STATE EX REL. EDUC. ASSMTS. SYS. V. COOPERATIVE EDUC. SERVS.,
1993-NMCA-024, 115 N.M. 196, 848
P.2d 1123 (Ct. App. 1993)
STATE ex rel. EDUCATIONAL ASSESSMENTS
SYSTEMS, INC.,
Plaintiff-Appellant,
vs.
COOPERATIVE EDUCATIONAL SERVICES OF NEW MEXICO, INC.,
Defendant-Appellee. EDUCATIONAL ASSESSMENTS SYSTEMS,
INC., a New Mexico corporation,
Plaintiff-Appellant, v. Max LUFT,
individually and Cooperative
Educational Services of New
Mexico, Inc., a New
Mexico non-profit
corporation,
Defendants-Appellees
COURT OF APPEALS OF NEW MEXICO
1993-NMCA-024, 115 N.M. 196, 848 P.2d 1123
February 17, 1993, Decided
APPEAL FROM THE DISTRICT COURT OF
BERNALILLO COUNTY. PHILIP R. ASHBY, District Judge
Certiorari not Applied for
Martin E. Threet, Robert G. Kavanagh,
Kevin H. Kartchner, Threet & King, Albuquerque, for plaintiff-appellant.
Marshall G. Martin, Hinkle, Cox, Eaton,
Coffield & Hensley, Albuquerque, for defendant-appellee Max Luft.
Dan A. McKinnon, III, Marron, McKinnon
& Ewing, Albuquerque, for defendant-appellee Co-op. Educational Services.
Flores, Judge. Pamela B. Minzner, C.J.,
and Hartz, J., concur.
{1} Educational Assessments
Systems, Inc. (EASI) appeals from a decision by the district court dismissing
with prejudice its petition for a writ of quo warranto, as well as its related
complaint for damages, both of which raise questions under the Procurement
{*197} Code, NMSA 1978, §§
13-1-28 to -199
(Supp.1984). On appeal, EASI contends that the district court erred (1) in
determining that the Procurement Code contained applicable exemptions, (2)
that, in any event, the Code contains an adequate legal remedy but does not
authorize a private cause of action, and (3) on these facts neither Cooperative
Educational Services of New Mexico, Inc. (CES) nor Max Luft (Luft), Chief
Executive Director of CES, were liable to EASI for actions in restraint of
trade or civil rights violations.
{2} In 1979, CES was formed
as a New Mexico nonprofit corporation by several public school districts for
the primary purpose of procuring and delivering educational services to the
school district members at a reduced cost. In 1984, approximately thirty school
districts joined forces and entered into a joint powers agreement (JPA)
pursuant to the provisions of the Joint Powers Agreements Act, NMSA 1978,
Sections
11-1-1 to -7 (Repl.Pamp.1983). The objective was to establish an
educational cooperative which would pool their efforts and resources in order
to procure services for the respective school districts at an affordable cost.
The member school districts comprising the cooperative designated CES as the
administering agency of the cooperative. Each superintendent of the various
member school districts served on the board of directors of CES. The JPA
provided that all purchases by the cooperative would be upon the direction of
the board of directors of CES and had to be in accordance with the requirements
of the Procurement Code.
{3} Subsequent to its
formation, one of CES's primary activities was the delivery of ancillary or
special education services to member school districts. In 1985, CES, an
administering agency of the cooperative, issued a request for proposal (RFP)
for ancillary services. EASI protested, claiming that (1) the RFP was too
burdensome because the requested background information concerning the
personnel who were to provide the services was difficult to obtain, and (2)
automobile insurance naming CES as a co-insured could not be obtained. CES
denied EASI's protest. Following a hearing before the cooperative's board of
directors, EASI's appeal was also denied. EASI was advised at that time of its
right to seek judicial review of that decision, pursuant to Section 13-1-183.
EASI failed to seek such judicial review under Section 13-1-183, but rather
initiated the present action.
