89-006926BID Cubic Western Data vs. Department Of Transportation Status: Closed Recommended Order on Tuesday, January 2, 1990.

Summary: Evidence will not support finding that petition for hearing was filed to needlessly increase cost of litigation or other improper purpose.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CUBIC WESTERN DATA, )

)

Petitioner, )

vs. ) CASE NO. 89-6926B1D

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

and )

)

PLANNING RESEARCH CORPORATION, )

)

Intervenor. )

_________________________________)

RECOMMENDED ORDER OF DISMISSAL

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Hearing Officer, K. N. Ayers, held a public hearing on Motions filed

in the above-styled case on December 27, 1989, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Frank A. Shepherd, Esquire

Gernard M. Kouri, Esquire

Rimbrell and Hamann

Suite 900, Brickell Center

799 Brickell Plaza

Miami, FL 33131-2805

For Respondent: Robert Daniti, Esquire

Department of Transportation

Haydon Burns Building, MS 58

Tallahassee, FL 32399-0458

For Intervenor: Deborah A. Getzoff, Esquire

David Bressler, Esquire

Fowler, White, et a1.

101 N. Monroe Street

Tallahassee, FL 32301

STATEMENT OF THE ISSUES

Whether Cubic Western has standing to bring the bid challenge involved in

these proceedings.

PRELIMINARY STATEMENT

By Formal Written Protest dated December 6, 1989, Cubic Western Data

(CUBIC), Petitioner, requested an administrative hearing to protest the award of

a contract to Planning Research Corporation (PRC), Intervenor, based upon

Request for Proposals No. RFP-DOT-88-01. This Petition was forwarded to the

Division of Administrative Hearings by the Department of Transportation (DOT),

Respondent's, letter dated December 1, 1989, with a request that this matter be

treated as a bid protest. On December 19, 1989, a Notice of Hearing was issued

scheduling this case for hearing on January 3, 1990.

On December 19, 1989, DOT filed a Motion to Dismiss Formal Written Protest,

Motion in Limine, Motion for Attorney's Fees and Motion to Expedite. By Motion

to Intervene dated December 20, 1989, PRC moved to intervene in these

proceedings, joined in DOT's Motion to Dismiss and requested oral argument. The

hearing to consider these Motions was held December 27, 1989. All Motions,

except the Motion to Dismiss, are the subject of a separate order.

FINDINGS OF FACT

1. On or about March 31, 1989, CUBIC submitted a Proposal in response to

DOT RFP-DOT-88-01 for a toll collection system for Florida's Turnpike.

2. After reviewing this proposal, DOT determined CUBIC's proposal was

nonresponsive to the RFP, and on May 18, 1989, advised CUBIC of the rejection of

its proposal and of CUBIC's right to challenge this determination by filing a

petition for administrative hearing. CUBIC timely filed a Formal Written

Protest dated June 5, 1989 requesting an administrative hearing challenging this

agency action. This protest was forwarded to the Division of Administrative

Hearings by DOT order of July 20, 1989, and the case was scheduled to be heard

August 4, 1989.

3. On July 31, 1989, CUBIC filed a Notice of Voluntary Dismissal. The

Division of Administrative Hearings entered an ORDER OF DISMISSAL closing the

DOAH file and returning the matter to DOT for final disposition. DOT entered a

Final Order dismissing CUBIC's bid protest.

4. On October 5, 1989, CUBIC filed an Amended Complaint in the Circuit

Court, Second Judicial Circuit, in and for Leon County, against DOT, which had

been consolidated with an action filed by PRC against DOT as both cases stemmed

from action taken by DOT on RFP-DOT-88-01. In this civil action, CUBIC seeks

return of the RFP it submitted to DOT. In this civil complaint CUBIC asserts

that since its proposal had been rejected by DOT as nonresponsive to the RFP, at

that point in time "DOT and the public had no further interest in CUBIC's

Proposal, and there is no public interest to be served by disclosing the CUBIC

Proposal at this time."

5. On November 21, 1989, DOT posted notice of its intended award of the

contract based on the RFP to PRC. On December 6, 1989, CUBIC timely filed the

Formal Written Protest that is the subject of this Motion.

CONCLUSIONS OF LAW

6. The Division of Administrative Hearings has jurisdiction over the

parties to, and the subject matter of, these proceedings.

