Emergency Planning Management,inc. v. United States ( 2020 )

In the United States Court of Federal Claims
No. 19-1024
(Filed: January 23, 2020)
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*
EMERGENCY PLANNING *
MANAGEMENT INC., *
* Motion for Stay Pending Appeal;
* RCFC 62; Factors to be
Plaintiff, * Considered; Analysis of Likelihood
* of Success on the Merits;
v. * Irreparable Harm; Balance of
* Harms to Government; Effect on
THE UNITED STATES, * Public Interest.
*
Defendant. *
*
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Joshua Duvall, Matross Edwards, LLC, Washington, D.C., with whom was Edward
DeLisle, Offit Kurman, P.A., Plymouth Meeting, Pennsylvania, for Plaintiff.
David R. Pehlke, Trial Attorney, with whom were Joseph H. Hunt, Assistant Attorney
General, Robert E. Kirschman, Jr., Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington,
D.C., and Tracey Sasser, Assistant General Counsel, U.S. Department of Education,
Washington, D.C., for Defendant.
OPINION AND ORDER
WHEELER, Judge.
Plaintiff, Emergency Planning Management, Inc. (“EPM”), requests a stay pending
its appeal of the Court’s October 2, 2019 Judgment on the Administrative Record in favor
of the Government. For the reasons explained below, the Court DENIES EPM’s motion.
Background
The Court’s October 2, 2019 judgment provides an in-depth history of the relevant
facts. See Emergency Planning Mgmt. Inc. v. United States, 145 Fed. Cl. 77, 79-80 (2019).
In summary, EPM brought a pre-award bid protest challenging a Department of Education
(“ED”) student loan servicing procurement (“Next Gen”). Id. at 80. EPM believes that
Next Gen’s “full life-cycle” structure, and the bundling it requires, will prevent EPM and
other small businesses from competing for prime contracts. Id. at 79.
On July 16, 2019, counsel for EPM filed its Complaint and motions for a temporary
restraining order and a preliminary injunction. Id. at 80. EPM claimed in its Complaint
that ED’s Next Gen Business Processing Operations (“BPO”) solicitation was unlawful
because: (1) it consolidated loan servicing and default collection without justification,
thereby precluding small business participation; (2) it violated federal laws and
Congressional policies regarding debt collectors; (3) it was arbitrary and capricious; and
(4) ED failed to adhere to the notification requirements regarding the consolidation of
services. Id. at 79. On July 23, 2019, after hearing arguments on the motions, the Court
denied EPM’s request for a temporary restraining order and preliminary injunction. Id. at
80.
After hearing oral arguments on the parties’ cross-motions for judgment on the
administrative record on September 26, 2019, the Court granted the Government’s motion
on October 2, 2019. Id. at 80. Counsel for EPM filed a notice of appeal with the Federal
Circuit on November 27, 2019, and on January 2, 2020, filed a motion to stay the Court’s
judgment pursuant to Rule 62(d) of the Rules of the United States Court of Federal Claims
(“RCFC”) pending its appeal. Dkt. Nos. 31–32. The Government filed its response to the
motion on January 16, 2020. Dkt. No. 33. This issue is now fully briefed and ready for
decision.
Discussion
I. Standard of Review
In assessing whether to stay its judgment pending an appeal to the Federal Circuit
pursuant to RCFC 62(d)1, the Court considers four factors: “(1) whether the stay applicant
has made a strong showing that he is likely to succeed on the merits; (2) whether the
applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will
substantially injure the other parties interested in the proceeding; and (4) where the public
interest lies.” Hilton v. Braunskill, 481 U.S. 770, 776 (1987). Each factor “need not be
given equal weight.” Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511,
512 (Fed. Cir. 1990). However, a court may lower the threshold from “a strong showing”
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The provision referenced in case law as Rule 62(c) is now Rule 62(d).
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of success on the merits to a “substantial case on the merits” when the question raised is
novel or harm to the applicant is great enough “provided the other factors militate in
movant’s favor.” Standard Havens Prod., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 513
(Fed. Cir. 1990) (emphasis in original); see also Acrow Corp. of Am. v. United States, 97
Fed. Cl. 182, 184–85 (2011).
Granting a stay is an “extraordinary remedy,” Axiom Res. Mgmt., Inc. v. United
States, 82 Fed. Cl. 522, 524 (2008), requiring the moving party to put forth “more than
base suppositions of disapproval from a party dissatisfied with the holding for a judicial
tribunal.” Minor Metals v. United States, 38 Fed. Cl. 379, 381 (1997); see also Acrow
Corp. of Am., 97 Fed. Cl. at 183.
II. A Stay Is Not Warranted In this Case
As discussed in greater detail below, EPM has failed to make a strong showing that
it is likely to succeed on the merits of its appeal, it will not be irreparably injured absent a
stay, issuing the stay could substantially harm the Government, and allowing the judgment
to go into effect serves the public interest. Accordingly, EPM’s motion for a stay pending
appeal must be DENIED.
A. Chances for Success on Appeal
EPM does not argue that it is likely to succeed on the merits. Rather, EPM contends
that it is entitled to this extraordinary relief because its appeal presents “substantial issues
of first impression.” Dkt. No. 32 at 4. The Government counters that EPM has not
demonstrated a substantial case on the merits or that the equities weigh heavily in its favor.
Dkt. No. 33 at 4.
EPM is unlikely to succeed on its appeal to the Federal Circuit. In fact, EPM’s
motion largely recites its arguments that were previously unsuccessful before this Court.