{4} This case initially began
as two separate, but related, lawsuits. In the first suit, EASI petitioned the
district court for a writ of quo warranto, for temporary restraint, and for
injunctive relief. EASI requested the district court to direct CES to show
cause regarding CES's authority to act as the administering agency of a JPA and
further requested the court to: (1) issue a temporary restraining order to
prevent the officers and directors of CES from issuing a response to the RFP
issued by the school districts that form the JPA, who, in turn, sought
submission of proposals to provide the JPA with management services; (2)
permanently enjoin the officers and directors of CES from issuing a proposal at
any time in response to the RFP; and (3) enjoin the directors of CES from
causing the JPA to approve any proposal submitted by CES until the provisions
of the Procurement Code had been met and until a meaningful competitive
atmosphere could be achieved. The district court denied EASI's request for a
temporary or preliminary injunction for the reason that EASI had failed to show
that irreparable harm would result.
{5} In the second suit, EASI
filed a complaint for damages based on restraint of trade and deprivation of
civil rights against Luft, individually, and against CES.
{6} Upon EASI's motion, the
district court ordered consolidation of the two cases. However, prior to
consolidation, CES moved for summary judgment in the first lawsuit, arguing (1)
that the issues were moot since CES had been dissolved and no longer acted as
the administering agency under the JPA; and (2) that an adequate remedy at law
existed under Section 13-1-172, therefore negating EASI's need for injunctive
relief or a writ of quo warranto. The district court granted CES's motion for
summary judgment, in part, stating that
{*198}
the Joint Powers Agreements Act does not prohibit a private corporation
from serving as an administering agency. Thereafter, EASI's motion for partial
summary judgment on the issue of the liability of CES and Luft, based on
restraint of trade and deprivation of civil rights, was denied.
{7} Following a trial on the
merits, and after filing amended findings of fact and conclusions of law, the
district court entered a judgment dismissing both complaints with prejudice.
EASI appeals from this judgment and raises several issues which we have
consolidated into the following: (1) whether the district court erred in
concluding that the Procurement Code contains relevant exemptions, and thus was
not violated as EASI claims; (2) whether the district court erred in concluding
that the Procurement Code provides the sole remedy for violations thereof; and
(3) and (4) whether the district court erred in concluding that CES and Luft
were not liable to EASI for restraint of trade or civil rights violations. We
affirm.
I. Applicability of the Procurement Code
{8} On appeal, EASI argues
that the district court erred in concluding that CES and Luft did not violate
the Procurement Code. Specifically, the district court concluded that a
cooperative formed pursuant to the provisions of the Joint Powers Agreements
Act is not required to comply with the provisions of the Procurement Code. The
district court also concluded that the Procurement Code exempts cooperative
procurement and that, as the administering agency of the cooperative, CES was
likewise immunized from the requirements of the Procurement Code. Finally, the
court concluded that "CES did not act in violation of the Procurement
Code, or it at least substantially complied with its provisions." EASI
contends that the district court erred in concluding that a cooperative
procurement agreement among local public bodies exempts those bodies from the
competitive proposal procedure mandated by the Procurement Code. EASI also
contends that the district court erred in concluding that CES did not act in
violation of the Procurement Code.
{9} The Procurement Code,
which became effective on November 1, 1984, applies to all expenditures by
state agencies and local public bodies for the procurement of items of tangible
personal property, services, and construction, unless the Procurement Code
provides otherwise. Section 13-1-30. An educational institution is included
within the definition of a state agency. Section 13-1-90. Local public bodies
encompass "every political subdivision of the state and the agencies,
instrumentalities and institutions thereof." Section 13-1-67. Both EASI
and CES agree that the parties to the joint powers agreement are local public
bodies. Thus, as local public bodies, school districts are generally subject to
the provisions of the Procurement Code. Under the Joint Powers Agreements Act,
a joint agency can exercise the powers of any of its member agencies
"subject to any of the restrictions imposed upon the manner of exercising
such power of one of the contracting public agencies." Section 11-1-5(C).
