Rainier Dispatch v. Seattle Tacoma Intl Taxi Assoc.

• Court: Court of Appeals of Washington
• Decided: May 13, 2013
• Docket: 67721-7
• Status: Unpublished

Opinion

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

RAINIER DISPATCH, LLC, a Washington limited liability company, No. 67721-7-1

Plaintiff, DIVISION ONE

v.

PORT OF SEATTLE, a municipal corporation;

Respondent, UNPUBLISHED OPINION

AIRPORT JOINT VENTURE FILED: May 13, 2013 RESPONSE PARTNERSHIP, LLC, an unincorporated entity; CHECKER CAB OF SEATAC CORPORATION, a Washington corporation; ORANGE CAB COMPANY, a Washington corporation; PUGET SOUND DISPATCH, LLC d/b/a YELLOW TAXI ASSOCIATION, a Washington limited liability company,

Defendants,

and

SEATTLE-TACOMA INTERNA TIONAL TAXI ASSOCIATION, a Washington nonprofit association,

Appellant.

Becker, J. — This appeal involves the decision by the Port of Seattle to

award a five-year exclusive taxi concession at Sea-Tac International Airport to a No. 67721-7-1/2

competitor of appellant Seattle-Tacoma International Taxi Association. Where a

request for competitive bids reserves to the issuing agency the right to negotiate

contract terms after selecting a bidder, and no competitive bidding statute

controls, a properly authorized contract is not ultra vires merely because some

contract terms differ from the original bid. We affirm the order of summary

judgment dismissing the Taxi Association's claims against the Port.

FACTS

In 1989, the Taxi Association obtained an exclusive concession for

providing on-demand taxi services at Sea-Tac airport. Twenty years later, the

Port sought competitive bids for the airport taxi concession. The Port issued a

request for proposals and received six responses. After evaluating the

proposals, port staff recommended approval of the bid by Puget Sound Dispatch

LLC d/b/a Yellow Taxi Association, commonly known as Yellow Cab. At a public

meeting on December 15, 2009, the port commission voted 4 to 1 in favor of

Yellow Cab.

In January 2010, before the Port and Yellow Cab signed the final contract,

the Taxi Association filed suit claiming the request for proposals was illegal and

requesting injunctions against any contract executed in reliance on it. The trial

court denied the injunction. The Taxi Association appealed. We affirmed.

Seattle-Tacoma Int'l Taxi Ass'n v. Port of Seattle (TaxiAss'n 1), noted at 156

Wn. App. 1025, review denied, 169 Wn.2d 1016 (2010). Later, we affirmed the

trial court's disbursement of a supersedeas bond of $144,000 posted by the Taxi No. 67721-7-1/3

Association to compensate the Port in part for approximately $400,000 in

revenue the Port lost as a result of the Taxi Association's lawsuit. Seattle-

Tacoma Int'l Taxi Ass'n v. Port of Seattle (Taxi Ass'n 2), noted at 168 Wn. App.

1036(2012).

While these matters were on appeal, the Taxi Association filed cross

claims in a second lawsuit against the Port initiated by another unsuccessful

bidder. Those cross claims were dismissed on summary judgment. In this

appeal, the Taxi Association contends there are issues of fact bearing on the

legality of the port commission's December 2009 decision to award the taxi

concession to Yellow Cab, as well as the legality of the contract the Port

negotiated and entered with Yellow Cab in August 2010.

We review an order granting summary judgment de novo, engaging in the

same inquiry as the trial court. Marquis v. City of Spokane, 130 Wn.2d 97, 105,

922 P.2d 43 (1996). Summary judgment is appropriate where there is no

genuine issue of material fact and the moving party is entitled to judgment as a

matter of law. CR 56(c). We construe the evidence and inferences from the

evidence in favor of the nonmoving party—here, the Taxi Association. Marquis,

130Wn.2dat105.

OPEN PUBLIC MEETINGS ACT

The Taxi Association contends the award of the concession to Yellow Cab

was invalid because the Port violated the Open Public Meetings Act of 1971,

chapter 42.30 RCW, in reaching its decision. The Port contends this argument is No. 67721-7-1/4

barred by res judicata. Also known as claim preclusion, res judicata bars

litigation of a claim that either was, or should have been, raised and litigated in a

former action. Loveridqe v. Fred Meyer, Inc., 125 Wn.2d 759, 763, 887 P.2d 898

(1995). When the parties to two successive proceedings are the same and the

prior proceeding culminated in a final judgment, a matter "may not be relitigated,

or even litigated for the first time, if it could have been raised, and in the exercise

of reasonable diligence should have been raised, in the prior proceeding."