7. Respondent relies on Rule 14-25.024(2), Florida Administrative Code, to

support its standing to bring this action. That rule provides:

(1) Any person adversely affected by the

intended decision of the Department to

award a contract or to reject all bids

shall file a notice of protest, in writing,

within 72 hours after the posting of the

bid tabulations or within 72 hours after

receipt of the notice of intended decision

if notice is given by certified mail or

express delivery, and shall file a formal

written protest and bond within ten days

after filing the notice of protest. The

formal written protest shall state with

particularity the facts and law upon which

the protest is based.

8. When CUBIC was notified that DOT had determined its proposal to be

nonresponsive to the RFP, CUBIC was given a window of opportunity to challenge

this determination. Had CUBIC failed to do so, that determination would have

become final agency action for which CUBIC's only redress would be an appeal to

the court of appeals. However, CUBIC duly filed a Written Formal Protest to

DOT's proposed action of declaring its response to the RFP to be nonresponsive.

This protest was forwarded to DOAH, and was duly scheduled to be heard. Before

the scheduled hearing, CUBIC filed a Voluntary Dismissal of its protest.

Neither DOAH nor DOT had any recourse but to accept CUBIC's voluntary dismissal.

This resulted in DOT's Final Order of August 2, 1989, completely dismissing

CUBIC as an interested party in DOT-RFP-88-01.

9. As a result of those proceedings, CUBIC is collaterally estopped from

bringing what is essentially the same action a second time. Since its prior

Formal Protest went to final order, this order estops CUBIC from bringing the

same action a second time. This is estoppel by judgment. It can also be

concluded that CUBIC's challenge has already been adjudicated, and further

proceedings to reconsider the same issues are barred by the doctrine of res

judicata. Court decisions regarding an agency's position at this juncture hold

the agency is without jurisdiction to consider the petition. See Humana of

Florida Inc. v. DHRS, 500 So.2d 186 (Fla. 1st DCA 1986); RHPC Inc. v. DHRS, 509

So.2d 1267 (F1a. 1st DCA 1987).

10. CUBIC, however, contends that the language of Rule 14- 25.04 above-

quoted provides a point of entry to challenge the bid proceedings as that

language includes "any person adversely affected by the intended decision," and

CUBIC is sorely affected.

11. To be a person adversely affected by an agency's action or proposed

action, the minimal requirement of standing--injury and interest in redress--

must be met. Florida Wildlife Federation v. Dept. of Environmental Regulation,

390 So.2d 64 (Fla. 1980)

12. Rule 14-25.024 is essentially a paraphrase of Section 120.52(12),

Florida Statutes, which defines "party" to mean

(b) Any other person who, as a matter of

constitutional right, provision of statute,

or provision of agency regulation is entitled

to participate in whole or in part in the

proceeding, or whose substantial interests

will be affected by proposed agency action

(underlining added)

13. CUBIC does not contend that there are statutes that accord it

standing, other than as one whose substantial interests are affected by DOT's

action.

14. After quoting this Section 120.52 provision, the court in Agrico

Chemical Co. v. DER, 406 So.2d 480, 482 (Fla. 2nd DOA 1981) held:

We believe that before one can be considered

to have a substantial interest in the out-

come of the proceeding he must show (1) that

he will suffer injury in fact which is of

sufficient immediancy to entitle him to a

Section 120.57 hearing, and (2) that his

substantial interest is of a type or nature

which the proceeding is designed to protect.

The first aspect of the test deals with the

degree of injury. The second deals with the

nature of the injury.

15. Preston Carroll Company Inc. v. Florida Keys Aqueduct Authority, 400

So.2d 524 (Fla. 3rd DCA 1981), involved the standing of an unsuccessful bidder

to challenge the bid award to the lowest responsive bidder. The court found

that Preston Carroll was not the second low bidder, but the third low bidder who

did not have standing to challenge the award of the contract. Since "Preston

Carroll as third low bidder was unable to demonstrate that it was substantially

affected; it therefore lacked standing to protest the award of the contract to

another bidder." Id. at 525.

16. CUBIC does not even attain the status of third low bidder. Instead,

when the decision became final that CUBIC's response to the RFP was

nonresponsive, CUBIC became a "no bidder." As such, it does not have standing

to challenge the award of the contract to PRC.