Here, since the member school districts are subject to the Procurement Code,
CES, as the joint agency, must also comply with the Procurement Code.
{10} Next, we address CES's
contention that pursuant to Section 13-1-98(A), cooperative procurement by CES
was specifically exempt from the requirements of the Procurement Code. Because
this Court determines there was a typographical error in the language of
Section 13-1-98(A), we review this section as enacted, codified, and amended.
{11} As published in 1984,
Section 13-1-98(A) stated that the procurement of personal property or services
by a state agency or a local public body from a state agency, a local public
body or external procurement unit is specifically exempted from the Procurement
Code, "except as otherwise provided in Sections 106 through 108 [
13-1-133
to
13-1-135 NMSA 1978] of the Procurement Code." Both parties, at the
request of this Court, filed supplemental briefs following oral argument
addressing whether the exception provided in Section 13-1-98(A), correctly
pertained to Sections 13-1-133 to -135, as stated in the Procurement
{*199} Code when published in 1984, or whether
the exception should have originally referred to Sections 13-1-135 to -137.
{12} In its supplemental
brief, CES states that, other than session laws and compiler's notes, there is
no legislative history in New Mexico and no indication why the legislature
amended Section 13-1-98(A) in 1987, when the phrase "Sections
13-1-135
through
13-1-137 NMSA 1978" was substituted for the phrase "Sections
106 through 108 [
13-1-133 to
13-1-135 NMSA 1978] of the Procurement Code."
However, CES contends Section 13-1-98(A) can be reasonably construed to exempt
purchases from a local public body, such as CES, created by an approved JPA.
Additionally, CES notes the lack of statutory authority which would make the
Joint Powers Agreements Act subject to the Procurement Code. In conclusion, CES
states that it was exempt from the operation of the Procurement Code when it
made purchases for the cooperative and that in spite of this, CES did comply
with the Procurement Code by issuing a RFP.
{13} EASI, on the other hand,
contends that Section 13-1-98(A) contained an error as it was originally
published in 1984. EASI submits that the error occurred as a result of the
renumbering of sections which took place between the time the house bill was
passed in 1984 as House Bill 237 and the time when the section was published as
part of the Procurement Code in the 1984 supplemental pamphlet. The enumerated
exceptions to the Procurement Code were originally drafted by the legislature
in Section 72 of House Bill 237. With only minor changes, not relevant to this
discussion, Section 72 of House Bill 237 was formally enacted as 1984 N.M. Laws,
chapter 65, Section 71. When initially drafted, Section 72(A) of House Bill 237
exempted the procurement of "personal property or services by a state
agency or a local public body from a state agency, a local public body or
external procurement unit
except as otherwise provided in Sections 108
through 110 of the Procurement Code." N.M. House Bill 237, § 72(A)
(emphasis added). At the time the house bill was passed, Sections 108 through
110 were, in all relevant parts, identical to Sections 13-1-135 through -137.
However, when Section 72(A) of House Bill 237 was included in the session laws
(1984 N.M. Laws, ch. 65, Section 71), Section 72 was renumbered as Section 71
and it provided that the provisions of the Procurement Code did not apply
"
except as otherwise provided in Sections 106 through 108 of the
Procurement Code." 1984 N.M. Laws, ch. 65, § 71(A) (emphasis added).
Likewise, when the session laws were codified in the 1984 supplement, the
applicable section, namely, Section 13-1-98(A), also provided that the
provisions of the Procurement Code did not apply "except as otherwise
provided in Sections 106 through 108 [
13-1-133 to
13-1-135 NMSA 1978] of the
Procurement Code." Section 13-1-98(A). EASI contends that Section
13-1-98(A), as originally codified, must be erroneous because it makes no sense
to group Sections 13-1-133 and 13-1-134 with Section 13-1-135, whereas Section
13-1-135 is naturally read in conjunction with Sections 13-1-136 and 13-1-137.
