Bidder’s lawsuit vs DPL over quarry permit junked

Superior Court Associate Judge Joseph N. Camacho dismissed Tuesday a bidder’s lawsuit against the Department of Public Lands over an exclusive quarry permit on a public land in As Matuis.

Camacho ruled that because plaintiff Fanter Corp. Ltd. failed to show that DPL acted arbitrarily and capriciously in its handling of USA Fanter’s submission for request for proposals, the company has not established that DPL violated a statute that provides constitutional standing to sue.

The RFP sought to “issue a quarry permit to the most responsive firm capable of providing DPL the highest return from limestone quarry operations on public lands.”

Because USA Fanter did not show that DPL violated the statute, the company did not demonstrate that it suffered an injury, Camacho said, and did not establish that it has constitutional standing to challenge DPL’s decision to revoke the RFP in lieu of negotiating with USA Fanter.

Camacho said the U.S. and CNMI supreme courts have ruled that the Legislature cannot erase constitutional standing, meaning the Legislature can give a right to sue but the person suing must still establish constitutional standing.

DPL issued the RFP in 2016. USA Fanter was the third highest bidder. DPL, however, did not enter into a contract with two highest bidders as they failed to agree on terms.

DPL then decided that, “given the significant amount of time that had passed since the RFP was issued, and considering the terms of the remaining proposals, it would not in the best interest of DPL…to award the contract to any of the remaining bidders,” including USA Fanter.

DPL then issued a second RFP in September 2017 without first negotiating with USA Fanter, or any other remaining bidders.

On Oct. 1, 2017, USA Fanter sent a letter to DPL, protesting the cancellation of the first RFP. USA Fanter then submitted a proposal in response to the second RFP.

DPL has not yet finished evaluating the proposals it received in response to the second RFP. Currently, no party has an exclusive quarry permit under either the two RFPs.

On Oct. 25, 2017, USA Fanter filed a lawsuit against DPL to stop awarding the permit to another company and for the court to direct DPL to award the quarry permit to it.

USA Fanter also sought a court judgment directing DPL to enter into negotiations for a contract for the exclusive quarry permit.

USA Fanter requested the court to prevent DPL from awarding the exclusive quarry permit for the land until such time that DPL and Fanter have determined they cannot come to terms for a contract.

DPL, through counsel assistant attorney general Matthew J. Pugh, then moved for the dismissal of the lawsuit. Pugh argued that USA Fanter lacks standing to sue to challenge a non-award of a government contract and that DPL does not have the legal capacity to be sued.

USA Fanter, through counsel Robert T. Torres, argued that USA Fanter has statutory standing and that DPL has the capacity to sue and be sued.

The motion was heard on Feb. 6, 2018.

In his order granting DPL’s motion to dismiss, Camacho said because USA Fanter lacks standing to challenge DPL’s actions, the court need not reach the question of whether DPL can be sued by the company.

Camacho said that none of its arguments made a prima facie showing that DPL acted arbitrarily and capriciously.

Camacho said DPL did not ignore plaintiff’s protest of its bid denial. Instead, the judge noted, DPL considered the remaining proposals after the second highest bidder ended negotiations but decided against continuing the negotiations under the first RFP.

He said DPL decided against continuing the negotiations because it found that both the terms of the remaining bids and the amount of time that had passed since the initial request for bids made continuing negotiations under the first RFP not to be in the best interests of the people of the Northern Marianas descent.

Camacho said DPL’s decision to cancel the first RFP after about one year of its issuance and issue the second RFP to try to obtain better bids was not an “unreasonable action.”

Camacho ruled that the DPL secretary has the discretionary authority to cancel the first RFP.