As outlined in the Court’s October 2, 2019 opinion, EPM’s claims are not supported by the
administrative record. See, e.g., Emergency Planning Mgmt., 145 Fed. Cl. at 82 (citing
Dkt. No. 22 at 11; AR 534–50). Contrary to EPM’s assertion, EPM does not even put forth
a substantial case on the merits. See id. at 84; L.E.A. Dynatech, Inc. v. Allina, Nos. 93-
1353, 94-1290, 1994 WL 732001, at *2 (Fed. Cir. Aug. 16, 1994); E.I. DuPont de Nemours
& Co. v. Phillips Petroleum Co., 835 F.2d 277, 278 (Fed. Cir. 1987); Interactive Health,
LLC v. King Kong USA, Inc., Nos. 2009-1141, 2009-1155, 2009 WL 1228489, at *1 (Fed.
Cir. May 1, 2009).
In E.I. DuPont, Phillips Petroleum Company sought a stay pending its appeal of a
district court decision upholding the validity of a patent held by E.I. DuPont de Nemours
& Company. E.I. DuPont, 835 F.2d at 277-78. There, the Court found a substantial case
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on the merits because a Patent and Trademark Office Examiner had previously found the
same patent invalid. See E.I. DuPont, 835 F.2d at 278. Unlike in E.I. DuPont, where a
complex question led to disagreement between adjudicators, here, the legal issues raised
by EPM are clear-cut. See E.I. DuPont, 835 F.2d at 278; Emergency Planning Mgmt., 145
Fed. Cl. at 81–84.
Alternatively, EPM argues that it raises issues of first impression because the agency
engaged in a “wholesale departure from the mandatory procedural requirements to justify
bundling” and the Federal Circuit “has yet to fully examine the mandatory nature of the
bundling procedures specifically set forth in FAR Part 7.” Dkt. No. 32 at 4–6. The
Government responds that EPM’s attempt at classifying this as a novel issue “falls flat”
and points to the Court’s application of the “very familiar rational basis standard.” Dkt.
No. 33 at 4.
EPM does not raise issues with the Court’s opinion that are so novel as to warrant
the extraordinary remedy of injunctive relief pending appeal. As discussed in the October
2, 2019 opinion, ED followed and documented its compliance with the appropriate
statutory and regulatory frameworks. See Emergency Planning Mgmt.,145 Fed. Cl. at 84.
Moreover, the Federal Circuit has found a bundling procurement valid, despite anti-
bundling provisions, when the contracting agency “conducted extensive market research
before determining that consolidation of the procurement requirements was necessary and
justified.” See Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1335 (Fed. Cir. 2009)
(internal quotation and citations omitted). ED did exactly that when it conducted market
research and consulted subject matter experts to identify “best-in-class collections
practices.” See Emergency Planning Mgmt.,145 Fed. Cl. at 81 (citing Dkt. No. 25 at 6;
AR 525–30). For these reasons, EPM has failed to show that it has a substantial case on
the merits.
B. Irreparable Harm to the Plaintiff
EPM insists that the Government will not be harmed, but that EPM will suffer
irreparable harm without an injunction because of its lost opportunity to compete as a prime
contractor. Dkt. No. 32 at 12–13. However, EPM’s argument is unpersuasive. It provides
no additional facts and instead relies on the same arguments that the Court already found
unpersuasive. The loss of a contract is not enough without more to show irreparable harm
or warrant a stay pending appeal. See Akima Intra-Data, LLC v. United States, 120 Fed.
Cl. 25, 28 (2015) (citing CRAssociates, Inc. v. United States, 103 Fed. Cl. 23, 26 (2012)).
Therefore, EPM has not demonstrated irreparable harm.
C. Substantial Injury to Other Parties
EPM contends that a failure to grant its motion would prevent it and other Private
Collection Agencies from “participating as prime contractors in Federal student loan debt
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collections in perpetuity.” Dkt. No. 32 at 8–9 (emphasis in original). It will not. As the
Court previously noted, nothing prevents EPM from competing through a teaming
arrangement or as a subcontractor. See Emergency Planning Mgmt., 145 Fed. Cl. at 84.
Moreover, even if the Court had ruled in EPM’s favor, EPM would not necessarily receive
a Next Gen solicitation award. Id.
Conversely, granting the motion for a stay pending resolution of EPM’s appeal
could substantially injure the Government. The Next Gen procurement process has
proceeded and staying the Court’s judgment now would interfere unnecessarily with the
progress of ED’s congressionally mandated cradle-to-grave servicing goal. See Dkt. No.
33 at 2. As a result, the balance of harms weighs in favor of denying EPM’s stay pending
appeal.
D. Public Interest
EPM advocates that the “public interest is served by, ‘fostering increased small
business participation,’ in Federal procurement.” Dkt. No. 32 at 15 (quoting Weeks
Marine, Inc. v. United States, 79 Fed. Cl. 22, 37 (2007)). In response, the Government
argues that any further delay would harm not only it, but also the public. Dkt. No. 33 at 8.
According to the Government, student debt is a “national crisis” which Congress is
attempting to rectify through programs such as Next Gen. Id.
The Court previously concluded that ED did not act irrationally in consolidating the
solicitations. While EPM is correct that promoting small businesses serves the public
interest, ED did so when it consulted with the Small Business Administration and asked
offerors to reserve 32 percent of subcontracted work for small businesses. See Emergency
Planning Mgmt., 145 Fed. Cl. at 83. Thus, allowing a lawfully conducted procurement to
continue serves the public interest and the interests of the student borrowers Next Gen will
serve.
Conclusion
EPM has not shown that it is entitled to the extraordinary remedy of a stay of the
Court’s judgment pending appeal. For the reasons stated above, the Court DENIES EPM’s
motion for a stay pending the resolution of its appeal.
IT IS SO ORDERED.
s/ Thomas C. Wheeler
THOMAS C. WHEELER
Judge
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