Waste Management of New Jersey, Inc. v. Morris County Municipal Utilities Authority

80 A.3d 1169, 433 N.J. Super. 445

• Court: New Jersey Superior Court Appellate Division
• Decided: December 16, 2013
• Docket: A-2806-12 A-2808-12
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2806-12T1 DOCKET NO. A-2808-12T1

WASTE MANAGEMENT OF NEW JERSEY, INC., APPROVED FOR PUBLICATION

Plaintiff-Appellant, December 16, 2013

APPELLATE DIVISION v.

MORRIS COUNTY MUNICIPAL UTILITIES AUTHORITY, and SOLID WASTE SERVICES, INC. d/b/a J.P. MASCARO & SONS,

Defendants-Respondents.

___________________________________________

COVANTA 4RECOVERY, L.P.,

Plaintiff-Appellant,

v.

MORRIS COUNTY MUNICIPAL UTILITIES AUTHORITY, SOLID WASTE SERVICES, INC. d/b/a J.P. MASCARO & SONS, and WASTE MANAGEMENT OF NEW JERSEY, INC.,

__________________________________________________________

Argued December 3, 2013 – Decided December 16, 2013

Before Judges Fisher, Espinosa and Koblitz.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket Nos. L-2627-12 and L-2868-12. Maeve E. Cannon argued the cause for appellant Waste Management of New Jersey, Inc. (Hill Wallack, LLP, attorneys; Patrick D. Kennedy, and Jamie G. O'Donohue, of counsel; Ms. Cannon and Susan L. Swatski, of counsel and on the brief).

Jeffrey J. Greenbaum argued the cause for appellant Covanta 4Recovery, L.P. (Sills Cummis & Gross, P.C., attorneys; Mr. Greenbaum and Kenneth F. Oettle, of counsel and on the brief).

Brent T. Carney argued the cause for respondent Morris County Municipal Utilities Authority (Maraziti, Falcon & Healey, LLP, attorneys; Joseph J. Maraziti, Mr. Carney, and Joanne Vos, of counsel and on the brief).

Thomas P. Scrivo argued the cause for respondent Solid Waste Services, Inc. d/b/a J.P. Mascaro & Sons (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Edward B. Deutsch and Mr. Scrivo, of counsel and on the brief).

The opinion of the court was delivered by

FISHER, P.J.A.D.

In this public bidding matter, we granted leave to appeal

the denial of an interlocutory injunction based solely on the

trial judge's determination that plaintiffs were not likely to

succeed on the merits. Because the judge mistakenly overlooked

his authority to impose interlocutory injunctive relief to

preserve the parties' positions and subject matter of the suit –

2 A-2806-12T1 even when there are legitimate doubts about plaintiffs'

likelihood of success – we reverse.

I

The record reveals that, on July 9, 2012, defendant Morris

County Municipal Utilities Authority (the Authority) issued a

public notice seeking sealed bids for a five-year contract to

operate the two Morris County solid waste transfer stations and

to provide related transportation and disposal services. The

request for bids mandated, among other things, that bidders

"[s]upply . . . the certified financial statement of the Bidder

and/or, if applicable, the Guarantor for each of the three (3)

recent fiscal years" (emphasis added). This request for bids

did not define what was meant by a "certified financial

statement," stating only that undefined terms were to be

afforded "the meaning normally ascribed to them in the trade,

profession or business with which they are associated."

The Authority received sealed bids in September 2012.

Plaintiff Covanta 4Recovery, L.P. (Covanta) submitted the lowest

bid ($131,004,000), defendant Solid Waste Services, Inc. d/b/a

J.P. Mascaro & Sons (Mascaro) submitted the second lowest bid

($134,380,000), and plaintiff Waste Management of New Jersey,

Inc. (Waste Management) submitted the third lowest bid

($137,952,000). The Authority determined that Mascaro submitted

3 A-2806-12T1 the lowest responsible bid, and the losing bidders objected,

arguing, among other things, that Mascaro included in its bid

package only two pages of uncertified "condensed financial

information" for the years ending March 31, 2010, 2011 and 2012.

Upon further consideration, public comment and the presentations

of the interested parties, as well as additional information

from Mascaro, the Authority again concluded Mascaro was the

lowest responsible bid.

On October 23, 2012, Waste Management filed a verified

complaint and sought entry of an order to show cause. On

November 5, 2012, Covanta filed a similar complaint, which

included a claim that its bid should not have been rejected;

Covanta also sought entry of an order to show cause. The judge

heard argument on November 8, 2012, and, on November 15, 2012,

entered an order that: memorialized the Authority's consent not

to enter into a contract with Mascaro until the court ruled on

the applications for interlocutory injunctive relief; scheduled

the production of expert reports; and specified questions of

interest the experts were to address in their anticipated

testimony. Expert testimony was heard on November 29, 2012,

regarding, among other things, the meaning of the phrase

"certified financial statement."

