T-NETIX, INC. v. COUNTY OF MIDDLESEX, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6591-05T16591-05T1

A-3707-06T1

T-NETIX, INC., and its

wholly-owned subsidiary,

T-NETIX TELECOMMUNICATIONS

SERVICES, INC.,

Plaintiffs-Appellants,

v.

COUNTY OF MIDDLESEX,

GLOBTAL TEL*LINK, CORP., and

STATE OF NEW JERSEY,

Defendants-Respondents.

_______________________________________

ARTHUR HECKEL, MAMDOUH KHIRY,

MARCUS MCCLEERY, and T-NETIX, INC.,

Plaintiffs-Appellants,

v.

COUNTY OF BURLINGTON, COUNTY OF CAMDEN,

COUNTY OF CAPE MAY, COUNTY OF CUMBERLAND,

COUNTY OF GLOUCESTER, COUNTY OF HUDSON,

COUNTY OF HUNTERDON, COUNTY OF MERCER,

COUNTY OF MONMOUTH, COUNTY OF MORRIS,

COUNTY OF OCEAN, COUNTY OF SOMERSET,

COUNTY OF SUSSEX, COUNTY OF UNION,

STATE OF NEW JERSEY, and

GLOBAL TEL*LINK, CORP.,

Defendants-Respondents.

________________________________________

 

Argued September 24, 2007 - Decided

Before Judges Weissbard, S. L. Reisner and Gilroy.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-5187-06 (A-6591-05T1) and Mercer County, Docket No. L-2947-06 (A-3707-06T1).

Jason L. Richey, of the Pennsylvania bar admitted pro hac vice, argued the cause for appellants (Kirkpatrick & Lockhart Preston Gates Ellis, attorneys; Mr. Richey, Richard F. Paciaroni, of the Pennsylvania bar admitted pro hac vice, George P. Barbatsuly and Anthony P. LaRocco, and Christopher A. Barbarisi, on the briefs).

David G. Tomeo argued the cause for respondent Global Tel*Link Corp. (Lowenstein Sandler, attorneys; Robert D. Towey, of counsel and on the briefs; Mr. Tomeo, on the briefs).

Cynthia Hackett, Deputy Attorney General, argued the cause for respondent State of New Jersey (Anne Milgram, Attorney General, attorney; Michael J. Haas, Assistant Attorney General, of counsel (A-6591-05); Lewis A. Scheindlin, Assistant Attorney General, of counsel (A-3707-06); Ms. Hackett, on the briefs).

Eric M. Aronowitz, First Deputy County Counsel, argued the cause for respondent County of Middlesex (Thomas F. Kelso, Middlesex County Counsel, attorney; Mr. Aronowitz, on the brief).

Peter H. Nelson, Burlington County Solicitor, attorney for respondent County of Burlington (Jean Hartman Culp, Senior Assistant Solicitor, on the brief).

Philip J. Anderson argued the cause for respondents County of Camden and County of Gloucester (Deborah Silverman Katz, Camden County Counsel, and Marks, O'Neill, O'Brien & Courtney, attorneys; Lawrence M. Vecchio, Assistant Camden County Counsel, and Frances Wang Deveney, join in the briefs filed by respondents in A-3707-06).

John C. Porto, Cape May County Counsel, attorney for respondent County of Cape May, joins in the brief of respondent State of New Jersey.

Gary D. Wodlinger, Cumberland County Counsel, attorney for respondent County of Cumberland joins in the brief of respondent State of New Jersey.

Mark E. Morchel, Deputy County Counsel, argued the cause for respondent County of Hudson (Donato J. Battista, Hudson County Counsel, attorney; Mr. Morchel joins in the brief of respondent State of New Jersey).

Gaetano M. DeSapio, Hunterdon County Counsel, attorney for respondent County of Hunterdon (Shana L. Taylor, Assistant County Counsel, joins in the brief of respondent State of New Jersey).

Arthur R. Sypek, Jr., Mercer County Counsel, attorney for County of Mercer (Sarah G. Crowley, Deputy County Counsel, joins in the brief of respondent State of New Jersey).

John R. Madden, Special County Counsel, argued the cause for respondent County of Monmouth (Mr. Madden joins in the brief of respondent State of New Jersey).

Edward McMahon (Lum, Drasco & Positan), Special Morris County Counsel, argued the cause for respondent County of Morris (Ronald Kevitz, Morris County Counsel, attorney; Mr. McMahon, on the brief).

R. Scott Clayton argued the cause for respondent Ocean County (Berry, Sahradnik, Kotzas, Riordan & Benson, attorneys; Mr. Clayton joins in the brief of respondent State of New Jersey).

Thomas C. Miller, Somerset County Counsel, attorney for County of Somerset, joins in the brief of respondent State of New Jersey.

Dennis Leonard argued the cause for County of Sussex (Dennis L. McConnell, Sussex County Counsel, attorney; Mr. Leonard joins in the brief filed by respondent State of New Jersey.

Rosalba L. Comas, Deputy County Counsel, argued the cause for respondent County of Union (Robert E. Barry, Union County Counsel, attorney; Ms. Comas joins in the brief of respondent State of New Jersey).

