Brait Builders Corporation v. Commonwealth of Massachusetts, (1st Cir. 2011)
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United States Court of Appeals
For the First Circuit
No. 09-2502
BRAIT BUILDERS CORPORATION,
Plaintiff, Appellant,
v.
COMMONWEALTH OF MASSACHUSETTS,
DIVISION OF CAPITAL ASSET MANAGEMENT,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Lynch, Chief Judge,
Torruella and Stahl, Circuit Judges.
John J. McNamara, with whom Domestico, Lane & McNamara, LLP,
was on brief for appellant.
Daniel G. Cromack, Assistant Attorney General, with whom
Martha Coakley, Attorney General, was on brief for appellee.
May 2, 2011
TORRUELLA, Circuit Judge. In this appeal, plaintiff-appellant Brait Builders Corporation ("Brait") challenges the
district court's dismissal of its claims -- brought under 42 U.S.C.
§ 1983 and Massachusetts state law -- against the Commonwealth of
Massachusetts, Division of Capital Asset Management ("DCAM"). The
district court issued a judgment dismissing the § 1983 claim with
prejudice under Federal Rule of Civil Procedure 12(b)(6) on the
ground that the interests asserted by Brait were not property
interests protected by the Fourteenth Amendment of the United
States Constitution. In addition, the court declined to exercise
supplemental jurisdiction on the state law claims and dismissed
them without prejudice. For the reasons stated below, we vacate
the district court's judgment and remand the case with directions
to dismiss for lack of jurisdiction, pursuant to the Eleventh
Amendment of the United States Constitution.
I. Factual Background
Given that the district court disposed of this case on a
motion to dismiss, see Fed. R. Civ. P. 12(b), we view the facts as
set forth in Brait's complaint and indulge all reasonable
inferences in Brait's favor. See McCloskey v. Mueller, 446 F.3d
262, 264 (1st Cir. 2006); Deniz v. Municipality of Guaynabo, 285
F.3d 142, 144 (1st Cir. 2002). Following, we recount the facts
relevant to our decision on jurisdiction.
Brait, a Massachusetts corporation, is a general
contractor that specializes in large-scale building construction
projects commissioned by the Commonwealth of Massachusetts or its
political subdivisions. As a condition precedent to bidding on
public construction projects in the Commonwealth of Massachusetts,
a contractor must hold a certificate of eligibility issued by
DCAM,
[1]
demonstrating that the contractor has a capacity rating
commensurate with the size and scope of the project on which it is
bidding. See Mass. Gen. Laws ch. 149, § 44D(1)(a); Fordyce v. Town
of Hanover, 929 N.E.2d 929, 938-39 (Mass. 2010). "Certificates of
eligibility, which must be renewed annually, are issued only after
DCAM's review of the contractor's prior construction experience,
professional references, financial condition, and organizational
capacity." Fordyce, 929 N.E.2d at 939 (citing Mass. Gen. Laws ch.
149, § 44D(1)-(3)). "DCAM may 'decertify a contractor or reduce
the classes of work and amount of work on which the contractor is
eligible to bid,' if DCAM learns of a contractor's incompetence,
poor performance, or misconduct." Id. (quoting Mass. Gen. Laws ch.
149, § 44D(5)). Under Massachusetts law, "[a]ny materially false
statement in the [certification] application or update
statement . . . shall constitute cause for debarring the applicant
from future public work as provided in [section 44C of chapter 149
of Massachusetts General Laws]." Mass. Gen. Laws ch. 149, § 44D
(2). "A contractor who is debarred or whose certification is
suspended, revoked, or not renewed by DCAM, loses the ability to
contract for construction work from any public authority in the
Commonwealth [of Massachusetts]." Fordyce, 929 N.E.2d at 939.
Brait first received DCAM certification to bid on public
construction building projects in 1994 and continued to annually
renew its certification through 2007. In December 2007, Brait
again applied for renewal of its certificate of eligibility. In
response to Brait's application and based on the information set
forth therein, DCAM issued a certificate of eligibility -- valid
from December 19, 2007 through December 19, 2008 -- in the category
of "General Building Construction" with a single project limit
("SPL") of $73,738,000 and aggregate work limit ("AWL") of
$75,408,000.
On or about September 12, 2008, Brait was declared the
lowest eligible bidder for the Beverly High School project in the
City of Beverly, Massachusetts (the "Beverly Project"). Shortly
thereafter, DCAM received communications from certain groups
alleging that Brait had intentionally submitted false information
in its December 2007 "certificate of eligibility application" in an
effort to attain higher certification limits that would allow it to
bid on more lucrative public building construction projects.
