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THREE RIVERS CABLEVISION, INC. v. CITY OF PITTSBUR

November 12, 1980

THREE RIVERS CABLEVISION, INC., and Matthew Moore, Plaintiffs,
v.
CITY OF PITTSBURGH and Warner Cable Corporation et al., Defendants



The opinion of the court was delivered by: DIAMOND

This litigation arises out of the award by the city of Pittsburgh (city) of a cable television contract for which several companies, including plaintiff Three Rivers Cablevision, Inc. (Three Rivers), were bidding. Plaintiffs, Three Rivers and one Matthew Moore, a party to a stock subscription agreement by which he would have become a shareholder of Three Rivers if the latter had been awarded the aforesaid contract, filed this suit under 42 U.S.C. § 1983, § 1985, and the Fifth and Fourteenth Amendments of the United States Constitution alleging that they were the victims of various civil rights deprivations committed during the bid procurement and award process. A pendent state law claim is also asserted. Named as defendants are Warner Cable Corporation of Pittsburgh (Warner), the company to which the contract was awarded, and a group of defendants consisting of the city, the city council (council), and the mayor and eight of the nine individual members of city council sued in their representative capacity (municipal defendants).

Plaintiffs' primary complaint is that as a result of a preconceived and unlawful preference, Warner was awarded the contract despite material deficiencies in its bid. In count I plaintiffs allege that this conduct violated their Fifth and Fourteenth Amendment rights to due process and equal protection of the laws as well as certain provisions of Pennsylvania law which require that contracts of this type be awarded to the lowest responsible bidder, 53 P.S. § 23301 and Article V § 3 of the City Home Rule Charter. In addition to the alleged deficiencies in the Warner bid, plaintiffs also claim that certain bid specifications designed to encourage minority involvement in bidding companies and which allegedly were the sole basis for the city's selection of Warner over the other bidders, were so conflicting, vague, and indefinite as to violate plaintiffs' right to due process and equal protection.

 Presently before the court are separate motions to dismiss filed by both the municipal defendants and Warner. The bases for these motions, which are varied, sometimes complex, and often overlapping and redundant, are more fully detailed later herein. For the reasons set forth below, the court will grant the motions with regard to count I insofar as they seek dismissal for failure to state a claim under § 1985(3), the Fifth Amendment, and the Fourteenth Amendment, and with regard to count II insofar as the municipal defendants seek partial summary judgment. In all other respects the motions will be denied.

 I. FACTUAL BACKGROUND

 When considering motions to dismiss we must take as true the well-pleaded allegations of the complaint. Scheuer v. Rhodes, 416 U.S. 232, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974); Lasher v. Shafer, 460 F.2d 343 (3rd Cir. 1972). Those allegations pertinent to the instant matters now before us may be summarized as follows.

 Following a review of separate reports prepared by one of its subcommittees and a privately retained expert consultant, council decided to solicit bids for a cable television system for the city. Council began with the adoption of Ordinance No. 20 entitled "Cable Communications Ordinance" (CCO). The principal purpose of the CCO was to regulate the construction, operation, and maintenance of a cable television system in the city by contract with a franchisee, and thus it provided the basic contract terms and specifications to be met by prospective bidders. In July of 1979 the city's Department of Public Works formally solicited bids by issuing a Request for Proposals (RFP). Among other things, the RFP provided that all bids must meet the construction and service specifications set forth in the CCO and that all bidders submit their bids to the city no later than October 1, 1979. In meetings with officials of the city solicitor's office and the Bureau of Cable Communications, a sub-division of the city's Department of Public Works, the prospective bidders were advised emphatically that all bids must comply in every detail with the CCO and that under no circumstances would opportunities for amendment be provided. The CCO as well as the RFP provided that any bid which failed to furnish any information required thereunder would be rejected without further consideration.