17. Since collateral estoppel or estoppel by judgment normally arises only

following an adjudicatory proceeding, and none was held in the initial Formal

Protest, those particular doctrines may not apply in this case. However, in

order to challenge the decision that its proposal to the RFP was nonresponsive,

CUBIC must timely file such a challenge. Once it dismissed the timely filed

protest, and the agency entered a final order, the time for filing a protest had

long since passed, and CUBIC cannot timely file a second protest to challenge

DOT's decision that its proposal was nonresponsive. Cf. U. S. Service

Industries-Florida v. Dept. of Health and Rehabilitative Services, 385 So.2d

1147 (Fla. 1st DCA 1980). Here CUBIC was afforded clear point of entry to

challenge the decision of DOT that its proposal was nonresponsive, it took that

point of entry, and thereafter voluntarily dismissed the challenge. At that

time, the DOT decision of nonresponsiveness became final, and DOT is without

jurisdiction to consider this latest protest.

18. From the foregoing, it is concluded that Cubic Western Data has failed

to show that it is a person adversely affected by the intended decision of DOT

to award a contract to Planning Research Corporation, and is without standing to

challenge the award of that contract.

RECOMMENDATION

It is recommended that the Formal Written Protest dated December 6, 1989,

submitted by Cubic Western Data, be dismissed.

ENTERED this 2nd day of January 1990, in Tallahassee, Florida.

_________________________

K. N. AYERS

Hearing Officer

Division of Administrative Hearings

The Desoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of January, 1990.

COPIES FURNISHED:

Frank A. Shepherd, Esquire

Gernard M. Kouri, Esquire Thomas H. Bateman, 111

Kimbrell and Hamann General Counsel

Suite 900, Brickell Center Department of Transportation

799 Brickell Plaza 562 Haydon Burns Building

Miami, FL 33131-2805 Tallahassee, FL 32399-0450

Robert Daniti, Esquire Ben G. Watts

Department of Transportation Secretary

Haydon Burns Building, MS 58 Department of Transportation

Tallahassee, FL 32399-0458 Haydon Burns Building

605 Suwannee Street

Deborah A. Getzoff, Esquire Tallahassee, FL 32399-0450

David Bressler, Esquire

Fowler, White, et al.

101 N. Monroe Street

Tallahassee, FL 32301

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CUBIC WESTERN DATA, )

)

Petitioner, )

)

vs. ) CASE NO. 89-6926BID

)

DEPARTMENT OF TRANSPORTATION )

)

Respondent. )

and )

)

PLANNING RESEARCH CORPORATION, )

)

Intervenor. )

_________________________________)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Hearing Officer, K. N. Ayers, held a hearing on January 8, 1990, at

Tallahassee, Florida, to consider Petitioner's and Intervenor's Motions for

attorney's fees in this matter.

APPEARANCES

For Petitioner: Frank A. Shepherd, Esquire

Gerard M. Kouri, Jr., Esquire

Suite 900 Brickell Centre

799 Brickell Plaza

Miami, FL 33131-2805

For Respondent: Robert P. Daniti, Esquire

605 Suwannee street, MS 58

Tallahassee, FL 32399-0458

For Intervenor: Deborah A. Getzoff, Esquire

101 N. Monroe Street

Tallahassee, FL 32301

STATEMENT OF THE ISSUES

Whether Respondent and Intervenor are entitled to attorney's fees and costs

arising out of Petitioner's challenge to the award of contract to Planning

Research Corporation (PRC).

PRELIMINARY STATEMENT

This is the final stage at the administration hearing level of the

proceedings which followed Petitioner's challenge to the award of bid to PRC.

Within the time prescribed by the Department of Transportation (DOT) rule, Cubic

Western Data (CUBIC) on December 6, 1989, filed a petition to protest the award

of a contract to PRC based upon Request for Proposals No. RFP-DOT-88-01.