4 A-2806-12T1 On December 12, 2012, the trial judge issued a written

opinion regarding the applications for interlocutory injunctive

relief. The judge concluded that Waste Management and Covanta

"failed to satisfy by clear and convincing evidence a likelihood

of success on the merits" and, consequently, he "need not

address the remaining Crowe[1] factors." An order denying relief

was entered the same day.

On December 21, 2012, the judge granted summary judgment

dismissing Covanta's complaint for reasons set forth in a

written opinion. That same day, Waste Management moved in this

court for leave to appeal the denial of its application for

interlocutory injunctive relief; Covanta similarly moved for

leave to appeal a short time later. Covanta also moved in the

trial court for reconsideration of the summary judgment entered

against it. On January 25, 2013, the judge granted the

reconsideration motion, reinstated certain portions of Covanta's

complaint, and permitted the joinder of two additional

plaintiffs.

Mascaro moved for summary judgment on January 17, 2013,

seeking a determination that its bid conformed to the

Authority's written requirements. That motion was argued in the

trial court on February 22, 2013. In the absence of any legal

1 Crowe v. De Gioia, 90 N.J. 126 (1982).

5 A-2806-12T1 impediment, Mascaro also began performing under the awarded

contract on January 28, 2013.

That was the status of the case when, on February 26, 2013,

another panel of this court granted Waste Management and

Covanta's pending motions for leave to appeal the denial of

interlocutory injunctive relief; the panel also stayed the

further performance of the Mascaro contract. The Authority

entered into an emergency contract with Mascaro on the same

terms as the awarded contract, with the exception that its

length was limited to the emergency's duration. Because we

granted leave to appeal, the trial judge was unable to rule on

Mascaro's summary judgment motion addressing the sufficiency of

its bid. See R. 2:9-1(a); Society Hill Condo. Ass'n, Inc. v.

Society Hill Assocs., 347 N.J. Super. 163, 177 (App. Div. 2002).

This is the current status of the litigation.

II

In light of what has already occurred in this case, as well

as the passage of time since we granted leave to appeal, it is

not surprising some parties seek our declaration whether the

trial judge's views of the meaning of "certified financial

statement" and the other bid requirements in dispute are correct

or incorrect. But the case is not presented in a posture that

would permit such a ruling. The trial judge – despite how one

6 A-2806-12T1 may wish to interpret his discussion about the meaning of the

phrase "certified financial statement" – held only that he did

not believe Covanta and Waste Management had clearly and

convincingly demonstrated a likelihood of success on the merits.

Such an expression is not the equivalent of an adjudication of

plaintiffs' claims, only an educated prediction about whether

plaintiffs are likely to succeed after a full exposition of the

merits.2 In short, the narrow question presented by this

interlocutory appeal is whether the trial judge mistakenly

exercised his discretion in denying interlocutory injunctive

relief. We conclude he did.

In summarizing the Supreme Court's oft-cited decision in

Crowe, supra, 90 N.J. at 132-34, we held in Waste Mgmt. of N.J.,

Inc. v. Union Cnty. Utils. Auth., 399 N.J. Super. 508, 519-20

(App. Div. 2008), that issuance of an interlocutory injunction

turns on whether "the movant has demonstrated a reasonable

probability of success on the merits; that a balancing of the

equities and hardships favors injunctive relief; that the movant

2 In alluding to its opposition to the pending summary judgment motion, Waste Management contends the trial judge has yet to hear all the evidence relevant to the meaning of "certified financial statement." Because the judge's observations were based on less than all the relevant evidence available, it would be further inappropriate for us to view the judge's prediction as a final adjudication and then proceed to determine whether we agree or should otherwise defer to that "finding."

7 A-2806-12T1 has no adequate remedy at law and that the irreparable injury to

be suffered in the absence of injunctive relief is substantial

and imminent; and that the public interest will not be harmed."

In his written opinion, the trial judge correctly identified

these as the factors to be applied. In addition, the judge held

that each of these factors must be clearly and convincingly

demonstrated, a general principle we have previously recognized.

See id. at 520; McKenzie v. Corzine, 396 N.J. Super. 405, 414

(App. Div. 2007); see also S&R Corp. v Jiffy Lube Int'l, Inc.,

968 F.2d 371, 374 (3d Cir. 1992). The judge then determined

that plaintiffs' failure to convince him of the likelihood of

success on their claims required denial of interlocutory

injunctive relief without consideration of the other factors.

