Flint Electric v. Whitworth , 68 F.3d 1309 ( 1995 )

  •                     United States Court of Appeals,
                               Eleventh Circuit.
                            Nos. 94-9199, 94-9227.
      Bobby WHITWORTH, Individually and in his official capacity as
    Department of Corrections Commissioner, Clyde Stovall, Individually
    and in his official capacity as Assistant Commissioner of
    Department of Corrections, Defendants-Appellants,
                       Georgia Power Company, Defendant.
      Bobby WHITWORTH, Individually and in his official capacity as
    Department of Corrections Commissioner, Clyde Stovall, Individually
    and in his official capacity as Assistant Commissioner of
    Department   of   Corrections,   David  C.   Evans,   Individually,
                       Georgia Power Company, Defendant.
                                Nov. 15, 1995.
    Appeals from the United States District Court for the Northern
    District of Georgia. (Nos. 1:90-CV-1550-HTW and 1:90-CV-1675-HTW),
    Horace T. Ward, Judge.
    Before BARKETT, Circuit Judge, and HENDERSON and CLARK, Senior
    Circuit Judges.
         PER CURIAM:
         Bobby Whitworth, Clyde Stovall and David C. Evans, officials
    of the Georgia Department of Corrections (the "DOC"),1 appeal from
    orders entered in the United States District Court for the Northern
          Whitworth is identified in the record as either the
    Commissioner or the Deputy Commissioner of the DOC during the
    relevant time frame and Evans as his predecessor in the office of
    Commissioner. Stovall is described as the Assistant Commissioner
    or the Director of Facilities Development and Maintenance for the
    DOC. They shall be referred to collectively as the "DOC
    officials" or "defendants."
    District of Georgia denying their motions for summary judgment
    asserting qualified immunity from 42 U.S.C. § 1983 damages.                 For
    the reasons stated below, we reverse the denial of qualified
    immunity and remand the case to the district court for further
    proceedings consistent with this opinion.
                                     I. BACKGROUND
         These appeals arose out of separate lawsuits brought by Flint
    Electric Membership Corporation and Pataula Electric Membership
    Corporation (the "EMCs"), against the DOC officials2 and Georgia
    Power Company ("Georgia Power").              The substantially identical
    amended complaints alleged that, under Georgia's State Purchasing
    Act and as "lowest responsible bidders," the EMCs were entitled to
    receive licenses to supply certain electrical services to the DOC,
    which were awarded instead to Georgia Power in contravention of the
    state statute.       Counts One and Two contended that by entering into
    the contracts with Georgia Power, the DOC defendants violated the
    EMCs' substantive and procedural due process rights, giving rise to
    § 1983 claims for injunctive relief and damages.                   Count Three
    asserted    a    state   law    cause   of   action   based   upon    the   same
    allegations. The district court initially dismissed the actions on
    the pleadings for failure to state a claim under § 1983, finding
    that the EMCs had no federally protected property interest in the
    contracts.      In an earlier appeal from that decision a panel of this
    court    reversed,    holding    that   Georgia   law   requires     electrical
    service contracts with the state to be awarded to the lowest
          Whitworth and Stovall were named as defendants in both
    actions. Evans was sued solely by Pataula Electric Membership
    responsible bidder "whenever possible."                 Pataula Elec. Membership
    Corp. v. Whitworth, 
    951 F.2d 1238
    , 1241-42 (11th Cir.),                         cert.
    denied, --- U.S. ----, 
    113 S. Ct. 302
    121 L. Ed. 2d 225
     (1992).                    The
    court explained that competitive bidding for electrical service is
    not possible in most cases because the Georgia Territorial Electric
    Service Act allows only one electricity supplier to provide service
    in a particular locality.               Id. at 1241 n. 3.      Here, however, more
    than one provider was eligible to furnish this service.                   The court
    consequently held that "there [was] no impediment to competitive
    bidding,    [and]     the    State       Purchasing    Act   and   relevant    rules
    mandate[d] competitive bidding."               Id. at 1242.        The court found
    further    that,     "[a]t    a    minimum,     then,    plaintiffs     state[d]   a
    cognizable [due process] claim by alleging that defendants abused
    their    discretion    by     arbitrarily       ignoring     competitive     bidding
    requirements."       Id. at 1243.           The court concluded that the DOC
    officials     should    have       known     they     were   required   to     follow
    competitive bidding procedures under clearly established state law,
    thus, they were not entitled to qualified immunity from § 1983
    monetary liability.          Id. at 1244.