PER CURIAM

These two appeals were calendared back-to-back. We consolidate the matters for purpose of this opinion and affirm.

The primary issue in each appeal concerns T-Netix's challenge to a contract that was awarded, following a competitive bidding process by the State of New Jersey, Department of Treasury, Division of Purchase and Property (the State), to AT&T Corp., and later assumed by defendant Global Tel*Link Corp. (Global). Under the contract, Global is required to provide inmate telephone services to State correctional facilities, and upon election, to county correctional facilities through the State's Cooperative Purchase Program (CPP). N.J.S.A. 40A:11-12; N.J.A.C. 5:34-7.29 to -7.32. T-Netix contends that Global "has developed an illegal scheme to circumvent New Jersey's public bidding laws and to monopolize the inmate telephone service provider market throughout the State of New Jersey." We first set forth the core facts and the procedural histories of the appeals. We will address other facts as necessary when discussing the issues presented.

I.

THE STATE CONTRACT

In 2001 the State issued a Request for Proposal (RFP), soliciting bids for a five-year contract for inmate/resident telephone equipment and control services, at State Department of Corrections (DOC) and Juvenile Justice Commission (JJC) facilities. Under the RFP, prison inmates would only be allowed to make outgoing, station-to-station collect calls. The inmates would be assigned a six digit, personal identification number, identifying an inmate's authorization to call a preapproved number. After an inmate made a collect telephone call, it was anticipated that the telephone service provider would receive payment for the telephone call by charging the individual who had accepted the telephone call, and then in turn, pay a commission at the contracted rate, to the State or county that operated the correction facility where the inmate was incarcerated. Under the RFP, bidders were asked to submit various commission alternatives, based upon the cost of telephone calls made by inmates. When responding to the proposal, bidders were encouraged to submit alternative solutions. In answering an inquiry concerning whether the commissions or the end user rates had greater value to the State, the "State never expressed a preference, but rather preferred that the bidders provide a range of options."

The RFP included a provision that the commission rates and services provided to the DOC and JJC "are to be extended to the county correctional facilities" participating in the contract. Paragraph 5.6 of the RFP (Procedural-New Technology) addressed post-award additions or substitutions:

A. After the contract award, additions and/or substitutions will be allowed provided:

It is approved in writing by the Director, Division of Purchase and Property, with or without consultation from OIT [the State Office of Information Technology], DOC and JJC;

Product/service meets or exceeds performance of the original; and

Product/service is compatible with the original.

B. If new service, having the same functional purpose and a demonstrated nexus to the service under the contract, is developed and comes into standard production after the contract award, that service will be considered for addition and/or replacement for the service under contract. The contractor must make a written request to the Purchase Bureau for new service to be added to the contract. Such written request must include the specifications for the new service, evidencing that the new service serves the same functional purpose and has a close nexus to the service under contract.

All proposed additions or replacements are subject to a review and written acceptance by the Director, Division of Purchase [and] Property. The sale of new service accepted in writing by the Director shall be governed by the terms of the contract, including price. The aggregate price of any new services must be equal to or less than the existing contracted service.

Among those submitting bids were Verizon New Jersey, Inc., AT&T Corp., Focal Communications, Inc., Quest Communication, Worldcom, and T-Netix, but not Global. The AT&T proposal included a provision allowing the State to "change its rate and commission structure" during the contract term to meet its needs, along with a variable call-rate schedule.

[W]e have proposed a flexible rate and commission offering that allows the State to select from four rate/commission alternatives. These alternatives will allow the State to tailor the most impact to the taxpayers of New Jersey and inmate friends and families across the nation. With AT&T, the State can also change its rate and commission structure at any time during the term of the contract to meet its specific needs and/or to address the concerns of consumers.

Depending on which of the four "rate/commission alternatives" was chosen under the AT&T proposal, commissions due the State or the counties could vary from 0% to 53%.

Following the issuance of the 2001 RFP, the State evaluated the technology offered through the proposals. In September 2003, the State's Purchase Bureau recommended that Verizon be awarded the contract. T-Netix and AT&T protested the State's intent to award the contract to Verizon. On April 26, 2004, the State rescinded its intention of awarding Verizon the contract, "[b]ecause of new information pertaining to the telephone industry and the possibility of changes relating to the scope of work."

On February 1, 2005, Verizon requested to be released from its proposal. The State consented. On February 25, 2005, the State awarded the contract to AT&T for the intended services AT&T had denominated in its responding proposal as the Value-Added Communications, Inc. ("VAC System, Option A," platform, with a 47% commission rate). The resulting contract, known as #61618, was for five years, commencing in April 2005, and provided that it was "available for political subdivision [meaning county] use" as well. Upon award of the contract to AT&T, T-Netix withdrew its bid protest that it had filed against the State's intention of awarding the contract to Verizon. T-Netix did not file a protest against the award of the contract to AT&T.

