New Law Removes Jurisdictional Uncertainty for Minnesota Bid Protests

By Stephen E. Schemenauer

On May 9, 2019, Governor Walz signed legislation re-establishing original jurisdiction in the district courts for all public procurement bid protests regardless of whether the challenged public entity acted in a judicial or quasi-judicial capacity. The law clarifies the uncertainty caused by the Minnesota Supreme Court's Rochester City Lines Co. v. First Transit, Inc. decision by eliminating the need for litigants to determine the nature of the public entity's actions and in which court they should file their bid dispute.  

Prior to this legislation, Rochester City Lines required litigants seeking to file a bid protest to make a crucial threshold decision regarding whether the public entity's actions were legislative or quasi-judicial in nature, which in turn determined where they should bring their action: (1) in a district court, which is better suited to hear the factually intense cases and render a more timely decision; (2) in the court of appeals, which is arguably ill-suited to hear such matters on an expedited basis; or (3) in both district court and the court of appeals to minimize any risk that they made an improper determination regarding the nature of the public entity's actions. 

The new legislation means parties can now save time and money litigating the merits of their bid disputes in a forum that facilitates quick decisions, allowing them to move forward with their projects instead of getting bogged down with procedural hurdles in potentially multiple forums, resulting in increased costs, time and delay. The legislation also benefits the courts, public entities and taxpayers by enhancing judicial economy, removing concerns over first presenting the dispute to the public entity for a decision and reducing costs and delays to public projects.

Although this legislation resolves a long-standing procedural concern, bid disputes remain a thorny legal issue with many traps and pitfalls that can ensnare unwary parties and derail projects. When faced with a potential dispute, it is absolutely critical to seek the assistance of experienced counsel who can help you quickly gather evidence of improper bidding practices, prevent your own company's bid from being rejected, and attempt to resolve the matter without court action, if possible.

Stinson's construction attorneys have significant experience in successfully challenging and defending bids, and we are known for providing practical and timely assistance to our clients. Because of the complexity involving bid protests, we encourage you to seek counsel to best evaluate your strategy. Please contact Stephen Schemenauer, Steven Lindemann or the Stinson contact with whom you regularly work for more information on bid protests as well as regarding this legislation. 

Related Resource

Minnesota Session Law Chapter 21–S.F.No. 558

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