This conclusion was erroneous because it overlooks a court's

authority to impose interlocutory restraints regardless of

doubts about the movants' likelihood of success.

To explain, we first consider what is meant when it is said

a movant's right to an interlocutory injunction "must be clearly

and convincingly demonstrated." Waste Mgmt., supra, 399 N.J.

Super. at 520. In this regard, we consider whether the legal or

equitable principles upon which the claim is based are doubtful

or unsettled, see Accident Index Bureau, Inc. v. Male, 95 N.J.

Super. 39, 50 (App. Div. 1967), aff’d o.b., 51 N.J. 107 (1968),

8 A-2806-12T1 app. dis., 393 U.S. 530, 89 S. Ct. 872, 21 L. Ed. 2d 754 (1969),

or whether the material facts are in dispute, Anders v.

Greenlands Corp., 31 N.J. Super. 329, 338 (Ch. Div. 1954), or

both.

In the matter at hand, the basis for the claim that a

publicly-advertised contract should not be awarded to a bidder

who has failed to meet material bid requirements or who has

provided insufficient financial information, is not doubtful but

well-established. See Meadowbrook Carting Co. v. Island Heights

Borough, 138 N.J. 307, 313-15 (1994). Instead, here, the judge

correctly recognized the likelihood-of-success factor was

governed by whether there was a factual dispute about the

meaning of the bid requirements and the sufficiency of the

financial information provided. The judge, having been

persuaded to Mascaro and the Authority's position after hearing

testimony from the parties' experts, determined that plaintiffs

had not clearly and convincingly shown they were likely to

succeed. Because the judge reached this conclusion after

considering the credibility and demeanor of the experts, we deem

it appropriate – despite plaintiffs' forceful contentions to the

contrary – to defer to the judge's observations about the

strength of the parties' positions. Again, that merely means

that, for the purpose of considering whether injunctive relief

9 A-2806-12T1 was properly denied, we assume the accuracy of the judge's

prediction about plaintiffs' likelihood of success.

Such an observation, however, does not end the matter. As

Judge Clapp explained many years ago, the reason we consider

whether a movant's right to injunctive relief is clear

"doubtless lies in the fact that an interlocutory injunction is

so drastic a remedy." Gen. Elec. Co. v. Gem Vacuum Stores,

Inc., 36 N.J. Super. 234, 236 (App. Div. 1955). But our courts

have also long recognized "there are exceptions, as where the

subject matter of the litigation would be destroyed or

substantially impaired if a preliminary injunction did not

issue." Id. at 237 (citing Naylor v. Harkins, 11 N.J. 435, 446

(1953); Christiansen v. Local 680 of Milk Drivers, 127 N.J. Eq.

215, 219-20 (E. & A. 1940); Haines v. Burlington Cnty. Bridge

Comm'n, 1 N.J. Super. 163, 174 (App. Div. 1949)). That is, "a

court may take a less rigid view" of the Crowe factors and the

general rule that all factors favor injunctive relief "when the

interlocutory injunction is merely designed to preserve the

status quo." Waste Mgmt., supra, 399 N.J. Super. at 520. See

also Brown v. City of Paterson, 424 N.J. Super. 176, 183 (App.

Div. 2012). The power to impose restraints pending the

disposition of a claim on its merits is flexible; it should be

exercised "whenever necessary to subserve the ends of justice,"

10 A-2806-12T1 and "justice is not served if the subject-matter of the

litigation is destroyed or substantially impaired during the

pendency of the suit." Christiansen, supra, 127 N.J. Eq. at

219-20.

This less rigid approach, for example, permits injunctive

relief preserving the status quo even if the claim appears

doubtful when a balancing of the relative hardships

substantially favors the movant, or the irreparable injury to be

suffered by the movant in the absence of the injunction would be

imminent and grave, or the subject matter of the suit would be

impaired or destroyed. See, e.g., Naylor, supra, 11 N.J. at 446

(holding that the plaintiffs "were justly entitled to have the

defendants restrained from taking affirmative action which might

destroy their status and the subject of the litigation, and this

was so notwithstanding the doubts expressed that they will

ultimately prevail"); Christiansen, supra, 127 N.J. Eq. at 219-

20 (noting that pendente lite restraints are appropriate if "the

subject-matter of the litigation [would otherwise be] destroyed

or substantially impaired during the pendency of the suit, and

thus the court loses the faculty of fully vindicating such right

and of remedying such wrong as may be revealed on final

hearing"); Hamilton Watch Co. v. Benrus Watch Co., Inc., 206

F.2d 738, 742 (2d Cir. 1953) (recognizing that an interlocutory

11 A-2806-12T1 injunction "serves as an equitable policing measure to prevent

the parties from harming one another during the litigation" and

"to keep the parties, while the suit goes on, as far as possible

in the respective positions they occupied when the suit began").

