory judgment order construing the provisions of General Statutes 31-57bas a bar to the award of the contract to 0& G and!or any entity in which 0& G maintainsan ownership interest.

On February 7, 2011, the defendant filed a second motion to dismiss addressingthe last remaining count of the plaintiff s amended complaint, arguing that the plaintifffailed to exhaust its administrative remedies because it did not seek a declaratory rulingfrom the State of Connecticut's Department of Labor (DOL) as to its interpretation ofGeneral Statutes 31-57b. On February 17, 2011, the plaintiff filed an objection to themotion to dismiss arguing that the court properly has subject matter jurisdiction overCount Four because it was not required to exhaust any administrative remedies and evenif it were, the plaintiff s action is excepted from the exhaustion of remedies doctrine. Thecourt heard oral argument on March 10,2011. For reasons more fully set forth herein,this court denies the Motion to Dismiss.


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The defendant contends that this action should be dismissed because the plaintiffid not exhaust its administrative remedies by seeking a declaratory ruling on theinterpretation of General Statutes 31-57b from the DOL. Additionally, the defendantrgues that the plaintiff cannot meet the narrowly drawn exceptions to the exhaustion ofdministrative remedies doctrine, in that the plaintiff cannot prove futility because thelaintiffhad ample time to seek a declaratory ruling from the DOL; and the DOL wouldave been required to act prior to the bid opening or the execution of the contract.herefore, the defendant claims that this court lacks subject matter jurisdiction, andccordingly must grant its motion to dismiss.

The plaintiff counters that its action cannot be barred by the exhaustion ofadministrative remedies doctrine because the defendant, as the bidding and awardingauthority, provides no regulatory or statutory appeal processes to obtain the requestedelief. According to the plaintiff, the decision to reject a bid or to award a contract is not acontested case under the Uniform Administrative Procedures Act (UAPA) and, therefore,it does not permit a challenge to an agency decision by way of an administrative appeal.The plaintiff contends that the defendant's agency (the DOT), not the DOL, is the agencyresponsible for enforcing General Statutes 31-57b under the specific facts of this caseand the DOT provides only an informal bid protest procedure. Alternatively, the plaintiff


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rgues that the futility exception to the exhaustion of administrative remedies doctrinepplies in this case.

"A motion to dismiss ... properly attacks the jurisdiction of the court, essentiallysserting that the plaintiff cannot as a matter of law and fact state a cause of action thatshould be heard by the court." (Internal quotation marks omitted.) Bacon ConstructionCo. v. Dept. of Public Works, 294 Conn. 695, 706, 987 A.2d 348 (2010). "A motion todismiss tests, inter alia, whether, on the face of the record, the court is withoutiurisdiction." (Internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., 294 Conn.06,213,982 A.2d 1053 (2009). "Pursuant to the rules of practice, a motion to dismiss ishe appropriate motion for raising a lack of subject matter jurisdiction." St. George v.Gordon, 264 Conn. 538,545,825 A. 2d 90 (2003).

"Under [the exhaustion of administrative remedies doctrine], a trial court lackssubject matter jurisdiction over an action that seeks a remedy that could be providedthrough an administrative proceeding, unless and until that remedy has been sought in theadministrative forum .... In the absence of exhaustion of that remedy, the action must bedismissed." (Internal quotation marks omitted.) Garcia v. Hartford, 292 Conn. 334, 339,972 A.2d 706 (2009).

"[I]t is the burden of the party who seeks the exercise of jurisdiction in his favor ... clearly to allege facts demonstrating that he is a proper party to invoke judicial


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esolution of the dispute .... It is well established that, in determining whether a court hasubject matter jurisdiction, every presumption favoring jurisdiction should be indulged."Citations omitted; internal quotation marks omitted.) Wilcox v. Webster Ins., Inc., supra,94 Conn. 213-14.

