O'Gilvie v. Corporation for National & Community Service , 802 F. Supp. 2d 77 ( 2011 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
GLEN O’GILVIE, )
)
Plaintiff, )
)
v. ) Civil Action No. 10-cv-00531 (ABJ)
)
CORPORATION FOR NATIONAL )
COMMUNITY SERVICE, et al. )
)
Defendants. )
____________________________________)
MEMORANDUM OPINION
Plaintiff Glen O’Gilvie has brought this action under the Administrative Procedures Act,
5 U.S.C. §§ 702, 703 (“APA”), against the Corporation for National Community Service
(“CNCS”); William Anderson, the Deputy Chief Financial Officer of CNCS, in his capacity as
its Debarment Official; Kenneth Bach, in his official capacity as the Acting Inspector General
(“IG”) for CNCS; and Gerald Walpin, the former Inspector General for CNCS; and the
AmeriCorps Program (collectively “defendants”). He seeks declaratory and mandamus relief to
challenge a 180-day debarment from participation in federal procurement and non-procurement
programs that expired in December 2009. Defendants have moved to dismiss plaintiff’s claim
pursuant to Fed. R. Civ. P. 12(b)(1), 12(b)(6), and 56. For the reasons stated below, the Court
agrees that plaintiff’s action is moot, and defendants’ motion to dismiss for lack of subject matter
jurisdiction should be granted.
BACKGROUND
Plaintiff previously served as the President and CEO of Earth Conservation Corps of
Washington, D.C. (“ECC”), a 501(c)(3) entity whose mission was to recruit and train at-risk
youths and young adults under the AmeriCorps program. Compl. ¶ 2. The debarment action
stemmed from plaintiff’s acts and omissions during a three-month period from February to May
2007. Since July 2008, plaintiff has been employed elsewhere, as the CEO of the Center for
Nonprofit Advancement (“CNA”). Id. ¶ 1.
ECC derived a portion of its annual operating revenue from non-procurement funding
obtained from other non-profit entities, which, in turn, received their funding from CNCS. Id. ¶
2. In June 2009, CNCS found that plaintiff failed to adequately supervise and manage an
AmeriCorps grant program operated by ECC, and it debarred him from government programs for
180 days. Id. ¶¶ 42–43. Specifically, CNCS found that plaintiff failed to provide ECC
AmeriCorps members sufficient opportunities to earn the required 1,700 service hours during the
2006–07 service year, and that he failed to supervise an employee, Brandon Swails, who fell
short in a number of ways, but most significantly, approved the submission of inflated service
hours for certain ECC AmeriCorps members. Id. ¶ 36.
On February 28, 2009, CNCS issued a Notice of Debarment Proceeding, proposing a
debarment for a period of three years. Id. ¶ 33. Between July 2008 and May 2009, plaintiff
presented CNCS with documents and declarations refuting the allegations, and he alleges that his
evidentiary presentation was “credible [and] abundant.” Compl. ¶ 39. 1 The Notice of
Debarment was issued on June 18, 2009, accompanied by a lengthy explanation. Compl. ¶ 42;
1 Plaintiff’s five voluminous submissions in opposition to the proposed debarment are
detailed in the Notice of Debarment attached to the complaint as Exhibit 1. See Exhibit 1 at 1–2.
Plaintiff states that “[t]he administrative record compiled during the debarment proceedings was
not insignificant, comprising several volumes and several thousand pages of supporting
documentation, corporate records, and declarations.” Compl. ¶ 56.
2
Compl. Exhibit 1. Plaintiff did not challenge the debarment when it was issued, and on
December 15, 2009, his debarment period came to an end. Id. at 2.
On April 1, 2010, plaintiff filed a 65 page, 181 paragraph complaint detailing alleged
factual errors and procedural defects underlying the debarment decision. He asserts in paragraph
86 that “[t]he Notice of Debarment is materially flawed, factually inaccurate and incomplete,
unsupported by a preponderance of the evidence, and therefore, arbitrary, capricious, and
irrational” for a series of reasons. Paragraph 87 of the complaint, which comprises 12 pages,
faults the Notice for “wrongly finding, concluding, suggesting, or implying” a series of “material
facts which are genuinely in dispute.” Plaintiff’s prolix attack on the administrative action at
issue need not be set forth in detail here, because for purposes of this opinion, the relevant
allegations are contained only in paragraphs 142 through 146, under the heading: “Mr. O’Gilvie
has been harmed by the debarment decision and will continue to suffer harm in the future even
after the debarment has expired.” Compl. at 57.