After certain subsequent communications between DCAM and
Brait -- the extent of which is not relevant to our decision on
jurisdiction -- DCAM debarred Brait from bidding on Massachusetts
public building construction projects for one year through a
decertification order issued on November 21, 2008 (the "Final
Determination"). In addition, as a result of the allegations
brought against Brait and relying on DCAM's findings, the Office of
the Attorney General of the Commonwealth of Massachusetts issued a
decision on November 19, 2008, rejecting Brait's bid on the Beverly
Project. Brait alleges that both the Final Determination and the
rejection of its bid in the Beverly Project deprived it of property
interests protected by the Fourteenth Amendment (i.e., the right to
bid on Massachusetts public construction projects and a contract
for the construction of a public school) without meaningful due
process.
II. Procedural Posture
On January 16, 2009, Brait filed a complaint in the
district court against DCAM asserting claims under state law and 42
U.S.C. § 1983 (for violation of its federal due process rights).
DCAM answered the complaint by asserting, among other things, (1)
that it could not be sued under 42 U.S.C. § 1983 because, as a
state agency, it was not considered a "person" under said statute,
see Will v. Mich. Dep't of State Police, 491 U.S. 58, 71 (1989);
and (2) that it was nonetheless immune from suit under the Eleventh
Amendment. In light thereof, Brait moved on April 17, 2009, to
amend the complaint by eliminating DCAM and adding four DCAM
officials. Brait's motion for leave to file an amended complaint
included as an attachment a "proposed first amended complaint,"
which named the following persons as proposed defendants, each in
their official and individual capacities: (1) David B. Perini,
Commissioner of DCAM; (2) George M. Matthews, Deputy General
Counsel of DCAM; (3) Natasha M. Bizanos, Manager of Contractor
Certification; and (4) Harry M. Schoenbrun, Compliance Officer
(collectively, the "Proposed Individual Defendants").
On May 13, 2009, DCAM moved to dismiss Brait's complaint
on two alternative grounds. First, DCAM alleged that the district
court lacked jurisdiction, see Fed. R. Civ. P. 12(b)(1), pursuant
to the Eleventh Amendment. Second, DCAM maintained that Brait's
§ 1983 claim should be dismissed for failure to state a claim upon
which relief could be granted, see Fed. R. Civ. P. 12(b)(6), and
the court should decline to exercise supplemental jurisdiction over
the state law claims. In addition, DCAM opposed Brait's motion for
leave to file an amended complaint alleging that such filing would
be futile because Brait's failure to state a claim would also
justify dismissal against the Proposed Individual Defendants.
On June 9, 2009, the district court ordered that Brait's
motion for leave to file an amended complaint be granted and stated
that it was taking DCAM's motion to dismiss "under advisement."
More than four months transpired after the district court granted
Brait's motion for leave to file and Brait neither filed an amended
complaint nor served the Proposed Individual Defendants.
Subsequently, on October 30, 2009, the district court
issued a brief order dismissing Brait's § 1983 claim -- on the
ground that the property interests asserted by Brait were not
property rights protected by the Fourteenth Amendment -- and
declining to exercise supplemental jurisdiction over the remaining
state law claims, which the court dismissed without prejudice.
This appeal ensued.
III. Standard of Review
Because the district court dismissed this case on a
motion to dismiss, we review its ruling de novo. McCloskey, 446
F.3d at 266. We, however, "are not wedded to the lower court's
rationale and may affirm an order of dismissal on any basis made
apparent by the record." Id.
IV. Discussion
A. DCAM is the only defendant in this appeal
Due to its relevance for purposes of our Eleventh
Amendment analysis, we begin by setting forth our understanding
with respect to which party is the defendant in this appeal. In
this regard, Brait avers that -- because the district court allowed
its motion for leave to file an amended complaint -- the Proposed
Individual Defendants should be considered the defendants in this
appeal. This is despite the fact that Brait did not file an
amended complaint after having been granted leave to do so and
never served the Proposed Individual Defendants with summonses.
For the reasons stated below, we find Brait's allegations
unavailing and conclude that DCAM is the only defendant in this
appeal.
Where amendment "as a matter of course" is no longer
available, Federal Rule of Civil Procedure 15(a)(2) allows
amendment of a complaint with the opposing party's written consent
or the court's leave. "An amended complaint, once filed, normally
supersedes the antecedent complaint," and causes the latter to "no
longer perform[] any function in the case." Connectu LLC v.
Zuckerberg, 522 F.3d 82, 91 (1st Cir. 2008) (emphasis added)
(citation and internal quotation marks omitted). An amended
complaint must generally be served upon every party. Fed. R. Civ.
P. 5(a)(1)(B). Furthermore, an amended complaint that adds
defendants to an action must be served upon such defendants "within
120 days after the amended complaint is filed." Fed. R. Civ. P.
4(m); see also Bolden v. City of Topeka, 441 F.3d 1129, 1148 (10th
Cir. 2006) (noting that the 120-day period provided by Rule 4(m)
applies to service upon defendants newly added in an amended
complaint).
