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Caperton v. Virginia Department of Transportation

United States District Court, W.D. Virginia, Charlottesville Division

September 12, 2016

FRED T. CAPERTON, III, et al., Plaintiffs,


          Hon. Glen E. Conrad Chief United States District Judge.

         Fred Caperton, Thirty Three, Inc., and Appearance Landscaping & Maintenance, Inc. filed this action in the Circuit Court of Culpeper County against the Virginia Department of Transportation ("VDOT") and two VDOT employees, Emmet Heltzel and Angelica Babb, asserting claims under 42 U.S.C. § 1983 and Virginia law. The defendants removed the case to this court on the basis of federal question jurisdiction, and then moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Following a hearing on the defendants' motion, the court dismissed the plaintiffs' federal claims under § 1983 and remanded the state-law claims. The plaintiffs have since filed a motion to amend the judgment and for leave to file an amended complaint. For the reasons that follow, the plaintiffs' motion will be denied.

         Factual Background

         The following facts, taken from the plaintiffs' proposed amended complaint, are accepted as true for purposes of the pending motion. See Hall v. Greystar Mgmt. Servs., L.P., 637 F.App'x 93, 94 (4th Cir. 2016) (citing Ridpath v. Bd. of Governors Marshall Univ.. 447 F.3d 292, 300 n.3 (4th Cir. 2006)).

         Fred Caperton, who resides in Culpeper, Virginia, operates two companies that provide "hauling, site maintenance . . ., winter weather preparation[, ] snow and ice removal, and landscaping" services. Proposed Am. Compl. ¶¶ 9-11. One of those companies, Appearance Landscaping, Inc. ("Appearance"), was formed in January of 2006. The other, Continental Land Development, Inc. ("Continental"), was formed in July of 2006.

         Following its incorporation, Continental successfully bid on a number of contracts with VDOT for the performance of snow removal services. Continental also entered into snow removal equipment agreements ("M-7B Agreements") with VDOT, pursuant to which Continental provided equipment on an on-call basis.

         Continental was awarded snow removal contracts for three routes during the winter of 2013-2014 (the "2013-2014 Route Bid Contracts"). In January of 2014, VDOT personnel complained about the work performed by Continental. That same month, VDOT issued Notices of Contract Deficiencies. Although Continental disputed the validity of VDOT's complaints and attempted to remedy the alleged deficiencies, VDOT issued Notices of Contract Termination to Continental on February 10 and 11, 2014, which terminated two of the 2013-2014 Route Bid Contracts for cause and the third for convenience. Continental received no further communication from VDOT after these notices were issued.

         In March of 2014, Caperton's wife, Lauren Caperton ("Lauren"), formed Thirty Three, Inc. ("Thirty Three") for the purpose of providing hauling, site maintenance, winter weather preparation, and snow and ice removal services. A few months later, Heltzel, a state maintenance engineer for VDOT, "issued internal correspondence to VDOT Maintenance Managers, Infrastructure Managers, and Assistant District Administrators [advising] that VDOT would not do business with either Continental Land Development, Inc. or Thirty Three, Inc., " and that the companies '"had been placed in default from the competitive bid process.'" Id. ¶ 33. Neither Caperton nor his wife was notified of this decision.

         On September 17, 2014, Caperton submitted a proposed M-7B Agreement to VDOT on behalf of Thirty Three. Twelve days later, Caperton submitted a proposed M-7B Agreement to VDOT on behalf of Appearance. The plaintiffs allege that Babb, a procurement manager for VDOT, "instructed other VDOT personnel not to accept any M-7B Agreement proposals signed by Mr. Caperton, or any other agreements indicating that any portion of the work would be performed by Mr. Caperton or by vehicles or equipment owned by Mr. Caperton." Id. ¶ 43.

         After Thirty Three's proposed M-7B Agreement was rejected by VDOT, Lauren emailed Babb and requested an explanation. In.response, Babb indicated that "VDOT cannot and does not prohibit any vendor from submitting a bid." Id. ¶ 46 (internal quotation marks omitted). Babb went on to indicate that the reason Thirty Three's M-7B Agreement was rejected was because of Caperton's association with the business.

         On October 1, 2014, Caperton emailed a VDOT contracts administrator and asked whether his vehicles could be leased to other vendors that perform snow removal services for VDOT. In response, a VDOT infrastructure manager advised Caperton that "the decision not to accept a proposal from . . . Caperton was based on an investigation of the bidder's qualifications." Id. ¶ 49.

         On October 10, 2014, counsel for Thirty Three sent Babb a letter rebutting the "facts and findings" in her earlier correspondence. Id. ¶ 50. Babb sent a response to counsel on October 20, 2014. In her response, Babb indicated that Thirty Three "had been determined a Non-Responsible Bidder by VDOT as that term is used in the [Virginia Public Procurement Act (VPPA)], specifically finding that Thirty Three, Inc. 'lacks business integrity and reliability that will ensure good faith performance.'" Id. ¶ 51. The plaintiffs allege that, in making the non-responsibility determination, VDOT did not comply with the applicable provisions of the VPPA. See id ¶ 52 (citing Va. Code § 2.2-4359).

         The plaintiffs also allege that "[a] finding of 'non-responsibility' or 'ineligibility' by a Commonwealth purchasing entity may affect a bidder's qualification to bid on other public procurement contracts in the future under the [Virginia Vendor's] Manual." Id. ¶ 40. The plaintiffs emphasize that the Vendor's Manual, which is "published by the Commonwealth's Department of General Services and utilized by VDOT and other Virginia public bodies and agencies, specifically requires the consideration of a vendor's past performance, " and that "the VPPA permits inspection of a vendor's 'record of integrity' as [a] factor[] in determining whether a bidder is a 'responsible bidder.'" Id. at 64. Consequently, the plaintiffs allege that "[t]he stain of a determination of non-responsibility may likely follow both Caperton and Thirty Three as Commonwealth agency procurers subject to the Virginia Vendor's Manual are required to investigate into past non-responsibility and eligibility status." Id. at 65.

         Procedural ...

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