 By the deadline of October 1, 1979, the city had received bids from four companies: Three Rivers, Warner, Community Cablevision, and Allegheny Cablevision, Inc. All four bids, however, were rejected on that day for failure fully to comply with the CCO. In this regard, plaintiffs allege that while Three Rivers' noncompliance related to a "technical requirement" concerning a surety bond, Warner's "... proposal was grossly deficient and did not comply in material and significant respects with the Cable Communications Ordicance (sic)." (PP 27, 28 of plaintiffs' complaint). The four companies which had submitted timely bids were then given until October 25, 1979, to submit new proposals. Again the bidders were admonished by the Bureau of Cable Communications and the city solicitor that no amendments would be permitted.

 Plaintiffs then allege that Three Rivers' second proposal fully complied with the CCO and RFP, whereas Warner's again contained several material deficiencies. Thereafter, beginning in November of 1979, certain unidentified employees of the Bureau of Cable Communications allegedly held private meetings with Warner, the effect and purpose of which were to provide Warner with an unfair advantage over the other bidders by advising Warner of the deficiencies in its second bid so that it could correct them by amendment. Subsequently, Warner was permitted to correct at least one of these deficiencies which, according to plaintiffs, was as significant as the technical one for which the initial proposal of Three Rivers was rejected.

 On January 30, 1980, council by a vote of 8-1, passed a resolution authorizing the award of the contract to Warner. Plaintiffs contend that this action was in complete disregard of the recommendation made by the two bodies charged with submitting bid evaluations to council, the Bureau of Cable Communications and the Cable Communications Advisory Committee, that the contract be awarded to Three Rivers. In addition, plaintiffs complain that the resolution completely ignored the fact that Warner's proposal still contained disqualifying deficiencies. Plaintiffs further allege that the award of the contract to Warner was in fact the result of a preconceived plan to favor Warner and to make a sham of the entire bidding process. And finally, plaintiffs assert that the city's sole proffered reason for the selection of Warner; viz, its supposedly superior program for minority involvement, is infirm since the specifications regarding that program were unconstitutionally vague and conflicting.

 Defendants seek dismissal of the complaint on various grounds. They challenge counts I and II, the constitutional claims, under Rule 12(b)(1), (6), and (7), Fed.R.Civ.P., for lack of subject matter jurisdiction, failure to state a claim, and failure to join persons needed for just adjudication under Rule 19. In support of both the 12(b)(1) (subject matter jurisdiction) and 12(b)(6) (failure to state a claim) bases for dismissal, the defendants contend that plaintiffs 1) lack standing to assert the constitutional claims raised; 2) had no recognized due process or equal protection interest at stake; 3) have failed to plead that the deprivations allegedly visited upon them were, in the municipal defendants' case, done pursuant to some official policy or, in Warner's case, under color of state law; 4) have failed to plead their constitutional claims with sufficient specificity; 5) have failed to state causes of action under § 1985, and the Fifth and Fourteenth Amendments; 6) are in any event entitled to no relief because of defendants' absolute legislative immunity.

 In support of their 12(b)(1) argument, defendants invoke the doctrine of abstention and contend that the court should refuse to entertain this case. As to the 12(b)(7) motion, defendants maintain that the two remaining bidders on the instant contract, Community Cablevision and Allegheny Cablevision, Inc., are indispensable parties whose absence on the record necessitates dismissal of the case. The defendants have moved to dismiss count III, the pendent state claim, on the ground that since plaintiffs have failed to state viable constitutional claims under counts I and II, the state law claim must be dismissed for lack of jurisdiction.

 Many of these grounds obviously are redundant or overlapping, particularly where they are raised in support of both the failure to state a claim and the lack of subject matter jurisdiction bases. Therefore, while ultimately we shall deal with the substance of all of defendants' points, we have framed the questions in broad comprehensive categories and have not attempted to respond seriatim to the issues as expressed by the defendants in their motions or briefs. Accordingly, we discuss the abstention question in Part II, in Part III we deal with the various dismissal bases as they relate to the count I claim regarding the alleged deficiencies of Warner's bid, and in Part IV we dispose of the dismissal bases as they relate to the count II claim dealing with the allegedly vague and conflicting minority involvement specifications.

 II. ABSTENTION

 The threshold question before us is one of abstention. The defendants urge that we decline to entertain this suit because it raises difficult and unsettled questions of state law and that the controversy is of such unique local concern that the state courts are a more proper forum for its resolution. We decline to abstain.

