This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C3-96-1853

Dakota Barge Services, Inc.,

Appellant,

vs.

The St. Paul Port Authority,

Respondent,

and

Upper River Services, Inc., intervenor,

Respondent.

Filed January 14, 1997

Affirmed

Norton, Judge

Ramsey County District Court

File No. C2-96-7266

Edward T. Wahl, Deborah C. Swenson, Oppenheimer Wolff & Donnelly, 3400 Plaza VII Building, 45 South Seventh Street, Minneapolis, MN 55402 (for Appellant)

Thomas A. Larson, Torbjorn Svensson, Briggs and Morgan, P.A., 2400 IDS Center, Minneapolis, MN 55402 and

Terrence J. Garvey, General Counsel and Assistant City Attorney, Port Authority of the City of St. Paul, 1900 Landmark Towers, 345 St. Peter Street, St. Paul, MN 55102-1661 (for Respondents)

Patrick S. Williams, Alan I. Silver, Doherty, Rumble & Butler, 2800 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101 (for Respondent/intervenor)

Considered and decided by Norton, Presiding Judge, Lansing, Judge, and Huspeni, Judge.

U N P U B L I S H E D O P I N I O N

NORTON, Judge

Appellant argues that the trial court abused its discretion by denying a temporary injunction after it concluded that appellant was unlikely to succeed on the merits. The trial court did not abuse its discretion, because analysis of the Dahlberg factors supports the trial court's denial of the injunction. Moreover, the record indicates that the Port Authority acted within its discretion when awarding the barge fleeting leases. We affirm.

FACTS

In the summer of 1995, respondent St. Paul Port Authority (the Authority) decided to award new barge fleeting leases by the "request for proposals" (RFP) system. The Authority has the statutory power to negotiate fleet leases without resort to a formal bidding process. See Minn. Stat. SSSS 469.055, subds. 1, 6, 7, 469.065 (1996) (conferring statutory authority to negotiate leases without a formal bidding process). The Authority chose the RFP system because it wanted to maintain maximum discretion in the award of leases and prevent the monopolization of the harbor.

In February 1996, the Authority distributed the RFP. The RFP explained how parties were to propose leases, the factors the Authority would consider in awarding leases, and the terms of the leases. The RFP retained significant discretion for the Authority to make the final award of leases.

Appellant Dakota Barge Services, Inc. (Dakota Barge), and respondent/intervenor Upper River Services, Inc. (Upper River), responded to the RFP. In May 1996, the Authority issued a detailed memorandum to the parties explaining its award of fleeting leases. Dakota Barge filed a motion for a temporary injunction to enjoin the Authority from taking any action with respect to the May 1996 leases. Dakota Barge argued that the Authority abused its discretion in awarding the leases, because it failed to follow its own RFP rules. The trial court denied Dakota Barge's motion.

D E C I S I O N

I. Scope and standard of review.

"An appeal from an order denying a motion for a temporary injunction is strictly limited in scope." Hvamstad v. City of Rochester, 276 N.W.2d 632, 632 (Minn. 1979). "A decision on whether to grant a temporary injunction is left to the discretion of the trial court and will not be overturned on review absent a clear abuse of that discretion." Carl Bolander & Sons Co. v. City of Minneapolis, 502 N.W.2d 203, 209 (Minn. 1993). Thus, the sole issue presented by this appeal is whether the trial court's denial of Dakota Barge's motion for a temporary injunction constitutes a clear abuse of discretion.

We must sustain the discretion of the trial court to deny a temporary injunction "unless the action of the trial court is clearly erroneous and will result in injury which it is the duty of the court to prevent." Independent Sch. Dist. No. 35 v. Engelstad, 274 Minn. 366, 370, 144 N.W.2d 245, 248 (1966), quoted in Pacific Equip. & Irrigation, Inc. v. Toro Co., 519 N.W.2d 911, 914 (Minn. App. 1994), review denied (Minn. Sept. 16, 1994). We must also view the facts alleged in the pleadings and affidavits in a light most favorable to the prevailing party, here the Authority or Upper River. Pacific Equip., 519 N.W.2d at 914.

