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Michigan Supreme Court Ruling: Disappointed Bidder Protection Extends to Consultants

Michigan Supreme Court Ruling: Disappointed Bidder Protection Extends to Consultants

Long-standing case law says a losing bidder to a government contract cannot sue the governmental unit unless there is a showing of impropriety in the award, but the Supreme Court ruled in a split decision that same protection applies to consultants assisting the government unit in reviewing the bid.

The majority overturned the Court of Appeals and upheld the Genesee Circuit Court (Cedroni Associates Incorporated v. Tomblinson, Harburn Associates, SC docket No. 142339) in dismissing the lawsuit, finding that Cedroni had no expectation that it would win the contract.

The issue here is whether plaintiff, the disappointed lowest bidder on a public contract, had valid business expectancy for the purpose of sustaining a claim of tortious interference with business expectancy. The trial court held that plaintiff did not have such expectancy, but a divided Court of Appeals panel held that a genuine issue of material fact exists in this regard, "because we agree with the trial court and the Court of Appeals dissent that plaintiff did not have valid business expectancy, we reverse the judgment of the Court of Appeals and reinstate the trial court's order granting defendant's motion for summary disposition."

Cedroni sued, arguing tortious interference because it had expected to be a qualified bidder on the project.

Justice Stephen Markman, joined by Chief Justice Robert Young Jr., Justice Mary Beth Kelly and Justice Brian Zahra, ruled this was a case of a disappointed bidder, whether the action was against the district or a consultant to the district. Bidders on government projects do not have a legal expectation of being awarded the bid and so cannot sue if they are not, he said.

A more formal analysis can be found at the following website address: