Case Number: BC554488    Hearing Date: September 04, 2014    Dept: 82

Westside Transit Partners, a California joint venture partnership,
v.
Los Angeles County Metropolitan Transportation Authority, a California public agency; and Does 1 through 50, inclusive.

Tentative Decision on OSC re PI: Denied

Plaintiff Westside Transit Partners (“WTP”) moves to enjoin Defendant Los Angeles County Metropolitan Transportation Authority (“Metro”) from releasing WTP’s purported confidential, proprietary and trade secret information contained in the Proposal and Best and Final Offer (“BAFO”) provided to Metro. The Proposal and BAFO were submitted in connection with the construction of the purple line subway expansion project in Los Angeles. The Court renders the following decision:

Statement of the Case

On or about September 27, 2012, the Board of Directors (“Board”) for Metro authorized the use of a design-build process to complete the final design and construction of the Westside Subway Extension Project, Section 1, Design/Build, Contract No. C1045 (“Project”). Accordingly, Metro solicited proposals (“Proposal”) for a contract for the 3.92 mile dual track heavy rail system with three new stations as part of the Los Angeles County Metropolitan Transportation Authority Measure R Program. (McDonald Decl., ¶6; Warrensford Decl., ¶2).

Metro’s Board authorized the procurement under Public Contract Code section 20209.5, et seq., which allows for the negotiation and award of a design-build contract to a responsible proposer whose proposal is determined to be the best value to Metro. (McDonald Decl., ¶7). The procurement of proposals for the Project was to be governed in part by Metro’s Procurement Policy Manual dated March 1, 2006 (“Policy Manual”). (McDonald Decl., ¶8, Exhibit A). Dragados Astaldi Southland (“DAS”) also provides a copy of an unsigned confidentiality agreement and stipend agreement in relation to the Project. (White Decl., ¶4 & 7, Exhibits C & F).

Metro issued a Request for Qualifications (“RFQ”) for the Project on November 30, 2012, and advertised the Request for Proposals (“RFP”) on June 10, 2013. (McDonald Decl., ¶9; Warrensford Decl., ¶3; White Decl., ¶2, Exhibit A). Metro, as part of the RFP process, prepared and distributed to its evaluation team a document entitled “Proposal Evaluation Team Guide.” (McDonald Decl., ¶12, Exhibit B). Metro received proposals from Skanska-Traylor-Shea (“STS”), WTP, and DAS. (Warrensford Decl., ¶4).

On May 2, 2014, Metro issued amendment number 6 to the RFP, requesting that STS, WTP, and DAS each submit BAFOs on or before May 30, 2014. (Warrensford Decl., ¶¶5-6). Bruce Warrensford, Director of Contract Administration for Metro, declares that on July 7, 2014, Metro staff concluded negotiations with the proposers by issuing its notice of intent to award the Project to STS. (Warrensford Decl., ¶8; White Decl., ¶8). On July 17, 2014, Metro issued a revised recommendation regarding the award of the contract for the Project. (White Decl., ¶8, Exhibit G).

On July 22, 2014, WTP submitted a protest with Metro regarding the Project, along with a supporting affidavit. (Dunn Decl., ¶¶2-3, Exhibits 1-2). WTP then submitted a supplement to its protest on July 29, 2014, along with a supporting affidavit. (Dunn Decl., ¶¶4-5, Exhibits 3-4). DAS also submitted a protest on July 22, 2014. (White Decl., ¶11).

A Metro Board meeting was held on July 24, 2014 to review and vote on the Metro staff recommendation to award the Project to STS. (McDonald Decl., ¶13, Exhibit C; White Decl., ¶12). The Metro Board voted to approve the award of the Project to STS. (White Decl., ¶14, Exhibit K).

On August 7, 2014, WTP received a letter from Metro stating that Metro had received a California Public Records Act request to obtain a copy of the proposal WTP submitted in response to the RFP for the Project. The August 7, 2014 letter stated Metro intended to release WTP’s proposals on August 15, 2014 unless WTP obtained a court order precluding Metro from releasing the documents. (McDonald Decl., ¶15, Exhibit D; Dunn Decl., ¶6). WTP has not authorized the release of this information. (McDonald Decl., ¶21; Morrow Decl., ¶4, Exhibit C).

Procedural History

On August 12, 2014, Plaintiff WTP filed a complaint for declaratory relief and injunctive relief against Defendant Metro.

