<< COB0000001 >> IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ) ELGUISE PEPION COBELL et at ) )No. l:96CV01235 Plaintiffs, ) (Judge Lambcrth) v. ) ) GALE A. NORTON, Secretary of ) the bilerior, et a]., ) Defcndants. ) _____________________________________________________________________________) INTERIOR DEFENDANTS' OPPOSITION TO THIRD-PARTY NATIVE AMERICAN INDUSTRIAL DISTRIBUTORS. INC.'S (1) MOTION FOR PERMISSIVE INTERVENTION ANI) (2) MOTION FOR TEMPORARY RESTRAINING ORDER. PRELIMINARY AND PERMANENT INJUNCTION The Secretary of the interior and the Assistant Secretary - Indian Affairs ("Interior Defendants," or "Interior") respectfully submit the following opposition to Native American Industrial Distributors, Inc's ("NATD") Motion for Intervention ('Intervention Motion") and NAID's concurrently filed Motion for a Temporary Restraining Order ("TRO Motion"). NALD has filed one memorandum ("NAID's Memorandum") in support of both motions and consequently Interior's opposition to both motions ~vill be included in this single pleading. It appears that the Intervention Motion should be decided first because, if the Intervention Motion is denied, then NAIID is not a party to this case and its TRO Motion must also be denied. INTRODUCTION NAID, a government contractor, had two contracts to perform services for Interior, one with the Bureau of Indian Affairs ("BIA") and one with the Office of Special Trustee ("OST"). See TRO Motion at ¶¶ 10, 12. The OST contract has been terminated for convenience. Id. at ¶¶ 5 1-52. The BIA contract has not been terminated. Id. at ¶ 53. << COB0000002 >> NAID alleges that the OST contract was terminated for improper purposes and that the BL~ contract will also be terminated, or allowed to expire without renewal, for similar improper purposes. TRO Motion at ¶ 45. NAIiD has filed its TRO Motion to ask the Court to reinstate the OST contract and enjoin Interior from terminating, or not renewing, the BIA contract. Id. at ¶ 60A-C. NAID has also moved to intervene in this action solely for the purposc of ha~ring its TRO Motion heard by this Court. Intervention Motion at 1. This Court should deny both motions. I. NAID'S MOTION FOR PERMISSIVE INTERVENTION MUST BE DENIED FOR LACK OF JURISDICTION AND COMMONALITY WITH THE MAIN ACTION NAIiD has not moved for intervention as of right under Federal Rules of Civil Procedure ("Rule") 24(a), but rather seeks permissive intervention under Rule 24(b)(2). To succeed in a request for permissive intervention, the putative intervenor must demonstrate (1) an independent ground for subject matter jurisdiction, (2) a timely motion, and (3) a claim or defense that has a question of law or fact in common 'vith the main action. See EEOC v. National Children's Ctr.. Inc., 146 F.3d 1042, 1046 (D.C. Cir. 1998). NAJID has not demonstrated the existence of jurisdiction over its claims or the requisite commonality with issues in the main action, and thus its Intervention Motion must be denied. A. No Subject Matter Jurisdiction Over NAID's Claims Exists Disti lied to their essence, the allegations in NAID's Memorandum and TRO Motion reveal a mere contract dispute between Interior and one of its contractors. NAID is asking this Court to step in and solve this dispute by forcing Interior to continue to do business with NAID. What NAID overlooks in its attempt to obtain this extra-contractual remedy is that both of its 2 << COB0000003 >> contracts with Interior are subject to the Contract Disputes Act of 1978 ("CDA"). 41 U.S.C. ~§ 601 et seq. The CDA applies to "any express or implied contract ... entered into by an executive agency" for the procurement of property, services, or construction. 41 U.S.C. § 602(a). Where it applies, as it does here, the CDA is the exclusive remedy for a dispute with a federal agency. A&S Council Oil Co. v. Lader, 56 F.3d 234, 241 (D.C. Cir. 1995); 1-10 Indus. Assocs. v. United States Postal Scm, 133 F. Supp. 2d 194. 195 (E.D.N.Y. 2001). Here, it is not even necessary to "read" the CDA into the BIA and OST contracts. Those contracts expressly incorporate the Federal Acquisition Regulation "Disputes" clause (FAR 52.233-1), which applies the CDA to any contract in which it appears. See TRO Motion Exhibit B at 5 (Section A, Clauses Incorporated by Reference); Interior's Attachment A at 3.' The Disputes Clause sets forth the steps that a contractor must follow in order to perfect its claim under the CDA. The first step of the process is to submit "[a]ll claims by a contractor against the government relating to a contract.. . to the contracting officer for a decision." 