The plaintiff is correct in its assertion that General Statutes 31-57b does notxplicitly provide for an administrative remedy with regard the impact of a violation ofsubparts (1) and (2), the sections for which the plaintiff seeks a declaratory ruling. Nordoes it clearly express any legislative intent to bypass the exhaustion requirements. Thiscourt concludes that, given the specific language in the statute and in related legislation, itis reasonable to infer that exhaustion of administrative remedies is required.

Our Supreme Court has held that a party seeking a declaratory judgmentconcerning the interpretation of a statute is required first to pursue the administrativeremedy of seeking a declaratory ruling from the applicable agency under the UAPA. SeeConnecticut Life &Health Ins. Guaranty Assn. v. Jackson, 173 Conn. 352, 357, 377 A.2d1099(1977); see also Connecticut Mobile Home Assn., Inc. v. Jensen's, Inc., 178Conn.586, 588, 424 A.2d 285 (1979)(plaintiffs were required to seek a declaratory judgment fromthe real estate commissioner concerning the validity of lease terms under General Statutes 21-82 before bringing declaratory action in the Superior Court). In Connecticut Life &Health Ins. Guaranty Assn. v. Jackson, supra, 173 Conn. 352, the plaintiff brought an


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ction for a declaratory judgment in the Superior Court seeking an interpretation of an.nsurance statute which did not include an explicit provision requiring resort todministrative remedies.' Connecticut Life &Health Ins. Guaranty Assn. v. Jackson,upra, 173 Conn. 353.

"The trial court determined that the plaintiff had an administrative remedyonsisting of a petition to the [agency] commissioner for a declaratory judgment rulingursuant to General Statutes 4-176 which could be reviewed in the [Superior Court], asrovided by General Statutes ... 4-183." Connecticut Life &Health Ins. Guarantyssn. v. Jackson, supra, 355. In affirming the lower court's decision, the Supreme Courtexplained that "[t]here are clear indications in the Uniform Administrative Procedure Act... that the legislature intended that administrators issue declaratory rulings based onheir interpretations of statutes .... [A]dministrative agencies must necessarily interpretstatutes which are made for their guidance. To rule otherwise would be to ignore the

2 The parties disputed the proper interpretation of then-General Statutes 38-308 U),which has since been transferred, providing: "The contractual obligations of the impairedinsurer for which the association (CLHIGA) becomes or may become liable shall be asgreat as but no greater than the contractual obligations of the impaired insurer wouldhave been in the absence of an impairment unless such obligations are reduced aspermitted by subsection (d) of this section but the association shall have no liability withrespect to any portion of a covered policy to the extent that the death benefit coverage onanyone life exceeds an aggregate of twenty-five thousand dollars, or to the extent thatany benefit under a covered policy other than life insurance exceeds an aggregate oftwenty-five thousand dollars." (Internal quotation marks omitted.) Connecticut Life &Health Ins. Guaranty Assn. v. Jackson, supra, 173 Conn. 354.

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corruption or favoritism has influenced the conduct of the bidding officials or when thevery object and integrity of the competitive bidding process is defeated by the conduct ofmunicipal officials .... " Id., 501.

By Public Acts 1988, Number 88-317, 23, General Statutes 4-183 (a) wasamended to its present form, which provides that "[a] person who has exhausted alladministrative remedies available within the agency and who is aggrieved by a finalIdecision may appeal to the Superior Court as provided in this section." The amendmentIIrepealed the requirement that a party be aggrieved by "a final decision in a contestedIiIIcase" and substituted the requirement that a party need only be aggrieved by a "final!decision." Public Act 88-317 also amended the definitions section of the UAPA, General!Istatutes 4-166.II, Under the amended statutory scheme, an unsuccessful bidder does have standingiunder the UAPA to seek a declaratory judgment from an agency. Pursuant to General!Statutes 4-17 6 (h), an agency decision on a petition for a declaratory ruling is a finaldecision for purposes of appeal under General Statutes 4-183. Accordingly, adisappointed bidder must seek redress under the UAPA before resorting to the courts.