On August 14, 2014, WTP filed a first amended complaint.

On August 15, 2014, the Court granted WTP’s ex parte application for TRO and OSC re preliminary injunction, setting the OSC for September 4, 2014. The moving papers were ordered served on Defendants and counsel for the entities that made the certifying records act request by August 18, 2014, opposition was to be filed by August 27, 2014, and reply was to be filed by August 29, 2014.

On August 19, 2014, Skanska-Traylor-Shea (“STS”) filed a Notice of Related case regarding case no. BC555067, Skanska-Traylor-Shea v. Los Angeles County Metropolitan Transportation Authority.

On August 21, 2014, the Court granted Dragados Astaldi Southland’s (“DAS”) ex parte application for leave to intervene in the action.

On August 22, 2014, DAS filed a complaint in intervention pursuant to CCP § 387 stating a cause of action for declaratory relief.

On August 27, 2014, Metro and DAS filed timely oppositions.

On August 29, 2014, WTP filed a timely Reply.
The matter was argued and submitted on September 4, 2014.

Summary of Applicable Law

The purpose of a preliminary injunction is to preserve the status quo pending a decision on the merits. Major v. Miraverde Homeowners Ass’n. (1992) 7 Cal.App.4th 618, 623. A plaintiff seeking injunctive relief must show the absence of an adequate damages remedy at law. CCP §526(a)(4). In determining whether to issue a preliminary injunction, the trial court is to consider the likelihood that the plaintiff will prevail on the merits at trial and to weigh the interim harm to the plaintiff if the injunction is denied against the harm to the defendant if the injunction is granted. King v. Meese (1987) 43 Cal. 3d 1217, 1226. A party seeking an injunction must demonstrate a reasonable probability of success on the merits. IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 73-74. “In seeking a preliminary injunction, [the party seeking the injunction] bore the burden of demonstrating both likely success on the merits and the occurrence of irreparable harm.” Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571; Citizens for Better Streets v. Board of Sup’rs of City and County (2004) 117 Cal.App.4th 1, 6.

Analysis

WTP asserts it is likely to prevail on the merits of its claims for declaratory relief and injunctive relief because the Proposal and BAFO were submitted with an expectation of confidentiality under state law and Metro’s own policies. (Ex Parte Application, pp.16-17).

Pub. Contr. Code § 20209.7(d)(2), (d)(3)(D), and (e)(2) states, in relevant part:

“Design-build projects shall progress in a three-step process, as follows: . . . . (d) . . . . (2) Each RFP shall invite interested parties to submit competitive sealed proposals in the manner prescribed by the contracting agency. . . . (3) Each RFP shall include a section identifying and describing: . . . . (D) If the contracting agency wishes to reserve the right to hold discussions or negotiations with offerors, it shall specify the same in the RFP and shall publish separately or incorporate into the RFP applicable rules and procedures to be observed by the agency to ensure that any discussions or negotiations are conducted in a fair and impartial manner. . . . (e) . . . . (2) The information required pursuant to this subdivision shall be verified under oath by the entity and its members in the manner in which civil pleadings in civil actions are verified. Information that is not a public record pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) shall not be open to public inspection.”

(emphasis added).

As a preliminary matter, WTP argues that Metro does not own the Proposals and BAFOs, and, therefore, these records are not “Public Records.” (Ex Parte Application, p.5). Metro previously took this position in letters it sent to WTP when it refused to release documents to WTP. (Morrow Decl., ¶2, Exhibits A & B). One such letter relates to the Project at issue, is dated July 25, 2014, and states: “The [STS] Joint Venture DBE Contracting Plan is part of the proposal submitted to Metro in response to RFP No. C1045. Therefore it is exempt from disclosure as this contract has not yet been fully executed and awarded” and “. . . please be advised that until all stipends are paid, [Metro] does not own these proposals. Therefore, as they are not public records of the agency, [Metro] is not in a position to release the proposals under the Public Records Act.” (Morrow Decl., ¶2, Exhibit A). An undated letter regarding another Metro project (C0980) states: “. . . the records you have requested are exempt from disclosure as this contract has not yet been fully executed and awarded” and “. . . please be advised that until all stipends are paid, [Metro] does not own these proposals.” (Morrow Decl., ¶2, Exhibit B). However, in opposition to the instant application, Metro takes the opposite position, arguing the proposals are public records. (Opposition, pp.2-3).

