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Click here for the full text of this decision FACTS:Appellant Renda is a construction company based in Roanoke, Texas, and specializes in public works projects. The appellee, city of Lubbock, requested bids for construction of improvements to its storm drainage system. Renda submitted the lowest bid by more than $2.2 million. The next lowest bidder was Utility Contractors of America (UCA). Under Texas law, the city is required to award the contract to the “lowest responsible bidder.” After becoming aware that city officials had recommended that the city award the contract to UCA, Renda requested a meeting with the city staff officials. During the meeting, the city officials apparently stated that they knew Renda had previously filed a lawsuit against the El Paso Water District and was awarded damages, and they expressed concern that Renda was “lawsuit happy.” Renda explained to the city staff officials its reasons for filing the suit, and Renda left the meeting believing it had dispelled the city officials’ concerns. The city officials recommended the acceptance of Renda’s bid proposal. Nonetheless, the Lubbock City Council awarded the contract to UCA, by a 4-3 vote, claiming that they had reservations concerning Renda’s business practices. Renda alleged that the city’s real reason for denying its bid stemmed from Renda’s suit against the Water District. Renda filed suit in the district court seeking damages and other relief because the city retaliated against it for exercising its First Amendment rights. The district court granted the city’s motion to dismiss the First Amendment retaliation claim because Renda did not allege that the speech involved a matter of public concern to the relevant city of Lubbock; and Renda did not have a pre-existing commercial relationship with the city. On appeal, Renda argues that the district court erred in resolving both issues against it and in dismissing its suit. HOLDING:Vacated and remanded. The district court erred in concluding that Renda’s complaint failed to allege that the Water District suit was a matter of public concern in the community because the protected activity (the suit) occurred in El Paso rather than Lubbock, where the retaliation occurred. The U.S. Supreme Court has held in a governmental employment context that no prior relationship is required before an employee is permitted to assert a claim for First Amendment retaliation. In Rutan v. Republican Party of Illinois, 497 U.S. 62, 110 S.Ct. 2729 (1990), the high court held that a government entity’s refusal to hire an employee for engaging in protected activity supports a claim for First Amendment retaliation. In Blackburn v. City of Marshall, 42 F.3d 925 (5th Cir. 1995), the 5th Circuit extended the same First Amendment protection enjoyed by employees to contractors dealing with a governmental entity. In Board of County Commissioners v. Umbehr, 518 U.S. 668 (1996), the U.S. Supreme Court agreed with the Fifth Circuit’s holding in Blackburn. The 3rd U.S. Circuit Court of Appeals, however, was the only circuit to address the question the Supreme Court reserved in Umbehr: Ten years before Blackburn was adopted by the Supreme Court in Umbehr, a divided panel of the 3rd Circuit declined to extend Umbehr’s protections to independent contractors who possess no pre-existing contractual relationship with the government. McClintock v. Eichelberger, 169 F.3d 812 (3d Cir. 1999). In dissent, the 3rd Circuit’s Judge Jane Roth criticized the McClintock majority for construing the Umbehr Court’s decision not to address First Amendment retaliation suits by bidders as categorically denying claims by contractors without a pre-existing commercial relationship with the government. The 5th Circuit agreed with Roth’s dissent in McClintock. Reading Umbehr and Rutan together, the court’s reasoning strongly supports her conclusion that the contractor like the individual job applicant is protected by the First Amendment if its bid is rejected in retaliation of its exercise of protected speech. Citing Umbehr, the Court decided that the U.S. Supreme Court would not require a contractor to have a prior relationship with a governmental entity before being able to assert a First Amendment claim and the district court erred in dismissing the suit on this ground. OPINION:Davis, J.; Davis, Barksdale, and DeMoss, J.J.

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