Sound Built Homes, Inc. v. Windermere Real Estate/S., Inc., 118 Wn. App. 617,

627-28, 72 P.3d 788 (2003).

In both proceedings, the Taxi Association filed claims against the Port for

the purpose of invalidating the Port's concession to Yellow Cab. This court's

decision in Taxi Ass'n 1 constituted a final judgment on the merits of the Taxi

Association's first lawsuit against the Port. See TaxiAss'n 1. at *7. The question

is whether the open meetings claims could and should have been raised in the

first lawsuit.

The Open Public Meetings Act of 1974 requires that all "meetings of the

governing body of a public agency shall be open and public and all persons shall

be permitted to attend any meeting of the governing body of a public agency."

RCW 42.30.030. Any action taken at a meeting that fails to comply with the Act

is "null and void." RCW 42.30.060(1). The Act defines "action" to include

deliberations, discussions, considerations, reviews, and evaluations of an issue

under consideration. RCW 42.30.020(3). The Taxi Association claims the Port No. 67721-7-1/5

violated the Act (1) when a committee of port staff evaluated and scored the

proposals in private, (2) when commissioners failed to rescore the proposals

during the public meeting and thereby rested on the staff's privately generated

recommendations, and (3) when port commissioners discussed the taxi

concession privately in e-mails before the December 2009 public meeting.

The first two theories rested on information the Taxi Association already

possessed when it filed its first suit in January 2010. The Taxi Association knew

from early in the bidding process that port staff would be privately evaluating the

proposals. The Port openly disclosed the evaluation and scoring process to

prospective proposers, and identified the five members of the evaluation

committee. A few days before the December 2009 public meeting, the Port

wrote each bidder a letter stating that it had "completed its evaluation of the six

proposals" and attached a score sheet reflecting Yellow Cab as the winner. No

effort was made to hide the fact that port staff had evaluated the proposals during

private sessions.

The Taxi Association also knew by the conclusion of the December 2009

meeting that the commissioners, before voting to award the concession to Yellow

Cab, had not themselves rescored the six proposals during the public meeting. It

was apparent at the meeting that at least some of the commissioners felt

obligated to follow the privately generated recommendation of the staff evaluation

committee. One commissioner stated on the record at the December 2009

meeting: "I think it's dangerous to open the door to anything except doing what it No. 67721-7-1/6

looks as if this has led us to, which is to approve the process." Another

commissioner remarked that because it appeared the competitive process had

been carried out in a legal fashion, "then I don't think for myself I have much

choice but to move ahead and approve the contract."

Because the Taxi Association knew by the end of the public meeting in

December 2009 that port staff had evaluated and scored the proposals during

private meetings and that the commissioners did not do their own scoring, these

two claims could have been raised in the first lawsuit as a basis for invalidating

the decision to award the concession to Yellow Cab. And these first two theories

are so closely related to the underlying transaction—the Port's competitive

bidding process—that they should have been raised in that lawsuit. See Sound

Built Homes, Inc., 118 Wn. App. at 629-32; cf Haves v. City of Seattle, 131

Wn.2d 706, 713, 934 P.2d 1179, 943 P.2d 265 (1997) (an action focused on the

city council's decision making process is distinct from a claim for money

damages).

The third theory is that port commissioners committed an open meetings

violation when they deliberated privately over e-mails in the weeks leading up to

the December 2009 meeting. This theory is based on information the Taxi

Association obtained through public records requests only after the decision in

the first lawsuit was already on appeal. It could not have been raised in that

lawsuit.

The Port contends the e-mails reflect only a discussion as to whether to

6 No. 67721-7-1/7

place the taxi concession on the meeting's agenda. But a reasonable jury could

find that the e-mails reveal the commissioners having substantive private

deliberations about the taxi concession, in violation of the Act's requirement that

all meetings be open. For example, in one e-mail, Commissioner Pat Davis

wrote that she and two other commissioners (a quorum of the five) "agree that

the commission cannot do anything about the outcome of the decision, because

it has gone through all the procedural and legal hoops. It is ripe for approval.

We cannot change the process, the elements, or the evaluation committee's

selection."

Nevertheless, even if the open meetings claim based on these e-mails is

not barred by res judicata, the claim does not warrant a trial. An action taken at a

private meeting is null and void under the Act. But a later final action taken in

compliance with the statute is not necessarily null and void. Org, to Pres. Aqric.