In the Spring of 2005, Global purchased the division of AT&T that had been awarded the contract. On June 2, 2005, with the consent of the State, AT&T assigned the contract to Global. In the fall of 2005, Global and the State had discussions, pursuant to the terms of the AT&T contract, allowing flexibility in the various rate and commission structures, and Global's offer to add a telecommunications product known as "LazerPhone." Those discussions led to the State's issuance of a one-page "Special Notice" (Notice) on January 13, 2006, referencing a "new contract" between it and Global, for the services previously covered by the contract with AT&T from which the counties could choose. Attached to the Notice was a schedule, listing the available technology and commission options for various services offered. On the same date of its issuance, the State sent a copy of the Notice to all eligible counties in the State inmate telephone contract.

Notwithstanding that the Notice referred to the contract as "new," it continued the "61618" contract reference number and recited that the contract had begun in April 2005, the same date as the AT&T contract had started, and would expire on March 31, 2010, the same expiration date as the AT&T award. It also affirmed that the contract extended to both State and county facilities, but not local facilities.

On March 24, 2006, the State notified Global that it approved adding the LazerPhone to contract 61618, in accordance with certain stipulations, including Global's provision of "upgraded Recording at [Global's] cost, value $250k+," and its agreement to "[m]ove all NJ DOC sites to 40% immediately." Counties, however, were free to choose a different commission rate in accordance with the schedule of options. All other terms of the contract remained unchanged. Global then offered the various options in accordance with the Notice and schedule of options directly to the counties.

THE MIDDLESEX COUNTY ACTION

On January 28, 2003, while the State's decision on the award of the contract was pending, T-Netix signed a three-year contract with Middlesex County to provide telephone equipment and related services to two county correctional facilities. Under the contract, T-Netix agreed to pay Middlesex County a commission of 53-6/10% of gross billed revenues for each completed call, excluding certain taxes and surcharges. During the fall of 2005, and prior to expiration of plaintiff's contract with Middlesex County, the County issued a new RFP. However, the County cancelled the advertised bid opening, and subsequently withdrew its RFP, expressing that changes were necessary to the RFP. After plaintiff's contract with Middlesex County expired in January 2006, the parties continued to operate under the terms of the prior contract "on a month to month basis."

On March 16, 2006, the Middlesex County Board of Chosen Freeholders adopted a resolution, awarding a contract to Global, pursuant to the terms of the State contract. Because Middlesex County elected to participate in the State contract pursuant to the CPP, a separate contract did not exist between Middlesex County and Global, the resolution acting as the contract. Middlesex selected one of the options set forth in the Notice, the option under which it would receive a commission of 53%: "[t]he Rate Option No. 2 - Category - New No. 1 New Technology Offer" plan. After awarding the contract to Global, Middlesex and eight other counties moved forward with implementation, as Global began customizing services and equipment for each subscribing facility. On April 12, 2006, Global notified T-Netix of its contract with Middlesex County. On June 12, 2006, Global notified T-Netix via e-mail, of its schedule of dates for the installation of its equipment in ten different counties, including Middlesex. By July 2006, Global had invested more than $650,000 in hardware and "contractual commitments" pursuant to those plans, and was scheduled to install and activate Middlesex County's system in the middle of July 2006. On July 13, 2006, Middlesex County advised that installation of the new system was nearly completed, and it anticipated operating inmate phones via the new system the following day.

Meanwhile, T-Netix had learned in March 2006 that Middlesex County had awarded a contract for inmate services to Global. T-Netix, aware of the State's March 24, 2006, intention to move "all NJ DOC sites to 40%," investigated whether Middlesex County had also agreed to accept the "forty percent State Commission rate" when that "was more than thirteen percent less than the commission [then] provided by [T-Netix]." T-Netix learned on April 12, 2006, that Global had agreed to pay Middlesex County a commission rate of 53% for providing inmate phone services at the County's two correctional facilities.

T-Netix accused Global of devising a scheme to procure county inmate phone service agreements outside the normal bid process, improperly leading to the "new contract," between Global and the State. Global countered that its discussions with the State in the fall of 2005, the State's acceptance of new technology, and the promulgation and acceptance of additional rate and commission options, were in compliance with AT&T's contract and the new technology provision in the State's RFP.

On June 15, 2006, T-Netix filed a verified complaint against defendant County of Middlesex, together with an application for an order to show cause (OTSC), seeking among other matters: 1) to restrain the County from awarding a new contract or expanding the terms of the existing contract to its current vendor for provision of inmate telephone services at Middlesex County's correctional facilities, and 2) a declaratory judgment "declaring null and void the March 16, 2006, Middlesex County Resolution (R. #06-374)." In the complaint, T-Netix alleged that "Middlesex has improperly awarded the new contract for inmate telephone services to the State vendor, as said award provides for terms and conditions that are significantly different from those awarded and currently utilized by the State under State Contract #61618 . . . ." T-Netix alleged that Middlesex's contract with Global was "contrary to the expressed requirements of the State [CPP]" and "constitute[d] clear violations of the Local Public Contract Law [(LPCL)] . . . including . . . the State [CPP] requirements and limitations set forth in N.J.S.A. 40A:11-12 and N.J.A.C. 5:34-7.29(d)."