Concurrently with forwarding this Petition to the Division of Administrative

Hearings (DOAH) for hearing, DOT also filed a Motion to Dismiss and Motion for

Attorney's Fees and Costs. Subsequent thereto, PRC moved to intervene and

joined in DOT's Motion to Dismiss and Motion for Attorney's Feed and Costs On

December 27, 1989, a hearing was held to consider these Motions. At this

hearing, the Motion to intervene and the Motion to Dismiss were granted, but the

ruling on the Motion for Attorney's Fees and Costs was reserved. By Recommended

Order dated January 2, 1990, the recommendation to dismiss Petitioner's petition

challenging the award of contract to PRC was entered. In this Recommended Order

it was determined that CUBIC did not have standing to challenge the award of

contract to PRC.

At the hearing on January 8, 1990, Respondent called one witness,

Intervenor called one witness and 9 exhibits were admitted into evidence. The

only factual dispute involves the hours billed by Intervenor.

Briefs have been submitted by the Parties and have been fully considered in

the preparation of this Order.

FINDINGS OF FACT

1. On or about March 31, 1989, CUBIC submitted a Proposal in response to

DOT RFP-DOT-88-01 for a toll collection system for Florida's Turnpike.

2. After reviewing this Proposal, DOT determined that CUBIC's proposal was

non-responsive and advised CUBIC of the rejection of its Proposal and of CUBIC's

right to challenge this determination by filing a petition for administrative

hearing. CUBIC timely filed a Formal Written Protest dated June 5, 1989,

requesting an administrative hearing challenging this agency action. This

protest was forwarded to the Division of Administrative Hearings by DOT letter

dated July 20, 1989, and the case was scheduled to be heard August 4, 1989.

3. On July 31, 1989, CUBIC filed a Notice of Voluntary Dismissal. The

Division of Administrative Hearings entered an ORDER OF DISMISSAL closing the

DOAH file and returning the matter to DOT for final disposition. DOT entered a

Final Order dismissing CUBIC's challenge to DOT's finding that CUBIC's Proposal

was non-responsive.

4. On November 21, 1989, DOT published Notice of its Intention to Award

Bid on RFP-DOT-88-01 to PRC. Thereafter, deeming itself to be a person

adversely affected by the intended decision of DOT to award the bid to PRC,

CUBIC timely filed a Formal Written Protest dated December 6, 1989. This

Petition seeks to challenge the award of the bid to PRC and contains many of the

allegations in CUBIC's original Petition challenging DOT's finding that CUBIC's

Proposal was non-responsive to the RFP, which was voluntarily dismissed by CUBIC

on July 31, 1989.

5. This Petition was forwarded to DOAH by DOT letter dated December 18,

1989, and was forthwith scheduled for hearing on January 3, 1990.

6. On December 27, 1989, a hearing was held on a Motion to Intervene filed

by PRC and Motions to Dismiss filed by DOT and PRC. This hearing resulted in

granting PRC's Motion to Intervene, and a Recommended Order to dismiss CUBIC's

Petition. A ruling on the Motion for Attorney's Fees and' Costs was reserved

pending this January 8, 1990, hearing.

7. The RFP here considered was to replace the electro- mechanical toll

collecting equipment on the Florida Turnpike with solid state computer

controlled equipment. Presently DOT owns the equipment in use on the old

portion of the Turnpike from Wildwood to Golden Glades and leases the other

equipment now in use from Automatic Toll Systems (ATS), a wholly owned,

subsidiary of CUBIC. For the equipment currently leased from ATS and used on

the Turnpike, the Department pays approximately $470,000 per year.

8. Changing the toll collection system under the RFP is to be done in four

stages with the equipment in use on the old portion of the Turnpike, the first

to be replaced. This is the equipment owned by DOT.

9. The current lease between DOT and ATS empires in 1990, and must be

renegotiated.

10. The final stages of the conversion of toll equipment from

electromagnetic to solid state will be on the sections of the Turnpike on which

DOT leases the equipment from ATS. The annual rental for this equipment to be

converted is approximately $470,000 per year. The total lease costs to DOT for

all equipment it leases from ATS which is used on toll roads including the

Turnpike is approximately $3,000,000 per year. Thus, the loss of revenue to ATS

from this conversion under this RFP is 10-20 percent of its total lease revenues

from DOT.

11. The project calls for completion of the conversion of toll equipment

on the Turnpike during the latter part of 1992. Although the commencement of the

project has been pushed back, DOT is still expecting to complete the project on

schedule.