Additionally, Section 13-1-98(A) was amended in 1987 and "Sections
13-1-135 through 13-1-137" was substituted for "Sections . . .
13-1-133 to 13-1-135" of the Procurement Code. EASI argues that this tends
to indicate that the legislature realized their error and corrected it. In
conclusion, EASI urges this Court to construe the law in accordance with the
obvious intent of the legislature.
{14} We agree with EASI that
in construing the meaning of the exception, we should determine and give effect
to the intent of the legislature.
See Security Escrow Corp. v. State
Taxation & Revenue Dep't, 107 N.M. 540,
760 P.2d 1306 (Ct.App.1988).
Clearly, the language "Sections . . . 13-1-133 to 13-1-135" found in
Section 13-1-98(A) was a typographical error and should be read "Sections
13-1-135 to 13-1-137."
See New Mexico Glycerin Co. v. Gallegos, 48
N.M. 65,
145 P.2d 995 (1944) (the court determined that the word "or"
within the statute was patently a typographical error and should be read
"of"). Section 13-1-135 provides that state agencies and local public
bodies may enter into agreements pursuant to the Joint Powers Agreements Act
for the procurement of
{*200} services,
construction, or tangible personal property and also permits central purchasing
offices to enter into cooperative agreements with the state purchasing agent.
Section 13-1-136 requires reporting of cooperative procurement agreements
entered into between state agencies and local public bodies or external
procurement units. Section 13-1-137 permits agreements providing for a state
agency or local public body to sell property to, acquire property from or
cooperatively use tangible personal property or services belonging to another
state agency, local public body, or external procurement unit. Thus, as we
understand Section 13-1-98(A), it provides that a state agency or local public
body may procure tangible personal property or services from a state agency,
local public body, or external procurement unit without needing to comply with
any of the provisions of the Procurement Code except the requirements of Sections
13-1-135, -136, and -137. As previously noted, the term "local public
body" includes "the agencies, instrumentalities and
institutions" of every political subdivision of the state. Section
13-1-67;
see § 11-1-3 (joint agency may "exercise any power common
to the contracting parties"). Thus, when a local public body acquires
property or services from a joint agency, the acquisition is not subject to any
provisions of the Procurement Code except those set forth in Sections 13-1-135,
-136, and -137. On the other hand, Section 13-1-98(A) does not exempt the
procurement of goods or services
by the joint agency from an outsider.
Thus, the acquisition of the services of CES by the joint agency was not exempt
from the provisions of the Procurement Code. This interpretation makes sense in
that the joint agency must comply with the provisions of the Code in acquiring
goods and services, but the contracting parties in the Joint Powers Agreement
may then acquire the goods and services from the joint agency without going
through the bidding requirements, etc., of the Procurement Code. We now proceed
to determine EASI's remedy under the Procurement Code.
II. Remedy Under Procurement Code
{15} EASI argues that the
district court erred in concluding that the Procurement Code provides the sole
remedy for violations thereof. EASI maintains that the Procurement Code fails
to expressly state that the remedies provided therein are exclusive and that
such exclusivity should not be inferred. CES contends, and the district court concluded,
that the Procurement Code does not expressly or impliedly authorize any private
right of action for disappointed offerors such as EASI, since Section 13-1-183
provides an adequate legal remedy. Section 13-1-183 states, in pertinent part:
A. All actions authorized by the Procurement Code . .
. for judicial review of a determination shall be based upon the records of the
central purchasing office and all evidence submitted by the protestant and
other interested parties. All actions for judicial review must be filed within
thirty days of receipt of notice of the determination . . . .
B. All determinations under the Procurement Code made
by a state agency or a local public body shall be sustained unless arbitrary,
capricious, contrary to law, clearly erroneous or not based upon substantial
evidence.
{16} CES argues that its
position, to the effect that there is no private right of action under the
Procurement Code, is consistent with federal procurement cases which hold that
no private right of action exists or will be implied under federal law. We
agree.
