NJ Judge Sides With Morris County Municipal Utilities Authority in Public Bidding Dispute

NJ Judge Sides With Morris County Municipal Utilities Authority in Public Bidding DisputeThe Appellate Division of the New Jersey Superior Court recently ruled in favor of the Morris County Municipal Utilities Authority in a public bidding dispute. In Waste Management of N.J. Inc. v. Morris County Municipal Utilities Authority, the court held that the trial judge mistakenly overlooked his authority to impose interlocutory injunctive relief  by considering only the plaintiffs’ likelihood of success.

The Facts of the Case

On July 9, 2012, defendant Morris County Municipal Utilities Authority (the Authority) issued a public notice seeking sealed bids for a five-year contract to operate the two Morris County solid waste transfer stations and to provide related transportation and disposal services. The request for bids mandated, among other things, that bidders “[s]upply . . . the certified financial statement of the Bidder and/or, if applicable, the Guarantor for each of the three (3) recent fiscal years.

Plaintiff Covanta 4Recovery, L.P. (Covanta) submitted the lowest bid, defendant Solid Waste Services, Inc. d/b/a J.P. Mascaro & Sons (Mascaro) submitted the second lowest bid, and plaintiff Waste Management of New Jersey, Inc. (Waste Management) submitted the third lowest bid. The Authority concluded that Mascaro submitted the lowest responsible bid, and the losing bidders objected. They contended that Mascaro failed to comply with the requirement for a certified financial statement.

After review of the issues, the Authority again concluded Mascaro was the lowest responsible bid, and the other bidders filed suit. The trial judge denied interlocutory injunctive relief, finding that Waste Management and Covanta failed to satisfy by clear and convincing evidence a likelihood of success on the merits. On appeal, the Appellate Division considered the narrow question of whether the trial judge mistakenly exercised his discretion in denying interlocutory injunctive relief.

The Court’s Decision

As explained by the court, the issuance of an interlocutory injunction turns on several factors, including whether “the movant has demonstrated a reasonable probability of success on the merits; that a balancing of the equities and hardships favors injunctive relief; that the movant has no adequate remedy at law and that the irreparable injury to be suffered in the absence of injunctive relief is substantial and imminent; and that the public interest will not be harmed.”

In this case, the judge only considered the first factor. After concluding that plaintiffs had not clearly and convincingly shown they were likely to succeed, he failed to consider any additional evidence. According to the Appellate Division, this decision was erroneous because it “overlooks a court’s authority to impose interlocutory restraints regardless of doubts about the movants’ likelihood of success.”

With regard to the other factors, the court noted that [t]hese circumstances weighed heavily in favor of interlocutory injunctive relief, and the judge’s failure to consider these other Crowe factors constitutes an abuse of discretion warranting intervention notwithstanding the deference owed to the judge’s prediction of the likelihood of success.” Accordingly, it reversed the decision.

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

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