Tremont Public Advisors, LLC v. Connecticut Resources Recovery Authority

Citation333 Conn. 672
Date Filed2019-11-12
DocketSC20119
JudgeRobinson; McDonald; Mullins; Kahn; Ecker
Cited14 times
StatusPublished

Syllabus

The plaintiff public affairs firm sought to recover damages from the defen- dant, a quasi-public agency responsible for providing solid waste dis- posal and recycling services to numerous Connecticut municipalities, alleging that it had engaged in certain anticompetitive practices by con- ducting a sham public bidding process in connection with its award of a contract for municipal government liaison services in violation of the Connecticut Antitrust Act (§ 35-24 et seq.). The defendant had issued a request for proposals for a multiyear liaison services contract. The plaintiff and B Co., a law firm that had provided the defendant with liaison services since 2006, were the only bidders for the contract, and, even though the plaintiff's bid complied with the request for proposals and B Co.'s did not, the defendant ultimately awarded the contract to B Co. The plaintiff alleged that the defendant had evaluated the bids in a biased manner to ensure that B Co. was awarded the contract, in violation of its own procurement policies and the competitive bidding statute (§ 22a-268) requiring the defendant to engage in open and com- petitive bidding for contracts with outside vendors. The plaintiff further alleged that the defendant awarded the contract to B Co. because B Co. carried out lobbying services on behalf of the defendant in violation of the statute (§ 1-101bb) prohibiting quasi-public agencies such as the defendant from retaining lobbyists. In addition, the plaintiff alleged that the defendant's conspiracy with B Co. had reduced the number of competitors for the liaison services contract, had increased the price paid by the defendant for liaison services, resulting in higher costs for those municipalities that dealt with the defendant, and had adversely affected the quality of the defendant's services. The defendant moved to dismiss the plaintiff's operative complaint, claiming, inter alia, that the plaintiff lacked standing to bring the antitrust claim because it did not allege that it had suffered an antitrust injury and that it was an efficient enforcer of the antitrust laws. The defendant also moved to strike the complaint, contending that the plaintiff had failed to allege facts sufficient to demonstrate an antitrust violation. The trial court denied the motion to dismiss, concluding, inter alia, that the plaintiff had standing to bring an antitrust claim against the defendant on the basis of the defendant's alleged violation of a competitive bidding law pursuant to this court's decision in Cheryl Terry Enterprises, Ltd. v. Hartford (270 Conn. 619). The trial court, however, granted the defen- dant's motion to strike on the ground that the plaintiff had failed to allege an antitrust injury because its allegations were conclusory and there was no allegation that the defendant's conduct has an adverse effect on competition as a whole in the relevant market of which it is a member. The trial court further found that, to the extent that being an efficient enforcer of the antitrust laws is required to state a cognizable claim under Connecticut law, the plaintiff also failed to adequately plead that element. Thereafter, the trial court rendered judgment for the defendant, from which the plaintiff appealed and the defendant cross appealed. Held that the trial court correctly concluded that the plaintiff failed to sufficiently allege an antitrust injury, but, because the failure to allege an antitrust injury implicates the plaintiff's standing and, thus, a court's subject matter jurisdiction, the trial court should have granted the defendant's motion to dismiss rather than its motion to strike: this court relied on federal case law, in accordance with the legislative intent expressed in the Connecticut Antitrust Act (§ 35-44b), in concluding that, to have standing to bring a claim under that act, a plaintiff must adequately allege both that it has suffered an antitrust injury and that it is an efficient enforcer of the antitrust laws, and, because a claim that a plaintiff has failed to allege either of those elements implicates the trial court's subject matter jurisdiction, such a claim should be raised in a motion to dismiss; in the present case, although the plaintiff alleged that the defendant's conduct had the anticompetitive effects of reducing the quality of its services and increasing its prices, it failed to demon- strate that the defendant's conduct itself was anticompetitive, as an agreement to provide illegal lobbying services in exchange for the award of a public contract, which does not restrict a purchaser's freedom of choice or prevent other potential bidders from competing, does not constitute a restraint of trade for purposes of antitrust law from which an antitrust injury could be inferred; moreover, because the plaintiff lacked standing as a result of its failure to allege an antitrust injury and the trial court therefore lacked subject matter jurisdiction, this court concluded that the form of the trial court's judgment, which was based on the granting of the defendant's motion to strike, was improper, and it vacated the granting of the motion to strike and remanded the case with direction to grant the defendant's motion to dismiss instead. Cheryl Terry Enterprises, Ltd. v. Hartford (270 Conn. 619), to the extent that it suggests a plaintiff need not allege that it has suffered an antitrust injury to establish standing to pursue an antitrust claim, overruled. Argued January 14—officially released November 12, 2019

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Case ID: 4676511 • Docket ID: 16438604