Additionally, Bruce Warrensford, Director of Contract Administration for Metro, declares that on July 7, 2014, Metro staff concluded negotiations with the proposers by issuing its notice of intent to award the Project to STS (Warrensford Decl., ¶8), which seems contrary to Metro’s July 25, 2014 letter stating “[t]he [STS] Joint Venture DBE Contracting Plan is part of the proposal submitted to Metro in response to RFP No. C1045. Therefore it is exempt from disclosure as this contract has not yet been fully executed and awarded” (Morrow Decl., ¶2, Exhibit A). Regardless of Metro’s shifting position on this issue, the Court makes its own, independent finding regarding whether these documents are public records.

A “public record” is defined, in relevant part, as “. . . any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics. . . .” (Gov. Code § 6252(e)). As explained by the court in Regents of University of California v. Superior Court (2013) 222 Cal.App.4th 383, 399:

“The statute unambiguously states that “ ‘[p]ublic records’ ” include “any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics.” (§ 6252, subd. (e).) Thus, unless the writing is related “to the conduct of the public’s business” and is “prepared, owned, used, or retained by” a public entity, it is not a public record under the CPRA, and its disclosure would not be governed by the Act. No words in this statute suggest that the public entity has an obligation to obtain documents even though it has not prepared, owned, used, or retained them. “ ‘Where the words of the statute are clear, we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history.’ ” [citation omitted] As already discussed, the trial court found that none of the documents sought was prepared, owned, used, or retained by the Regents [of the University of California]. Accordingly, under the plain meaning of the statute, and applying the requirements of Article I, section 3, subdivision (b)(2) of the California Constitution, the Regents did not have to obtain the individual fund information that is the subject of Reuters’ [American LLC] petition . . . .”

Here, contrary to WTP’s arguments (Ex Parte Application, pp.18-19) and unlike in Regents, Metro “used” the WTP Proposal in making a determination as to whom to award the Project. Therefore, the Court finds that the proposals are public records.

Pursuant to the California Public Records Act (“CPRA”):

“Except with respect to public records exempt from disclosure by express provisions of law, each state or local agency, upon a request for a copy of records that reasonably describes an identifiable record or records, shall make the records promptly available to any person upon payment of fees covering direct costs of duplication, or a statutory fee if applicable. Upon request, an exact copy shall be provided unless impracticable to do so.”

(Gov. Code, § 6253(b)). But, under Gov. Code § 6255(a): “The agency shall justify withholding any record by demonstrating that the record in question is exempt under express provisions of this chapter or that on the facts of the particular case the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record.” “The burden of proof is on the proponent of nondisclosure, who must demonstrate a ‘clear overbalance’ on the side of confidentiality.” California State University v. Superior Court (2001) 90 Cal.App.4th 810, 831.

WTP also argues that its “Proposal qualifies as an exemption to the disclosure requirements of Sections 6254 and 6255, and the disclosure and production of WTP’s Proposal will have a chilling effect on contractors’ willingness to submit competitive sealed proposals on this or any future Metro project—thereby defeating the stated purposes of the competitive bid statutes to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate advantageous market place competition” (Ex Parte Application, p.17), citing MCM Const., Inc. v. City & County of San Francisco (1998) 66 Cal.App.4th 359, 369 (“The purpose of requiring governmental entities to open the contracts process to public bidding is to eliminate favoritism, fraud and corruption; avoid misuse of public funds; and stimulate advantageous market place competition.”). The Court disagrees. Here, there is a significant public interest in the disclosure of these documents now that the Project has been awarded to STS. Certainly, the public has a legitimate and substantial interest in scrutinizing the process to ensure that Metro’s decision was not based on political favoritism or some other criteria that do not serve the public.

Further, unlike in Michaelis, Montanari & Johnson v. Superior Court (2006) 38 Cal.4th 1065,
Metro staff concluded negotiations with the proposers by issuing its notice of intent to award the Project to STS. (Warrensford Decl., ¶8; White Decl., ¶8). Indeed, the Metro Procurement Policy Manual defines “Negotiation” as “a procedure that includes the receipt of proposals from offerors. It permits bargaining, and usually affords offerors an opportunity to revise their offer before award of a contract.” (McDonald Decl., ¶8, Exhibit A, p.A-6). On July 17, 2014, Metro issued a revised recommendation regarding the award of the contract for the Project. (White Decl., ¶8, Exhibit G). A Metro Board meeting was held on July 24, 2014 to review and vote on the Metro staff recommendation to award the Project to STS (McDonald Decl., ¶13, Exhibit C; White Decl., ¶12), where the Board voted to approve the award of the Project to STS (White Decl., ¶14, Exhibit K).
WTP also points to Chapter 8.9 of Metro’s Policy Manual (Ex Parte Application, p.17), which states:

“Disclosure And Use Of Information Before Award

A. After receipt of proposals, the information contained in them and the number or identity of offerors shall not be made available to the public or to anyone in the MTA not required to have access to the information in the performance of his or her duties.