{17} Under federal law,
remedies are provided for disappointed bidders. Pursuant to the Bid Protest
Regulations, 4 C.F.R. §§ 21.0 to -.12 (1991), a disappointed bidder may seek
administrative relief by filing a protest with the General Accounting Office
(GAO). 4 C.F.R. § 21.1. Additionally, a disappointed bidder may request
reconsideration of the GAO's decision. 4 C.F.R. § 21.12. Further, the
Administrative Procedure Act, 5 U.S.C. § 701-06 (1989), provides that "[a]
person suffering legal wrong because of agency action, or adversely affected or
aggrieved by agency action within the meaning of a relevant
{*201}
statute, is entitled to judicial review thereof." 5 U.S.C. § 702.
{18} Analogy can be made to
the cases in which the federal courts have declined to recognize an express or
implied private right of action by the disappointed bidder under federal
statutes and regulations. In
Northland Equities, Inc. v. Gateway Center
Corp., 441 F. Supp. 259 (E.D.Pa.1977), the unsuccessful bidder of a
government lease sued the successful bidder on a federal cause of action for
recovery of damages and lost profits for various violations of the federal
procurement statutes. The appellate court held that neither federal statutes
nor regulations, while providing several other remedies, provide a disappointed
bidder a statutory cause of action to recover either damages or lost profits
from the successful bidder.
Id. at 261. The court stated that there was
no implicit damage remedy in the federal procurement statutes and that the
federal procurement statutes were not created for the primary benefit of
bidders, but rather were created to protect the government's interest in
economical procurement.
Id. at 262;
see also Tectonics, Inc. v.
Castle Constr. Co., 753 F.2d 957 (11th Cir.1985) (in discussing the Small
Business Act, the court held that Congress did not intend to provide a civil
private cause of action to disappointed bidders);
Savini Constr. Co. v.
Crooks Bros. Constr. Co., 540 F.2d 1355 (9th Cir.1974) (in discussing the
Small Business Act, the court held that it did not create an express cause of
action by the disappointed bidder against a successful bidder);
John C.
Holland Enters., Inc. v. J.P. Mascaro & Sons, Inc., 653 F. Supp. 1242
(E.D.Va.1987) (in discussing the Small Business Act, the court stated that it
did not create either an express or implied right of action by the disappointed
bidder against the successful bidder). At least one other court has interpreted
a state procurement code to hold that the disappointed bidder cannot maintain a
private cause of action against a successful bidder.
See Ohio River
Conversions, Inc. v. City of Owensboro, 663 S.W.2d 759 (Ky.Ct.App.1984).
{19} Additionally, CES argues
that the purpose of the Procurement Code is to benefit the citizens and that
"benefitting the citizens" means having an efficient procurement
system. In discussing the federal procurement statutes, the court in
Northland
Equities stated that "[t]he procurement statutes were not created for
the 'especial' benefit of bidders" but rather for the governmental
interest in an economical and efficient system of procurement.
Northland
Equities, 441 F. Supp. at 262-63;
see also Ohio River Conversions,
663 S.W.2d at 760 ("Competitive bidding statutes are primarily intended
for the benefit of the public rather than for the benefit or enrichment of
bidders, and consideration of advantages or disadvantages to bidders must be
secondary to the general welfare of the public" (quoting 72 C.J.S.Supp.
Public
Contracts § 8 (1975))). CES contends that the system is not efficient if a
disappointed bidder can wait until after the performance to sue in order to
recover lost profits.
See Northland Equities, 441 F. Supp. at 263.
Further, the creation of additional causes of action in addition to the
prescribed remedies under the procurement statutes may discourage disappointed
bidders from seeking prompt judicial and administrative review of contract
awards, create litigation in government procurement, increase the cost of
conducting business with the government, and deter potential bidders from
participating in government procurement.
John C. Holland Enters., 653 F.
Supp. at 1247.