Lands v. Adams County (OPAL), 128 Wn.2d 869, 883-84, 913 P.2d 793 (1996).

In OPAL, the trial court found two out of three county commissioners discussed

in private how they would vote on an issue at an upcoming meeting. OPAL, 128

Wn.2d at 881-82. The Supreme Court deemed the private discussions

"irrelevant because the final vote occurred in a proper, open public meeting."

OPAL, 128 Wn.2d at 883. The private discussion was minimal, and because

there was extensive opportunity for the opposing parties to provide input at the

public meeting, the Supreme Court did not accept the appellant's

characterization of the public meeting as one "in which formal action is merely No. 67721-7-1/8

summary approval of decisions made in numerous and detailed secret

meetings." OPAL, 128 Wn.2d at 884; see also Euqster v. City of Spokane, 118

Wn. App. 383, 423, 76 P.3d 741 (2003) (no violation where private meetings

were followed by public meeting which included "a great deal of public comment,

both for and against the project," with much of the opposing comment coming

from the plaintiff), review denied, 151 Wn.2d 1027 (2004).

The court may grant a summary judgment motion if, from all the evidence,

reasonable minds could reach but one conclusion. Heath v. Uraqa. 106 Wn.

App. 506, 513. 24 P.3d 413 (2001), review denied, 145Wn.2d 1016(2002). The

Taxi Association contends a reasonable mind could perceive the public meeting

as merely a ceremony concealing that the final decision had already been

reached in earlier private deliberations. The record does not support that view.

At the public meeting, the port commission engaged in lengthy consideration of

the taxi concession. For about two hours, the commissioners heard

presentations by port staff, reviewed documents, took 31 public comments

(including 26 comments from representatives of the Taxi Association), and

debated the matter on the record. A reasonable juror could not fail to conclude

that before the commission took final action, the Taxi Association was, like the

appellants in OPAL, given a full opportunity to express its views in a public

meeting that was genuinely open.

PORT'S AUTHORITY TO NEGOTIATE CONTRACT

The Taxi Association contends the contract the Port negotiated with

8 No. 67721-7-1/9

Yellow Cab is a nullity because it was ultra vires.

Ultra vires acts are those done wholly without legal authorization or in

direct violation of existing statutes. Metro. Park Dist. v. State, 85 Wn.2d 821,

825, 539 P.2d 854 (1975). They are characterized as void "on the basis that no

power to act existed, even where proper procedural requirements are followed."

S. Tacoma Way, LLC v. State. 169Wn.2d 118, 123, 233 P.3d 871 (2010); see

also Haslund v. City of Seattle. 86 Wn.2d 607, 622, 547 P.2d 1221 (1976) ("An

ultra vires act is one performed without any authority to act on the subject.").

Whether an action is ultra vires is a question of law we review de novo. Dept. of

Transp. v. Marine Emps. Comm'n, 167 Wn. App. 827, 835, 274 P.3d 1094

(2012).

The request for proposals stated that the successful bidder would be

required to enter an exclusive contract with the Port, "substantially in the form" of

a sample agreement that was attached. After the commission voted to award

Yellow Cab the concession, the Port and Yellow Cab privately negotiated the

contract terms. Changes were made to a number of items in the sample

agreement.

The Taxi Association argues the final contract terms changed so much

that they represent a material departure from what Yellow Cab promised to offer

the Port in its original bid and from what the Port promised—by means of the

terms of its request for proposals—to demand from any successful bidder. One

new term required the Port to take into consideration Yellow Cab's "good faith No. 67721-7-1/10

efforts" before terminating the contract on the basis of a failure to meet deadhead

reduction goals. Another new term was an overall emergency exit clause

excusing Yellow Cab from being found in breach if the impediment to

performance was "due to causes that are unforeseeable, beyond its reasonable

control, and without its fault or negligence." The Taxi Association also finds fault

with terms regarding the green fleet requirement, the five minute wait

requirement, the overall size of the fleet, and the number of dual-licensed

vehicles. The Taxi Association argues that these terms render the contract void

because the Port lacked authority to add them.