Plaintiff's application for an OTSC was argued before the trial court on June 23, 2006. On motion granted, Global intervened. Determining that plaintiff had not established a likelihood of success on the merits and had known about the contract between Middlesex County and Global since March 2006 before filing the complaint, Judge Longhi denied T-Netix's application for a temporary restraint. The judge also dismissed the action without prejudice, concluding that the complaint was improvidently filed because T-Netix failed to join the State as a party having an interest in the action. A confirming order was entered on August 8, 2006.

In the interim, on June 30, 2006, plaintiff filed a second complaint, naming the County of Middlesex, the State, and Global as defendants, substantially repeating its earlier claims and prayers for relief in support of an OTSC with temporary restraints and for a declaratory judgment. In this complaint, T-Netix alleged that "[t]he Middlesex Contract with [Global] differs substantially from the terms and conditions awarded to AT&T by the State for State Contract #61618, and differs substantially from the newly-negotiated option utilized by the State, which provides for a far lower commission rate and requires the VAC technology platform." T-Netix further alleged that "[t]he authorization and publication of the new County Rate Schedule by the State, which provides options and technology platforms not set forth in the AT&T bid award of 2005 and not currently utilized by the State, constitute violations of the [LPCL] . . . including . . . the State [CPP] . . . ."

T-Netix's application for a preliminary restraint was argued before Judge Longhi on July 14, 2006. Following argument, the judge denied the application for temporary restraints and dismissed the complaint with prejudice, determining that the complaint was time barred, both by court rule and administrative regulations, and that Middlesex County had properly awarded the contract to Global pursuant to the State CPP. A confirming order was entered the same day.

THE MERCER COUNTY ACTION

In the second appeal filed under Docket No. A-3707-06T1, T-Netix filed its complaint on November 14, 2006, against the fourteen named County defendants, the State, and Global, challenging the Counties' rights to award contracts for telephone service at their respective correctional facilities to Global. T-Netix alleged that the State and Global had engaged in secret negotiations resulting in a contract for State and County correctional facility phone services which included provisions beyond AT&T's bid, in violation of the State's public bidding laws. Specifically, T-Netix alleged that "[t]the private negotiations between the State and [Global] illegally changed material terms and conditions of the original State Contract, resulting in a completely new contract. Such private negotiations violated the public bidding laws." T-Netix further alleged, "[t]he State also illegally issued [Global's] menu of approximately 30 different commission/technology options from which the Counties could select their own inmate telephone service (under the auspices of the CPP). This conduct violated the public bidding laws and the CPP." Lastly, T-Netix alleged "[t]he Counties illegally contracted for inmate telephone services by issuing a purchase order for inmate telephone service under terms and conditions that materially differ from those contained in the State Contract. This conduct violates both the LCPL and the CPP."

T-Netix sought preliminary and permanent injunctive relief, rescinding any contract terms beyond those of AT&T's bid, and enjoining the State and counties from availing themselves of any terms other than those made part of the original State contract, as well as declaratory relief. On November 28, 2006, an OTSC was entered, directing defendants to show cause before the court on January 19, 2006, as to why a preliminary restraint and other relief should not be granted.

On January 9, 2007, the State filed a motion to dismiss the complaint on the grounds of res judicata, collateral estoppel, the entire controversy doctrine, statute of limitations, and lack of subject matter jurisdiction, asserting that the Appellate Division has exclusive jurisdiction over actions of a State Administrative Agency. The State also asserted that plaintiff failed to establish the necessary requirements for a preliminary injunction. On the same day, Global filed a motion to consolidate the action with the Middlesex County case, then on appeal; or, in the alternative, to dismiss the action on the grounds of res judicata and for the reasons articulated by Judge Longhi in the Middlesex County case. Various counties joined in Global's motion.

On January 19, 2007, Judge Linda Feinberg rendered an oral decision and written opinion that dissolved the earlier OTSC and dismissed the complaint, determining that: 1) T-Netix had not established that it was entitled to injunctive relief because T-Netix had not demonstrated a likelihood of success on the merits; 2) the complaint was barred by the time constraints of N.J.A.C. 17:12-3.2(b); N.J.A.C. 17:12-3.3(b); and R. 4:69-6(a); 3) the complaint was barred by the doctrines of res judicata, collateral estoppel, and the entire controversy; 4) to the extent that T-Netix was challenging the State's decision to amend a contract with Global, the Law Division did not have jurisdiction, because exclusive jurisdiction rests with the Appellate Division pursuant to R. 2:2-3a(2).

On appeal, T-Netix argues in the Middlesex County action:

POINT I.

THE TRIAL COURT ERRED BY DISMISSING THE COMPLAINT WITH PREJUDICE SUA SPONTE.

A. T-NETIX HAD NO OPPORTUNITY TO MAKE AN ADEQUATE RECORD.

B. THE TRIAL COURT DID NOT FOLLOW PROPER PROCEDURES BEFORE DISMISSING THE CASE.

C. THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT WITH PREJUDICE ON THE GROUNDS THAT IT LACKED JURISDICTION OVER THE STATE.