Because the court turns to the plaintiff s futility argument, which it concludesresolves the disputed issues presented by the Motion to Dismiss, it does not address theplaintiff s contention that it cannot be required to exhaust any administrative remedies

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because the DOT has not adopted any formal or mandatory bid protest or appeal!

procedures. However, the court does note that at least one other Superior Court hasejected similar arguments. See, Patten v. Spada, Superior Court, judicial district ofitchfield, Docket No. CV 03 0090209 (September 22,2003, Pickard, J) (35 Conn. L.

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ptr. 518) (The court rejected the plaintiffs' argument that because the Department ofublic Safety did not issue regulations pursuant to General Statutes 4-176, there was nodministrative remedy for them to initiate and exhaust, explaining that "the absence ofegulations promulgated pursuant to Section 4-176 (b) does not" relieve the plaintiffs ofheir obligation to exhaust their administrative remedies by first petitioning the agency fordeclaratory ruling.)

Based on the review of related statutes and applicable case law, it seemseasonable to conclude that the exhaustion of administrative remedies doctrine applies toa party seeking a declaratory ruling on the rights of the parties under General Statutes 31-57b. Thus, a party should first seek a declaratory ruling from the agency responsiblefor General Statutes 31-57b' s administration.

The court must now determine whether an exception to the exhaustion requirementapplies to excuse the plaintiff from prior recourse to the agency. The plaintiff argues thatit is excepted from the exhaustion doctrine because seeking a declaratory judgment fromeither the defendant or the DOL would have been futile.


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"It is a settled principle of administrative law that, if an adequate administrativeemedy exists, it must be exhausted before the Superior Court will obtain jurisdiction toact in the matter. ... Notwithstanding the important public policy considerationsnderlying the exhaustion requirement, [our Supreme Court] has carved out severalexceptions from the exhaustion doctrine ... although only infrequently and only forarrowly defined purposes .... Such narrowly defined purposes include when recourse tohe ... remedy would be futile or inadequate." (Citation omitted; internal quotation marksomitted.) Peruta v. Commissioner of Public Safety, 128 Conn. App. 777, 789, _ A.3d

(2011).

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The defendant contends that the plaintiff had ample time to seek a declaratoryruling as to the applicability of General Statutes 31-57b. It argues that the plaintiff couldhave sought a declaratory ruling in August 2010, after 0& G was cited by OSHA as aresult of the Kleen Energy plant explosion and in October 2010, either prior to theopening of bids or after the opening bids. The defendant contends that because theUAPA, General Statutes 4-176 (e), requires the agency petitioned to act within twomonths after receiving the petition for a declaratory ruling, if the plaintiff had petitionedat any of the aforementioned opportunities, it would have had an answer prior to theexecution of the contract in December 2010.


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In response, the plaintiff claims that it could not have filed for a declaratory rulingwith the DOL in August 2010, when OSHA issued the violations, because the bids for thcontract had not yet opened and there was no way for the plaintiff to determine whetherthey would suffer any harm or injury resulting from 0& G's inability to comply withGeneral Statutes 31-57b. Additionally, the plaintiff argue that it would have been futilI

Iito have filed for a declaratory ruling after the bid opened because between October 21,,

i12010,and November 2,2010, the defendant and 0& G corresponded with each other forthe specific purpose of determining the applicability of General Statutes 31-57b. OnDecember 3, 2010, before any hearing on the plaintiff's application for injunction or theIIdefendant's first motion to dismiss in the present case,' the defendant issued aiResponsibility Determination finding that General Statutes 31-57b did not act as a barito an award of the contract to 0& G and recommending that the contract be awarded to0& G. The Responsibility Determination incorporated the findings of the DOL and theDepartment of Administrative Services that General Statutes 31-57b did not act as a bato an award of the contract to 0& G.!

