Tuesday, January 22, 2013

The Charlottesville YMCA at the Supreme Court

For me, one of life's "mini disappointments" is learning that a court has decided an interesting legal question on procedural rather than substantive grounds.

To put it differently: sometimes I get bummed-out when a court resolves a dispute based on the procedural rules (which are often quite technical) rather than evaluating the underlying, substantive claims of the two parties.

(An aside: another mini disappointment, rooted in childhood snow-days, is a predicted snowstorm that fails to materialize.  We had one such "non-storm" last week in Charlottesville, and I felt like a disappointed 7-year old boy all over again.  My fingers are crossed that we get at least one heavy snow during the winter of 2013).

But back to the courts:

I have followed with curiosity the long-running effort to build a YMCA in Charlottesville's McIntire Park. 

(Aside #2: I belong to ACAC and rank it as one of my absolute favorite Charlottesville institutions (along with Bodo's, the Charlottesville Ten Miler, Timberlake's, and Mint Springs). I also think that our community would benefit significantly from a central YMCA facility. I'm uncertain at this point whether I think McIntire is the best location.)

When the YMCA was selected by the Charlottesville and Albemarle governments to build and lease a facility in McIntire Park in 2007, a group of for-profit health clubs filed a lawsuit against the local governments. 

Essentially (and pardon the over-simplification), the other health clubs claimed that the YMCA received an unfair "leg up" from the City and County because of its non-profit status -- in particular, the clubs said that Charlottesville and Albemarle did not put the McIntire project out for competitive bids using the normal public procurement process.


The case is Charlottesville Area Fitness Club Operators Association v. Albemarle County Board of Supervisors et als.

The Albemarle County Circuit Court dismissed the clubs' claims, and the clubs appealed to the Supreme Court of Virginia.

I was very curious to see how the SCV would evaluate the case. Alas, Justice Goodwyn's January 10 opinion (the text is here) was something of a let-down.

The Court held that it could not evaluate the legal rights of the for-profit clubs vis รก vis the McIntire Park project because the Fitness Club Operators Association did not have standing to bring a claim against the two local governments. The Fitness Club lacked standing under either Code Section 15.2-953 or the Virginia Public Procurement Act:
The Fitness Clubs are strangers to the Board's negotiations with the YMCA, including its decision to make a $2.03 million payment to the YMCA and enter into the Use Agreement.  
[The relevant Virginia statute] provides no right of action to a third party to challenge a locality's appropriation [under these circumstances].
I would paraphrase the Court's analysis this way: the Fitness Clubs do not have the right, under Virginia statutes, to a court determination of whether their rights were violated. 

Perhaps. But a more satisfying analysis would have reviewed the substance of their claims.


The majority's analysis is particularly problematic with respect to the Virginia Public Procurement Act (the VPPA).

The majority says that the Fitness Club cannot bring a claim under the VPPA because they "do not allege that the VPPA provides a mechanism for them to protest an award of a public contract and they have no remedy independent of the VPPA."

This reasoning is conclusory (or circular): Charlottesville and Albemarle determined that the McIntire project was not subject to the Virginia Public Procurement Act (which would have mandated a different bid process), therefore the McIntire project was not subject to the Virginia Public Procurement Act.

Justice Mims has the better of it in his dissent:
The VPPA provides no internal procedures for determining whether it applies to a contract (emphasis in original). Yet the General Assembly clearly intended the VPPA to apply to those contracts defined in Cod Section 2.2-4303(A).  
The conclusion that the General Assembly provided no mechanism to adjudicate a dispute over whether the VPPA applied to a procurement action, simply because the VPPA does not contain any, leaves the VPPA unenforceable where a public body determines by fiat that the VPPA does not apply.   
That is an untenable result in face of the clear statutory expression of the legislature's intent that the VPPA's procurement procedures be mandatory, rather than voluntary.
Note that Justice Mims does not opine whether the for-profit clubs have a valid complaint -- merely that they have the right to their day in court on the substance, rather than just the rules. 

And now it's time to contemplate legal theories upon the treadmill...