41 U.S.C. § 605(a). After receiving a proper "claim," the contracting officer then renders a decision which becomes final and conclusive ("final decision") unless the contractor timely appeals. 41 U.S.C. § 605(b). There are only two routes of appeal from a contracting officer's final decision under the CDA. One is to an agency's contract appeals board (here, the Tnterior Board of Contract Appeals) within 90 days of the decision and the other is to the U.S. Court of Federal Claims within one year. 41 U.S.C. §§ 606, 609(a)(l). NAID has placed both contracts before this Court as Exhibits A and B to its TRO Motion, but misidentified them: the BIA Contract is Exhibit A and the OST contract is Exhibit B. In addition, NAID has omitted the portion of the iBIA contract which incorporates FAR 52.233-1. Interior has attached the relevant portions of the GSA supply schedule for the BIA contract as Attachment A. 3 << COB0000004 >> NAID has not presented a CDA claim to either BIA or OST. It has never obtained a contracting officer's final decision from BIA or OST. Although NAD refers to a "protest" that it filed concerning a modification to the BLA~ contract, the contracting officer withdrew the modification. See TRO Motion at ~J 39. Furthermore, even if there had been a contracting officer's final decision on a NAUI) claim — something that NAD has not alleged — it would still be necessary for NAID to appeal the final decision to the Interior Bnard of Contract Appeals or to the Court of Federal Claims. 41 U.S.C. §§ 606, 609(a)(1). Thus, it does not matter whether NAD has asserted its claims or whether a contracting officer has finally decided them. While those questions might be relevant to the Interior Board of Contract Appeals or Court of Federal Claims, this Court simply lacks jurisdiction to hear a CDA claim — any claim "relating to" the BIA and OST contracts. B&B Indus.. Inc. v. United States Postal Serv., 185 F. Supp. 2d 760, 765-66 (E.D. fvlich. 2002). A claim falls under the CDA if it is "essentially contractual." RIvIL Titanium Co. v. Westinghouse Elec. ~ 78 F.3d 1125, 1136 (6th Cir. 1996). What matters is the "source of the right that is at stake." Mutual of Omaha v. National Assoc. of Gov't Employees, 145 F.3d 389, 394 (D.C. Cir. 1998) (citing In er~oI1—R.and Co. x. United States, 780 F.2d 74, 76 (D.C. Cir. 1985)). Here, the BIA and OST contracts are the "source" of NAIID's rights because NAID's concern is about the "termination, non-renewal or curtailment" of those contracts. Those contingencies are addressed by the contracts themselves. See. e.g., Interior Attachment A at 4 (Termination for convenience and cause); TRO Motion Exhibit B at S (Termination for convenience and default). 4 << COB0000005 >> A significant body of precedent pertaining to terminations has developed squarely within CDA jurisprudence before the former Claims Court, which is today's U.S. Court of Federal Claims, the contract appeals boards, and the U.S. Court of Appeals for the Federal Circuit See e.g., John Reiner & Co. v. United States, 163 Ct. Cl. 381 (1963) (addresses "constnictive termination"); Kalvar Corp. v. United States, 211 Ct. Cl. 192, 543 F.2d 1298 (1976) (proof of intent to injure contractor or "malice" is required); Tomcello v. Unitcd States, 231 Ct. Cl. 20 (1982)(illusory contract or "bad faith" required for convenience termination to be tantamount to breach); Caldwell & Santmyer. Inc. v. Glic~nan, 55 F.3d 1578 (Fed.Cir. 1995); Rowe. Inc. v. GSA, GSBCA No. 15,217, 00-2 BCA ¶ 31.125 (Sept. 7,2000) (in absence of had faith or abuse of discretion, constructive termination for convenience moots all breach claims). Citing Torncello, the D.C. Circuit has recognized that "it is possible to conceive of[a termination-for- convenience] dispute as entirely contained within the terms of the contract." Ingersoll-Rand, 780 F.2d at 78. Such determinations are "within the unique expertise of the Court of Claims." Id. That court is "a single, uniquely qualified forum for the resolution of contractual disputes." B&13 Indus., 185 F. Supp. 2d at 765. Like NAID, the plaintiff in Tn~ersoll-Rand challenged the Government's decision to terminate its contract, relying on two federal regulations to argue that the termination was wrongful. Irwersoll-Rand, 780 F.2d at 77. Finding that the "essential rights at stake [were] contractual," the court cautioned that a plaintiff may not "avoid the jurisdictional bar of the CDA merely by alleging violations of regulatory or statutory