In that section of his complaint, plaintiff alleges that debarment “is an extreme measure,
an extraordinary measure, which is not to be imposed as a means of punishing individuals and
entities . . . ,” id. ¶ 142, and that his debarment was “unjustified and unwarranted.” Id. ¶ 43. He
asserts that his “reputation has been damaged by Mr. Anderson’s debarment decision.” Compl. ¶
144. Plaintiff further alleges in paragraph 145:
[Plaintiff’s] reputation continues to be damaged even after the debarment period
has expired because his debarment is now part of the public record. It is part of
the government’s records. It is known to his current employer, his former
employer (ECC), and can readily be discovered by any person who accesses the
Excluded Parties List System (“EPLS”) maintained by the U.S. General Services
Administration . . . . Mr. O’Gilvie’s debarment is permanently recorded in the
archives of EPLS. The EPLS archive is accessible to the public at large and to
government officials.
3
Finally, plaintiff states in paragraph 146:
For so long as [plaintiff’s] debarment remains in the government’s informational
archives, it will impede his ability to successfully compete for procurement
contracts and government funded non-procurement programs without the taint of
an unreasonable and unjustifiable debarment on his record. [Plaintiff] has
suffered and continues to suffer very real reputational, vocational, and economic
injuries as a result of the Defendant’s actions.
The defendants have moved to dismiss the action on a number of grounds, including on
the basis that the lawsuit is moot.
LEGAL STANDARD
In evaluating a motion to dismiss under Rule 12(b)(1), the Court must “treat the
complaint’s factual allegations as true . . . and must grant plaintiff ‘the benefit of all inferences
that can be derived from the facts alleged.’” Sparrow v. United Air Lines, Inc., 216 F.3d 1111,
1113 (D.C. Cir. 2000), quoting Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979)
(citations omitted). Nevertheless, the Court need not accept inferences drawn by the plaintiff if
those inferences are unsupported by facts alleged in the complaint, nor must the Court accept
plaintiff’s legal conclusions. Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002).
Under Rule 12(b)(1), plaintiff bears the burden of establishing jurisdiction by a
preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992);
Shekoyan v. Sibly Int’l Corp., 217 F. Supp. 2d 59, 63 (D.D.C. 2002). Federal courts are courts of
limited jurisdiction and the law presumes that “a cause lies outside this limited jurisdiction.”
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); see also Gen. Motors
Corp. v. EPA, 363 F.3d 442, 448 (D.C. Cir. 2004) (“As a court of limited jurisdiction, we begin,
and end, with examination of our jurisdiction.”). Because “subject-matter jurisdiction is ‘an
Art[icle] III as well as a statutory requirement . . . no action of the parties can confer subject-
4
matter jurisdiction upon a federal court.’” Akinseye v. District of Columbia, 339 F.3d 970, 971
(D.C. Cir. 2003), quoting Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S.
694, 702 (1982).
When considering a jurisdictional challenge, unlike when deciding a motion to dismiss
under Rule 12(b)(6), the court “is not limited to the allegations of the complaint . . . .” Hohri v.
United States, 782 F.2d 227, 241 (D.C. Cir. 1986), vacated on other grounds, 482 U.S. 64(1987). Rather, a court “may consider such materials outside the pleadings as it deems
appropriate to resolve the question whether it has jurisdiction to hear the case.” Scolaro v. D.C.
Bd. of Elections & Ethics, 104 F. Supp. 2d 18, 22 (D.D.C. 2000). See, e.g., Herbert v. Nat’l
Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992); see also Jerome Stevens Pharms., Inc. v.
FDA, 402 F.3d 1249, 1253 (D.C. Cir. 2005).
Article III, section 2 of the Constitution permits federal courts to adjudicate only “actual,
ongoing controversies.” Honig v. Doe, 484 U.S. 305, 317 (1988). “This limitation gives rise to
the doctrines of standing and mootness.” Foretich v. United States, 351 F.3d 1198, 1210 (D.C.
Cir. 2003). “Lack of standing is a defect in subject matter jurisdiction.” George v. Napolitano,
693 F. Supp. 2d 125, 128–29 (D.D.C. 2010), citing Haase v. Sessions, 835 F.2d 902, 906 (D.C.
Cir. 1987). To establish Article III standing, plaintiffs must demonstrate that “(1) [they have]
suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the
defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed
by a favorable decision.” George, 693 F. Supp. 2d at 129–30, quoting Friends of the Earth, Inc.
v. Laidlaw Envt’l Servs., 528 U.S. 167, 180–81 (2000). A case is moot if “events have so
transpired that the decision will neither presently affect the parties’ rights nor have a more-than-
5
speculative chance of affecting them in the future.” Clarke v. United States, 915 F.2d 699, 701
(D.C. Cir. 1990), quoting Transwestern Pipeline Co. v. FERC, 897 F.2d 570, 575 (D.C. Cir.
