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Dortch, Figures, & Sons, Inc. v. City of Mobile

United States District Court, S.D. Alabama, Southern Division

October 23, 2019

DORTCH, FIGURES & SONS, INC., Plaintiff,
v.
CITY OF MOBILE, ALABAMA, Defendant.

          ORDER

          KRISTI K. DUBOSE CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant's motion for summary judgment (Docs. 27, 28), Plaintiff's Response (Docs. 36, 37), Defendant's Reply (Doc. 41), and Plaintiff's Sur-Reply (Doc. 42).

         I. Background

         This case is about a minority-owned company's right to compete in a city's bidding process for federally funded sidewalk projects. On April 3, 2018, Plaintiff Dortch, Figures & Sons, Inc. (Dortch), an African-American owned company, initiated a four (4) count complaint against Defendant City of Mobile, Alabama (the City) in the Circuit Court of Mobile County, Alabama (02-CV-2018-900847.00), asserting the following claims: Count I - 42 U.S.C. § 1981 made actionable by 42 U.S.C. § 1983; Count II - Title VI of The Civil Rights Act of 1964; Count III -Federal Executive Order 11246; and Count IV - violations of the Federal Community Development Block Grant Program (CDBG). (Doc. 1-1). On May 4, 2018, the City removed the case to this Court on the basis of federal question jurisdiction. (Doc. 1).

         In the Complaint, Dortch alleges discrimination by the City in the manner through which competitive bids were awarded for sidewalks projects. (Doc. 1-1). Dortch asserts that the City discriminated against it during the bidding process because the City would "hold" Dortch's bid on projects by refusing to open its bids yet opening bids by other companies with the same or less qualifications. (Id. at 3). In so doing, the City "would repeatedly state" that Dortch lacked the necessary qualifications (a Municipal & Utilities (MU) or Highways & Streets (HS) major classification requirement) but would accept bids from other Caucasian owned companies which also lacked this requirement. (Id.)

         In response, the City contends: the "bid requirements apply to everyone regardless of race." (Doc. 28 at 12). The City adds that it had a legitimate non-discriminatory reason for rejecting Dortch's bids and/or not allowing Dortch to bid on projects -- the major classification requirement which Dortch lacked. (Doc. 28 at 13). The City claims that Dortch cannot establish a prima facie case of racial discrimination because it "was not qualified to bid[, ]" as it lacked a major classification license. (Doc. 28 at 14-15).

         As evidenced on summary judgment, Dortch's racial discrimination claim is more nuanced than the City's interpretation. It is not whether the bid requirement technically applies to all bidders, it is whether the City treats all bidders equally and/or enforces that requirement uniformly (i.e., the major classification requirement may always "apply," but Dortch alleges that such has been disregarded or excused for Caucasian-owned companies while strictly enforced against his minority-owned company). In sum, Dortch's case is two-fold: 1) that the City does not uniformly or equally apply and/or enforce -- to all sidewalk project bidders -- a MU or HS major classification requirement, but instead enforces or applies such requirement in a racially discriminatory manner; and 2) the City's major classification requirement itself violates federal law as it has no practical effect other than to stifle competition in the bidding process for minority-owned entities. (Doc. 37-1 at 8, 13, 15). In support, Dortch cites instances in which the City either did not allow him to bid and/or allowed and awarded contracts to Caucasian-owned contractors who lacked the requisite qualifications/requirements (MU or HS major classification).[1]

         II. Findings of Fact [2]

         A. The Parties [3]

         Plaintiff Dortch, Figures & Sons, Inc. (Dortch) is a Mobile, Alabama minority owned (African-American) company and a licensed general contractor in the State of Alabama. (Doc. 1-1 at 2; Doc. 37-1 (Ex. D); Doc. 28-4; Doc. 35 (Decltn. Figures)).

         Defendant the City of Mobile, Alabama (the City) is a municipality organized and operating pursuant to the laws of the State of Alabama. (Doc. 1-1 at 2). The City is the recipient of federal and state funding for transportation related construction projects including curbing and sidewalks along public roadways. (Id.) The City conducts a bidding process for Engineering projects, including sidewalk projects, which include a MU or HS major classification requirement.