POINT II.

THE TRIAL COURT ERRED IN FINDING THAT THE 45-DAY STATUTE OF REPOSE BARS THIS ACTION.

A. T-NETIX'S COMPLAINT WAS TIMELY FILED.

B. EVEN IF T-NETIX'S COMPLAINT WAS UNTIMELY, THE TRIAL COURT ERRED BY NOT EXTENDING THE 45-DAY TIME PERIOD.

1. THE 45-DAY TIME PERIOD SHOULD BE EXPANDED BECAUSE THE STATE AND COUNTY HAVE VIOLATED NEW JERSEY'S PUBLIC BIDDING LAWS.

a. THE STATE VIOLATED THE LPCL.

b. THE STATE AND COUNTY VIOLATED THE CPP.

2. THE 45-DAY TIME PERIOD SHOULD BE EXTENDED BECAUSE THIS CASE INVOLVES A CONTINUING VIOLATION OF PUBLIC RIGHTS.

3. THE 45-DAY TIME PERIOD IS INAPPLICABLE BECAUSE T-NETIX SEEKS INJUNCTIVE RELIEF.

POINT III.

THE COURT ERRED IN FINDING THE "TEN-DAY RULE" APPLICABLE TO THIS CASE.

POINT IV.

THIS COURT SHOULD ENTER THE INJUNCTIVE RELIEF THE TRIAL COURT DENIED.

A. A PRELIMINARY INJUNCTION IS NECESSARY TO PREVENT IRREPARABLE HARM.

B. THERE IS A SETTLED LEGAL RIGHT SUPPORTING T-NETIX'S CLAIM.

C. T-NETIX HAS A REASONABLE PROBABILITY OF SUCCESS ON THE MERITS.

D. THE RELATIVE HARDSHIPS FAVOR GRANTING INJUNCTIVE RELIEF.

In the Mercer County action, T-Netix argues:

POINT I.

THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT WITH PREJUDICE ON THE GROUNDS THAT IT LACKED JURISDICTION OVER THE STATE.

POINT II.

THE TRIAL COURT ERRED IN FINDING THIS ACTION UNTIMELY UNDER RULE 4:69-6(a).

A. THE TRIAL COURT ERRED BY NOT DETERMINING WHEN THE STATUTE OF LIMITATIONS ACCRUED FOR EACH DEFENDANT.

B. EVEN IF THE 45-DAY TIME PERIOD EXPIRED, THE TRIAL COURT ERRED BY NOT EXTENDING THE TIME FOR FILING.

1. THE 45-DAY RULE SHOULD BE EXTENDED BECAUSE PLAINTIFFS HAVE ALLEGED VIOLATIONS OF PUBLIC BIDDING LAWS.

a. THE STATE VIOLATED THE PUBLIC BIDDING LAWS BY PRIVATELY NEGOTIATING A NEW CONTRACT WITH [GLOBAL].

b. THE STATE AND [GLOBAL] VIOLATED THE PUBLIC BIDDING LAWS BY NOT COMPLYING WITH THE TERMS OF THE RFP.

i. NEW TECHNOLOGY PROVISIONS.

ii. AT&T'S RFP RESPONSE, RFP ADDENDUM NO. 3 AND THE RFP'S STANDARD TERMS AND CONDITIONS.

c. THE STATE AND COUNTIES HAVE VIOLATED THE LPCL AND THE CPP.

2. THE 45-DAY RULE SHOULD BE EXPANDED BECAUSE THIS CASE INVOLVES A CONTINUING VIOLATION OF PUBLIC RIGHTS.

3. THE 45-DAY RULE IS INAPPLICABLE BECAUSE THE TAXPAYERS ARE SEEKING INJUNCTIVE RELIEF.

POINT III.

THE TRIAL COURT ERRED IN FINDING THIS CASE UNTIMELY UNDER THE ADMINISTRATIVE CODE.

POINT IV.

THE TRIAL COURT ERRED IN DISMISSING THIS CASE BASED ON PRECLUSION DOCTRINES.

A. PRECLUSION DOCTRINES ARE INAPPLICABLE TO THIS CASE BECAUSE IT INVOLVES ISSUES OF GENERAL PUBLIC IMPORTANCE.

B. THE TRIAL COURT ERRED BY FINDING CERTAIN ELEMENTS OF RES JUDICATA AND COLLATERAL ESTOPPEL PRESENT.

1. THERE IS NO FINAL JUDGMENT ON THE MERITS BY A COURT OF COMPETENT JURISDICTION.

2. THERE ARE NO IDENTICAL ISSUES THAT WERE ACTUALLY LITIGATED IN THE PRIOR ACTION.

C. THE TRIAL COURT ERRED BY DISMISSING THIS CASE BASED ON THE ENTIRE CONTROVERSY DOCTRINE.

POINT V.

THIS COURT SHOULD ENTER THE INJUNCTIVE RELIEF THE TRIAL COURT DENIED.