12. The evidence submitted is insufficient to show CUBIC will obtain any

significant benefit to its leasing program with DOT by any delay caused by these

proceedings. The facts do not demonstrate the Petition under consideration was

filed for an improper purpose.

13. In preparing for the scheduled hearing and the Motions to Dismiss and

for Attorney's Fees, two DOT attorneys over a period between December 4, 1989

and December 27, 1989, spent a total of 27.4 hours. This is reasonable.

14. For similar preparations between December 19, 1989 and December 27,

1989, the Intervenor contends some 94.45 hours was spent by four attorneys.

Thus, in 8 days Intervenor billed more than three times the hours billed by DOT

over a 23 day period. This is unreasonable. If fees are to be awarded,

Intervenor should be allowed, if any, no more chargeable hours than the 27.4

hours claimed by DOT.

15. The hourly rate of $150 for attorneys is reasonable considering the

complexity and urgency of the expected litigation.

16. In view of the disposition of these requests for fees and costs, the

latter remain unaddressed.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has jurisdiction over the

parties to, and the subject matter of, these proceedings.

18. This action is brought pursuant to Section 120.57(1)(b)5, Florida

Statutes, which provides in pertinent part:

. . . All pleadings must be signed . . . .

The signature constitutes a certificate that

. . . to the best of (the Signer's) knowledge

. . .[the pleading) is not interposed for

any improper purposes, such as to harass or

to cause unnecessary delay or for frivolous

purposes or needless increase in the cost of

litigation. If a pleading, motion, or other

paper is signed in violation of these require-

ments, the hearing officer, upon motion or his

own initiative, shall impose upon the person

who signed it, a represented party, or both,

an appropriate sanction, which may include an

order to pay the other party or parties the

amount of the reasonable expenses incurred

because of the filing of the pleading, motion,

or other paper, including a reasonable attorney's

fee.

19. Here the evidence will not support a finding that CUBIC filed the

Petition for Formal Hearing to harass or to cause unnecessary delay in

converting the toll collecting devices on the Turnpike. The third and fourth

alternatives for which costs including attorney's fees may be assessed are for

frivolous purposes or needless increase in the cost of litigation. Here no

evidence was submitted to support a finding that the Petition was filed to

needlessly increase the cost of litigation. This leaves only the third

alternative, viz., that the pleading was frivolous. No case has been cited in

the excellent briefs submitted by the Parties where a Florida court has defined

the word frivolous in the context of this statute.

20. In resolving this issue, it is appropriate to start with the

proposition that the award of attorney's fees is in derogation of the common law

and that statutes allowing for the award of such fees should be strictly

construed. Sunbeam Enterprises, Inc. v. Uptheqrove, 316 So.2d 34, 37 (Fla.

1975). This is also referred to as the "American rule" in that "in the United

States, the prevailing litigant is ordinarily not entitled to collect a

reasonable attorney's fee from the loser." Alyeska Pipeline Service Co. v.

Wilderness society, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed 141

(1975); and each party generally pays their own attorney'S fees unless expressed

statutory authorization exists to the contrary. Hartman v. Hallmark Cards,

Inc., 833 F.2d 117, 122 (8th Cir. 1987).

21. An exception to this rule evolved under the inherent power of the

courts to supervise and control their own proceedings which permits the court to

award a reasonable attorneys' fee to the prevailing party when the losing party

has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons . . .

." F. D. Rich Co. Inc. v. United States ex rel Industrial Lumber Co. Inc.,

417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed 2d 703 (1974). An inherent

power award may be imposed either for commencing or for continuing an action in

bad faith, vexatiously, wantonly, or for oppressive reasons. Oliveri v.

Thompson et al, 803 F.2d 1265, 1272 (2nd Cir. 1986:.

22. Florida statutes provide for awarding of attorney's fees in Sections

57.105, 57.111, 120.57(1)(b)5 and 10. Section 57.105 provides in pertinent

part:

The court shall award a reasonable attorney's

fee to be paid to the prevailing party in equal

amounts by the losing party and the losing

party's attorney in any civil action in which

the court finds there was a complete absence of

a justiciable issue of either law or fact raised

by the complaint or defense of the losing party:

Section 57.111 provides in pertinent part:

(4)(a) Unless otherwise provided by law, and

award of attorney's fees and costs shall be,

made to a prevailing small business party in

any adjudicatory proceeding or administrative

proceeding pursuant to chapter 120 initiated

by a state agency, unless the actions of the

agency were substantially justified or special

circumstances exist which would make the award

unjust.