            On remand, the parties proceeded with discovery.                Thereafter,
    Georgia Power and the DOC defendants filed motions for summary
    judgment.    The motions addressed the merits of the actions and, in
    addition, the DOC officials again asserted a qualified immunity
    defense.     The district court denied all the motions.                      The DOC
    officials     then    filed       the    current    appeals,    which   have    been
    consolidated for our review.
                                       II. DISCUSSION
            Although final orders have not been entered in these cases,
    we have jurisdiction to review the district court's denial of the
    motions   for   summary    judgment   grounded   on   qualified   immunity.
    Mitchell v. Forsyth, 
    472 U.S. 511
    , 530, 
    105 S. Ct. 2806
    , 2817, 
    86 L. Ed. 2d 411
    , 427 (1985).       Our consideration of this issue is        de
    novo.   Elder v. Holloway,      
    510 U.S.
    ----, ----, 
    114 S. Ct. 1019
    127 L. Ed. 2d 344
    , 351 (1994).         This court's prior decision
    that the DOC defendants were not entitled to qualified immunity
    from § 1983 damages is binding here as the law of the case unless
    (1) new and substantially different evidence material to the issue
    has been presented;       (2) controlling authority has been rendered
    which is contrary to the law of the previous decision;            or (3) the
    earlier ruling was clearly erroneous and would work a manifest
    injustice if implemented.       United States v. White, 
    846 F.2d 678
    685 (11th Cir.), cert. denied, 
    488 U.S. 984
    109 S. Ct. 537
    102 L. Ed. 2d 568
            The main thrust of the current appeal is the defendants'
    insistence that, contrary to this court's earlier observation that
    there was no impediment to competitive bidding, later discovery
    revealed that it was impossible to determine a "lowest responsible
    bidder" because neither the EMCs nor Georgia Power could guarantee
    a fixed rate for electrical service over the life of the contracts.
    They also maintain that the EMCs failed to adhere to competitive
    bidding procedures.       They claim that now it is clear that the EMCs
    did not in fact have a property right in the contracts because
    competitive bidding was either impossible and/or did not take place
    due to the EMCs' own failure to follow the competitive bidding
    rules. They postulate that, in the absence of a property interest,
    they are entitled to qualified immunity.
           In keeping with the district court's decision, we must reject
    these arguments.         The record shows that the EMCs had sufficient
    awareness of the competitive bidding procedures to form a valid
    expectation of entitlement to the contracts if they submitted the
    lowest bids.      See Board of Regents v. Roth, 
    408 U.S. 564
    , 577, 
    92 S. Ct. 2701
    , 2709, 
    33 L. Ed. 2d 548
    , 561 (1972).             The record also
    supports the district court's finding that the EMCs were the
    "lowest responsible bidders." The appellants have offered no legal
    authority for their suggestion that the prospect of a subsequent
    rate      increase    rendered     competitive      bidding       impossible.
    Furthermore, there is undisputed evidence that the EMCs have
    refrained from retail rate increases in the past despite rises in
    wholesale costs. The consultant employed by the DOC to analyze and
    evaluate    the   bids    specifically   found   that   Georgia    Power   had
    historically promulgated greater rate increases than the EMCs and
    that, over the long run, their rates would probably "approach each
    other."    For this reason, the consultant viewed the rate increase
    issue as an insignificant factor in determining cost over the life
    of the contracts.     By contrast, in choosing the EMCs, the DOC stood
    to realize definite and substantial savings in the shorter term,
    both in the rates charged and the cost of leasing equipment.
    Consequently, this court's earlier decision that the EMCs were
    vested with a property right in the contracts remains the law of
    the case.3
             Even though the EMCs' rights to a property interest in the
    contracts remain, we nevertheless hold that because of a change in
    the law governing the viability of their due process claims, the
    defendants are now entitled to qualified immunity from § 1983
    damages.     In McKinney v. Pate, 
    20 F.3d 1550
     (11th Cir.1994) (en
    banc), cert. denied, --- U.S. ----, 
    115 S. Ct. 898
    130 L. Ed. 2d 783
    (1995), decided after the prior appeal in these cases, the court
    held that § 1983 substantive due process claims arising from
    nonlegislative deprivations of state-created property interests are
    no longer cognizable in this circuit.    Id. at 1560.4   It has also
    become evident, in light of McKinney, that the EMCs' procedural due
    process claims are not ripe for review.     In   McKinney the court
    observed that, unlike the deprivation of a right provided by
    substantive federal law, which gives rise to a § 1983 lawsuit as
    soon as the wrongful action is taken,
         a procedural due process violation is not complete "unless and
         until the State fails to provide due process."       In other
         words, the state may cure a procedural deprivation by
         providing a later procedural remedy;     only when the state
         refuses to provide a process sufficient to remedy the
         procedural deprivation does a constitutional violation
         actionable under section 1983 arise.
