State of Tenn. Ex Rel. Leech v. Dole

567 F. Supp. 704, 1983 U.S. Dist. LEXIS 16890
CourtDistrict Court, M.D. Tennessee
DecidedMay 18, 1983
Docket3-83-0046
StatusPublished
Cited by5 cases

This text of 567 F. Supp. 704 (State of Tenn. Ex Rel. Leech v. Dole) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State of Tenn. Ex Rel. Leech v. Dole, 567 F. Supp. 704, 1983 U.S. Dist. LEXIS 16890 (M.D. Tenn. 1983).

Opinion

MEMORANDUM

JOHN T. NIXON, District Judge.

The State of Tennessee through its Attorney General and Reporter, William M. Leech, Jr., filed this action on January 13, 1983 against the Secretary of the United States Department of Transportation, Elizabeth H. Dole, (the Secretary) and the Administrator and Division Administrator of the Federal Highway Administration, R.A. Barnhart and E.G. Oakley, respectively, seeking a declaratory judgment and injunctive relief. At issue is whether the defendants have any Congressional or Constitutional authority to withhold or debit any amount of monies against the State’s account with the Federal Highway Administration (FHWA) because of the State’s recovery of overcharges due to bid-rigging on Tennessee highway construction projects awarded under the Federal-Aid Highway Act of 1956, as amended, 23 U.S.C. §§ 101, et seq. (the Highway Act). This Court has jurisdiction by virtue of 28 U.S.C. § 1331(a), this case arising under Article I, Section 8 of the United States Constitution and the Highway Act. This Court also has jurisdiction pursuant to 28 U.S.C. § 1361 because the State seeks to compel the Secretary and her agents to properly perform their duties under federal law. Venue lies in this District under 28 U.S.C. § 1391(e).

By agreement of the parties, the trial on the merits of this action was consolidated with the State’s motion for preliminary injunctive relief and a hearing was held on April 28, 1983. Fed.R.Civ.P. 65(a)(2). The Secretary further agreed to withhold taking any action on the State’s billings under the Highway Act pending this Court’s decision. The parties submitted the case to the Court based on the pleadings and documentary evidence, objecting only to relevance of certain documents. Pursuant to Fed.R.Civ.P. 52(a), this Memorandum contains the Court’s findings of fact and conclusions of law.

I.

The parties do not dispute that in 1979, the United States Department of Justice and a federal grand jury commenced an investigation of possible bid-rigging on highway construction projects let for competitive bidding by the State under the Highway Act. This investigation included companies and persons in Tennessee. As a result of the investigation, criminal proceedings were initiated against numerous firms and persons identified as involved in collusive bidding on highway construction projects let by Tennessee under the Highway Act. More than seventy firms and individuals were convicted of bid-rigging in violation of either the Sherman Antitrust Act, 15 U.S.C. § 1 et seq., or the federal mail fraud statute, 18 U.S.C. § 1341 et seq. Most of these convictions in Tennessee were obtained by guilty plea agreements between the United States and the defendants named in the criminal actions. The federal guilty pleas usually included a pledge by the convicted firms and persons to cooperate with the United States in its on-going investigation of bid-rigging on highway construction projects. See e.g., Information, Petition to Enter Guilty Plea and Guilty Plea Agreement in United States v. Burns & Baker & J.H. Burns, No. 80-30142 (M.D.Tenn.1980), State’s Exh. B. Upon conviction in federal court the FHWA Administrator debarred or disqualified the convicted firm for a period of time from employment on federally funded FHWA projects. State’s Exh. D and Secretary’s Exh. 7. If a convicted firm agreed to cooperate with federal authorities the FHWA Administrator, in several instances, reduced the firm’s debarment period thereby acknowledging the firm’s cooperation. Id. State’s Exh. D and Secretary’s Exh. -7.

*707 It is uncontroverted, and the documentary evidence establishes, that the State’s civil investigation resulted in certain settlement agreements. 1 These settlement agreements involved disputed claims of injuries suffered by the State because of collusive bidding in violation of the Federal and State Antitrust Laws. 15 U.S.C. §§ 1 and 15; Tenn.Code Ann. §§ 69-101, et seq. The settlement agreements expressly stated that the settlement represented a compromise and release only of the claims of the State. State’s Exh. E.

During the course of the State’s investigation, Sanford M. Litvack, Assistant Attorney General, United States Department of Justice, Antitrust Division, from January 1980 to March 1981, advised General Leech as to the Department’s legal position on claims for recovery of overcharges due to bid-rigging on highway construction projects under the Highway Act. In his undisputed affidavit, Mr. Litvack states that he supervised the Antitrust Division’s litigation involving bid-rigging and prosecutions in Tennessee and that in 1980 the Division’s position was “that only the State was injured in its property by reason of bid-rigging on such highway construction projects and that the United States had no legal claim or interest in such recoveries under the federal antitrust laws”. He further stated, “The Division’s legal position had been previously stated in litigation in Illinois involving suits to recover overcharges due to bid-rigging on highway construction projects awarded by the State of Illinois under the [Highway Act], Those cases were State of Illinois v. Brighton Construction Co., et al., and United States v. Azzarelli Construction Co., et al.” Litvack Affidavit, Exh. G. Mr. Litvack’s assertion on September 10, 1980 to General Leech that the United States had no interest in Tennessee’s efforts to recover any overcharges due to bid-rigging on highway construction projects under the Highway Act is supported in the briefs of the United States in the Brighton and Azzarelli cases.

Brighton involved an action brought by Illinois to recover damages under the Clayton Act, 15 U.S.C. § 15, against highway contractors who conspired to rig bids on highway construction projects. The defendants in Brighton moved to join the United States as an indispensable party under Fed.R.Civ.P. 19.

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Cite This Page — Counsel Stack

Bluebook (online)
567 F. Supp. 704, 1983 U.S. Dist. LEXIS 16890, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-tenn-ex-rel-leech-v-dole-tnmd-1983.