State Ex Rel. American Subcontractors Ass'n v. Ohio State University

2011 Ohio 2881, 129 Ohio St. 3d 111
CourtOhio Supreme Court
DecidedJune 21, 2011
Docket2010-2059
StatusPublished
Cited by14 cases

This text of 2011 Ohio 2881 (State Ex Rel. American Subcontractors Ass'n v. Ohio State University) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. American Subcontractors Ass'n v. Ohio State University, 2011 Ohio 2881, 129 Ohio St. 3d 111 (Ohio 2011).

Opinion

Per Curiam.

{¶ 1} This is an original action for a writ of mandamus to compel respondent, Ohio State University, to require that a bond be furnished by Turner Construction Company as construction manager at risk for a construction project. Because relators are not entitled to the requested extraordinary relief, we deny the writ.

*112 Facts

{¶ 2} In 2005, Ohio State began work on a $1 billion expansion of its Medical Center, which has been referred to as “ProjectOne.” In February 2009, Ohio State entered into an agreement for construction-management services with Turner on the project. Construction work on the project began in the fall of 2009 and is scheduled to be completed in 2014.

{¶ 3} Under the usual construction method, public institutions of higher education like Ohio State would be required to employ multiple prime contractors for constructing, renovating, or improving capital facilities. That method would require Ohio State to first engage a company to design the project and then seek bids from contractors to do the construction and would prohibit having one prime contractor holding all trade contracts for a project. It is alleged that the multiple-prime-contractor system has resulted in delays and increased costs.

{¶ 4} In December 2009, the General Assembly enacted Section 8 of Sub.H.B. No. 318 (“H.B. 318”), a temporary uncodified law that directed the chancellor of the Ohio Board of Regents to designate during 2010 one construction project at each of three different state institutions of higher education as a Construction Reform Demonstration Project. The purpose of the law was to test alternative methods of securing public construction projects to determine whether they would afford greater flexibility in increasing efficiency and lowering costs.

{¶ 5} Pursuant to H.B. 318, Ohio State requested that the Ohio Board of Regents designate certain core phases of the overall project as a Construction Reform Demonstration Project. On March 24, 2010, the chancellor designated portions of the project as a Construction Reform Demonstration Project, and on April 5, 2010, the Ohio Controlling Board approved the designation. The core phases of the project encompassed in the designation are (1) constructing a new cancer and critical-care tower, (2) relocating and upgrading infrastructure and roadways, (3) upgrading current space in existing Medical Center facilities, (4) landscaping and urban planning, (5) demolishing Cramblett Hall, and (6) constructing a chiller plant, with the estimated cost of these phases being $658.3 million.

{¶ 6} One of the specified alternative methods of construction delivery authorized by Section 8 of H.B. 318 is designated “construction manager at risk.” On July 8, 2010, Ohio State entered into a construction-manager-at-risk agreement with Turner for the project. Ohio State selected Turner to serve as construction manager at risk through a qualifications-based selection process. This process differed from traditional competitive bidding, which requires selection of a contractor based on the lowest responsive and responsible bidder.

{¶ 7} Ohio State did not require Turner to furnish a surety bond to secure the performance of Turner and its subcontractors. Requiring Turner to provide a *113 bond would have increased the cost of the project by as much as $11.9 million. Instead, under the agreement, Turner provided to Ohio State a $20,000,000 irrevocable standby letter of credit. Turner also purchased subcontractor-default insurance to protect Turner against default by the subcontractors performing the construction. Turner has entered into subcontracts for performance of some of the work on the project. As of February 2011, Turner and its subcontractors had entered into 47 subcontracts with 43 subcontractors, and Turner had paid out $5 million, with all payments made within five days of payment to Turner, as required by the contract.

{¶ 8} Relators American Subcontractors Association (“ASA”) and American Subcontractors Association of-Ohio, Inc. (“ASA-Ohio”) are trade associations of suppliers who work primarily as subcontractors on construction projects. Their purpose is to protect and advance the interests of subcontractors and suppliers, including those in Ohio. Relator Surety and Fidelity Association of America (“SFAA”) is a national trade association of companies licensed to write fidelity and surety bonds and comprises 451 members, including 33 members with their principal places of business in Ohio. SFAA’s purpose is to protect and advance the interests of sureties in the nation and in Ohio.

{¶ 9} On November 30, 2010, relators filed this action for a writ of mandamus to compel Ohio State to require that Turner furnish a bond as construction manager at risk. After Ohio State filed an answer, we granted an alternative writ. 127 Ohio St.3d 1530, 2011-Ohio-376, 940 N.E.2d 984. The parties submitted briefs and evidence.

{¶ 10} This cause is now before the court for our consideration of relators’ mandamus claim.

Legal Analysis

Standing

{¶ 11} Ohio State asserts that relators lack standing to institute this mandamus action. “A preliminary inquiry in all legal claims is the issue of standing.” Cuyahoga Cty. Bd. of Commrs. v. State, 112 Ohio St.3d 59, 2006-Ohio-6499, 858 N.E.2d 330, ¶ 22. “Before an Ohio court can consider the merits of a legal claim, the person or entity seeking relief must establish standing to sue.” Ohio Pyro, Inc. v. Ohio Dept. of Commerce, 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 27. “ ‘[T]he question of standing depends upon whether the party has alleged such a “personal stake in the outcome of the controversy * * * ” as to ensure that “the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution.” ’ ” State ex rel. Dallman v. Franklin Cty. Court of Common Pleas (1973), 35 Ohio St.2d 176, 178-179, 64 O.O.2d 103, 298 N.E.2d 515, quoting Sierra *114 Club v. Morton (1972), 405 U.S. 727, 732, 92 S.Ct. 1361, 31 L.Ed.2d 636, quoting Baker v. Carr (1962), 369 U.S. 186, 204, 82 S.Ct. 691, 7 L.Ed.2d 663, and Flast v. Cohen (1968), 392 U.S. 83, 101, 88 S.Ct. 1942, 20 L.Ed.2d 947.

{¶ 12} “[A]n association has standing on behalf of its members when ‘(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.’ ” Ohio Contractors Assn. v. Bicking

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Cite This Page — Counsel Stack

Bluebook (online)
2011 Ohio 2881, 129 Ohio St. 3d 111, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-american-subcontractors-assn-v-ohio-state-university-ohio-2011.