The Taxi Association does not dispute that the Port's chief executive

officer enjoyed statutory authority to privately negotiate and enter into contracts

for the airport taxi concession. The Port's chief executive officer exercised this

authority for 20 years by entering taxi concession contracts with the Taxi

Association. Municipal airport commissions are authorized by statute to "grant

concessions" at the airport "by private negotiation and under such terms and

conditions that seem just and proper" to the commission. RCW 14.08.120(5). A

port district commission is authorized to "delegate" to the managing official of the

district "such administerial powers and duties of the commission as it may deem

proper for the efficient and proper management of port district operations." RCW

53.12.270. The Port of Seattle Commission has, by resolution, delegated to the

chief executive officer of the Port of Seattle the authority "to prepare, negotiate,

and manage" all aspects of contracts needed "in order to conduct the Port's

10 No. 67721-7-1/11

business."

The Taxi Association contends that when the Port committed itself to a

competitive bidding process and issued the request for proposals, it gave up the

authority to negotiate terms with the successful bidder. We disagree. The

request for proposals explicitly reserved the Port's discretion to negotiate the

terms of the contract after the concession was awarded. It declared this

discretion in no uncertain terms: "The Port has the right to negotiate fees and

other terms it deems approphate for the benefit of the Port and the traveling

public." (Emphasis added.) Each bidder, including the Taxi Association, was

required to attach to its proposal a certification agreeing to this reservation of

rights. At the meeting in December 2009, one commissioner clarified on the

record that the purpose of the commission's vote on the taxi concession would

be to authorize the chief executive officer "to go forward and negotiate the

contract." The meeting minutes reflect the commission's expectation that the

selected provider and the Port's chief executive officer would "negotiate in good

faith" as to the deadheading issue in particular.

In short, the Port had authority to negotiate the contract and the extent of

its authority was made clear to all concerned. The Taxi Association's

protestations of surprise are not credible. Internal e-mails between Taxi

Association representatives and the consultant who prepared the Taxi

Association's proposal demonstrate a full awareness and anticipation of further

negotiations between the Port and the winning bidder. In one e-mail, the

11 No. 67721-7-1/12

consultant cautioned against the Association's decision to propose a low figure

on a key revenue item and then "take their chances with . . . negotiations down

the line." The consultant ultimately conceded that he could "see the wisdom" in

the Taxi Association's "desire to get the contract and then iron out the details."

(Emphasis added.) The consultant remarked that the request for proposals

created certain complexities that would make "negotiation more important than

ever."

This is not a case like those cited by the Taxi Association, where a

competitive bidding law prevents negotiation after a bid is selected because the

terms of the winning bid must be incorporated directly into the final contract.

See, e.g., Dep't of Lottery v. Gtech Corp., 816 So.2d 648, 652 (Fla. Dist. Ct. App.

2001) (observing that Florida's competitive bidding statute "envisions finalizing an

agreement by turning the winning proposal into a contract") (emphasis added),

review dismissed as improvidentlv granted by 822 So.2d 1243 (2002).

This was a competitive bidding process not governed by a binding statute,

and the rules are not so strict. In such a case, "while it is true that all who submit

proposals must be treated fairly, there is no legal requirement that a final contract

must conform to the original RFP." 10 Eugene McQuillin, The Law of Municipal

Corporations § 29:33, at 476 (3d ed. 2009). Because the Port's chief executive

officer was "generally authorized" to negotiate contract terms with the winning

bidder, the shifting of terms as a result of negotiations could not render the

contract ultra vires. See S. Tacoma Way, 169 Wn.2d at 123 ("If... the State

12 No. 67721-7-1/13

was generally authorized to sell the surplus property, its act of doing so was not

ultra vires.").

Despite the absence of a binding statute, the Taxi Association contends

the request for proposals filled this gap by creating a binding framework. The

Taxi Association points to section 8 of the request for proposals, which reserved

to the Port a broad right of free negotiation in the event that the Port deemed

none of the bids acceptable:

In the event that, in the Port's sole determination, there is not an acceptable response, the Port reserves the right to enter into direct contract negotiations with any party it chooses and on such terms and conditions as shall then be acceptable to the Port, notwithstanding any provisions of this RFP.

The Taxi Association argues this language had the inverse effect of prohibiting

free negotiation in the event the Port determined there was an acceptable

response. This interpretation does not withstand scrutiny. Section 8 guaranteed

the Port a specific right to "reject" all proposals if none were acceptable. Nothing

in that section limited the Port's right to accept a proposal and freely negotiate

contract terms with the successful bidder. The first line of section 8 declared the

Port's right to "accept or reject any or all proposals in their entirety or in part."

