By Nick Goldstein, vice president of regulatory affairs & assistant general counsel, ARTBA
The U.S. Supreme Court Oct. 3 declined to hear the argument of an Illinois-based prime contractor challenging a state transportation agency’s interpretation of a federal rule. Earlier this year, ARTBA filed a brief to support the contracting firm’s appeal to the nation’s highest court.
At issue in the case of Dunnet Bay Construction Company v. Randall S. Blankenhorn was whether transportation construction contractors have the right to challenge state agencies that they believe have misapplied federal regulations. The case had made its way through lower courts since 2010. In siding with defendant Illinois Department of Transportation, a federal district court and the 7th U.S. Circuit Court of Appeals ruled that a prime contractor on a federal-aid highway project does not have a cause of action if a state agency appears to have followed federal regulations, such as those for the Disadvantage Business Enterprise (DBE) program, even though the government may have broad discretion in doing so.
In its Feb. 16 amicus brief to the Supreme Court, ARTBA stressed that, if allowed to stand, the appeals court holding would severely curtail review of state transportation agencies’ implementation of federal regulations, opening the door for egregious interpretations outside the bounds of the U.S. Constitution. “[W]hen administrative decision makers understand that meaningful judicial review is unlikely, they face no such constraints, and the risk that they will act for impermissible reasons is heightened accordingly,” ARTBA argued.
As a result of the Supreme Court’s refusal to hear the case, the federal appeals court decision will stand in the states of Illinois, Wisconsin and Indiana.
ARTBA thanks its members and chapters who helped support the national association’s involvement in this important case. Working with them, ARTBA will continue to aggressively monitor and consider participating in litigation that could shape precedent for our members. We will also continue to explore legislative options to ensure contractors have the right to challenge federal regulations they believe have been politicized or otherwise improperly applied.
Please contact me with any questions.