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A.L.L. Construction, LLC v. Metropolitan St. Louis Sewer District

United States District Court, E.D. Missouri, Eastern Division

December 14, 2017




         This matter is before the Court on the motions of Defendants Metropolitan St. Louis Sewer District (“MSD”) and five of the six members of MSD's Board of Trustees (“Trustees”), in their individual capacities, to dismiss the complaint of Plaintiff ALL Construction, LLC (“ALL”) for lack of standing and failure to state a claim. ECF Nos. 10 & 12. In the event that the Court does not dismiss the complaint, Defendants have also moved to strike certain allegations. ECF No. 8. For the following reasons, the Court will deny the motion to strike and will hold the motion to dismiss in abeyance, subject to ALL amending its complaint.


         As alleged in the complaint, ALL is a construction company that aids in the construction of sewer systems, and has worked as a general contractor or subcontractor for MSD for approximately 20 years. MSD is a “municipal corporation and political subdivision of the State of Missouri, organized and existing pursuant to powers conferred by Article VI, Section 30 of the Missouri Constitution.” Compl., ECF No. 5 ¶ 2.

         MSD has a policy providing that “a bidder on non-building construction projects exceeding $50, 000.00 must utilize Minority Business Enterprises (African American) on 17% of the project. A bidder who fails to achieve this percentage of MBE participation will have its bid rejected as nonresponsive, unless the bidder can demonstrate a good faith effort to achieve the MBE goal.” Compl. ¶ 11. ALL qualifies as a “Minority Business Enterprise” (“MBE”) under MSD's policy in that its owner, Anton Lumpkins, is African American. ALL was awarded MSD's “Minority Contractor of the Year” in 2000.

         ALL has worked as an MBE subcontractor for general contractors that frequently do business with MSD, including Bates Utility Company (“Bates”) and SAK Construction, LLC (“SAK”). Beginning in 2016, Bates included ALL as a subcontractor on several projects for MSD, with ALL helping Bates achieve MSD's MBE requirements. However, a Chief Estimator and Project Manager with Bates soon expressed his “distaste” for MSD's MBE requirements, and “beginning in early 2016, Bates used ALL on bids to meet MSD's MBE participation requirements so that it would be awarded MSD projects but did not actually use ALL on these projects, ” at times not even calling ALL to the job site. Compl. ¶¶ 23, 27, 29.

         ALL contacted MSD staff in an effort to obtain Bates's compliance with MSD's MBE participation requirements. Lumpkins, ALL's owner, “believed that ALL was not the only MBE that was being exploited on MSD projects and that other MBEs were being listed on bids to meet MSD's MBE participation requirements and then not being used on the projects.” Compl. ¶ 33.

         ALL alleges that “[o]n or about April 14, 2016, Lumpkins, as a private citizen, spoke at a public meeting of MSD's Board of Trustees.” Compl. ¶ 34. Lumpkins told the Board about the issues that he and other minority subcontractors were having with Bates. Specifically, Lumpkins told the Board that Bates was using ALL and other MBEs in bids to achieve MSD's diversity requirements, while excluding them from performing work on projects. Compl. ¶ 35. During the meeting, Defendant James Singer, one of the Trustees, “noted that Lumpkins was ‘like a whistleblower' given the ‘pretty serious' allegations regarding Bates'[s] circumvention of MSD's MBE participation requirements.” Compl. ¶ 37.

         According to the complaint, a few days after the meeting, “MSD staff began contacting ALL complaining about various issues with ALL's work, ” and “MSD also refused to approve a change order on an ALL project, forcing it to pay thousands of dollars out of pocket[.]” Compl. ¶¶ 41-42. Then, on June 19, 2016, “ALL was removed from the Small Contractor Program.”[1] Compl. ¶ 44. ALL further alleges that “the most egregious retaliation” occurred during the bid and award process for an MSD project known as the “Deer Creek Project.” On September 29, 2016, MSD's professional staff of engineers awarded the Deer Creek Project to a general contractor, Jay Dee and Frontier- Kemper (“Jay Dee”), who had submitted the lowest and best bid of $147, 777, 777.77. Jay Dee listed ALL as a subcontractor in the bid to perform $5 million worth of tunneling construction work, helping Jay Dee meet MSD's MBE requirements.

         SAK, another general contractor that had previously employed ALL, had also submitted a bid for the Deer Creek Project and lost. SAK thereafter filed with MSD a formal protest of the award of the Deer Creek Project to Jay Dee. In its protest, SAK claimed that ALL was not qualified to do the tunneling work on the Deer Creek Project.

         MSD's professional staff of engineers denied the protest, finding that the assertions were without merit and that ALL was a qualified subcontractor. SAK appealed, and on November 29, 2016, MSD's professional staff denied the appeal. Nevertheless, on December 8, 2017, the Trustees “voted against introducing the ordinance that would have approved MSD's professional staff's award of the bid to Jay Dee, ” by a 5-1 vote.[2] According to ALL, “the MSD Board of Trustees has rarely-if ever-refused to ratify a notice of award to a contractor recommended by its professional staff of engineers, ” and in the last five years, the Trustees have ratified every single notice of award given by MSD's professional staff for projects in excess of $10 million with the “lone exception of Jay Dee and the Deer Creek Project.” Compl. ¶¶ 63-64.

         The following day, December 9, 2016, MSD's Director of Engineering wrote two letters to Jay Dee. The first letter stated that MSD was “rescinding the Notice of Award previously issued . . . for the [Deer Creek Project] due to the proposed contract not being confirmed.” The second letter stated, “as a follow up to the recension of the Notice of Award, ” that MSD “object[ed] to the utilization of ALL Construction as a subcontractor” for the Deer Creek Project, and that MSD was requesting that Jay Dee submit “an acceptable MBE substitute(s) to ALL Construction.” Compl. ¶¶ 66-67. “MSD's request that Jay Dee remove [ALL] from the Deer Creek Project was, according to [MSD's Executive Director, ] Brian Hoelscher, the ‘first time in MSD's staff's recollection' that it had ever specifically requested the removal of a single subcontractor.” Compl. ¶ 69. Jay Dee subsequently “removed and replaced ALL from the Deer Creek Project, as required by MSD and its Board of Trustees.” Compl. ¶ 73.[3]

         ALL alleges that the “Board of Trustees caused [ALL] to be removed a subcontractor from the Deer Creek Project, resulting in financial injury to [ALL], ” and that the “Board of Trustees has final policymaking authority in MSD.” Compl. ¶¶ 78-79.

         ALL further alleges:

Lumpkins'[s] speech, and more specifically, his expressions as a private citizen to the Board of Trustees that Bates was not complying with MSD's MBE participation requirements on its projects (and potentially engaging in fraud as it relates to such participation) designed to ameliorate the legacy of race discrimination in the St. Louis-area construction community, made at a reasonable time and in a reasonable manner, was a motivating factor and/or played a part in the decisions to retaliate against [ALL] by among other things, removing it from the Deer Creek Project.

Compl. ¶ 80.

         ALL filed suit in state court on August 9, 2017, asserting claims under 42 U.S.C. § 1983 against MSD and the Trustees, in their individual capacities, for First Amendment retaliation. Defendants removed the case to this Court on September 6, 2017, on the basis of federal question jurisdiction.

         ARGUMENTS ...

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