 Our analysis commences with the premise that "abstention from the exercise of federal jurisdiction is the exception, not the rule," Colorado River Water Conservation District v. U. S., 424 U.S. 800, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976), and that the doctrine should be invoked "only in exceptional circumstances where the order to the parties to repair to State court would clearly serve an important countervailing interest." County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 79 S. Ct. 1060, 3 L. Ed. 2d 1163 (1959). The courts which have ordered abstention usually have done so on one of three grounds, two of which are relevant here: 1) that there exists an unsettled question of state law, the resolution of which by state courts would make unnecessary, or substantially affect, the ultimate resolution of a federal constitution issue, or 2) that the controversy involves an issue of unique state concern having broad policy implications. *fn1" These two types of abstention are sometimes referred to by the names of the cases from which they were cast, Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971 (1941), and Burford v. Sun Oil Co., 319 U.S. 315, 63 S. Ct. 1098, 87 L. Ed. 1424 (1943), respectively. Accordingly, we shall examine the instant dispute in terms of Pullman and Burford -type abstention.

 In Pullman the petitioner and certain railroad companies obtained a lower court injunction enjoining the Texas Railroad Commission from enforcing one of its orders relating to the assignment of porters on sleeping cars. The order was objected to on constitutional and state law grounds. Without reaching the federal constitutional issue, the district court found that the order was invalid on state law grounds; viz., that the Commission lacked the authority under local law to issue it. The Supreme Court reversed, holding that because the case could be decided on state law grounds and the relevant state law was subject to conflicting interpretations the district court should have stayed its hand while the parties petitioned the readily available state court for an authoritative ruling. Otherwise, said the Court, depending on its ruling regarding the state law question, the district court not only could be adjudicating prematurely a constitutional issue, but also might be rendering an unnecessary forecast of state law which could thereafter be supplanted by an authoritative ruling.

 Pullman -type abstention has been invoked often by the Court. See cases at Wright & Miller, Federal Practice and Procedure (Wright & Miller ) Civil § 4241 n.24, and 1A Moore's Federal Practice, (Moore ) p. 2103 at n. 8. It also has been applied by the Third Circuit, which in D'Iorio v. County of Delaware, 592 F.2d 681 (3rd Cir. 1978) held that abstention was required where uncertainty existed under state law as to whether plaintiff had tenure rights in his job and, therefore, whether he had a Fourteenth Amendment property interest in the position.

 There are two essential prerequisites to the application of the Pullman doctrine: 1) the existence of an unsettled question of state law, and 2) the likelihood that an alternative construction of that law will make unnecessary, or substantially affect, the ultimate resolution of a federal constitutional question. Colorado River, supra, 424 U.S. at 814, 96 S. Ct. at 1244-1245, and 1A Moore P .203(1). *fn2" In regard to the latter requirement, it has been said that the state law normally must be so uncertain as to be "fairly subject" to differing interpretations. Wisconsin v. Constantineau, 400 U.S. 433, 91 S. Ct. 507, 27 L. Ed. 2d 515 (1971); Zwickler v. Koota, 389 U.S. 241, 88 S. Ct. 391, 19 L. Ed. 2d 444 (1967). In total, the Pullman doctrine is a carefully molded accommodation of three fundamental jurisprudential principles; namely, that a federal court is obliged to resolve cases which are properly before it; that decisions on constitutional bases should be avoided when possible; and that friction between the state and federal systems should be minimized. 1A Moore P .203(1).

 Applying the Pullman doctrine to the instant case, we conclude that abstention on that basis is not appropriate. Neither the defendants' brief nor our independent examination of the issues and research of the law convinces us that this case presents novel and unresolved questions of Pennsylvania law. As set forth more fully below, *fn3" the state law with regard to the awarding of governmental contracts is quite clear: the contract must be awarded to the lowest responsible bidder, and in determining who in fact is the lowest responsible bidder the awarding authority must exercise its discretion in a non-arbitrary fashion.

