## Facts

- The City of Sutton solicited competitive bids for wastewater treatment facility improvements under bid documents requiring certifications (including nondebarment) and compliance with nondiscrimination and DBE requirements.
- The bid materials stated bids would be publicly opened and included clauses reserving to the City the right to reject any and all bids, waive informalities, and select a bid deemed in the City’s best interest.
- Westhoff submitted a bid approximately $16,000 lower than Van Kirk Sand & Gravel, a local contractor.
- The City Council awarded the contract to Van Kirk, citing local economic benefits and similar considerations rather than bid price.
- A Sutton resident taxpayer, funded by the disappointed bidder, sued the City, its mayor and council members, and Van Kirk seeking an injunction to stop performance and a declaratory judgment that the award violated Nebraska “lowest responsible bidder” statutes (Neb. Rev. Stat. §§ 17-918 and 18-507).
- The district court denied injunctive and declaratory relief, reasoning Rath failed to show irreparable harm.
- While the appeal was pending, Van Kirk completed the project and the City paid the contract price in full.

## Issues

1. Whether the appeal became moot after full performance and payment, making injunctive and declaratory relief ineffective.
2. Whether, in a taxpayer action challenging an unlawful public expenditure, proof of illegality itself establishes irreparable harm for injunctive relief.
3. Whether a public body may award a contract to a higher bidder when all bidders are responsible and bids differ only in price.

## Decision

- The Nebraska Supreme Court dismissed the appeal as moot because the contract had been fully performed and paid, leaving no effective injunctive or declaratory remedy.
- The court nevertheless addressed the recurring legal questions under the public interest exception to mootness.
- The court stated that, for taxpayer suits, an illegal expenditure of public funds constitutes irreparable harm without any additional showing of special damage.
- The court stated that when all bidders are responsible and bids are identical except for price, the public entity lacks discretion to select a higher-priced bidder.

## Legal Principles

- A case is moot when there is no longer a present controversy or legally cognizable interest that a court’s judgment can affect; completed public works generally cannot be undone through injunction or declaration.
- The public interest exception permits review of an otherwise moot dispute when the issue is of public importance, likely to recur, and likely to evade review.
- In a taxpayer suit to enjoin unlawful spending, proof that the expenditure is contrary to law establishes irreparable harm; taxpayers need not prove additional, individualized injury.
- “Lowest responsible bidder” statutes permit discretion in determining bidder responsibility, but once bidders are responsible and bids differ only by price, the contract must be awarded to the lowest responsible bidder; bid-reservation language cannot override the statute.

## Conclusion

The appeal was dismissed as moot due to completion and payment of the contract, but the court clarified that illegality alone satisfies irreparable harm in taxpayer challenges to public expenditures and that, when responsibility is equal and only price differs, public entities must award to the lowest responsible bidder.


Rath v. City of Sutton, 267 Neb. 265, 673 N.W.2d 869 (Neb. 2004)