As we have stated, Brait concedes that it has neither
filed an amended complaint -- after having been granted leave to do
so -- nor served the Proposed Individual Defendants. In addition,
Brait has not requested that the "proposed amended complaint" --
attached to its motion for leave to file -- be deemed a proper
filing of an amended complaint.
[2]
See Fed. R. Civ. P. 5(d). Brait,
however, alleges that its inaction was justified in light of the
circumstances of this case. Specifically, Brait contends that it
would have been a waste of resources for Brait to file the "first
amended complaint" and serve it upon the Proposed Individual
Defendants, given that the "proposed amended complaint" advised the
district court of Brait's allegations for purposes of determining
whether the case should nonetheless be dismissed. Accordingly,
Brait maintains that it should not have been required to file an
amended complaint or serve the Proposed Individual Defendants with
summonses while the district court was still considering DCAM's
motion to dismiss.
Brait's arguments do not support its contention that the
Proposed Individual Defendants are the defendants in this case.
Its arguments merely attempt to provide cost-efficiency reasons for
why Brait should not have been required to remedy an alleged defect
in the district court's jurisdiction, despite having been granted
leave to do so. It is unnecessary for us to address these
arguments at this point, since they do not change the fact that
Brait failed to file an amended complaint and serve the Proposed
Individual Defendants, and, consequently, that DCAM is the sole
defendant here.
For the reasons stated, we conclude that DCAM is the sole
defendant in this appeal.
[3]
This conclusion is consistent with the
apparent understanding of the district court, which did not change
the caption of this case to eliminate DCAM and add the Proposed
Individual Defendants. Such proposed defendants have not appeared
in this case (on appeal or in the district court). With this
understanding in mind, we proceed to analyze DCAM's Eleventh
Amendment immunity defense.
B. Eleventh Amendment immunity
This appeal presents an Eleventh Amendment question
(i.e., whether the Eleventh Amendment precludes us from exercising
judicial power over DCAM) and questions that relate to the
plausibility of Brait's claims on the merits. As explained below,
the nature of the issues presented in this appeal counsels that we
begin the dispositional order by analyzing DCAM's Eleventh
Amendment immunity defense.
Generally, courts must adjudicate plausible challenges to
their jurisdiction prior to adjudicating the merits of a case. See
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999).
Moreover, although the Supreme Court "has declined to state
definitively whether the Eleventh Amendment is a doctrine of
subject matter jurisdiction," Hudson Sav. Bank v. Austin, 479 F.3d
102, 109 (1st. Cir. 2007) (citing Wis. Dep't of Corr. v. Schacht,
524 U.S. 381, 391 (1998)), the Court has stated that the "Amendment
is jurisdictional in the sense that it is a limitation on the
federal court's judicial power." Calderon v. Ashmus, 523 U.S. 740,
745 n.2 (1998) (emphasis added); see also Seminole Tribe of Fla. v.
Florida, 517 U.S. 44, 72-73 (1996) ("The Eleventh Amendment
restricts the judicial power under Article III . . . .").
On the other hand, the Supreme Court has also "recognized
that [the Eleventh Amendment] is not co-extensive with the
limitations on judicial power in Article III." Calderon, 523 U.S.
at 745 n.2. Consistent with these principles, it is well-established under First Circuit precedent that federal courts may
resolve a case on the merits in favor of a state without first
resolving any Eleventh Amendment issues the state raises. Parella
v. Ret. Bd. of R.I. Emps.' Ret. Sys., 173 F.3d 46, 53-57 (1st Cir.
1999); see also McBee v. Delica Co., 417 F.3d 107, 127 (1st Cir.
2005) ("In Parella, we held that Eleventh Amendment immunity . . .
can be bypassed in certain cases . . . ."). This First Circuit
"precedent allows [federal courts] to defer thorny Eleventh
Amendment questions in cases in which it is perfectly clear that
the state entity will prevail on the merits." Dávila v.
Corporación De P.R. Para La Difusión Pública, 498 F.3d 9, 14 (1st
Cir. 2007) (citing Parella, 173 F.3d at 53-57).
We do not bypass the Eleventh Amendment question in this
case because the answer to that question is quite straightforward.
Brait did not amend its complaint to include the individual DCAM
officers as named defendants under the doctrine of Ex parte Young,
209 U.S. 123 (1908). DCAM is the only defendant. "The Supreme
Court has clearly said that the Eleventh Amendment bars federal
suits by citizens against the state or state agencies . . . ."
[4]
O'Neill v. Baker, 210 F.3d 41, 47 (1st Cir. 2000). Therefore,
"[u]nless a State has waived its Eleventh Amendment immunity or
Congress has overridden it, . . . a State cannot be sued directly
in its own name regardless of the relief sought." Kentucky v.
