XTL- NH, Inc. New Hampshire State Liquor Commission. No CV-119 ORDER

Transcription

1 MERRIMACK, SS SUPERIOR COURT XTL- NH, Inc. v. New Hampshire State Liquor Commission No CV-119 ORDER The Plaintiff, XTL-NH, Inc. ( XTL ), a disappointed bidder for a warehousing contract, has brought an action against the Defendant State of New Hampshire Liquor Commission ( Commission ), asserting a number of claims based upon its view that the Commission failed to comply with the New Hampshire competitive bidding statutes. The Commission has filed a motion in limine to exclude the testimony of XTL s two proposed expert witnesses, Christopher R. Yukins ( Yukins ) and Gary F. Ankabrandt ( Ankabrandt ). In response, XTL objects. For the reasons stated in this Order, the Motion is GRANTED IN PART and DENIED IN PART. Yukins and Ankabrandt may not testify regarding their opinions that based upon their review of facts, the bidding process did not comply with New Hampshire law, nor may they testify as to the appropriate remedy that would be afforded under New Hampshire law if the Court found that the bidding process violated RSA 21-I:22-a and RSA 21-I:22-b. They may testify to provide the Court with general background regarding

2 the process of competitive bidding. I Yukins and Ankabrandt are experienced lawyers who have had distinguished careers in the legal specialty of government contracts. Yukins is a Professor of Government Contract Law and Co-Director of the Government Procurement Law Program at George Washington University Law School in Washington, D.C. He has authored many publications involving government procurement contracts, has served on the editorial board of a number of legal journals, and is of counsel to a major Washington law firm with a significant federal procurement practice. Prior to that time, he was an equity partner in another national firm with a federal government contracts practice. He states that for over 20 years, both in private practice and as an attorney for the United States Department of Justice, he has worked with the issues of procurement law presented in this case. Ankabrandt served as a government contracts attorney with the Pennsylvania Department of General Services for 33 years. During that period of time, he provided legal assistance and authored dozens of bid protest decisions involving procurement of supplies and services for the Pennsylvania Department of General Services. He has been a speaker at national conferences and continuing legal education programs, and he has authored several articles on government procurement. Both lawyers have provided expert reports, which are appended to the Commission s motion in limine. Yukins report explains that the process the Commission employed was an RFP process and not a sealed bidding process and describes the difference between them. (Yukins Report at 14 15, 1 5.) While he does not reference the New Hampshire statutes governing competitive bidding, RSA 21-I:22-a and RSA 21-I:22-b, Yukins concludes that, - 2 -

3 based on his review of the facts, the Commission s actions appeared to show favoritism towards Exel. (Id. at 15, 6.) He further opines that the failure of the Commission and its staff to follow basic principles of competitive negotiation means that the final award does not reflect common accepted practices and competitive negotiation, and also raises serious issues regarding integrity, transparency and competition. (Id. at 16, 10.) He further concludes that where procurement has been so deeply tainted by procedural failures in the competitive process, the appropriate remedy is to award the contract to the offeror with the best value proposal, which, in this case, was XTL. (Id. at 16, 11.) Ankabrandt s expert report similarly explains the background and principles of competitive bidding, and then renders a number of opinions based upon his understanding of the facts and the law. He opines that the Commission violated principles of competitive bidding when it amended the RFP and concludes that the amendment was a clear attempt to correct an error made by the NHSLC months earlier when the amendments should have been issued before the proposal submission date. (Ankbrandt Report at 11.) He further opines that since Exel s proposal did not conform in all material aspects to the RFP, it should have been rejected. (Id. at 12.) He concludes, based upon his review and understanding of the facts, that Exel was treated preferentially during the Phase I and Phase II evaluation processes. (Id. at 16.) He summarizes: (Id. at 22.) For all of the reasons above, and in my opinion, based on my significant knowledge, training and experience, the contract was awarded to Exel in clear violation of competitive bidding principles and standards. Exel should have been disqualified for a deficient, non-conforming proposal, and XTL- NH, as the highest scored bidder that met all of the RFP s terms requirements, and conditions, should have been awarded the contract

4 II In New Hampshire, expert testimony is admissible so long as it will aid the trier of fact in understanding the evidence or making a decision on a pertinent issue. N.H. R. Evid. 702; Freeman v. Scahill, 92 N.H. 471, 471 (1943); Rau v. First Nat. Stores, 97 N.H. 490, 495 (1952); State v. Gourlay, 148 N.H. 75, 81 (2002). The admissibility of expert testimony in New Hampshire is within the discretion of this Court. Rau, 97 N.H. at 495; Johnston by Johnston v. Lynch, 133 N.H. 79, 80 (1990) (citation omitted). The threshold question is whether the witness, by either study or experience, has knowledge on the subject matter of his or her testimony so superior to that of people in general concerning it that his or her views will probably assist the triers of fact. Gourlay, 148 N.H. at 81. Whether the opinion testimony bears on an ultimate issue is of no moment; there is no doubt that, in the appropriate circumstances, New Hampshire Rule of Evidence 702 allows testimony regarding the ultimate issue on a case to be submitted. See Johnston, 133 N.H. at 80. However, a witness, expert or otherwise, may not testify to conclusions of law. Saltzman v. Saltzman, 124 N.H. 515, 524 (1984). The New Hampshire Supreme Court, although only addressing the issue of a police officer testifying on the issues of fault and causation, has stated: [A] witness may not testify to an opinion or conclusion which contains matters of law. On mixed questions of law and fact the jury, after being properly instructed by the court as to the law, can draw the required conclusion from the facts as well as can the expert, so that the opinion of the witness, be he expert or layman, is superfluous in the sense that it will be of no assistance to the jury. Id. at (citation and quotation omitted). Where the evidence available to the jury is the same evidence the expert uses to render an opinion about a conclusion based in - 4 -