II. Injunctive relief factors.

On review, the appellate court must examine the five Dahlberg factors to determine whether the trial court's decision regarding a temporary injunction was an abuse of discretion. Dahlberg Bros., Inc. v. Ford Motor Co., 272 Minn. 264, 274-75, 137 N.W.2d 314, 321-22 (1965).

A. The nature of the relationship between the parties.

Dakota Barge argues that its motion for an injunction must be granted to preserve the status quo. See Miller v. Foley, 317 N.W.2d 710, 712 (Minn. 1982) (purpose of temporary injunction is to preserve status quo until trial on the merits). Dakota Barge argues that the denial of the injunction does not preserve the status quo, because the 1996 lease changes its fleeting locations and, consequently, it cannot operate as it has in the past. However, granting the injunction would not serve the status quo either, because, after the 1986 leases expire on January 1, 1997, the Authority would be precluded from implementing the 1996 leases and the parties would be left no leases under which to operate. Denial of the injunction, even in light of Dakota Barge's fleeting location change, is closer to the status quo than leaving the parties without leases. Thus, this factor supports the denial of Dakota Barge's motion for a temporary injunction.

B. Balance of harms.

Dakota Barge must show irreparable harm to trigger the injunction, while Upper River and the Authority need only show substantial harm to bar the injunction. Pacific Equip., 519 N.W.2d at 915. Dakota Barge argues that its very existence is threatened by the Authority's 1996 leases, because it was not awarded lease K, O, L, or M. In its proposal, Dakota Barge prioritized leases O, L, M and K, as their top four choices. Dakota Barge characterizes O, L, M, and K, as the "best leases" in the St. Paul Harbor, because they are located below the Pig's Eye Bridge and because they commanded the highest lease offer prices. Dakota Barge alleges that they will suffer irreparable harm because the leases they were awarded are located above the Pig's Eye Bridge. Dakota Barge asserts that the Pig's Eye Bridge poses significant navigational delays, up to five hours, requiring barges to go through the bridge's narrow straits twice in their trips north and south.

Upper River argues that Dakota Barge is not irreparably harmed by the 1996 leases, because Dakota Barge has always operated its fleeting areas above the Pig's Eye Bridge. Upper River contends that Dakota Barge overstates its concerns regarding time delays because Dakota Barge owns 2,600 lineal feet of fleeting space below the Pig's Eye Bridge and has in the past had 1,800 feet of area O, which is below the Pig's Eye Bridge, pursuant to a swap agreement with Upper River.

While Dakota Barge delineates several problems associated with the 1996 leases, it fails to show that the harm is irreparable. The Authority, however, has shown the requisite substantial harm necessary to block the injunction. If the injunction were issued after January 1, 1997, the Authority would be left without any leases. There is no guarantee that the Authority would be able to extend the leases after the expiration date, particularly in light of the fact that the injunction would cover the winter months when barge operators are not fleeting. The Authority would stand to lose substantial amounts of rental income. Therefore, this factor supports the trial court's denial of the injunction.

Finally, we are also not persuaded that Dakota Barge has suffered irreparable harm because it lost its chance to participate in an untainted RFP process. See United Techs. Communications Co. v. Washington County Bd., 624 F. Supp. 185, 188 (D. Minn. 1985) (holding that loss of chance to participate in fair bidding process raises significant threat of irreparable harm to plaintiff). If, when deciding the merits, the court determines the RFP was unfair, Dakota Barge will be able to participate in a new RFP process.

C. Success on the merits.

The key factor in our analysis is whether Dakota Barge is likely to succeed on the merits of its claim at trial. The trial court found it unlikely that Dakota Barge would prevail on the merits, because the Authority had not abused its discretion in awarding leases under the RFP process. We agree.