 The municipal defendants suggest as an area of uncertainty a refinement of the law relating to public contracts; that is, the degree of non-compliance with contract specifications which a bid must evidence before it will be deemed so materially defective as to warrant rejection. We disagree that this raises a question of uncertain state law, for it appears to us that it is resolved with relative certainty. If plaintiffs prove their allegation that, either as a result of some language in the specifications or because of discussions had with city officials, all bidders were informed that to avoid rejection they must comply with even the most minute details of the CCO and RFP specifications, then the standard for rejection is quite specific and definitive. If plaintiffs fail so to prove, then the general rule would apply, and non-compliance would cause rejection only if it was of such a degree as to render the bid "non-irresponsible," Cf. Book v. Hall, 339 Pa. 470, 15 A.2d 355 (1940), and that too presents a reasonably certain standard.

 Finally, the defendants argue in support of Pullman abstention that the state courts never have been given an opportunity to pass upon the question of who was the lowest responsible bidder here. This contention fundamentally misconceives the nature of the principles underlying abstention. The issue in an abstention case is not so much whether the dispute can be resolved in a state forum (assuming one is available), but rather whether for some special reason a federal court cannot, or should not, resolve it. Cf. Wright & Miller : Civil § 4242 and cases at n. 26. And the special reason that must be present, the sine qua non of Pullman abstention, is an uncertain issue of state law. 1A Moore p. 2106. No such uncertainty having been established here, we deny the request for Pullman abstention and need not reach the secondary question of whether a state court ruling on uncertain issues might substantially affect or render unnecessary the resolution of federal constitutional questions.

 We consider now the second general type of abstention relevant to the instant case, the so-called Burford abstention. In Burford the Supreme Court ruled that abstention was properly invoked where an oil company attacked on constitutional grounds the validity of a Texas Railroad Commission order permitting Burford to drill oil wells in an approximately 280 sq. mile oil tract or "pool." The Court so ruled because the controversy directly implicated the formulation of broad economic and social policy of that state. Specifically, the Court alluded to the profound impact of oil production and allocation on the economy and the conservation efforts of the state; the geologically-based necessity of regulating single wells only vis-a-vis an entire pool; and the state's decision, therefore, to establish a special judicial network whereby all matters of this nature would be brought first before the Commission and thereafter appealed to a specially designated state district court. Under these circumstances the Court held that to retain control of the dispute in a federal court, with its comparative lack of expertise and its likelihood of rendering a judgment inconsistent with prior or future state pronouncements, would upset the carefully structured attempt of Texas to deal wisely and uniformly with a matter of basic state policy.

 Burford -type abstention also has been invoked by the Court where a party attacked a state regulatory order regarding cessation of railroad service. In that case the Court found that abstention was proper since the state had established a special state-wide review process to resolve the "essentially local problem" of regulating intrastate transportation service, which required one to balance the needs of the public against the economic interests of the railroad. Alabama Public Service Commission v. Southern Railway Co., 341 U.S. 341, 71 S. Ct. 762, 95 L. Ed. 1002 (1951). The Third Circuit also has sanctioned abstention on this ground in an action by an airline to enjoin enforcement of a state public utility commission rule requiring it to obtain commission approval prior to discontinuing certain flights. Allegheny Airlines, Inc. v. Pennsylvania Public Utility Commission, 465 F.2d 237 (3rd Cir. 1972). The basic rationale in Allegheny Airlines was that the controversy involved state-wide transportation matters which the Pennsylvania Public Utility Commission had the responsibility to regulate in the public interest, and that to reach the merits of the airlines' contention while the airline refused to re-institute service might throw the state into chaos by encouraging other airlines to follow suit. Conversely, in a diversity action in assumpsit to recover payment for the sale of milk, this Circuit refused to order abstention where referring the matter to the state milk marketing board would further no Burford interest. Specifically, the court noted that the suit involved nothing within the special discretion or expertise of the state board; that it did not involve the formulation of state policies; that it did not interfere with a matter presently before the board; and that it was essentially a dispute between two private parties. Baltimore Bank, Etc. v. Farmers Cheese Corporation, 583 F.2d 104 (3rd Cir. 1978).