1990).
Reputational harm can be enough to create standing. McBryde v. Comm. to Review
Circuit Council Conduct, 264 F.3d 52, 57 (D.C. Cir. 2001). See also Foretich v. United States,
351 F.3d 1198, 1214 (D.C. Cir. 2003) (“[R]eputational injury that derives directly from
government action will support Article III standing to challenge that action.”). “At some point,
however, claims of reputational injury can be too vague and unsubstantiated to preserve a case
from mootness.” McBryde, 264 F.3d at 57, citing Advanced Mgmt. Tech. v. FAA, 211 F.3d 633,
636–37 (D.C. Cir. 2000). “[W]hen injury to reputation is alleged as a secondary effect of an
otherwise moot action, [the D.C. Circuit] [has] required that ‘some tangible, concrete effect’
remain, susceptible to judicial correction.” Id. at 57–58, quoting Penthouse Int’l, Ltd. v. Messe,
939 F.2d 1011, 1019 (D.C. Cir. 1991). This showing is necessary to establish the “injury in fact”
and “redressability” elements of the standing analysis.
ANALYSIS
Since the agency action that is challenged in this case – a debarment from participation in
government funded programs – has expired, the Court finds that “events have so transpired that
the decision will neither presently affect the parties’ rights nor have a more-than-speculative
chance of affecting them in the future.” Clarke, 915 F.2d at 701. “It has long been settled that a
federal court has no authority to give opinions upon moot questions or abstract propositions, or
to declare principles or rules of law which cannot affect the matter in issue in the case before it.”
Sierra Club v. Jackson, --- F.3d ---, Civ. No. 10-5280, 2011 WL 2600841, at *2 (D.C. Cir. July
1, 2011) (internal quotation marks omitted), quoting Church of Scientology v. United States, 506
6
U.S. 9, 12 (1992). This is not even a case, like Clarke, where the situation changed while the
matter was being litigated and appealed; this lawsuit was moot when it was filed.
Plaintiff’s contends that his claim was not dead on arrival because the complaint includes
a claim for ongoing reputational harm. See Plaintiff’s Opposition to Defendants’ Motion to
Dismiss (“Pl.’s Opp.”), at 12–19. [Dkt. #18]. The Court finds that the allegations in paragraphs
142 through 144, and the statement in paragraph 146 that plaintiff is suffering “very real
reputational, vocational and economic injuries” are entirely conclusory, so need not be treated as
true, and they are insufficient to defeat the motion to dismiss.
The analysis therefore comes down to whether plaintiff’s statement that his debarment is
“known to his current employer, his former employer (ECC), and can readily be discovered by
any person who accesses the Excluded Parties List System (‘EPLS’),” Compl. ¶ 145, and his
allegation that the existence of a publicly available record of the prior debarment will impede his
ability to compete for government contracts and grants in the future, id. ¶ 146, are sufficient to
create a live case or controversy and give rise to Article III standing.
Plaintiff’s worries about his current and former employer do not give rise to any claim of
an injury in fact; plaintiff specifically alleges that he voluntarily resigned from ECC in June of
2008 to accept his new job – he was not fired – and there is no allegation that his employment at
the current job was interrupted or adversely affected in any way during the months of the
debarment or after. See id. ¶¶ 1, 9. And any injury to his reputation in their eyes – which was
not enough to prompt them to take any action against him – besides being purely speculative,
could not be redressed by a Court decision two years later.
With respect to his concern about the state of the public record, plaintiff points the Court
to Hickey v. Chadick, 649 F. Supp. 2d 770 (S.D. Ohio 2009), in which a court held that the
7
plaintiffs did have standing to seek judicial review of an expired debarment. However the facts
of that case are distinguishable from the instant case, and they demonstrate where this plaintiff’s
action falls short.
The Hickey court began by laying out the proper framework.
A plaintiff seeking declaratory and injunctive relief must show “actual present
harm” or a “significant possibility of future harm.” . . . Simply being exposed to
illegal conduct in the past does not, in itself, demonstrate a present case or
controversy for purposes of injunctive relief unless such exposure is accompanied
by continuing, present, adverse effects.