Moreover, we have recognized the important role the public

interest plays when implicated, as here, and have held "that

courts, in the exercise of their equitable powers, 'may, and

frequently do, go much farther both to give and withhold relief

in furtherance of the public interest than they are accustomed

to go when only private interests are involved.'" Waste Mgmt.,

supra, 399 N.J. Super. at 520-21 (quoting Virginian Ry. Co. v.

Sys. Fed'n, 300 U.S. 515, 552, 57 S. Ct. 592, 601, 81 L. Ed.

789, 802 (1937)).

Ultimately, on appellate review, the question is whether

the grant or denial of interlocutory injunctive relief emanated

from the trial judge's exercise of sound judicial discretion.

See N.J. State Bar Ass'n v. Northern N.J. Mortgage Assocs., 22

N.J. 184, 194 (1956); Waste Mgmt., supra, 399 N.J. Super. at

520. This standard "defies precise definition" when we question

whether "there are good reasons for an appellate court to defer

to the particular decision at issue." Flagg v. Essex Cnty.

Prosecutor, 171 N.J. 561, 571 (2002). This narrow inquiry

requires consideration of the trial judge's explanation as well

12 A-2806-12T1 as the legal grounds upon which the decision was based. Our

Supreme Court has observed that an abuse of discretion has

occurred when a decision was "'made without a rational

explanation, inexplicably departed from established policies, or

rested on an impermissible basis.'" Ibid. (quoting Achacoso-

Sanchez v. Immigration & Naturalization Serv., 779 F.2d 1260,

1265 (7th Cir. 1985)); see also US Bank Nat'l Ass'n v.

Guillaume, 209 N.J. 449, 467-68 (2012).

Here, the judge made observations, after hearing expert

testimony, that plaintiffs were not likely to succeed on the

merits and, to be sure, those factual observations are entitled

to deference at this stage.3 But the judge's examination of the

matter mistakenly ended there. He did not balance the relative

hardships; he did not consider the irreparable injury that would

follow the injunction's denial; he did not examine whether the

denial of interlocutory relief would impair or destroy the

3 We hasten to describe the limitations of our deference. The judge made no findings on the pivotal factual issues, and our expression of deference should not be interpreted as an agreement with the judge's view of the facts or his identification or application of the governing legal principles. We express no view of the merits nor predict what may occur on appeal once the issues are finally adjudicated in the trial court. We are reviewing only the sufficiency of a prediction not a finding of fact. Indeed, the trial judge is similarly unbound even to his own prior prediction. See, e.g., Univ. of Texas v. Camenisch, 451 U.S. 390, 395, 101 S. Ct. 1830, 1834, 68 L. Ed. 2d 175, 180 (1981).

13 A-2806-12T1 subject matter of the suit; and he did not weigh the detrimental

impact on the public if a lucrative contract were to be given to

a potentially unqualified party before a challenge to the

bidding process could be fully and finally adjudicated. These

circumstances weighed heavily in favor of interlocutory

injunctive relief here, and the judge's failure to consider

these other Crowe factors constitutes an abuse of discretion

warranting our intervention notwithstanding the deference owed

to the judge's prediction of the likelihood of success.

III

We recognize that the trial judge had effectively managed

the case and that it had rapidly advanced to a point where a

final disposition may not have been far off when we granted

leave to appeal. That is, even if the summary judgment motion

still pending does not result in a final disposition, we gather

the trial of any remaining disputed issues would occur in the

very near future. Accordingly, although such circumstances

might ordinarily warrant a remand to the trial judge for

reconsideration of his denial of injunctive relief following a

review and application of the other Crowe factors, we are

satisfied the record fully supports injunctive relief and – to

avoid causing any further delay in the case's final adjudication

14 A-2806-12T1 – we will simply direct that the restraints imposed by our prior

order remain in place.

The trial court order of December 12, 2012, which denied

interlocutory injunctive relief, is reversed. Our order of

February 26, 2013, which was designed to preserve the status quo

as it existed when suit was commenced, shall remain in place –

with the additional condition that Mascaro may continue to

perform under the emergency contract – pending the entry of

final judgment in the trial court. We do not retain

jurisdiction.

15 A-2806-12T1