A. A PRELIMINATY INJUNCTION IS NECESSARY TO PREVENT IRREPARABLE HARM.

B. THERE IS A SETTLED LEGAL RIGHT SUPPORTING THE TAXPAYERS' CLAIM.

C. THE TAXPAYERS HAVE A REASONABLE PROBABILITY OF SUCCESS ON THE MERITS.

D. THE RELATIVE HARDSHIPS FAVOR GRANTING INJUNCTION RELIEF.

II.

We first address T-Netix's argument that the trial judge erred in dismissing the Middlesex County complaint with prejudice sua sponte, determining that the action was barred by the "statute of limitations and/or alleged lack of jurisdiction over the State." T-Netix contends that the trial court erred in dismissing the action on its own initiative because "none of the [d]efendants had filed a motion to dismiss or a motion for summary judgment." T-Netix asserts that the dismissal "came as a surprise and without affording [it] a fair opportunity to respond to those arguments, to conduct discovery or to make an adequate record." We are not persuaded by these contentions.

A trial court has discretion to convert an application for a temporary restraining order into a motion for summary judgment. See Concerned Citizens of Borough of Wildwood Crest v. Pantalone, 185 N.J. Super. 37, 48 (App. Div. 1982) (determining that a trial court has discretion to convert an application for injunctive relief into a motion for summary judgment on the return date of an OTSC when there are no material facts in dispute). See also Enourato v. N.J. Bldg. Auth., 182 N.J. Super. 58, 64-65 (App. Div. 1981) (holding that a trial court has discretion to grant summary dismissal of a complaint on a return date of an application for an OTSC seeking a preliminary restraint against the issuance of public bonds), aff'd, 90 N.J. 396 (1982).

Here, on the return date of T-Netix's application for an order to show cause with temporary restraints, each defendant made an oral motion to dismiss the complaint. Middlesex County not only moved on the basis that it had properly awarded the contract to Global under the State CPP, but also because the complaint was filed beyond the forty-five-day time constraint of N.J.S.A. 4:69-6(a). Global moved to dismiss on the basis that its contract with the State was presumptively valid and that T-Netix's opportunity to challenge the State's acceptance of AT&T's flexible rate offer was time barred, pursuant to N.J.A.C. 17:12-3.3. The State argued that T-Netix should have initially protested the terms of the RFP, the initial award of the contract to AT&T, the approval of Global's assumption of the contract, and any changes to the technology or commission rates made to the contract pursuant to AT&T's flexible rate offer to the Division of Purchase and Property, pursuant to the administrative code; and then ultimately challenged the State's actions in the Appellate Division, not the Law Division.

Because many of the issues raised by defendants in their motions are the same issues raised before the trial court on June 23, 2006, when Judge Longhi dismissed T-Netix's first complaint, we discern no surprise to T-Netix that the arguments were again raised at the time T-Netix made application for its OTSC under its second complaint. We are satisfied that the issues of whether T-Netix's complaint was time barred, either by rule or administrative regulation, and whether the case was properly venued in the Law Division, rather than the Appellate Division, are questions of law, not requiring additional discovery or a plenary hearing. Accordingly, we determine that the trial judge had the inherent authority to entertain defendants' oral motions to dismiss, R. 1:6-2(a), at the July 14, 2006, hearing, subject to the Law Division having jurisdiction over the matter.

Having determined that a trial court can dismiss an action on the return date of an application for an OTSC, we now consider whether the two cases were properly dismissed. In reviewing a trial court's determination on a question of law, appellate courts consider the issue de novo. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). Whether an action is time barred by a statute of limitations is a legal determination. Churchill v. State, 378 N.J. Super. 471, 478 (App. Div. 2005).

On appeal from the denial of an application for a temporary restraint or a preliminary injunction, this court applies the abuse-of-discretion standard in determining whether the trial court correctly applied the four prong test of Crowe v. De Gioia, 90 N.J. 126, 132-34 (1982), when ruling on the application. Rindaldo v. RLR Inv. LLC, 387 N.J. Super. 387, 395 (App. Div. 2006).

T-Netix argues that both trial judges erred in concluding that its two complaints were time barred, determining: 1) the complaints were not filed within the forty-five-day time constraint, governing complaints in lieu of prerogative writs; 2) T-Netix failed to administratively protest the changes to the State contract pertaining to the technology or commission rates, within ten days after first learning of the Notice; or 3) in the alternative, by T-Netix not filing an appeal directly with the Appellate Division within forty-five days after learning of the State contract changes.

In addressing T-Netix's argument, we must first determine whether the Law Division was the proper venue for T-Netix to have filed its complaints. T-Netix argues that it is "seeking redress from certain illegal actions of certain County Governments," and that it is not challenging the terms of the RFP, the award of the contract to AT&T, AT&T's flexible rate offer, or the assignment of the AT&T contract to Global. T-Netix contends that the appropriate method of reviewing the awards by the Counties of telephone service contracts to Global through the State CPP, is by "an action in lieu of prerogative writ[s] instituted in the Law Division." T-Netix asserts that its complaints were timely filed within the forty-five-day time period of Rule 4:69-6(a), and even if they were not, that the courts should have enlarged the forty-five-day period for commencing the actions, because "the interest of justice so require[d]." R. 4:69-6(c).