         B. Major Classifications: MU/HS

         The City Engineering Department sidewalk projects require that a bidder have an MU or HS major classification. In Alabama, to obtain an MU or HS major classification, a licensed general contractor must submit a formal application to the Alabama Licensing Board for General Contractors (“ALBGC”), which must approve the application.

         According to City Engineer Nicholas R. Amberger (Amberger), the Engineering department has "historically required" contractors who bid on City Engineering sidewalk projects to possess an MU or HS major classification as well as a general contractor's license. (Doc. 28-9 (Dep. Amberger at 11, 74)). Section 230-X-.27 of the State of Alabama Licensing Board for General Contractors Administrative Code defines an MU and HS major classification as follows:

Highways and Streets: Shall include the construction of roads, streets, guardrails, fences,
parkways, parking areas, bridges, grading, drainage and all other types incidental thereto.
Municipal and Utility: Shall include clearing, grubbing, paving, curbs, gutters, walks, alleys, driveways, sewer projects, water projects, gas projects, electric projects, telephone projects and work incidental thereto.

         According to the City, this requirement is clearly specified within the bid documents and advertisement for each City Engineering sidewalk project bid. The major classification requirement reads as follows:

Any contractor that desires to bid as a prime contractor must possess a Municipal & utility (MU) or a Highway & Streets (HS) Major Classification per Section 230-X-.27 of the State of Alabama Licensing Board for General Contractors Administrative Code.

         The City applies this requirement to ensure sidewalk projects are handled by a general contractor that is "is adequately qualified" to perform and complete the project. The City further contends that it does not consider the size or racial makeup of a bidding entity when reviewing bid submissions: "[w]e care about the licensures that they hold….we welcome everyone[, ]" and "[t]he more bidders, the better…[w]e want the most there for competitive reasons." (Doc. 28-9 (Dep. Amberger at 81, 99-100)).

         Dortch contends that the City's major classification requirement is an "anomaly among other city departments." (Doc. 37-1 at 4). Dortch argues the requirement is improper (as not required by City ordinance, State Transportation Department rules, or U.S. Department of Transportation rules), and that such is used by the City to racially discriminate because: "[a]ll state and federal policy manuals require that all contracts utilizing federal funds be awarded on the basis of fair and open competitive negotiations….Not meaningless licensure requirements that have no specific relationship to the project at hand. Those policies encourage open competition and discourage any artificial means utilized to stifle competitiveness and the ability of DBEs to participate in the process." (Id.) Per Dortch, "[t]here is no such requirement of the State Licensing Board that a contractor hold an MU classification in order to serve as the prime contractor on a sidewalk project[]" and instead, the ALBGC rule provides:

A general contractor may undertake to construct or superintend the construction of any project if 51% or more of the work as measured by the cost falls within the major classification, subclassification or specific subclassification in which the contractor's license.

(Doc. 37-1 at 7-8 (citing Section 230-X-26.1)).

         Dortch submitted bids to the City for sidewalk projects even though it lacked an MU or HS major classification. In 2016 and 2017, Dortch submitted applications to the ALBGC for an MU major classification. (Doc. 28-10 (Dep. Figures at 6, 18, 82-83, 118-122, 124); Doc. 37-1 (Ex. E); Doc. 28-6; Doc. 28-7). Dortch has never been issued either an MU or HS major classification. (Id.) Dortch admits that part of the reason the City denied its bids was because it lacks a major classification. (Doc. 28-10 (Dep. R. Figures at 118-124, 131)). However, per Dortch, the MU major classification is composed of sub-licenses for “clearing, grubbing, grading, paving, curbs, gutters, walks, alleys, driveways, sewer projects, water projects, gas projects, electric projects, telephone projects, and work incidental thereto.” And Dortch claims that it possesses all of the sub-licenses required for the MU classification, lacking only the formal MU major classification itself. (Doc. 28-4 to Doc. 28-7; Doc. 28-10 (Dep. Figures at 119-122); Doc. 35 (Decltn. Figures)). Dortch adds that with just those sublicenses, it has successfully completed sidewalk projects across Alabama (but not the City of Mobile). Further, Dortch notes that the definition of MU major classification includes an Editor's Note stating: "[p]rime contractors may be assigned classifications from the list of Major Classifications and/or Specialty Construction Classifications…" (Doc. 37-1 at 8).