Graham, 473 U.S. 159, 167 n.14 (1985) (citing Alabama v. Pugh, 438
U.S. 781 (1978)). Pursuant to these principles, it is perfectly
clear that Brait's claims in the complaint are barred by the
Eleventh Amendment, since Brait sued DCAM in the latter's own
name.
[5]
See Virginia Office for Protection and Advocacy v. Stewart,
No. 09-529, slip op. at 5 (U.S. April 19, 2011).
In addition, although we do not render an opinion with
regards to the merits of the constitutional question reached by the
district court (i.e., whether Brait asserted property interests
protected by the Fourteenth Amendment), we note that the brevity of
the district court's opinion understates the complexity of this
question, particularly in relation to the issue of whether Brait
had a constitutionally protected property interest in its
certification of eligibility to bid on Massachusetts public
building construction projects.
[6]
Therefore, we note that bypassing
the Eleventh Amendment question here might require us to
unnecessarily resolve a more complex Fourteenth Amendment question.
Based on the above, we find that the questions at issue
in this case do not counsel that we bypass the Eleventh Amendment
immunity question. Accordingly, we conclude that Brait's claims in
the complaint are barred by the Eleventh Amendment.
V. Conclusion
For the reasons stated, we conclude that Eleventh
Amendment immunity applies and, consequently, that we lack
jurisdiction to hear this appeal. We therefore vacate the district
court's judgment and remand the case with directions to dismiss for
lack of jurisdiction.
Vacated and Remanded with directions to dismiss for lack
of jurisdiction. Costs in this appeal shall be taxed against
plaintiff-appellant Brait Builders Corporation.
Footnotes
[1] 'DCAM is an agency of the Commonwealth of Massachusetts in charge
of, among other things, overseeing administration of Massachusetts'
public bidding statutes, Mass. Gen. Laws ch. 149, §§ 44A-44H. See
Mass. Gen. Laws ch. 7, §§ 4A, 40A; Fordyce v. Town of Hanover, 929
N.E.2d 929, 938-39 (Mass. 2010).
[2] 'Such an argument is therefore waived, and we limit our analysis
accordingly. See United States v. Zannino, 895 F.2d 1, 17 (1st
Cir. 1990). In light thereof, it is unnecessary for us to address
the issue of whether Brait's amended complaint -- in the event it
had been filed -- should nonetheless be dismissed due to Brait's
subsequent failure to serve summonses upon the Proposed Individual
Defendants within 120 days, as required by Federal Rule of Civil
Procedure 4(m).
[3] 'We note that Brait's "proposed amended complaint" presented four
state law claims and one federal law claim, namely, a request for
declaratory judgment that the Proposed Individual Defendants
deprived Brait of its property interests in violation of its right
to due process. Because we find that Brait did not amend its
complaint, it is unnecessary for us to address whether a federal
court would have jurisdiction to issue such declaratory relief, in
light of the fact that no ongoing violation of federal law is
alleged by Brait (i.e., Brait concedes that it was only barred for
one year from applying for recertification, a period which has
elapsed). See Mills v. Maine, 118 F.3d 37, 55 (1st Cir. 1997)
(noting that "a declaratory judgment is unavailable where . . . the
parties agree that there is no ongoing legal violation").
[4] 'Brait has not disputed DCAM's assertion that it is a state
agency subject to Eleventh Amendment immunity. Therefore, we
assume for purposes of our analysis that it is. See O'Neill v.
Baker, 210 F.3d 41, 47 n.5 (1st Cir. 2000).
[5] 'Brait's contention that DCAM waived its Eleventh Amendment
immunity is unavailing. Specifically, Brait avers that during a
motion hearing in the district court, DCAM's counsel allegedly
admitted that the Eleventh Amendment was not an issue. Brait
conveniently misconstrues the record here, since DCAM's counsel's
comments were made with reference to the "proposed amended
complaint," whose filing DCAM argued would be futile because it
allegedly failed to state a claim upon which relief could be
granted. DCAM has consistently asserted its Eleventh Amendment
immunity by raising it in the answer to the complaint, in its
motion to dismiss, in its appellate brief and at oral arguments
before this court. No more was needed to preserve its Eleventh
Amendment immunity.
[6] 'Without fully setting forth its analysis, the district court
relied solely on Redondo-Borges v. United States HUD, 421 F.3d 1,
8 (1st Cir. 2005), for its conclusion that Brait was not deprived
of a constitutionally protected property interest when it was
debarred from bidding on Massachusetts public construction projects
for a year. Such reliance on Redondo-Borges may be misplaced
because the court in Redondo-Borges expressly declined "to reach
the issue of whether there is a constitutionally protected property
interest associated with effective debarment," because the
plaintiff in that case "[had] not alleged sufficient facts to
establish the underlying debarment." Redondo-Borges, 421 F.3d
at 8. Thus, deciding the merits of this case may involve more
analysis.
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