Dakota Barge asserts that the Authority's failure to comply with its own adopted requirements and criteria for awarding barge leases was arbitrary, capricious, and unreasonable and, therefore, an abuse of discretion. See Schwandt Sanitation v. City of Paynesville, 423 N.W.2d 59, 64-65 (Minn. App. 1988) (bid-letting authority must follow its advertised process; appropriate inquiry is whether agency awarded leases in arbitrary, capricious, and unreasonable manner). First, Dakota Barge alleges that the Authority failed to require Upper River to comply with the RFP Proposal Requirements section that stated the proposals must include a list of priorities of proposed fleeting areas. Dakota Barge argues that Upper River's proposal violated this requirement because it failed to prioritize the fleeting areas individually. Upper River argues that Dakota Barge's interpretation of the RFP to require prioritization of each individual fleeting area is incorrect in light of the RFP's directive to propose "a lease" which encumbers up to 10,000 lineal feet. Moreover, Upper River asserts that the RFP's statement that "[t]he term of the lease shall be for five (5) years and commence on January 1, 1997," lends further credence to its interpretation of the RFP to allow lease proposals consisting of combined fleeting areas. Upper River observes that other companies, including Dakota Barge, interpreted the RFP as permitting the submission of a proposal with combined fleeting areas.

The Authority argues that it interpreted Upper River's proposal as containing three priorities: the first priority was a combined proposal to lease four areas E, L, M, and O; the second priority was to lease portions of N; and the third priority was to lease the remaining portions of N. The Authority claims that it was within its discretion to interpret the prioritization requirement in this manner. As discussed below, given the RFP rules and discretion of the Authority, the Authority's construction of the prioritization requirement and Upper River's proposal is not arbitrary and capricious.

Secondly, Dakota Barge argues that the Authority acted arbitrarily and capriciously by failing to require compliance with the RFP proposal requirement that "[e]ach company shall be permitted to propose a lease which encumbers a maximum of 10,000 lineal feet of fleeting space." Dakota Barge argues that Upper River's bid for areas E, L, M, and O violated the RFP requirement because it encumbered 10,182 lineal feet. Upper River maintains that its bid did not violate the 10,000 lineal foot maximum because the 182 lineal feet exceeding the 10,000 foot-maximum is unusable due to the length of most barges. Upper River states that excluding unusable feet from its lease proposal was reasonable, because in prior dealings the Authority had requested payment only for usable lease space. Upper River contends that Dakota Barge recognizes a reduction for unusable fleeting area space based on its past dealings with Dakota Barge. The Authority acknowledged that Upper River's proposal deviated from the 10,000 foot maximum, but waived the deviation stating that the deviation did not defeat the purpose of the maximum prevention of a harbor monopoly.

The Authority's construction of Upper River's priority and its decision to waive the lineal feet defect is not an abuse of discretion in view of the broad power the legislature gave the Authority to carry out its duties. See Minn. Stat. § 469.055, subd. 7 (1996) ("The authority may sell, convey, and exchange any real or personal property owned or held by it in any manner and on any terms it wishes"); see also Minn. Stat. § 469.055, subd. 6 (providing the port authority with power to purchase property, enter leases, and fix rules in order to carry out its duties); Minn. Stat. § 469.065 (1996) (setting guidelines for the port authority to sell and convey its property). Likewise, the RFP retained significant discretion for the Authority. The RFP stated: "selection of companies will be at discretion of the Port Authority Board of Commissioners"; "the Port Authority Board of Commissioners shall in their sole discretion award barge fleeting leasing rights"; and "[t]he Authority reserves the right to reject any and all proposals without compensation to proposers and to waive any and all informalities and defects in any proposals."

The Authority's memorandum discussing the lease awards demonstrates that the Authority awarded the leases consistent with that discretion and the Authority's statutory obligations. In keeping with the Authority's interest in local job creation, the Authority awarded switching operators more lease space than line-haul operators. The Authority awarded fleet leases fairly consistently with how it had awarded them in the past, thereby keeping employment regular.