The Taxi Association points out that section 8 prohibited the Port from

modifying or waiving particular requirements as to one bidder without doing the

same for all bidders:

During the evaluation process, if the Port determines that a particular requirement may be modified or waived, then the requirement(s) will be modified or waived for all Proposers and all proposals will be re-evaluated in light of the change.

13 No. 67721-7-1/14

This provision, however, is irrelevant to the negotiation phase. It applied only

during "the evaluation process," before the concession was awarded. It did not

require the Port to go back and rescore all six proposals each time the

negotiation phase produced a change in the contract terms.

The Taxi Association argues the Port's reservation of its right to freely

negotiate "for the benefit of the Port and the traveling public" restricted the Port

from agreeing to any contract revision that was favorable to Yellow Cab. This

argument misunderstands the basic meaning of a "negotiation." A negotiation is

a "consensual bargaining process." Black's Law Dictionary 1136 (9th ed.

2009). Some back and forth, and some lessening of certain strictures as to one

or both parties, is to be expected. By reserving its right to negotiate, the Port

reserved its right to modify terms to the benefit of either party, not merely to

impose unilaterally upon the successful bidder stricter terms than those the

bidder originally contemplated.

CONSTITUTIONAL THEORIES OF ULTRA VIRES ACTION

The Taxi Association argues the Yellow Cab contract was ultra vires for

the additional reason that it violated the Taxi Association's due process rights

and was an unconstitutional gift of public funds.1

1See Wash. Const, art. 8, § 7 ("No county, city, town or other municipal corporation shall hereafter give any money, or property ... to or in aid of any individual, association, company or corporation."); art. 2, § 25 ("The legislature shall never grant any extra compensation to any public officer, agent, employee, servant, or contractor, after the services shall have been rendered, or the contract entered into."). 14 No. 67721-7-1/15

The due process theory lacks merit. To begin with, the Taxi Association

did not possess a constitutionally protected property interest in receiving the

concession. In Washington, "a bidder on a public works contract has no

constitutionally protected property interest in being awarded a government

contract." Quinn Const. Co.. LLC v. King County Fire Prot. Dist. No. 26. 111 Wn.

App. 19, 32, 44 P.3d 865 (2002).

Nor did the Taxi Association have a protected property interest in the

procedures the Port followed in dealing with bidders. See Olim v. Wakinekona.

461 U.S. 238, 250 & n.12, 103 S. Ct. 1741, 75 L Ed. 2d 813 (1983) ("Process is

not an end in itself. Its constitutional purpose is to protect a substantive interest

to which the individual has a legitimate claim of entitlement.") The Taxi

Association concedes that the Port followed proper procedures through to the

selection of a presumed candidate and obtained Commission approval for that

candidate. Briefof Appellant at 31. The Taxi Association's argument is that the

Port violated certain procedures during the contract negotiation phase.

This argument fails because there were no prescribed procedures to be

followed during the negotiation phase. The request for proposals reserved the

Port's discretion to negotiate the contract terms after awarding the concession.

The section 8 language requiring the Port to give equal treatment to each bidder

in modifying or waiving certain requirements applied exclusively during "the

evaluation process," not during the negotiation phase. The Taxi Association

plainly understood that a period of negotiation would be available to the winning

15 No. 67721-7-1/16

bidder. During the negotiation phase, any procedural guarantees set forth in

section 8 or elsewhere in the request for proposals no longer applied.

The gift of public funds theory likewise lacks merit. The Taxi Association

cites no authority for the notion that a gift of public funds results when a final

contract differs in some way from a proposed bid. Nothing bound the Port to hold

Yellow Cab to each of its original proposal terms during the negotiation phase.

The Taxi Association argues the contract was effectively a gift to Yellow

Cab because "all of the contract revisions plainly accrued to Yellow Cab's benefit

alone, with no gains to the Port, the traveling public, or the taxpayers." Brief of

Appellant at 37. Because the question of relative benefits implicates agency

discretion, it is not clear that it would be a proper question for a jury. In any

event, many of the supposed "benefits" to Yellow Cab—such as the deferred

deadlines for meeting certain fleet requirements—were direct results of the

litigation delays caused by the Taxi Association. The Taxi Association cannot be

permitted to cause a delay and then cry foul when a competitor is incidentally

benefited by revisions made necessary by the delays.

We conclude the Port's decision awarding the concession to Yellow Cab

was not invalid, the contract was not ultra vires, and neither action is subject to

being voided.

16 No. 67721-7-1/17

Affirmed.

%*£<&£, WE CONCUR:

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