          We stress that the underlying finding that the EMCs were
    the lowest responsible bidders does not involve a factual
    dispute. The appellants do not contest the accuracy of the
    consultant's cost assessments. They urge simply that a future
    rate hike by any of the bidders would introduce an unknown
    element into the formula. Given the consultant's reasoned
    rejection of this factor as an obstacle to determining long-term
    costs, it was not impossible for the appellants to reach a
    competitive bidding decision.
          The alleged deprivations at issue here plainly stem from
    non-legislative acts, see McKinney, 20 F.3d at 1557 n. 9, and
    involve a state-created property right.
    Id. at 1557 (quoting Zinermon v. Burch,     
    494 U.S. 113
    , 126, 
    110 S. Ct. 975
    , 983, 
    108 L. Ed. 2d 100
    , 114 (1990)).     Thus, even when a
    plaintiff has "suffered a procedural deprivation at the hands of
    [the state], he has not suffered a violation of his procedural due
    process rights unless and until the State ... refuses to make
    available a means to remedy the deprivation."    Id. at 1563.
         The Supreme Court of Georgia has held that "[w]hen, as here,
    a governmental entity has frustrated the bid process and awarded
    the contract to an unqualified bidder, the injured low bidder may
    bring an action for appropriate relief."    City of Atlanta v. J.A.
    Jones Constr. Co., 
    260 Ga. 658
    , 659, 
    398 S.E.2d 369
    , 370 (1990),
    cert. denied, 
    500 U.S. 928
    111 S. Ct. 2042
    114 L. Ed. 2d 126
    One vehicle for bringing such an action in state court is O.C.G.A.
    § 50-5-79, through which contracts made in violation of the State
    Purchasing Act may be declared void. 5     See also Amdahl Corp. v.
    Georgia Dep't of Admin. Servs., 
    260 Ga. 690
    , 695-97, 
    398 S.E.2d 5
          Section 50-5-79 provides:
                   Whenever any department, institution, or agency of
              the state government required by this part and the
              rules and regulations adopted pursuant to this part
              applying to the purchase of supplies, materials, or
              equipment through the Department of Administrative
              Services shall contract for the purchase of such
              supplies, materials, or equipment contrary to this part
              or the rules and regulations made pursuant to this
              part, such contract shall be void and of no effect. If
              any official of such department, institution, or agency
              willfully purchases or causes to be purchased any
              supplies, materials, or equipment contrary to this part
              or the rules and regulations made pursuant to this
              part, such official shall be personally liable for the
              cost thereof; and, if such supplies, materials, or
              equipment are so unlawfully purchased and paid for out
              of the state funds, the amount thereof may be recovered
              in the name of the state in an appropriate action
              instituted therefor.
    540, 544-46 (1990) (frustrated bidders who allege violations of
    state procurement laws may seek equitable relief and damages
    limited to the recovery of bid preparation costs under general
    principles of law);            Hilton Constr. Co., Inc. v. Rockdale County
    Bd. of Educ., 
    245 Ga. 533
    , 540, 
    266 S.E.2d 157
    , 162-63 (1980) (low
    bidder    had     right   to    damages   and/or   injunctive   relief,   to    be
    determined by the trial court on remand).
             The EMCs could have filed actions in state court pursuant to
    O.C.G.A. § 50-5-79 for the purpose of rescinding the contracts with
    Georgia Power and/or to recover their bid preparation costs.6
    Because they failed to do so, and because the rule of law announced
    in McKinney must be applied retroactively, McKinney, 20 F.3d at
    1566,     their    §   1983     procedural   due   process   claims   are      not
          By this statement, we do not intend to imply that this was
    the sole course of action available to the EMCs under Georgia
    law. We point out only that the state provided an adequate
    process for redressing the EMCs' complaints.