{20} CES submits that under
Section 13-1-172, the Procurement Code adequately protects the bidders. Section
13-1-172 provides that "Any bidder, offeror or contractor who is aggrieved
in connection with a procurement may protest to the state purchasing agent or a
central purchasing office. The protest shall be submitted in writing within
fifteen calendar days after the facts or occurrences giving rise thereto."
EASI suggests the remedy under the Procurement Code is inadequate because no
specific remedy exists for the problem that arose in this case, which it describes
as CES's "direct economic interest in the outcome." We are not
persuaded that the remedy provided by the legislature is inadequate or
inapplicable.
See generally Patterson v. Globe Am. Casualty Co., 101
N.M. 541,
{*202} 685 P.2d 396
(Ct.App.1984) (discussing New Mexico precedent regarding private cause of
action under statute not expressly providing one).
{21} The Procurement Code
regulates all the stages of the public procurement process. The Code gives the
disappointed bidder the right to protest pursuant to Section 13-1-172, and also
creates a statutory remedy, namely, judicial review pursuant to Section
13-1-183. The Code does not specifically provide for a damage remedy. However,
it does provide for protest and for an appealable determination of the protest.
See §§ 13-1-172, -175, -176, -183. We determine that the Procurement
Code provides an adequate legal remedy and that the writ of quo warranto was
not the proper remedy herein.
Cf. State ex rel. Vigil v. Rodriguez, 65
N.M. 80,
332 P.2d 1005 (1958). Accordingly, we affirm the district court on
this issue.
{22} EASI argues that the
district court erred in concluding that it failed to establish an antitrust
violation. Under NMSA 1986, Section 57-1-1 (Repl.Pamp.1987), "Every
contract, agreement, combination or conspiracy in restraint of trade or
commerce, any part of which trade or commerce is within this state, is
unlawful." In order to establish an antitrust law violation, "the
plaintiff must show a conspiracy or combination among two or more persons and
an unreasonable restraint of trade due to this combination or conspiracy."
Clough v. Adventist Health Sys., Inc., 108 N.M. 801, 804,
780 P.2d 627,
630 (1989) (citation omitted). "Furthermore, the object of the conduct
must be to restrain trade."
Id. For purposes of the Antitrust Act,
NMSA 1986, Sections 57-1-1 to -15 (Repl.Pamp.1987), "person" is
defined as "an individual, corporation, business trust, partnership,
association or any governmental or other legal entity with the exception of the
state . . . and the United States." Section 57-1-1.2.
{23} Here, EASI's brief in
chief concedes "that a conspiracy could not exist between CES . . . and
its [e]xecutive [d]irector, Dr. Luft." Rather, EASI contends on appeal
that a conspiracy existed among the various school superintendents who acted in
a dual capacity as directors of CES. However, EASI failed to try the case on
this theory; the theory was not raised in the complaint, the pre-trial order,
or any motion to amend the complaint. "Where the record fails to indicate
that an argument was presented to the court below, unless it is jurisdictional
in nature, it will not be considered on appeal."
Woolwine v. Furr's,
Inc., 106 N.M. 492, 496,
745 P.2d 717, 721 (Ct.App.1987). To preserve an
issue for appellate review, it must appear that the appellant fairly invoked a
ruling of the district court on the same grounds argued in the appellate court.
Id. at 496, 745 P.2d at 721;
see SCRA 1986, 1-046; 12-213(A)(3);
12-216(A). Based on EASI's failure to preserve its theory that a conspiracy
existed among the various school superintendents, we do not address this issue.
IV. Violation of Civil Rights
{24} EASI argues that the
actions of CES and Luft in attempting to circumvent the competitive-proposal
process of the Procurement Code deprived EASI of property rights, including the
right to submit a meaningful bid to provide services, in violation of the
United States Constitution, and as such were actionable under 42 U.S.C. Section
1983 (1989). EASI maintains that the Procurement Code creates a valuable
property interest in all prospective bidders vying to provide services for
governmental entities and that such prospective bidders have a sufficient
economic interest at stake to enable them to challenge, on constitutional
grounds, actions by such public entities which deprive them of their ability to
compete.
