Creation Upgrades, Inc. v. United States , 417 F. App'x 957 ( 2011 )

NOTE: This disposition is nonprecedential
United States Court of Appeals
for the Federal Circuit
__________________________
CREATION UPGRADES, INC.
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
2010-5098
__________________________
Appeal from the United States Court of Federal
Claims in case no. 09-CV-788, Senior Judge John P.
Wiese.
___________________________
Decided: April 8, 2011
___________________________
DAVID EFRON, Law Offices of David Efron, of San
Juan, Puerto Rico, for plaintiff-appellant.
MICHAEL D. AUSTIN, Trial Attorney, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, for defendant-appellee.
With him on the brief were TONY WEST, Assistant Attor-
ney General, JEANNE E. DAVIDSON, Director, and STEVEN
J. GILLINGHAN, Assistant Director.
CREATION UPGRADES v. US 2
__________________________
Before BRYSON, MAYER, and DYK, Circuit Judges.
DYK, Circuit Judge.
Creation Upgrades, Inc. (“Creation”) appeals from a
decision of the United States Court of Federal Claims
(“Claims Court”). The Claims Court dismissed Creation’s
bid protest claim for lack of subject matter jurisdiction
insofar as it sought equitable relief and granted the
United States’ motion for judgment on the administrative
record with respect to the remainder of the claim. We
affirm.
BACKGROUND
On March 14, 2008, the United States Navy (“Navy”)
issued a solicitation announcing the sale of two parcels of
government property in Ceiba, Puerto Rico. Parcel II is
involved here. The solicitation stated:
The Government has established a minimum ac-
ceptable bid price for [sale of the parcels]. In the
event the Government does not receive a satisfac-
tory bid that is at least equal to this Reserve
Price, the Government reserves the right to reject
the sealed-bids submitted, and conduct online
auctions [for the parcels].
Appellee’s Supplemental App. 360. The Navy adopted an
Award Plan establishing internal agency procedures for
the bidding process. The Award Plan was finalized on
April 10, 2008. The reserve prices were temporarily left
undetermined pending the results of a General Services
Administration (“GSA”) appraisal process. On April 18,
2008, the GSA preliminarily recommended a value of
$36,650,000 for Parcel II. The Navy incorporated this
3 CREATION UPGRADES v. US
value into its Award Plan on April 25, 2008, and the GSA
provided a final certification of that appraisal value on
April 28, 2008. The next day, the Navy approved the final
Award Plan with a reserve price of $36,650,000 for Parcel
II.
The Award Plan provided that if the bids failed to
meet the reserve prices, the Navy could, among other
options, “reject the bids received.” Id. 17. It also stated:
In no instance shall the Government accept a con-
forming high bid that is less than 80% of the es-
tablished [reserve price] . . . .
Id. 20. Creation submitted a bid of $27,027,000 to pur-
chase Parcel II on April 29, 2008, and it was received by
the Navy on April 30, 2008, the deadline for submissions.
The Navy rejected Creation’s bid pursuant to its Award
Plan because the bid was less than 80% of the established
reserve price.
On November 16, 2009, Creation filed suit in the
Claims Court, asserting jurisdiction under 28 U.S.C. §
1491(b)(1) and seeking a declaration that its bid was the
highest qualifying bid for Parcel II, specific performance
directing the sale to Creation, and an award of bid prepa-
ration costs. The parties filed cross-motions for judgment
on the administrative record. While the case was pend-
ing, we issued our decision in Resource Conservation Grp.,
LLC v. United States, 597 F.3d 1238 (Fed. Cir. 2010). In
Resource Conservation, we held that § 1491(b)(1) only
provided jurisdiction over bid protests that involved “the
process of acquiring property or services.” 597 F.3d at
1244 (emphasis omitted). Jurisdiction over bid protest
claims that do not involve government acquisitions, we
explained, was only available under 28 U.S.C. §
1491(a)(1), which grants jurisdiction over “any express or
CREATION UPGRADES v. US 4
implied contract with the United States.” Id. at 1242,
1245–46.