          Although the effect of McKinney on the EMCs' due process
    claims was not resolved in the district court, we have the
    authority to address this pure question of law on appeal. See
    Skinner v. City of Miami, Fla., 
    62 F.3d 344
    , 347-48 (11th
    Cir.1995) (following McKinney to hold that the complaint failed
    to state a constitutional claim even though the issue was not
    raised by the defendant in the district court or on appeal);
    Narey v. Dean, 
    32 F.3d 1521
    , 1526-28 (11th Cir.1994) (recognizing
    for the first time on appeal that the plaintiff's substantive and
    procedural due process claims were eviscerated in light of
    McKinney ); see also Plaut v. Spendthrift Farm, Inc., 
    514 U.S.
    ---, ----, 
    115 S. Ct. 1447
    , 1450, 
    131 L. Ed. 2d 328
    , 339 (1995) (a
    new rule of federal law applied to the parties in the case
    announcing the rule must be utilized in all cases pending on
    direct review) (citing James B. Beam Distilling Co. v. Georgia,
    501 U.S. 529
    111 S. Ct. 2439
    115 L. Ed. 2d 481
     (1991)). We note
    that the McKinney decision was issued after the motions for
    summary judgment and supporting briefs were filed, but before the
    district court entered its orders. It would have behooved the
    defendants to file supplemental briefs bringing McKinney to the
         In Siegert v. Gilley, 
    500 U.S. 226
    111 S. Ct. 1789
    114 L. Ed. 2d 277
     (1991), the Supreme Court observed that a "necessary
    concomitant" to the decision of whether a defendant is entitled to
    qualified immunity, "is the determination of whether the plaintiff
    has asserted a violation of a constitutional right at all."   Id. at
    232, 111 S.Ct. at 1793, 114 L.Ed.2d at 287.   The complaints in the
    present cases state neither substantive nor procedural due process
    claims.   Consequently, we must reverse the district court's denial
    of qualified immunity from § 1983 damages.
          Even though no federal rights remain to be determined in
    these cases, the EMCs may be permitted to pursue the state law
    cause of action raised in Count Three of their amended complaints
    in the federal forum.      The decision of whether to dismiss a
    complaint still containing state law issues after all federal
    causes evaporate is within the district court's sound discretion.
    See 28 U.S.C. § 1367(c);   McCoy v. Webster, 
    47 F.3d 404
    , 408 (11th
    Cir.1995). These actions present the unusual circumstance that, at
    the time the complaints were filed, it was common practice in this
    district court's attention after that decision was published. In
    its orders denying the motions for summary judgment, the district
    court astutely invited them to do so. They chose instead to
    immediately appeal the district court's rulings on the qualified
    immunity issue. Perhaps they feared that the time for appeal
    would expire during the pendency of supplemental pleadings.
    However, the question of qualified immunity could have been
    preserved for review, with the benefit of a full exploration of
    the McKinney issues in the district court, and this appeal
    possibly avoided, if the defendants had served timely
    Fed.R.Civ.P. 59 motions to alter or amend the district court's
    denials of summary judgment in view of McKinney. See
    Fed.R.App.P. 4(a)(4)(C) (tolling the time for appeal during the
    pendency of a timely Rule 59 motion). At the oral argument
    before this court, the parties were directed to and did address
    the effect of McKinney on the due process claims.
    circuit   to   bring    §    1983   lawsuits    in   federal   court   asserting
    substantive and procedural due process claims arising from the
    deprivation of state-created property rights, without resorting to
    remedies made available by the state.            In addition, we have held on
    occasion that it may be an abuse of discretion to dismiss an
    outstanding     state   law    cause    of   action    after   the    statute   of
    limitations has expired.            See McCoy, 47 F.3d at 408 n. 4.             The
    district court should consider these factors in the exercise of its
    discretion and in reaching its decision.
                                    III. CONCLUSION
          In accordance with the foregoing, we AFFIRM the district
    court's finding that the EMCs were vested with a state-created
    property right in the electrical service contracts as "lowest
    responsible bidders."         We REVERSE the district court's denial of
    qualified immunity from § 1983 damages and REMAND the case to the
    district court for further proceedings with respect to the state
    law   cause    of   action    alleged   in     Count   Three   of    the   amended
          In addition to the qualified immunity issue, the defendants
    urge us to review those portions of district court's orders
    denying summary judgment on the merits, which are relevant to the
    § 1983 claims lodged against them in their official capacities.
    See Lassiter v. Alabama A & M Univ., 
    28 F.3d 1146
    , 1149 n. 2
    (11th Cir.1994) (observing that the qualified immunity defense
    extends solely to § 1983 complaints for damages against state
    actors in their individual capacities). They maintain that we
    may do so by exercising pendent appellate jurisdiction in a
    manner consistent with Swint v. Chambers County Comm'n, 
    514 U.S.
    ----, ----, 
    115 S. Ct. 1203
    , 1212, 
    131 L. Ed. 2d 60
    , 74-75 (1995)
    (leaving open the possibility of exercising pendent appellate
    jurisdiction in appropriate circumstances). Because of our
    holding that the complaints fail to allege a § 1983 cause of
    action of any sort, we find it unnecessary to address this