23. What is now Section 120.57(1)(b)10 was earlier Section 120.57(1)(b)9

which provided in pertinent part:

In the event a court reverses an agency's order,

the court in its discretion may award

fees and costs to the aggrieved prevailing

party.

This provision was noted in Jess Parrish Hospital v. PERC, 364 So.2d 777,

784, 785 (Fla. 1st DCA 1978), where the court stated:

While Section 120.57(1)(b)9 does not at

present impose any requirement of bad faith

or maliciousness as a condition to an award

[of attorney's fees] we would be reluctant

to impose fees and costs against an agency

if, for example, its order was reversed only

because it had erroneously interpreted a

provision of law or the agency's action

depended upon a finding of fact which was

not supported by competent, substantial

evidence in the record.

[W]e conclude that an agency's action may

more often be subject to the harsher sanctions

of fees and costs if either the fairness or

the proceedings or the correctness of the

action was impaired by material error in

procedure or by failure to follow prescribed

procedure. * * * Stated in another way,

an agency which does not "conform to and act

consistently with the authority delegated"

to it, Griffin v. United States, supra, at

1069, may be answerable to a prevailing party

in costs and fees.

24. This section relating to attorney's fees and costs on appeal has been

amended and, as amended, is now Section 120.57(1)(b)10. The pertinent part

thereof now provides:

When there is an appeal, the court in its

discretion may award reasonable attorney's

fees and costs to the prevailing party if

the court finds the appeal was frivolous,

meritless, or an abuse of the appellate

process or that the agency action which

precipitated the appeal was a gross abuse

of the agency's discretion.

25. These two provisions are cited merely to show that statutory

provisions which derogate from the common law are strictly construed, and the

Legislature obviously recognized the potential problems with Section

120.57(1)(b)9.

26. Of greater help in determining whether the facts here involved require

the imposition of sanctions is to look to federal cases which interpret Rule 11

of the Federal Rules of Civil Procedure from which Section 120.57(l)(b)5 was

derived. That this is so is not only evident by comparing the language of the

rule with the language of the statute, but also the legislative history of

Section 120.57(1)(b)5 confirms this to be the case. See Staff Analysis HB 792

and HB 227, House of Representatives Committee on Governmental Operations and

memo from Paul H. Amundsen to Booter Imhoff, Esquire, dated April 14, 1986.

27. In applying Rule 11, if the district court concludes that the motion,

pleading, or other document was not well grounded in fact or warranted by the

existing law, or was meant to harass, then the court must impose a sanction.

See e.g., Szabo Food Service Inc. v. Canteen Corp., 823 F.2d 1073, 1082 (7th

Cir. 1987). As stated in Brown v. Federation of State Medical Boards of the

United States, 830 F.2d 1429, 1435 (7th Cir. 1987).

Rule 11 contains two grounds for sanctions.

Each ground is concerned with eliminating

abuses in the federal courts. The first

ground is the "frivolous clause. " This

portion of Rule 11 is composed of two

subparts: Whether the party or attorney

made a reasonable inquiry into the facts,

and whether the party or attorney made a

reasonable inquiry into the law. A viola-

tion of either part of the frivolous clause

constitutes a violation of Rule 11.

* * *

To determine whether the attorney in question

made a reasonable inquiry into the law, the

district court should consider: the amount

of time the attorney had to prepare the

document and research the relevant law;

whether the document contained a plausible

view of the law; the complexity of the legal

questions involved; and whether the document

was a good faith effort to extend or modify

the law (citations omitted).

28. Oliveri v. Thompson et al, 803 So.2d 1265, (2nd Cir. 1986), involved

attorney's fees and costs against the attorney and his client who had been

arrested on narcotics charges which charges were dismissed and who filed a civil

action for various infringements resulting from the arrest. During a lengthy

discussion of the applicability of Rule 11, the court stated at P. 1275:

As a final matter we note in imposing

Rule 11 sanctions the court is to avoid

hindsight and resolve all doubts in

favor of the signer. As we stated in

Eastway, rule 11 is violated only when

it is "patently clear that a claim has

absolutely no chance of success" 762

F.2d at 254.