         C. The City Engineering Department sidewalk projects

         1. Project 2016-202-22A/B [4]

         The City's bid advertisement for a $1.7 million sidewalk repair project states in part:

Bidders must be licensed Contractors in the State of Alabama pursuant to Sections 34-8-1through 34-8-27 of the Code of Alabama of 1975 as amended, and shall indicate State License Number on outside of bid envelope. Any contractor that desires to bid as a prime contractor must possess a Municipal & Utility (MU) or a Highways & Streets (HS) Major Classification per Section 230-X-.27 of the State of Alabama Licensing Board for General Contractors Administrative Code. The bidder must be on ALDOT's "bidder's list" in effect at the time of the Pre-Bid Conference.

(Doc. 28-1).

         Dortch did not officially submit a bid on this project but rather "tried" to bid. (Doc. 28-10 (Dep. Figures at 128)). The City told Dortch that it was not permitted to bid due the lack of an MU or HS major classification. (Id. (Dep. Figures at 131)). Nevertheless, the City awarded the project to a Caucasian owned company, Harwell & Company, LLC (Harwell), which also lacked an MU or HS major classification at the time. (Doc. 28 at 7; Doc. 28-1; Doc. 28-9 (Dep. Amberger at 67); Doc. 28-11 (Dep. Harwell at 21)).

         As explanation, the City states that the award to Harwell was a mistake, subsequently corrected in July 2016 after the City became aware of the error. (Id.) The City asserts that the Purchasing Department, rather than the Engineering Department, handled this bid, and did so for the first time. (Doc. 28-9 (Dep. Amberger at 93, 108-109)). The City references this event as an "outlier." (Doc. 28 at 11). Per the City, when it realized that Harwell lacked the major classification, it instructed Harwell to obtain one -- but permitted work to continue. In July 2016, Harwell obtained a major MU/HS classification license. (Doc. 28-11 (Dep. Harwell at 21, 26)).

         2. Project 2017-3005-18 (2017 CDBG Sidewalks)

         The City's bid advertisement stated in pertinent part:

Bidders must be licensed Contractors in the State of Alabama pursuant to Sections 34-8-1through 34-8-27 of the Code of Alabama of 1975 as amended, and shall indicate State License Number on outside of bid envelope. Any contractor that desires to bid as a prime contractor must possess a Municipal & Utility (MU) or a Highways & Streets (HS) Major Classification per Section 230-X-.27 of the State of Alabama Licensing Board for General Contractors Administrative Code. The bidder must be on ALDOT's "bidder's list" in effect at the time of the Pre-Bid Conference.

(Doc. 28-3). Dortch contends that it submitted a bid for this project but that the City determined that it lacked the MU or HS major classification license as required by the City's Engineering department and so did not even allow it to submit a bid. Emails from the City to Dortch confirm such. (Doc. 35-1; Doc. 42-2; Doc. 35 at 2-3 (Decltn. Figures)). Dortch contends that the City is not allowed to refuse to accept a bid from a general contractor and that the licensing requirement need only be met upon award of the contract, not "to submit a bid." (Doc. 35 at 3-4). It is unclear what company was awarded this project.

         3. Brewer related projects

         Per Dortch, Caucasian contractor Chris Brewer's company received two (2) sidewalk projects though Brewer lacked an MU major classification. (Doc. 37-1 at 6; Doc. 35 (Decltn. Figures at 6); Doc. 37-2 (Brewer related projects)). First, Dortch cites a 2013 project for which the City awarded a sidewalk contract to Caucasian contractor Chris Brewer, who lacked an MU major classification. Dortch ...


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