provisions rather than breach of contract." Id. Neither was the court swayed by that fact that plaintiff sought only nonrnonetary, injunctive relief. Id. at 79. Plaintiffs labeling is of little importance. This is true even if the harm 5 << COB0000006 >> complained of purportedly flows from "unlawful agency action." A&S Council, 56 F.3d at 241. This is also true even if plaintiff alleges constitutional violations or arbitrary or capricious action. See B&B Indus., 185 F. Supp. 2d at 765-66 (claim that incorporation of unfavorable terms into new contracts violated Fifth Amendment and was arbitrary, without legal authority, and a restraint of trade not sufficient to overcome CDA's jurisdictional bar; resolution depended on contract interpretation): see also MLItual of Omaha, 145 F.3d at 394 ("Nor would the health Benefits Act confer jurisdiction on the court if the complaints indeed turn on contract"). Thus, NAID's hypothesized wrongful agency motivation for Interior's contract actions cannot remove these contract disputes from CDA jurisdiction. To the extent NAID casts its challenge as a ~'bid protest," this is also not a matter for this Court. First, NAID is not a proper protester because it is not a "disappointed bidder" seeking to voi(l the award of a contract to another. Instead, NAID challenges the termination or non- renewal of its own contracts. Quite unlike NAJID, which has two government contracts, "frustrated bidder[s]" have no express contract on which to sue the Government. Jn~ersoll-Rand, 780 F.2d at 78-79 (citin~ Megapulse. Inc. v. Lewis, 672 F.2d 959, 968 (D.C. Cir. 1982)). Moreover, even if NAIID were properly bringing a bid protest, this Court would not be the proper forum in which to bring it. The Comptroller General (General Accounting Office) and the Court of Federal Claims are the only fora in which to bring bid protests. Under procedures set forth at 31 U.S.C. §§ 3551 et seq., "interested part[ies]" may file a "protest concerning an alleged violation of a procurement statute or regulation" with the Comptroller General. 31 U.S.C. §§ 3552, 3553(a). Alternatively, under the Alternative Dispute Resolution Act of 1996 ("ADRA"), an "interested party" may 6 << COB0000007 >> challenge in the Court of Federal Claims "a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement." 28 U.s.c. § 1491(b)(1). The concurrent protest jurisdiction once enjoyed by the federal district courts expired on January' 1, 2001. The Court of Federal Claims now has exclusive jurisdiction over any bid protests filed after that (late. See Pub.L. No. 104-320, § 12(d), 110 Stat. at 3875. The protest jurisdiction of the federal (listrict courts under Scanwell Labs. Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), which predated the ADRA, was "subsumed" into the ADRA upon its passage. Emery Worldwide Airlines Inc 264 F.3d 1071, 1079-80 (Fed. Cir. 2001); ~~l1 Inc. v. United States, 1 09 F. Supp. 2d 22. 24-25 (D.D.C. 2000). After "sunsetting" of the concurrent jurisdiction portion of the ADRA, no protest jurisdiction remains in the U.S. district courts. Id. NAJID does not point to any federal law that would give this Court jurisdiction over its contract dispute with Interior. NAlD provides citations for the unremarkable proposition that the availability of another forum should not prevent permissive intervention (~ NAD's Memorandum at 6), but that principle has no relevance where it is plain that exclusive jurisdiction is vested in another forum. In short, this Court does not have jurisdiction to hear NAID's request for injunctive relief. Because resolution of NAID's TRO Motion is the only issue for which NAJID seeks to intervene, the Intervention Motion must be denied. B. NAID Has No Claims in Common with the Main Action Another prerequisite for permissive intervention is a claim that shares a cornnion question of law or fact with the main action. National Children's Ctr., 146 F.3d at 1047. NATD has asked << COB0000008 >> to intervene in this action solely for the purpose of having its TRO Motion heard. The TRO Motion relates exclusively to NAID's contracts with Interior. NAID's disputes under these contracts have nothing in common with any of the issues in the main action. NAIID vaguely references the Court's prior orders that Interior submit quarterly reports on the progress of trust refonn and the general government obligation to provide accurate information to the Court. See NAHYs Memorandum at 7. NAID does not. and cannot, explain how the continued operation of its contracts with Interior