Moreover, the Authority awarded leases consistent with its statement in the RFP that it would consider, among others: 1) the number of jobs created or attained; 2) the financial strength of proposed lessee; 3) price per lineal foot; 4) capital improvements; and 5) experience of operator. For example, Dakota Barge was the only bidder on leases B, G, and H. Therefore, the Authority was required to lease those properties to Dakota Barge in order to meet its interest in the price per lineal foot and its legislative mandate to use fleeting areas efficiently. The Authority awarded Dakota Barge leases D and I because Dakota Barge proposed the highest price. Although Dakota Barge had listed for other fleeting areas, only one of them, area K, would have met the 10,000-foot maximum. The Authority awarded area K to ACBL because that company's bid was higher than Dakota Barge's. The memorandum explains that the Authority awarded leases E and sub-area A of N to Upper River, the highest bidder. Upper River was awarded leases L, M, and O, in light of several factors: 1) it was a local switching operator; 2) it was the highest bidder; and 3) the only other bid was from a company exceeding the 10,000-foot maximum.

Dakota Barge argues that the Authority abused its broad discretion because, although the Authority reserved the right to waive minor defects, it did not have the right to waive defects that destroy the decision-making process and result in favoritism. Byrd v. Independent Sch. Dist. No. 194, 495 N.W.2d 226, 231 (Minn.App. 1993) (Although public agencies may not waive bidding defects which destroy competitive bidding, they may waive defects if public rights are not compromised and if certain parties do not receive a substantial advantage by the waiver) (citing Telephone Assocs., Inc. v. St. Louis County Bd., 364 N.W.2d 378, 382 (Minn. 1985)), review denied (Minn. Apr. 20, 1993). The Authority's lease awards advanced public rights by promoting the interests of commerce and welfare of the St. Paul harbor. Moreover, any advantage Upper River received due to the Authority's decisions was not "substantial" under the relevant case law. See Byrd, 495 N.W.2d at 231-32 (waiver of bidding requirements was substantial because there was evidence of collusion; waiver violated RFP provision that stated waived requirement was grounds for rejection); Telephone Assocs., 364 N.W.2d at 370-82 (waiver of required price proposal was substantial, because it resulted in county arbitrarily assigning price term). Examination of the Authority's actions demonstrates that the Authority did not act arbitrarily or capriciously, but considered the parties' proposals and the interests the Authority had a duty to protect.

Finally, Dakota Barge contends that it will succeed on the merits of its promissory estoppel claim. Dakota Barge bases its claim on the Authority's promise that each proposal would be considered fairly and in good faith according to the RFP. That promise is not sufficiently specific and definite to form a basis for a promissory estoppel claim. See Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 372 (Minn. 1995) (requiring promise be clear and definite in order to be basis for promissory estoppel). Like the statements in Ruud, the RFP statements were not binding, were merely the Authority's policies, and were vague, given the discretion the Authority retained in the RFP. The trial court did not abuse its discretion by finding that Dakota Barge was unlikely to succeed on the merits. This factor supports the trial court's denial of the injunction.

D. Public policy.

The trial court's denial of the injunction supports public policy, because it enables the Authority to use its discretion to meet its statutory obligations. The Minnesota Legislature gave the Authority discretion to consider many factors when awarding leases. Public policy would not be advanced if this court, or the trial court, imposed restrictions on the broad discretion that the legislature vested in the Authority. See Villaume Indus., Inc. v. Dakota County Bd. of Comm'rs, 386 N.W.2d 344, 347 (Minn. App. 1986) (this court refused to limit county's discretion to negotiate with hydropower developers, because such action would undercut county's ability to carry out its duties). This factor supports the denial of the injunction.

E. Administrative Burden.

The injunction could result in a significant administrative burden on the court, given the impending expiration of the leases on January 1, 1997. The court would likely be called upon to determine what lease governs the Authority and all St. Paul Harbor lessees. This factor also supports the denial of the injunction.

III. Conclusion.

The trial court was in the best position to determine whether Dakota Barge would succeed on the merits. Given this court's narrow standard of review, and viewing the facts most favorably to the Authority, we cannot say that the trial court abused its discretion in finding that Dakota Barge would not succeed on the merits. Moreover, the evidence regarding the Dahlberg factors indicates that the trial court properly denied the temporary injunction.

Affirmed.