3 On October 22, 2010, the plaintiff filed an application for an ex parte temporaryinjunction and the original complaint, which was subsequently amended on November12,2010, to include the request for a declaratory judgment. On October 26,2010, thecourt issued an Order to Show Cause. An evidentiary hearing date of December 7, 2010,was established. On November 22,2010, the defendant filed a motion to dismiss theplaintiffs amended complaint, which the court granted as to counts one, two and three,on December 21,2010.


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"It is well established that [a]n administrative remedy is futile or inadequate if theagency is without authority to grant the requested relief .... It is futile to seek a remedyonly when such action could not result in a favorable decision and invariably would resulin further judicial proceedings." (Internal quotation marks omitted.) Piteau v. Board ofEducation, 300 Conn. 667, 684, 15 A.3d 1067 (2011). "[Our Supreme Court has] heldthat utilizing administrative remedies is not futile for purposes of the futility exceptioneven when the decision maker has indicated that it will rule against the grievant." Neimanv. Yale University, 270 Conn. 244, 259,851 A.2d 1165 (2004). "The guiding principle indetermining futility is that the law does not require the doing of a useless thing." (Interna[quotat ion marks omitted.) Santana v. Hartford, 94 Conn. App. 445, 462,894 A.2d 307(2006).

1. The due date for bids for Contract E was postponed to October 13,2010, on whichdate the bids were opened.

:2. On October 13,2010,0&0 Joint Ventures was the apparent low bidder, with a biprice of$356,823,512.20.

In a previous Memorandum of Decision, this court found the following factualtime-line:

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3. On October 13,2010, SDE was the apparent second low bidder, with a bid price o$377,989,999.62.

4. After opening the bids, the DOT asked the bidders to extend their bids toJanuary11, 2011.

6 . The state awarded Contract E to 0& G Joint Venture on December 10,2010.~. The contract was executed between the State and O&G Joint Venture on

December 14,2010.As noted earlier, General Statutes 4-176 (e) requires that "[w]ithin sixty days

~fter receipt of a petition for a declaratory ruling, an agency in writing shall: (1) Issue ai~ling declaring the validity of a regulation or the applicability of the provision of the~eneral statutes, the regulation, or the fmal decision inquestion to the specifiedircumstances, (2) order the matter set for specified proceedings, (3) agree to issue aeclaratory ruling by a specified date, (4) decide not to issue a declaratory ruling andinitiate regulation-making proceedings, under section 4-168, on the subject, or (5) decideot to issue a declaratory ruling, stating the reasons for its action."

Assuming that the plaintiff filed a motion for a declaratory ruling with DOL orDOT on October 13,2010, the first date upon which it had notice ofO&G's status as theapparent low-bidder, the agency would have had two months within which to render a

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decision or other action regarding the motion. December 12, 2010 is the sixtieth day fromI

ctober 13,2010. December 12,2010 is two days after the State awarded Contract E to

Ro son, A., J

&G. The defendant has provided no evidence upon which this court can conclude thathe Agency would have acted before the 60th day, nor was the Agency legally required too so. Therefore, this court cannot find that the plaintiff had ample time, as the movantlaims, to obtain a declaratory ruling from the appropriate state agency.

Accordingly, this court concludes that there is an applicable exception to thexhaustion doctrine in this case. While there is no affirmative evidence that the Stateagency would have required the full sixty days to render a decision, neither is there anyevidence that it would not have used this time allotted to it by statute. Therefore, thiscourt finds it reasonable to conclude that the plaintiff was not allotted sufficient time,under the statutory scheme to obtain relief at the Administrative level.

The court does not need to address the other futility arguments advanced by theplaintiff, namely, that the agencies had rendered opinions regarding the applicability ofthe statute to O&G, because it finds that a request by the plaintiff would have been futileon other grounds.

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decision on motion to dismiss sde v. transportation commissioner 6-30-11

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