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BROWNING-FERRIS, INC. v. MANCHESTER BOROUGH

August 9, 1996

BROWNING-FERRIS, INC., Plaintiff
v.
MANCHESTER BOROUGH and YORK WASTE DISPOSAL COMPANY, Defendants


James F. McClure, Jr., United States District Judge


The opinion of the court was delivered by: MCCLURE

August 9, 1996

 BACKGROUND :

 On July 23, 1996, plaintiff Browning-Ferris, Inc. (BFI), initiated this action with the filing of a complaint pursuant to 42 U.S.C. § 1983 and the Fourteenth Amendment, along with a motion for a temporary restraining order and preliminary injunction. BFI alleges that its rights under the Fourteenth Amendment were violated by the awarding of a waste disposal contract to defendant York Waste Disposal Co. (York Waste) by defendant Manchester Borough.

 Following a telephone conference call involving the court and counsel for the parties, the court denied the motion for a temporary restraining order and scheduled a hearing on the motion for a preliminary injunction, with time permitted for briefing. The hearing was held on Wednesday, July 31, 1996, at which time the court determined that BFI does not have a protected property interest under Pennsylvania law. The case therefore was dismissed for lack of subject matter jurisdiction.

 This memorandum and order is intended to explain and memorialize that holding.

 DISCUSSION :

 I. STANDARD OF REVIEW

 A. Preliminary Injunction

 Fed. R. Civ. P. 65 provides for the issuance of preliminary injunctions. In this Circuit,

 
at the trial level, the party seeking a preliminary injunction bears the burden of producing evidence sufficient to convince the court that (1) the movant has shown a reasonable probability of success on the merits; (2) the movant will be irreparably injured by denial of relief; (3) granting preliminary relief will not result in even greater harm to the other party; and (4) granting preliminary relief will be in the public interest. ...

 ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987) (citation omitted).

 Regarding the element of irreparable injury, the harm must be imminent and of such a nature that money damages alone cannot atone for it. Id.

 B. Property Interest

 The limited question before the court at this time is whether BFI has a property interest implicated by the awarding of the contract to York Waste. There is a property interest subject to protection under the Fourteenth Amendment when there is a legitimate claim of entitlement created by or grounded in state law. Logan v. Zimmerman Brush Co., 455 U.S. 422, 230, 71 L. Ed. 2d 265, 102 S. Ct. 1148 (1982); Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577, 33 L. Ed. 2d 548, 92 S. Ct. 2701 (1972); Midnight Sessions, Ltd. v. City of Philadelphia, 945 F.2d 667, 679 (3d Cir. 1991), reh'g denied, cert. denied, 503 U.S. 984, 118 L. Ed. 2d 389, 112 S. Ct. 1668 (1992). Constitutional standards of due process govern the deprivation of a property interest, once conferred under state law. Logan at 432.

 C. State Law

 The provision of Pennsylvania state law upon which BFI relies is a subsection of the Borough Code, see 53 Pa. Stat. Ann. §§ 45101 et seq., governing the award of contracts by a borough. That provision reads in relevant part:

 
All contracts or purchases in excess of ten thousand dollars ($ 10,000), except those hereinafter mentioned, shall not be made except with and from the lowest responsible bidder after due notice ... In awarding contracts, council shall have the right to take into consideration such other factors as the availability, cost and quality of service.

 53 Pa. Stat. Ann. § 46402(a). In interpreting this provision, the Pennsylvania courts have held uniformly that an action to enjoin a municipality from awarding a contract to any but the lowest responsible bidder may be brought only by a taxpayer of the municipality which has created the governmental entity awarding the contract; a disappointed bidder may bring an action only if it is a taxpayer of the contracting jurisdiction. American Totalisator Co., Inc. v. Seligman, 489 Pa. 568, 414 A.2d 1037, 1040 (Pa. 1980); C.O. Falter Construction Corp. v. Towanda Municipal Authority, 149 Pa. Commw. 74, 614 A.2d 328, 330 (Pa. Commw. 1992). A "mere disappointed bidder" does not have standing to challenge the award of a contract. C.O. Falter at 331-332.

 The purpose of § 46402 and similar laws is to "invite competition, to guard against favoritism, improvidence, extravagance, fraud, and corruption in the awarding of municipal contracts." Berryhill v. Dugan, 89 Pa. Commw. 46, 491 A.2d 950, 952 (Pa. Commw. 1985)(quoting Conduit and Foundation Corp. v. ...


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