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S.F. No. 558 - Public Procurement Actions Original Jurisdiction Granted To District Courts - Second Engrossment
 
Author: Senator Mark Johnson
 
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Joan White, Senate Counsel (651/296-3814)
 
Date: March 13, 2019



 

SF 558 gives state district courts original jurisdiction in actions involving procurement contracts with the state or with local governments. In 2015, the Minnesota Supreme Court considered an appeal by an unsuccessful bidder to provide transit service in Rochester.  One issue that the Supreme Court decided was whether the district court had jurisdiction to decide if the city’s denial of the plaintiff’s bid-protest filings was legal. The Court concluded that because quasi-judicial actions can only be challenged by a writ of certiorari in the court of appeals, the district court lacked jurisdiction to consider this issue.  Rochester City Lines, Co. v. City of Rochester, 868 N.W.2d 655, 662-663 (Minn. 2015).

A “quasi-judicial” act affects the rights of a few individuals and has the following three characteristics:  (1) an investigation into a disputed claim and the weighing of evidentiary facts; (2) the application of those facts to a prescribed standard; and (3) a binding decision regarding a disputed claim.

SF 558 establishes original jurisdiction in the district court to consider this type of claim – a challenge to the validity of a state or local government selection of a bidder or vendor – regardless of whether the public entity’s action is quasi-judicial.

SF 558 also limits the award of attorney fees for actions arising out of procurement.

Section 1 [Original Jurisdiction of Public Procurement Actions]

Subdivision 1 [Original jurisdiction granted] gives state district courts original jurisdiction over challenges regarding public procurement, regardless of whether the public entity involved has acted in a judicial or quasi-judicial capacity. This grant does not alter the standard of review to be applied by the courts, remedies available under current law, or required procedural steps.

Subdivision 2 [Filing requirement] requires a putative plaintiff to file an action regarding public procurement before the contract is fully executed unless certain conditions are met.  This requirements does not apply to claims alleging fraud or misrepresentation.

Section 2 [Damage awards] states that the Uniform Municipal Contracting Laws (UMCL) prohibition on awarding attorney fees applies to any action against a municipality involving public procurement even if not a “contract” under the UMCL.  Under the UMCL, “contract” means “an agreement entered into by a municipality for the sale or purchase of supplies, materials, equipment or the rental thereof, or the construction, alteration, repair or maintenance of real or personal property.”

 

 

 

 
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