B. During the pre-award period of a competitive-proposal procurement, only the Contracting Officer and others specifically authorized may transmit technical or other information and conduct discussions with prospective contractors.

C. A Contracting Officer may release proposals outside the MTA for evaluation, consistent with the following requirements:

1. A written agreement shall be obtained from the outside evaluator that the information contained in the proposal will be used only for evaluation purposes and will not be further disclosed;

2. Any authorized restrictive legends placed on the proposal by the prospective contractor or subcontractor or by the MTA shall be affixed to any reproduction or abstracted information made by the evaluator

3. Proposals will not be released to a person or organization that has or may have a current or prospective business interest.”

(McDonald Decl., ¶8, Exhibit A, p.8-8). However, as pointed out by Metro, the section of the Policy Manual cited by WTP is entitled, in part, “Before Award” and, although that phrase is not defined, this section applies up to the time that Metro issues its Notice of Intent to Award (Warrensfeld Decl., ¶7), which was issued on July 7, 2014 (Warrensfeld Decl., ¶8). In addition, on July 24, 2014, the Metro Board voted to approve the award of the Project to STS. (White Decl., ¶14, Exhibit K).

In any event, WTP fails to show how Metro’s Policy Manual or Proposal Evaluation Team Guide trumps the requirements of disclosure under California Public Records Act. (Ex Parte Application, pp.19-20). “Assurances of confidentiality by the City to the Disposal Company that the date would remain private were not sufficient to convert what was a public record into a private record. [citation omitted] Unless one of the exemptions applies to bar disclosure then the City must yield to its statutory duty that compels disclosure of the data.” San Gabriel Tribune v. Superior Court (1983) 143 Cal.App.3d 762, 775; see also Register Div. of Freedom Newspapers, Inc. v. County of Orange (1984) 158 Cal.App.3d 893, 909.

Finally, WTP argues that its “Proposal contains confidential, proprietary, and trade secret information . . .” (Ex Parte Application, p.5). However, the only evidence offered by WTP that its Proposal contains trade secret information is a declaration from WTP’s counsel, James McDonald, which simply states: “WTP’s Proposal to the RFP for the Project contains proprietary, confidential and trade secret information which was provided by WTP to Metro in reliance upon the confidentiality provision of the Policy Manual, which if released prior to the Award of a Contract for the Project will substantially prejudice WTP and cause irreparable harm.” (McDonald Decl., ¶16). The declaration also states:

“WTP’s Proposal and BAFO were prepared over several months and include unique and proprietary pricing schemes developed for this Project and WTP’s confidential and proprietary construction strategy. WTP and its individual joint venture partners incurred more than $1,500,000 in labor and expenses to investigate and analyze the RFP and Project and to develop and prepare the Proposal and BAFO. As part of preparing its Proposal and BAFO, WTP developed certain construction and constructability strategies unique to this Project that it believes provides the best value for Metro. WTP’s Proposal and BAFO contain confidential and proprietary information concerning how WTP intended to phase the construction work, address the construction of the various Project underground stations, and its means and methods for the tunneling.”

(McDonald Decl., ¶17). McDonald’s conclusory declaration is insufficient to show that the Proposal actually contains trade secret information. In addition, section 20.8 of Metro’s Procurement Policy Manual states: “. . . the bidder or offeror shall conspicuously mark each separate sheet containing proprietary or confidential information . . . .” (White Decl., ¶3, Exhibit B, p.20-7). As such, under section 28, WTP is able to redact proprietary or confidential information from its Proposal.

Disposition

Plaintiff’s request for injunctive relief is DENIED because it has not shown a likelihood of success on the merits or irreparable harm. The temporary restraining order is dissolved and the order to show cause is discharged.

IT IS SO ORDERED.