Contrary to T-Netix's assertion, we conclude, as did the two trial judges, that T-Netix's primary grievance pertains to the State's modification to the AT&T contract as formalized by the Notice. We reach that determination after considering the allegations contained in the two Middlesex County complaints and the Mercer County complaint. Moreover, the Counties did not act illegally in entering into the agreements with Global. The County contracts were properly entered into pursuant to the CPP:

[A]ny contracting unit under this act may without advertising for bids, or having rejected all bids obtained pursuant to advertising therefor, purchase any goods or services under any contract or contracts for such goods or services entered into on behalf of the State by the Division of Purchase and Property in the Department of the Treasury.

[N.J.S.A. 40A:11-12.a.]

The Counties received the Notice, advising that the State contract for the provision of inmate telephone service with Global was being extended to the county governments for use at the County correctional facilities. Commission rates of each County contract are in accordance with the State contract. Any claims of damage that T-Netix asserts arise because of the State's actions with Global, not from each County's award of a contract to Global. Accordingly, we reject T-Netix's argument that a new filing deadline was triggered each time a County Government awarded a contract to Global through the State CPP.

Because the primary complaint of T-Netix centers around the actions of the State in amending the contract with Global, as evidenced by the Notice, we are satisfied that T-Netix should have challenged that action within forty-five days of the issuance of the Notice on January 13, 2006, by filing its challenges in the Appellate Division, not the Law Division. R. 2:4-1(b) ("Appeals from final decisions or actions of State administrative agencies or officers . . . shall be taken within forty-five days from the date of service of the decision or notice of the action taken.").

"The overarching rule in New Jersey has long been that 'every proceeding to review the action or inaction of a local administrative agency [is] by complaint in the Law Division and that every proceeding to review the action or inaction of a state administrative agency [is] by appeal to the Appellate Division.'" Infinity Broad. v. N.J. Meadowlands Comm'n, 187 N.J. 212, 223 (2006) (quoting Cent. R.R. Co. v. Neeld, 26 N.J. 172, 184-85, cert. denied, 357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2d 1371 (1958) (internal citations omitted)). Nor does the "Appellate Division's exclusive jurisdiction . . . turn on the theory of the challenging party's claim or the nature of the relief sought." Mutschler v. N.J. Dep't of Envtl. Prot., 337 N.J. Super. 1, 9 (App. Div.), certif. denied, 168 N.J. 292 (2001). Moreover, "where it appears to have concurrent or overlapping jurisdiction with a trial court . . . the Appellate Division is . . . the exclusively appropriate forum." Pressler, Current N.J. Court Rules, comment 3.2.1 on R. 2:2-3 (2008).

Assuming that T-Netix was not aware of the Notice at the time it was published to the Counties, T-Netix was aware of the State's action as of April 12, 2006, when Global advised T-Netix that it had been awarded the Middlesex County contract pursuant to the State CPP. T-Netix's second Middlesex County complaint was filed on June 15, 2006, and the Mercer County complaint was filed on November 14, 2006, both complaints filed more than forty-five days after April 12, 2006. Therefore, we conclude that both actions were not timely filed. R. 4:69-6(a).

Because this matter was not initially transferred to us by the Law Division, we choose to "exercise our original jurisdiction on appeal from the judgment[s] [of the Law Division] and review the underlying agency action as if the challenging party had appealed directly to this court." Mutschler, supra, 337 N.J. Super. at 10. For the reasons stated, we are satisfied that the two complaints, forming the basis of these appeals, were not filed within forty-five days of April 12, 2006, and therefore, are time barred. Thus, the two complaints were properly dismissed with prejudice.

Assuming that we are mistaken in our conclusion that the gravaman of the two lawsuits concerns the State's action in amending the State contract, rather than T-Netix's challenge to the counties' actions, we are satisfied that the same result is required because the same period of repose for the filing of the complaints would have applied, that is, forty-five days from April 12, 2006. R. 4:69-6(c). T-Netix contends that if the matters were properly venued in the Law Division, the trial judges should have enlarged the forty-five-day period under Rule 4:69-6(a) before commencing the actions. R. 4:69-6(c). We are satisfied that the trial judges correctly denied the request to enlarge the time period for the filing of the two complaints.

An action in lieu of prerogative writs must be commenced no later than "forty-five days after the accrual of the right of review, hearing, or relief claimed, except in Paragraph (d) of [the rule]." R. 4:69-6(a). However, in certain instances an enlargement of the forty-five-day time limitation may be permitted.