 The principal element in Burford abstention is the implication of state interests, and in Colorado River, supra, one of its more recent decisions in the area, the Court indicates how very substantial the effect of federal court action thereon must be to invoke Burford abstention. The Colorado River case involved an action by the United States seeking a declaration of its rights under federal and state law in certain Colorado rivers and streams. Despite the Court's recognition that probably "no problem of the Southwest section of the Nation is more critical than that of the scarcity of water," 424 U.S. at 804, 96 S. Ct. at 1239; that Colorado had specifically established an elaborate regulatory scheme for adjudication of water rights disputes; that the United States itself had utilized said scheme in the past; and that the water rights established under federal law might conflict with those prevailing under state law, the Court held that state interests were not sufficiently implicated to justify abstention. *fn4" As Professor Moore states, Colorado River, when compared with the earlier holding in the less, or at best equally, compelling case of Southern Railway, supra, makes it clear that Burford -type abstention is proper "only when there are truly exceptional circumstances 1A Moore p. 2130. At the very least, it suggests that the Court is becoming less receptive to pleas for abstention on that basis.

 Applying Burford and its progeny to the case at bar, we conclude again that abstention is inappropriate. There are material distinctions between the instant case and those in which the courts have invoked the Burford doctrine. First, and perhaps most conclusively, this case lacks the crucial element of Burford abstention that the controversy be one "whose importance transcends the result in the case at bar," by reason of its effect on state policy in an area of substantial public concern. Colorado River, supra, at 814, 96 S. Ct. at 1244-1245. Here, unlike Burford and Allegheny Airlines, where a state's entire policy regarding oil production and air transportation respectively were at issue, the defendants point to no particular state-wide policy or program which has been drawn into question. As important as it may be locally, this controversy appears simply to have no material impact on any matter beyond the installation of cable television in the City of Pittsburgh, and if the converse be true, the defendants certainly have not established it. *fn5"

 Another basic difference between the case sub judice and Burford, Southern Railway, and Allegheny Airlines, lies in the fact that Pennsylvania has created neither a public agency to deal particularly with the regulation of cable television service nor a special system of judicial review for those allegedly aggrieved by governmental action regarding such service. *fn6" We recognize that creation of such bodies is not an absolute prerequisite to the establishment of Burford abstention, See Wright & Miller : Civil § 4244, but it is an additional indication that to this point the state itself has not viewed the regulation of cable television systems as a matter of general public concern or one which requires the expertise of a specialized regulatory agency.

 In the final analysis, it appears that the defendants' argument for abstention rests almost exclusively on the fact that the installation of this system is a matter of keen public interest. But the gravamen of Burford abstention is the implication of public policy, which is, of course, to be distinguished from public interest. The defendants have failed to identify any legitimate and substantial public policy at issue here, nor is the court able to perceive any such considerations which exceed or even equal the seemingly substantial ones considered but deemed insufficient in Colorado River. Thus, is not a "truly extraordinary" situation calling for the exceptional remedy of abstention.

 There is an additional factor, though less significant than those considered above, which militates against abstention on either Pullman or Burford grounds. That is the matter of undue delay. See cases at Wright & Miller : Civil § 4242 n.49.

 Under the terms of the CCO, the franchisee is obligated to proceed with construction and installation of the system according to a rather detailed time table, and § 8.1(f) of the franchise agreement executed by Warner and the city specifies that "any litigation instituted by a third party shall not suspend franchisee's obligation to construct and install the system in accordance with the (said) time schedule ...." If Warner is engaged in construction and installation work, it is fair to assume that should the contract be declared void that some of that work will have been wasted. In addition, Three Rivers claims that it may be irreparably prejudiced by Warner's on-going installation efforts. *fn7"

 Thus, the longer the resolution of this matter is delayed, the greater the potential harm to both companies and the public. In view of the fact that no state proceeding has yet been commenced, it is likely that our abstention would delay the ultimate disposition of this case for more than an immaterial period. If this was the only matter weighing against abstention, it would not be sufficient, but in conjunction with the other bases which we have ...


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