is required for Interior to fulfill its obligations. Surely NAIID cannot be arguing that NAID, only NAID, and no other potential contractor, has the ability to provide accurate information, and that EDS or whatever other contractor Interior engages would not be able to assist Interior in providing reports to the Court. At most, if everything NAID has alleged is presumed true, NAID or its employees may possess information relevant to an issue in the main action. But that information can still be l)rovided to the Court in the absence of NAIIJ's presence as a party to the suit and regardless of whether NAID continues as an Interior contractor. NAID's TRO Motion thus has nothing in common with the issues in the main action, and NAID's Intervention Motion must be denied.2 II. NAID'S MOTION FOR TRO AND INJUNCTIVE RELIEF MUST BE DENIED Pursuant to Rule 65 of the Federal Rules of Civil Procedure and Local Civil Rule 65.1, Interior Defendants also oppose NAID's TRO Motion. If the Intervention Motion is denied, NAJID is not a party to this case, and its TRO Motion must also be denied. If NALD is permitted to intervene, the Court should still deny NAIID's request for injunctive relief The remaining requirement for permissive intervention is that a "timely motion" has been filed. See National Children's Ctr., 146 F.3d at 1046. Interior does not dispute the timeliness of NAID's Intervention Motion. 8 << COB0000009 >> As a preliminary matter, and as discussed above, the Court Jacks jurisdiction to entertain NAT's TRO Motion. However, even ifjnrisdiction existed, injunctive relief would not be appropriate or warranted here. In considering whether to grant an application for a TRO or a preliminary injunction, this Court must examine (1) whether there is a substantial likelihood that the applicant would succeed on the merits, (2) whether the applicant would sufFer irreparable injury if the injunctive relief is denied, (3) whether the granting of injunctive relief would substantially injure the other party, and (4) whether the public interest would be served by the granting of the injunctive relief. ~g, Davenport V. International Bhd. of Teamsters, AFL-CIO, 166 F.3d 356, 360-61 (D.C. Cir. 1999) (citing SeronoLabs.. Inc. v. Shalala, 158 F.3d 1313, 1317-18 (D.C. Cir. 1998)); Kudiodi v. Wells Fargo Bank, 181 F. Supp. 2d 1, 2 ii.2 (D.D.C. 2001) (application for temporaryrestraining order would be denied when plaintiffs failed to show substantial likelihood of prevailing on merits or irreparable harm). As we explain below, the TRO Motion does not satisfy any of the four elements required for the issuance of a TRO or a preliminary injunction and must therefore be denied. A. No Substantial Likelihood of Success on the Merits NAID cannot show that any action by Interior warrants the injunctive relieFof the type asked for by NA ID in its TRO Motion or that the Court has the authority to grant the extraordinary relief requested by NATD. NAID not only demands that Interior must forgo its rights to terminate any contracts with NAID, including one that has already been terminated, but also demands that Interior must renew all contracts with NAID when they would ordinarily expire. 9 << COB0000010 >> NAD provides no citation to any law, and the government has not found any, that would authorize the Court to reinstate a contract that has already been terminated. Any damages or other claims related to this termination must be resolved by the contracting officer and then by the Board of Contract Appeals or the Court of Federal Claims. Similarly, NAID cites to no law that ~vould provide the C'ourt authority to modify the terms of the ongoing contract bet~~~een NAID and Interior in the manner that NAID demands. The ongoing NAD contract gives Interior the right to terminate under certain circumstances and does not require Interior to renew the Contract when it expires. Again, if NAID has any claim whatsoever regarding the operation of this contract it must first pursue a claim with the contracting offlcer and then proceed to the Board of Contract Appeals or the Court of Federal Claims. There simply is no relief that this Court can give to NAID related to these contracts, and thus, NAID cannot conceivably succeed on the merits. B. No Irreparable Injury if Injunctive Relief is Denied If NATD does not get the injunctive relief that it has requested, it can pursue thc same remedies that any government contractor has and bring a claim for damages in the appropriate forum. The risk of termination of a government contract and