At P. 1278 the court noted:

The district court, however, found the

claim frivolous and sanctionable not on

the merits, but on the ground that since

Oliveri had refused to sign the tendered

waiver, he lacked standing to challenge

its validity. We do not here decide the

issue of standing because it is not before

us; but we note that, like the merits of

the claim, standing to assert it is not

an easy question.

29. To the argument that Rule 11 would inhibit the filing of legal actions

in which they may not succeed, the court in Golden Eagle Distributing Corp. v.

Burroughs Corp., 801 F.2d 1531, 1537 (9th Cir. 1986), stated:

The rule is not intended to chill an

attorney's enthusiasm or creativity in

pursuing factual or legal theories. The

court is expected to avoid the wisdom of

hindsight and should test the signer's

conduct by inquiring what was reasonable

to believe at the time the pleading,

motion, or other paper was submitted.

Later at P. 1538 the court summarized:

We conclude from this review that there is

a dominant theme in the comments made by the

Rule's proponents at the time of its adop-

tion and by its implementers in the court

decisions since its adoption. That theme is

that the Rule discourages wasteful, 1costly

litigation battles by mandating the imposi-

tion of sanctions when a lawyer's position,

after reasonable inquiry, will not support

a reasonable belief that there is a sound

basis in law or in fact for the position

taken. If, judged by an objective standard,

a reasonable basis for the position exists

in both law and in fact at the time that

the position is adopted, then sanctions

should not be imposed. Zaldiver, 780

F.2d at 832; Eastway, 762 F.2d at 254.

30. DOT and PRC base their claim for costs including attorney's fees

largely on RHPC Inc. v. DHRS, 509 So.2d 1267 (Fla. 1st DCA 1987). There RHPC

applied for a certificate of need which DHRS denied, and RHPC filed a request

for a Section 120.57(1), hearing to challenge that denial. Before that case was

heard, RHPC voluntarily dismissed its request for hearing. Subsequently, RHPC

refiled its petition to challenge the denial by DHRS of its application for a

CON. At this time, 1RHPC's window of opportunity to challenge agency action had

long since passed, and the court held DHRS was without jurisdiction to consider

the refiled petition. Standing was not the issue in RHPC; jurisdiction was the

issue.

31. Here CUBIC followed a somewhat similar, but by no means parallel, path

as the one followed by RHPC. CUBIC, when notified that its proposal to the RFP

was nonresponsive, requested a 120.57(1) hearing to challenge that

determination. Before that hearing was held, CUBIC voluntarily dismissed its

petition to challenge the non-responsive decision made by DOT, and DOT entered a

final order that CUBIC's bid was non-responsive.

32. When the announcement was published that PRC had submitted the

successful proposal and that the bid would be awarded to PRC, CUBIC, deeming

itself a party adversely affected by the decision to award the bid to PRC, filed

a petition to challenge that award. The conclusion that CUBIC could bring such

an action stemmed from the language of Rule 14-25.024(2), Florida Administrative

Code, which provides in pertinent part:

Any person adversely affected by the

intended decision by the Department to

award a contract or to reject all bids

shall file a notice of protest, in writing,

within 72 hours after the posting of the

bid tabulations . . . . The formal written

protest shall state with particularity the

facts and law upon which the protest is

based.

33. When CUBIC's formal protest was filed, there was no question regarding

the jurisdiction of DOT to consider this protest. This is where this case

differs from PRHC. In the Recommended Order that the Motion to dismiss CUBIC's

petition be granted because CUBIC lacks standing, I found that although CUBIC

was sorely affected by the intended agency action to award the contract to PRC,

CUBIC was without standing to challenge that determination. As noted by the

court in Oliveri, supra, "standing . . . is not an easy question."

34. Hoover Universal Inc. v. Brockway Imco Inc., 809 F.2d 1039 (4th Cir.

1987), involved a case where the trial court entered a summary judgment in favor

of defendant, but rejected defendant's claim for attorney's fees under Rule 11.

Although the summary judgment was predicated upon Hoover being bound by the

terms of the purchase agreement, nevertheless "objectively [Hoover had] a

glimmer of a chance of prevailing." With a much more difficult standing question

at issue in these proceedings, it can hardly be said CUBIC's position had no

glimmer of a chance to prevail.

