The opinion of the court was delivered by: Marovitz, District Judge.
This is a class action for a declaratory judgment pursuant to
28 U.S.C. § 2201 and for an injunction seeking to declare
unconstitutional defendant's practice whereby bidding for the
printing of educational materials and booklets is restricted to
unionized firms only. Plaintiff brings this action on behalf of
the approximately four hundred printing firms who are its members
and whose employees are not members of or represented by any
labor organization and on behalf of all others similarly
Defendant has filed a Motion to Dismiss on the grounds that no
constitutional right has been violated and plaintiff has no
standing to question the bidding specifications of defendant.
We will first discuss the standing question in view of the fact
that a disposition in defendant's favor will eliminate any need
to elaborate on the substantive issue. Defendant places heavy
reliance in Perkins v. Lukens Steel Co., 310 U.S. 113, 60 S.Ct.
869, 84 L.Ed. 1108. At issue in Perkins was a provision of the
Walsh-Healy Act (41 U.S.C. § 35-45) that required sellers to pay
their employees who were engaged in producing goods for sale to
the government not less than a minimum wage as determined by the
Secretary of Labor. The plaintiffs were prospective bidders who
sought review of certain wage determinations made by the
Secretary of Labor. The Supreme Court held that potential bidders
have no right to challenge government procurement actions.
Applying the principles of Perkins to our case defendant would
have us find that plaintiff association and its members are in no
way injured or deprived by defendant's acts and that as
"potential bidders" they have no standing to sue. Defendant's
fundamental error lies in his belief in the continuing viability
of Perkin's as the landmark decision in regard to standing to the
exclusion of more recent developments. Various recent decisions
have greatly expanded and liberalized standing requirements. In
Association Of Data Processing Service Organizations, Inc. v.
Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970) the
Supreme Court held that an association of data processing
companies had standing as an aggrieved party to sue to reverse a
ruling of the Comptroller of the Currency that the Bank Service
Corporation Act of 1972 did not prohibit national banks from
selling data processing services to other banks and that the
traditional "legal interest" test goes to the merits and is not
a prerequisite to standing. Scanwell Laboratories, Inc. v.
Shaffer, 137 U.S.App.D.C. 371, 424 F.2d 859 (1970) radically
changed the law in regard to the standing of unsuccessful or
potential bidders to sue. In Scanwell the second lowest and
unsuccessful bidder for the installation of certain instrument
landing systems for the FAA challenged the award to the lowest
bidder on the ground that its bid was not responsive to the
bidding invitation. The Court found that the recent trend of
Supreme Court decisions on standing such as Flast v. Cohen,
392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968); Hardin v. Kentucky
Util. Co., 390 U.S. 1, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968) and
Abbot Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18
L.Ed.2d 681 (1967) indicate that Perkins is no longer viable law
and that unsuccessful bidders have standing to sue. Finally in
Ballerina Pen Co. v. Kunzig, 140 U.S.App.D.C. 98, 433 F.2d 1204
(1970), a case quite similar to ours, plaintiff challenged the
determination of the Administrator of the General Services
Administration that contract competition for the supply of
government pens should be limited to firms employing the blind.
The Court of Appeals reversed the lower court and found that as
a potential bidder plaintiff had standing. Ballerina is
significant in that a potential bidder was involved such as in
our case unlike the unsuccessful bidder involved in Scanwell and
yet the Court found that foreclosure from an opportunity to bid
can result in "legal injury" and is sufficient to afford
standing. While the aforementioned cases admittedly deal mostly
with Federal procurement contracts and the various related
statutes, the clear trend towards the grant of standing to
potential bidders is unmistakable and is applicable to state or
municipal procurement contracts as it is to Federal contracts.
See also Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25
L.Ed.2d 192 (1970); Blackhawk Heating & Plumbing Co. v. Driver,
140 U.S.App.D.C. 31, 433 F.2d 1137 (1970).
The rationale of these cases as applied to our action compels
us to find that plaintiff association and its members as
potential bidders do indeed have standing to challenge
defendant's practice to limit bidding to firms employing only
As to the substantive elements of the complaint defendant
contends that no constitutional rights have been violated by
defendants practice and that consequently the case ought to be
dismissed for failure to state a cause of action. At least for
the purposes of this motion at the inception of the case it would
be remiss for us not to take notice of the long line of cases
holding the precise conduct alleged here as unconstitutional and
against public policy. Beginning with Adams v. Brenan, 177 Ill. 194,
52 N.E. 314 (1898) the law in this state has prohibited such
conduct. Indeed in Holden v. Alton, 179 Ill. 318, 53 N.E. 556
(1899) the Supreme Court of Illinois held that a contract for
city printing must be granted the lowest bidder and cannot be
refused because a firm employs non-union help. Likewise in
Anthony P. Miller, Inc. v. Wilmington Housing Auth., 165 F. Supp. 275
(D.Del. 1958) the District Court stated that "by the clear
weight of authority, a municipal corporation cannot discriminate
in favor of organized labor." (at 279) citing Mugford v. Mayor,
infra; Teller on Labor Disputes, Vol. 1, § 171; and State ex rel.
United Dist. Heating v. State Office Building Commission, infra.
We note here that the issue is not purely a labor one, i.e.
whether a state or municipal corporation can support organized
labor exclusively but rather the general question of whether as
a matter of public policy the lowest bidder ought to be granted
the contract in order to conserve public funds irrespective of
the union or non-union implications and whether discrimination
results from restriction to unions alone.
See also Miller v. City of Des Moines, 143 Iowa 409,
122 N.W. 226 (1909); City of Atlanta v. Stein, 111 Ga. 789, 36 S.E. 932
(1900); Fiske v. People, 188 Ill. 206, 58 N.E. 985 (1900);
Davenport v. Walker, 57 A.D. 221, 68 N.Y.S. 161 (1901); Lewis v.
Board of Education, 139 Mich. 306, 102 N.W. 756 (1905); Wright v.
Hoctor, 95 Neb. 342, 145 N.W. 704, 146 N.W. 997 (1914); State ex
rel. United District Heating, Inc. v. State Office Building
Commission, 124 Ohio St. 413, 179 N.E. 138 (1931); Reid v. Smith,
375 Ill. 147, 30 N.E.2d 908 (1940); Mugford v. Mayor and City
Council of Baltimore, 185 Md. 266, 44 A.2d 745. See also
McQuillin, Municipal Corporations, 2d ed. Vol. 3 § 1305 and cases
cited therein to the proposition that municipal contracts cannot
be restricted to firms employing only union labor. While most of
the Illinois cases cited are not of recent
vintage, indications are that they still represent the law in
this state as it exists today.
In view of the foregoing cases we believe that plaintiff may
indeed be able to prove that it falls within the ambit of this
proposition and we therefore deny the Motion to Dismiss with
leave to reinstate at a later date should the facts evolve in
such a manner as to indicate the inapplicability of the above
stated rule to this case.
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