Id. at 774 (citations omitted). The court then found the plaintiffs’ allegations to be reasonably
definite to sustain standing. Id. at 774. It noted that according to the complaint, plaintiffs earned
over $27 million in annual revenue prior to their debarment, primarily from government
contracting. Id. It observed that under the Federal Acquisition Regulations (“FAR”), plaintiffs’
past debarment would be directly related to their ability to be awarded future contracts, because
contracting officers are required to consider contractors’ performance records, as reflected in
government sources of information, when assessing present responsibility. Id. at 774–75, citing
48 C.F.R. § 9.103(b), 104-1(c) and (d), and 105-1(a) and (c). Since it was “highly likely that
plaintiffs will continue to submit contracts in the future,” id., the combination of all of those
factors led the court to find the allegations of harm not “merely speculative or too attenuated to
demonstrate the requisite injury.” Id.But in this case, the complaint contains nothing more than speculation. Plaintiff does not
allege that in his current capacity as the CEO of CNA, he has applied for any government grants
or contracts. Nor does the complaint allege that he has any present plans to do so in the future.
The complaint does not assert that plaintiff historically made his living through government
contracting; in fact, plaintiff alleges that he was not a government grantee, even at the time that
8
he was debarred. Compl. ¶¶ 33, 35. Plaintiff states only in his opposition to the motion to
dismiss that “the possibility of applying for federal funding is neither remote nor speculative.”
Pls.’s Opp. at 17. This conclusory assertion does not supply the missing allegation of an injury
that is concrete and particularized, actual and imminent, and not merely hypothetical or
conjectural. See George, 693 F. Supp. 2d at 130.
Moreover, plaintiff has not demonstrated that his expired debarment would be a factor in
determining his eligibility for government grants if he ever did apply. Applications for grants
such as AmeriCorps grants are governed by 2 C.F.R. § 180.355,2 which unlike the FAR
provisions cited in Hickey, does not call for an evaluation of contractor responsibility. Instead,
grant applicants are only required to certify that they (a) are not presently excluded or
disqualified; (b) have not been convicted of a crime or had a civil judgment entered against them
concerning a specific list of offenses in the past three years; (c) are not presently indicted or
civilly charged by a government entity for the same; and (d) have not had a public transaction
terminated in the past three years for cause or default. Id. There is no general responsibility
determination that would make it necessary for the grantor to consider a past debarment.
Other cases cited by the plaintiff for the proposition that his complaint is not moot also
involved regulations that specifically required the disclosure or consideration of past debarments.
See, e.g., Kisser v. Cisneros, 14 F.3d 615, 618 n.4 (D.C. Cir. 1994) (holding that appeal of
expired debarment was not moot because Department of Housing and Urban Development
regulations expressly requiring program applicants to explain their past debarments were likely
to affect plaintiff’s future transactions); Caiola v. Carroll, 851 F.2d 395, 401 (D.C. Cir. 1988)
(holding that a regulation requiring a company seeking to sell the government supplies to certify
2 See AmeriCorps Nat’l Application Instructions at 54, Defs.’ Mot. to Dismiss at Ex. 2.
9
whether its officers had ever been debarred was a sufficient “prospect of a lingering stigma or
other adverse impact” to keep the individual plaintiffs’ case alive). Like Hickey, these
precedents are distinguishable from the instant case, where the plaintiff can point to no likely
future impact of the government’s action.
With nothing concrete to point to, plaintiff attempts to shift the burden to the defense. He
argues: “Nowhere does the Government point to evidence of non-injury to Mr. O’Gilvie. Nor
does the Government present any fresh evidence of the absence of continuing injury beyond the
six month duration of his debarment.” Pl.’s Opp. at 15–16. Putting aside the interesting
academic question of what “evidence” of the “absence” of something might look like, plaintiff’s
effort to direct the focus to the government’s allegations must fail. It is the party claiming
subject matter jurisdiction who bears the burden of demonstrating that jurisdiction exists.
George, 693 F. Supp. 2d at 129, citing Khadr v. United States, 529 F.3d 1112, 1115 (D.C. Cir.
2008).
Since plaintiff has not alleged any facts from which the court could infer that there is a
likelihood that actual harm that could flow from his expired debarment, and the Court need not
accept his legal conclusions, plaintiff’s allegations are “too attenuated to establish injury in fact,”
Hickey, 649 F. Supp. 2d at 777, and he lacks standing. Since the Court will dismiss plaintiff’s
claim for lack of subject matter jurisdiction, it need not address the defendants’ motion to
dismiss on substantive grounds.
10
CONCLUSION
For the foregoing reasons, defendant’s motion to dismiss is granted. A separate order
will issue.
AMY BERMAN JACKSON
United States District Judge
DATE: August 10, 2011
11