{25} The district court
concluded, inter alia, that (1) no private right of action for disappointed
offerors such as EASI was either expressly or impliedly provided under the
Procurement Code since Section 13-1-183 provides an adequate legal remedy; (2)
EASI was not denied due process nor was it deprived of any property interest;
(3) EASI waived any rights it had under the Procurement Code when it failed to
seek timely judicial review of the cooperative's action under Section 13-1-183;
(4) CES as the alter ego of the member school districts
{*203}
was immune from the claims for damages on account of alleged civil rights;
and (5) there was no evidence that EASI suffered any damages as a result of its
failure to obtain either the ancillary services contract or the administering
agency contract, nor did EASI prove a loss of profits or any other damages.
{26} This claim, which is
based on a statute creating liability for action under color of state law,
requires that the plaintiff establish (1) that the defendants acted under color
of state law, and (2) that the actions of the defendants caused the plaintiffs
to be deprived of a right secured by the Federal Constitution or the laws of
the United States.
See Lugar v. Edmondson Oil Co., 457 U.S. 922, 102 S.
Ct. 2744, 73 L. Ed. 2d 482 (1982);
Rendell-Baker v. Kohn, 457 U.S. 830,
102 S. Ct. 2764, 73 L. Ed. 2d 418 (1982).
{27} 42 U.S.C. Section 1983
provides, in pertinent part:
Every person who, under color of any statute,
ordinance, regulation, custom, or usage, of any State or Territory or the
District of Columbia, subjects, or causes to be subjected, any citizen of the
United States or other person within the jurisdiction thereof to the
deprivation of any rights, privileges, or immunities secured by the Constitution
and laws, shall be liable to the party injured in an action at law, suit in
equity, or other proper proceeding for redress.
{28} CES argues that EASI has
failed to prove that CES has acted under color of state law. In support of
their argument, CES relies on
Blum v. Yaretsky, 457 U.S. 991, 102 S. Ct.
2777, 73 L. Ed. 2d 534 (1982), in which the Supreme Court held that private
corporations may not be liable under 42 U.S.C. Section 1983 unless the State is
responsible for the acts complained of. "[A] State normally can be held
responsible for a private decision only when it has exercised coercive power or
has provided such significant encouragement, either over or covert, that the
choice must in law be deemed to be that of the State."
Id. at 1004,
102 S. Ct. at 2786.
{29} EASI argues that
although CES and Luft maintained their identities as a private entity and a
private individual, respectively, they intentionally invoked their relationship
with member school districts thereby indicating that their actions were
directed by such districts. CES responds that the State was not responsible
for, nor did it dictate the complained-of activities conducted by the board of
directors of CES.
{30} We note that the
activities of CES were conducted by the members of the board of directors, all
of whom were superintendents of school districts. In fact, each of the members
of the board of directors of CES held that position solely as a result of being
employed in a public position.
{31} Alternatively, CES
argues that even if state action was involved, EASI was not denied due process
because the Procurement Code sets forth provisions to deal with aggrieved
bidders or offerors. As previously noted, Section 13-1-172 states that
"[a]ny bidder, offeror or contractor who is aggrieved in connection with a
procurement may protest to the state purchasing agent or a central purchasing
office . . . in writing within fifteen calendar days after the facts or
occurrences giving rise thereto." Additionally, Section 13-1-183(A) provides
for judicial review of all actions authorized by the Procurement Code filed
within thirty days of receipt of notice of the determination.
{32} Assuming without
deciding that there was action under color of state law and that EASI had a
protected property interest, we agree with CES's alternate argument that there
was no violation of due process because EASI was given a reasonable opportunity
to participate in the protest process afforded pursuant to the Procurement
Code.
See Atencio v. Board of Educ., 658 F.2d 774 (10th Cir.1981).
Accordingly, we affirm the district court on this issue.
{33} For the foregoing
reasons, we affirm.