Considering itself bound by Resource Conservation,
the Claims Court dismissed Creation’s claims for equita-
ble relief under § 1491(b) for lack of subject matter juris-
diction. Although Creation did not raise a § 1491(a)(1)
contract claim explicitly, the Claims Court found that
Creation had made sufficient allegations to raise a claim
for breach of the implied contract of fair dealing. The
court also found that Creation’s implied contract claim
failed on the merits and granted the United States’ mo-
tion for judgment on the administrative record. In doing
so, the Claims Court denied Creation’s request to depose
Kimberly Kessler, a Navy official and one of the signato-
ries of the Award Plan. Creation timely appealed. We
have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review the Claims Court decision regarding sub-
ject matter jurisdiction and its judgment on the merits
based on its interpretation of the award documents de
novo. See Int’l Data Prods. Corp. v. United States, 492
F.3d 1317, 1321 (Fed. Cir. 2007); Taylor v. United States,
303 F.3d 1357, 1359 (Fed. Cir. 2002).
I
Creation first argues that it is not bound by Resource
Conservation because that case involved a lease, rather
than a sale, of government property and that, in any
event, the precedent should not be retroactively applied.
Section 1491(b)(1) grants the Claims Court jurisdiction to
“render judgment on an action by an interested party
objecting to 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 . . . in connection with a pro-
curement or a proposed procurement.” 28 U.S.C. §
5 CREATION UPGRADES v. US
1491(b)(1). In Resource Conservation, we construed
“procurement” to mean “the process of acquiring property
or services.” 597 F.3d at 1244 (quoting 41 U.S.C. § 403(2))
(emphasis omitted). Therefore, we held that a solicitation
for the lease of government property was not a “procure-
ment” under § 1491(b)(1) because the government was not
“acquiring property or services.” Id. We see no meaning-
ful distinction between the lease and sale of government
property. Resource Conservation governs this case.
Contrary to Creation, the fact that Resource Conservation
was decided after it filed suit does not prevent it from
being binding precedent. The Claims Court properly
dismissed Creation’s § 1491(b)(1) claim for lack of juris-
diction.
II
Creation also argues that the Claims Court erred by
denying its discovery request and deciding the §
1491(a)(1) case on the administrative record as it stood.
Since our decision in Resource Conservation, we have not
decided whether bid protest cases brought under §
1491(a)(1) of the Tucker Act are to be decided on the
administrative record, and we see no need to decide that
question in this case. Even if the Claims Court must
exercise original jurisdiction in these cases, we see no
error in the Claims Court’s refusal to allow the deposition
of Ms. Kessler.
Whether the proceeding is one on the administrative
record or is original in nature, review of the government’s
decision rejecting Creation’s bid requires a showing that
the government action was arbitrary or capricious or
contrary to law. See, e.g., Keco Indus., Inc. v. United
States, 428 F.2d 1233, 1238 (Ct. Cl. 1970) (“[P]laintiff
should be allowed standing to maintain this action [for
breach of the implied contract of fair dealing under §
1491(a)(1)], provided it can give prima facie evidence of
CREATION UPGRADES v. US 6
arbitrary and capricious action on the part of defen-
dant.”); Heyer Prods. Co. v. United States, 140 F. Supp.
409, 414 (Ct. Cl. 1956) (stating that to prove a breach of
the implied contract of fair dealing, the plaintiff must
prove the government acted arbitrarily).
Creation has made no such showing, and discovery is
unnecessary. As the Claims Court properly found, the bid
documents are clear on their face. The Award Plan for-
bade the Navy from accepting a bid that was less than
80% of the reserve price. The reserve price was incorpo-
rated into the Award Plan and received final certification
before Creation’s bid was received by the Navy. Crea-
tion’s bid, which was under 80% of the reserve price, did
not qualify, and the government made no error in reject-
ing it.
III
Creation finally asserts that the Claims Court was bi-
ased against it and therefore improperly predisposed to
dismiss the claim. This argument has no merit. Not only
did Creation fail to bring a recusal motion below, it has
also failed to present any evidence of judicial bias on
appeal. “[J]udicial rulings alone almost never constitute a
valid basis for a bias or partiality motion.” Liteky v.
United States, 510 U.S. 540, 555 (1994).
AFFIRMED