5 law, the expert s testimony will not assist the jurors in their search for the truth and the opinion must be excluded. See Johnston, 133 N.H. at 88. This principle is settled law in the United States. For example, the United States Court of Appeals for the First Circuit stated in Nieves-Villanueva v. Soto-Rivera: It is black-letter law that [i]t is not for witnesses to instruct the jury as to applicable principles of law, but for the judge. At least seven circuit courts have held that the Federal Rules of Evidence prohibit such testimony, and we now join them as to the general rule. 133 F.3d 92, 99 (1st Cir 1997) (internal citations and quotations omitted). American courts generally hold that while an expert may testify to questions of foreign law as a question of fact, U.S. v. Pre-Columbian Artifacts, 845 F. Supp. 544, 546 (N.D. Ill. 1993), allowing an expert to testify to pure questions of law is inconsistent with the role of the judge and jury, and is considered reversible error. See, e.g., Greenberg Traurig of New York, P.C. v. Moody, 161 S.W.3d 56, (Tex. Ct. App. 2005). A concern expressed in some cases is that if an expert witness is allowed to give expert testimony on legal issues, the danger is that the jury may think that the expert in the particular branch of the law knows more than the judge surely an impermissible inference in our system of law. Marks & Co. v. Diners Club, Inc., 550 F.2d 505, 512 (2d Cir. 1977). That is not a concern in the instant case, which will be tried to the Court rather than a jury. But the threshold inquiry in considering whether expert testimony should be admissible is whether it would be helpful to the trier of fact. Apart from the fact that presenting legal opinions in the form of testimony during a bench trial, rather than briefing and oral argument, is inefficient, it would not be helpful. Ultimately, the Court, as the trier of fact, must reach factual conclusions based on the evidence presented. Factual conclusions presented by experts are of no aid to the Court

6 Similarly, pure opinions of law are unhelpful and inadmissible. For example, Yukins has opined that in the circumstances of this case, the remedy must be carefully considered and that [w]hile sometimes the process is reopened to allow a recompetition, that may not be a suitable solution where, as here, the offerors respective technical and price solutions have been disclosed to competitors. (Yukins Report at 16, 11.) Yukins concludes that a sounder approach is to assume that Exel, the winning bidder, bore the risk that its proposal, which deviated from the solicitation s material requirements, would be unacceptable for consideration and award, and that award would go to the offeror with the best value proposal which conformed to the solicitation s material requirements, in this case, XTL. (Id.) While Yukins view of policy in awarding government contracts may be an enlightened one, the New Hampshire Supreme Court has held that a plaintiff cannot circumvent the State s sovereign immunity by framing a claim for damages as equitable relief. Lorenz v. N.H. Admin. Office of the Courts, 152 N.H. 632, 636 (2006). Based upon Lorenz, this Court has already ruled it has no authority to award the contract to XTL as a remedy if the Court were to find that the Commission did not comply with the competitive bidding laws. Order, September 29, 2014, at 5 6; Order, December 3, 2014, at 2. Sovereign immunity is waived to the extent that there is a contract between the State and an aggrieved party. An invitation to bid on a public contract is not an offer, and the bid itself is an offer that creates no right until it is accepted. Marbucco Corp. v. City of Manchester, 137 N.H. 629, (1993). However, a bidder s reasonable reliance on a public entity s promise to award a contract to the lowest responsible bidder that submits required information by the stated deadline may entitle a bidder to - 6 -

7 damages under a theory of promissory estoppel. Id. (citing RESTATEMENT (SECOND) OF CONTRACTS 90 (1979)). A disappointed bidder asserting a promissory estoppel claim is generally limited to damages sustained by justifiable reliance on the promise to conduct a fair bidding process. Marbucco Corp., 137 N.H. at 634. Only if a disappointed low bidder complies with all requirements of the bid instructions, but is deprived of the contract through some conduct of the awarding authority tantamount to bad faith, may the bidder recover lost profits. This Court has already held that the State s sovereign immunity is not impliedly waived by New Hampshire s competitive bidding statute. Order, July 16, 2014, at The doctrine of sovereign immunity would prohibit this Court from directing the Commission to award a contract to any particular vendor. Therefore, testimony from an expert about the policy reasons in favor of allowing a court to award a contract to a disappointed bidder would not be helpful. It follows that while Yukins and Ankabrandt may provide general background information about competitive bidding to aid the Court in applying the law to the facts, they may not opine on whether or not the bidding processes in this case complied with New Hampshire law, or what New Hampshire competitive bidding law requires. An expert may educate a fact finder about general principles without attempting to apply those general principles to the facts of the case. Miller v. Holzman, 563 F. Supp. 2d 54, 90 (D.D.C. 2008). Yukins and Ankabrandt may provide general background information about competitive bidding but may not opine on whether or not they believed the Commission violated competitive bidding standards in this case, which is the ultimate issue for the fact finder to decide. Law Warehouses, Inc. v. N.H. State - 7 -

8 Liquor Comm n, Hillsborough County Superior Court South, No CV-00128, at 5 (March 19, 2015) (Order, Temple, J.). SO ORDERED. 5/12/15 s/richard B. McNamara DATE Richard B. McNamara, Presiding Justice RBM/ - 8 -