Former Colonial School Board President Offers Current President Advice on How to Handle Lawsuit

As reported last week, the Colonial School District, along with Plymouth Township, have been sued over the adoption of “Responsible Contractors” policies/ordinances.

A former President of the Colonial School Board, attorney Marc Orlow, has written an open letter to current Colonial School Board President Felix Raimondo offering advice on how best to handle the lawsuit.

Read the letter (originally posted as a comment on a post in the Colonial Roundtable Facebook group:

Dear Mr. Raimondo,

I write to raise concerns over the lawsuit that was filed in Federal Court on September 11th challenging the legality of the controversial “Responsible” Contractor Policy (RCO) recently adopted by the Board. First, however, while we have not formally met, as a former Colonial School member and Board President, I understand the commitment and responsibility that comes with the office. So, before I discuss my concerns, I wanted to thank you for your service to the District and community.

As you know, the Plaintiffs in their Complaint, are seeking a declaratory judgment and injunctive relief to prevent Colonial School District from giving effect to, or enforcing the RCO Policy. The suit alleges that the RCO Policy violates the (i) Pennsylvania Public Bidding Law, (ii) Equal Protection and Due Process Clauses of the Fourteenth Amendment of the United States Constitution and (iii) is preempted by federal law under ERISA.. In addition, they are also seeking counsel fees and the costs of the suit.

I can appreciate that now that the District has been sued, your solicitor will understandably direct that you cannot respond to questions involving litigation strategy and/or discussions with your solicitor. With that in my mind, in lieu of expecting direct answers to questions I may have, I wanted to share my concerns regarding the exposure and negative impact that this lawsuit can have on the District if not properly managed.

First, as accurately stated in the Complaint, in order to defend the lawsuit, the District will have to demonstrate that the specific Apprentice Program specified in the RCO Policy is “necessary and reasonable” to determine in advance who is a qualified bidder. Given that the perceived “need” for the RCO Policy began with you and your solicitor, and did not originate through the normal vetting process, you and your solicitor will no doubt be subpoenaed to testify. These discussions between you and your solicitor would certainly be protected from disclosure based on the attorney client privilege. However, should you invoke the privilege regarding those conversations where the “need” for the RCO originated, the risk of the District losing the lawsuit certainly increases, with the District being exposed to potentially significant liability. On the other hand, if you waive the Privilege, this can have significant unforseen negative consequences. However, in either case, hollow talking points about the concern for “safety” will not suffice to demonstrate the requisite “need” to defend the lawsuit. The District will have to provide a fact based rationale to demonstrate the “need” for the so-called “Class A Apprenticeship Program” set forth in the RCO Policy. Frankly, listening to Board’s explanation during the recent public meetings has not shown that you can, in fact, demonstrate such “need” with objective fact based data. I hope that you take this opportunity to re-evaluate whether you can meet this burden before taking the District down this dangerous path.

Second, the Plaintiffs in the lawsuit are seeking immediate injunctive relief while the lawsuit proceeds to prevent the District from giving effect to, or enforcing the RCO Policy. While you may instinctively want to challenge this request for an injunction, I suggest that you consider voluntarily suspending the RCO Policy pending the outcome of the lawsuit. The reason for this suggestion is based on exercising caution in order to avoid the risks of enforcing the RCO while the lawsuit is pending and the outcome uncertain. For example, if the RCO is enforced while the lawsuit is pending, and the Plaintiffs ultimately prevail, the District would likely face multiple additional claims from those contractors who were not permitted to bid on the Middle School project or other significant projects. There is no way to predict what this potential liability could be. Proceeding with caution and suspending the implementation of the RCO is the prudent course. As stewards of the District’s finances, I hope you will act responsibly.

Third, proceeding with bidding on the Middle School project and the bond financing that will be required with the RCO Policy in effect while the lawsuit is being litigated, will no doubt add uncertainty and cost. Under such circumstances, how will the lawsuit impact the financing? Will it impact the Bond rating? Cause an increase in the interest rate? While we know that Bond underwriters do not like uncertainty, no one can know for sure what impact this will have on this project. Again, proceeding with caution and suspending the implementation of the RCO is the prudent course.

Fourth, given the potential conflict of interest involving solicitor Clarke regarding his potential role as the originator of the Policy, a potential witness, and the issues surrounding the attorney client privilege, I urge you to seek an independent legal opinion on the viability of Plaintiff’s claim that the RCO Policy violates Pennsylvania Public Bidding Law, the Equal Protection and Due Process Clauses of the Fourteenth Amendment of the United States Constitution.

Last, does the District have adequate insurance to protect itself and pay for the legal expenses involved in defending the lawsuit? To the extent insurance exists, is there a significant retention/deductible the District is responsible for? Will it cover damages if the lawsuit is successful? Will it cover expenses from the solicitor related to defending the lawsuit? Will it cover claims from aggrieved contractors who may file suit if the Plaintiffs are successful and the RCO Policy ruled to be illegal? Will it result in higher premiums in the future? All of these factors should be considered in evaluating the merits of the reason for implementing the RCO Policy.

In summary, we know that the District has a near spotless safety record over many years. We know that the Administration has a proven track record in identifying responsible contractors. We know that the District has existing legal authority without the RCO Policy under State law to evaluate a whether a bidder is responsible by looking at their financial record of responsibility, integrity, efficiency, industry experience, promptness, and ability to successfully to complete the project. We also know that the potential risks associated with the RCO Policy and defending the lawsuit could be significant and costly. As President of the Board, it is your responsibility to ensure that the Board properly evaluates all of the risks of continuing to defend the RCO Policy. The prudent course is to limit the risk by voluntarily suspending the RCO Policy while the lawsuit is pending.

More to come.