Rule 4:69-6(c) provides: "[t]he court may enlarge the period of time provided in Paragraph (a) or (b) of this rule where it is manifest that the interest of justice so requires." Courts generally grant exception from the time limit, in "'cases involving (1) important and novel constitutional questions; (2) informal or ex parte determinations of legal questions by administrative officials; and (3) important public rather than private interest which require adjudication or clarification.'" Adams v. DelMonte, 309 N.J. Super. 572, 580-81 (App. Div. 1998) (quoting Brunetti v. Borough of New Milford, 68 N.J. 576, 586 (1975) (footnotes omitted)); Pressler, Current N.J. Court Rules, comment 7 on R. 4:69-6 (2008). "However, a trial court's authority to grant an enlargement of time under Rule 4:6-96(c) is not limited to these three categories of cases." Gregory v. Borough of Avalon, 391 N.J. Super. 181, 189 (App. Div. 2007). Such exceptions to the time constraint in the rule "should be but exceptionally condoned and only in the most persuasive circumstances." Robbins v. City of Jersey City, 23 N.J. 229, 238 (1957).

In arguing that the third exception to the rule is applicable, T-Netix cites Borough of Princeton v. Bd. of Chosen Freeholders of Mercer, 169 N.J. 135, 152 (2001), contending that any alleged violation of the public bidding laws justifies an enlargement of the filing deadline. We do not interpret Borough of Princeton so broadly. In Borough of Princeton, two plaintiffs had filed separate actions, challenging two long-term solid waste disposal contracts that were granted by Mercer and Morris Counties to Waste Management, Inc. The contracts were not publicly bid. Rather, each county granted easement rights on properties owned by the counties to Waste Management, obligating the disposal company to dispose of each county's solid waste by burying and covering the waste in accordance with applicable law. Id. at 145-49.

After the expiration of the forty-five-day period of repose, R. 4:69-6(a), plaintiffs filed their actions, contending that the contracts were invalid, not having been bid in accordance with the LPCL. In addressing the timeliness issue, the trial court determined that the forty-five-day time period should have been enlarged because "the interest of justice so require[d]," citing R. 4:69-6(c). Id. at 149. On appeal, we determined that both contracts were subject to the LPCL and remanded the matter to the Law Division. Id. at 151. On certification granted, the Court affirmed. Id. at 141. In affirming, the Court addressed defendants' contention that the complaints in lieu of prerogative writs had been filed beyond the forty-five-day period of repose under the court rule. In affirming the trial court's enlargement of the time period for the filing of the complaints, the Court noted the unique facts of the two cases.

First, the Court noted that the "Mercer and Morris agreements are . . . ten and fourteen years longer than the LPCL would authorize for such contracts." Id. at 153. Secondly, the court noted that the two lawsuits involved "unique public policy concerns," id. at 155, because the matters arose in "the context of solid waste management contracts, which [the] Court has described as being 'fraught with the potential for abuse in the form of favoritism, rigged bids, official corruption, and the infiltration of organized crime.'" Id. at 155 (quoting In re Application of Saddle River, 71 N.J. 14, 22 (1976). Because of the unique circumstances involved and the policies, including the LPCL, the Court concluded that the petitions concerned "'important public . . . interests which require adjudication or clarification.'" Id. at 155 (quoting Brunetti, supra, 68 N.J. at 586). Here, contrary to Borough of Princeton, the State did not circumvent the public bidding process. The State publicly advertised the contract and initially awarded it to AT&T in 2005, the award for which plaintiff did not protest. The changes complained of were made pursuant to the terms of the RFP and the flexible rate provision of the AT&T contract. We are satisfied that this matter does not involve the grave public concerns found in Borough of Princeton.

Moreover, given the large amounts of money expended by Global and by the counties in reliance on the State CPP, and the harm that would be caused by undoing inmate telephone systems across the State after the fact, we conclude it was incumbent on T-Netix to file any challenge promptly, timely, and in the correct forum. Therefore, we perceive no good cause to extend the forty-five day filing deadline either for a trial court action in lieu of prerogative writs or for an appeal. To the contrary, there was good cause here to strictly apply the filing deadlines.

Affirmed.

The plaintiffs in appeal under Docket No. A-6591-05T1 are T-Netix, Inc., and its wholly-owned subsidiary, T-Netix Telecommunications Services, Inc. The plaintiffs in appeal under Docket No. A-3707-06T1 are Arthur Heckel, Mamdouh Khiry, Marcus McCleery, and T-Netix, Inc. The three individual plaintiffs are employees of T-Netix, Inc, or of SECURUS Technologies, the corporate parent of T-Netix, Inc. For purposes of this opinion, we refer to all plaintiffs collectively as "T-Netix."

N.J.S.A. 40A:11-1 to -51.

Although there is an indication in the record by a statement of T-Netix's trial counsel at the June 23, 2006, OTSC hearing that "[w]e did learn about this contract in March 2006," there is no evidence of the exact date that T-Netix learned of Middlesex County's award of the contract to Global. Accordingly, giving T-Netix all favorable inferences of when it had learned of the State's action, we choose the later date of April 12, 2006, for the running of any periods of limitations, for challenging the amendments to the State contract.

The trial judges had also determined that the two complaints were time barred because T-Netix failed to administratively protest the State's action within ten days of learning of the State's action in amending the State contract. N.J.A.C. 17:12-3.3(b). Because we determine that the complaints are time barred by Rule 2:4-1(b), we need not decide whether the two complaints were time barred under the administrative rule. The issue is moot.

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A-6591-05T1

December 21, 2007