A Florida county school board has won the latest round of litigation against a construction company that claimed it suffered illegal retaliation when it complained after its bid for a project failed.
A key issue in the case was the role of the Orange County School Board general counsel, Woody Rodriguez. A federal appeals court held that his efforts to collect $40,000 of a bond submitted by the construction company—to challenge its loss of the project—didn’t establish municipal liability for the construction company’s claim that the board was retaliating for the company’s comments about alleged irregularities in the bidding process.
Last week’s ruling by the U.S. Court of Appeals for the Eleventh Circuit was the latest blow to Maitland, Florida-based Southern Atlantic Electric Co. Inc. in its yearslong legal battle, in both federal and state courts, over a 2010 bid to perform work on a renovation project at Oak Ridge High School in Orlando.
Initially, general contractor Wharton-Smith Inc., headquartered in Sanford, Florida, accepted Southern Atlantic’s bid for the first phase of the project. But when it didn’t win the job for the second phase, Southern Atlantic petitioned the Orange County School Board for redress and posted a nearly $130,000 bond to do so.
An administrative judge found that Wharton-Smith, not the school board, selected the winning bid, so Southern Atlantic lacked standing to maintain its bid protest against the board. A few months later, the school board, through its GC, Rodriguez, filed a $40,000 claim against the bond for fees and costs associated with the protest.
The surety company holding the bond rejected the claim. The school board responded that, to the extent the surety company’s decision was due to the board’s failure to reimburse Wharton-Smith for the bid protest defense under their indemnification agreement, the board would assign its claim for reimbursement to Wharton-Smith.
Southern Atlantic president Raymond McIntosh and vice president Edward Hutchins alleged that the school board’s assertion of this claim and its subsequent assignment to Wharton-Smith were retaliation for their complaint to board officials about the “gross mismanagement” in the bidding process. They held their complaints amounted to the conduct that “had their company’s bond attacked, which resulted in a tarnished business reputation, sureties not consistently issuing bonds to Southern Atlantic, a decreased bonding capacity … and ultimately lost profits.”
A federal judge in Florida granted summary judgment to the school board, and Southern Atlantic appealed to the Eleventh Circuit.
A panel of Judges Adalberto Jordan, Julie Carnes and Roger Vinson on June 14 issued an unpublished per curiam opinion, ruling that Rodriguez lacked the final policymaking authority needed to attach municipal liability to his actions of attacking the bond and assigning the subsequent claim. The crux of the analysis, the court said, is that the school board could have intervened in the decision-making process and decided the matter.
In so ruling, the court rejected Southern Atlantic’s argument that a long-standing board practice of delegating final authority to its GC to settle litigation matters under $50,000 deemed Rodriguez as the municipal board’s final policymaker.
Because the board “at all times retained the authority to micromanage litigation and overrule the general counsel’s decisions … it therefore does not matter that the Board generally did not review the general counsel’s litigation decisions,” the court wrote.
“A government employee is a final policymaker only if his decisions have legal effect without further action by the governing body—in this case, the Board—and if the governing body lacks the power to reverse the employee’s decision,” it added. “The alleged custom, even as characterized by Southern Atlantic, did not prevent the board from intervening and overriding the general counsel’s decisions, so it remained the final policymaker.”
In a phone interview, Rodriguez said the opinion is “validation of what we have believed from the outset to be frivolous litigation in pursuit of those claims.”
Brian Kirwin and Douglas Ackerman of Kirwin Norris represented the school board.
Brett Miller, Lindsay Oyewale and Thomas Neal of DeBeaubien, Knight, Simmons, Mantzaris & Neal represented Southern Atlantic. Miller did not respond to a request for comment.