the consequent disruption of the business of the contractor is the risk that any government contractor bears when it enters into its contract. This Court is not the appropriate forum for this contract dispute, and NAID cannot show how it will suffer any irreparable injury if the Court denies its TRO Motion. C. Granting the Injunctive Relief Would Substantially Harm the Government If the Court were to order Interior to reinstate the contract that was terminated and somehow modify' the terms of the ongoing contract to prevent it from ever expiring, it would 10 << COB0000011 >> alter tho law of government contracts and interfere with the government's ability to enter into contracts in the future. In addition, if Interior is enjoined in the manner requested by NAJID, the government will incur costs from any replacement contracts that it xviii be unable to recoup. D. Public Interest Is Not Served by Granting Emergency Injunctive Relief The public interest in predictable government contract rules, including thosc involving the termination of contracts and the hiring of other contractors to perforni the needed work is severely harmed if the draconian injunctive relief requested by NAD were granted here. No public interest is served by forcing the government to enter into contracts that can never expire. Any public interest in hearing NAID's complaints of government wrongdoing can be served by a proceeding in the appropriate forum provided by the CDA .Also, if any NAID employee has evidence that is relevant to any iSsUe in this case, the parties can bring the evidence to the Court. CONCLUSION For these reasons, NAIiD's Intervention Motion and TRO Motion should be denied. Dated: September 5, 2002 Respectfully submitted, ROBERT D. McCALLUM, JR. Assistant Attorney General STUART E. SCHIFFER Deputy Assistant Attorney General J. CHRISTOPHER KOHN Deputy Direct6Y D.C. Bar No. 261495 11 << COB0000012 >> JOHN T. STEMPLEWTCZ Senior Trial Attorney PHILLIP M. SELIGMAN D.C. Bar No. 433422 Commercial Litigation Branch Civil Division P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 (202) 514-7194 Of Counsel: HUGO TEUFEL III Associate Solicitor JIM WEINER General Law Division Office of the Solicitor U.S. Dept. of the Interior 1849 C. St., NW Washington, D.C. 20240 (202) 208-4722 12 << COB0000013 >> rN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ELOUISE PEPION COBELL. et al., ) ) Plaintiffs, ) ) v. ) Case No. I:96CV01285 ) (.Judge Lamberth) GALE NORTON, Secretary of the Interior et aL, ) ) Defendants. ) ) ORDER This matter coming before the Court on third-party Native American Tndustt-ial Distributors, Inc.'s ("NAD") (1) Motion for Permissive Intervention and (2) Motion for Temporary Restraining Order, Preliminary and Permanent Injunction, the Court finds that the Motions should be DENIED. SO ORDERED this _____ day of , 2002. ROYCE C. LAMBERTH United States District Judge << COB0000014 >> cc: Sandra P. Spooner John T. Stcmplewicz Commercial Litigation Branch Civil Division P.O. Box S75 Ben Franklin Station Washington, 1). C. 20044-0875 (202) 514-7194 Neil J. Ruther, Esq. 29 West Susquehanna Ave. Suite 610 Towson, MD 21204 (410) 337-6888 Dennis M Gingold, Esq. Mark Brown, Esq. 1275 Pennsylvania Avenue, N.W. Ninth Floor Washington, D.C. 20004 202-318-2372 Keith Harper. Fsq. Native American Rights Fund 1712 N Street, NW Washington, D.C. 20036-2976 202-822-0068 Elliott Levitas, Esq. 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 << COB0000015 >> CERTIFICATE OF SERVICE I declare under penalty of perjury that, on September 5, 2002 I served the foregoing Interior Defendants' Opposition 10 Third-Party Native American Industrial Distributors, Inc. 1~ Motion for Permissive Intervention and Motion for Temporary Restraining Order, Preliminary and Permanent In/unction by facsimile upon: Keith Harper, Esq. Dennis M Gingold, Esq. Native American Rights Fund Mark Kester Brown, Esq. 1712 N Street, NAY. 1275 Pennsylvania Avenue, N.W. Washington, D.C. 20036-2976 Ninth Floor (202) 822-0068 Washington, D.C. 20004 (202) 318-2372 Neil J. Ruther, Esq. 29 West Susquehanna Ave. Suite 610 Towson, MD 21204 (410) 337-6888 and by U.S. Mail upon: Elliott Levitas, Esq. 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 Copy by Facsimile and U.S. Mail upon: Alan L. Balaran, Esq. Special Master 1717 Pennsylvania Avenue, N.W. 12th Floor Washington, D.C. 20006 (202) 986-8477 Courtesy Copy By U.S. Mail: Joseph S. Kieffer, m Court Monitor 420 7th Street, N.W. Apartment 705 Washington, D.C. 20004 X ~ -1 A 4- Kevin P. ~ngsto