35. In Golden Eagle Distributing Corp. v. Burrows et al, 801 F.2d 1531,

1540-41 (9th Cir. 1986), in overturning a lower court's order granting

attorney's fees, `the court noted:

Moreover, Rule 11 does not apply to

the mere making of a frivolous argument.

The Rule permits the imposition of sanc-

tions only when the "pleading, motion,

or other paper" itself is frivolous, not

when one of the arguments in support of

a pleading is frivolous. Nothing in the

language of the Rule or the Advisory

Committee Notes supports the view that

the Rule empowers the district court to

impose sanctions on lawyers simply because

a particular argument or ground for relief

contained in a non-frivolous motion is

found by the district court to be unjustified.

In short, the fact that the court concludes

that one argument or sub-argument in support

of an otherwise valid motion, pleading, or

other paper is unmeritorious does not

warrant a finding that the motion or

pleading is frivolous or that the Rule has

been violated.

36. Other citations from federal cases involving Rule 11 include:

An award of fees under Rule 11 is more like

a sanction for contempt of court than like

a disposition on the merits or even an

award of costs. An award under Rule 11

is a "sanction" for violating a rule of

court. Szabo Food Service Inc. v. Canteen

Corp., 823 F.2d 1073, 1079 (7th Cir. 1987).

Federal appellate courts have power under federal rules to impose sanctions

on a party who brings a "frivolous" appeal. An appeal is deemed "frivolous" when

its disposition is "obvious" and legal arguments are "wholly without merit."

Reliance Ins. Co. v. Sweeny Corporation, Maryland, 792 F.2d 1137, 1138 (D.C.

Cir. 1986).

The standard for testing conduct under Rule 11 is "reasonableness under the

circumstances," an objective standard of good faith. Local 938 v. B. L. Starns

Co. of Fla. et al, 827 F.2d 1454, 1458 (11th Cir. 1987).

Where it is patently clear that a claim has absolutely no chance of success

under the existing precedents, and where no reasonable argument can be advanced

to extend, modify or reverse the law as it stands, Rule 11 has been violated.

Eastway Constr. Corp. v. City of New York, 762 F.2d 243, 254 (2nd Cir. 1985).

The affirmative duty on an attorney to conduct a "reasonable inquiry" into

both the factual and legal basis of any document before signing it does not mean

that an attorney must be correct in his view of the law. A reasonable inquiry

is that amount of examination into the facts and legal research which is

reasonable under the circumstances of the case. Robinson v. Natl. Cash

Register Co., 808 F.2d 1119, 1127 (5th Cir. 1987).

37. From the foregoing, it is concluded that considering the time

constraints involved in challenging the bid award to PRC, the complexity of the

law respecting standing, and the apparently clear language of Rule 14-25.024(2),

Florida Administrative Code, neither CUBIC nor its attorney who signed the

Formal Bid Protest violated Section 120.57(1)(b)5. Accordingly, it is

ORDERED that the Motions for costs, including attorney's fees filed by DOT

and PRC, be dismissed.

DONE and ORDERED this 25th day of January, 1990, in Tallahassee, Florida.

__________________________

K. N. AYERS

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 25 day of January, 1990.

COPIES FURNISHED:

Frank A. Shepherd, Esquire

Gerard M. Kouri, Esquire Thomas H. Batemen, III

Kimbrell and Hamann General Counsel

Suite 900, Brickell Center Department of Transportation

799 Brickell Plaza 562 Haydon Burns Building

Miami, FL 33131-2805 Tallahassee, FL 32399-0450

Robert Daniti, Esquire Ben G. Watts

Department of Transportation Secretary

Haydon Burns Building, MS 58 Department of Transportation

Tallahassee, FL 32399-0458 Haydon Burns Building

605 Suwannee Street

Deborah A. Getzoff, Esquire Tallahassee, FL 32399-0450

David Bressler, Esquire

Fowler, White, et al.

101 N. Monroe Street

Tallahassee, FL 32301

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL

REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE

GOVERNED BY THE FLORIDA RULES 6F APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE

COMMENCED BY FILING 9NE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE

DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING

FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR

WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY

RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE

ORDER TO BE "REVIEWED.