Rlb Contracting, Inc. v. United States

In the United States Court of Federal Claims
Nos. 14-651C
(Filed: April 1, 2015)
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RLB CONTRACTING, INC,
Plaintiff,
Bid protest; Motion for stay
v. pending appeal.
THE UNITED STATES,
Defendant.
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ORDER ON MOTION FOR STAY PENDING APPEAL
Pending post-judgment in this bid protest is plaintiff’s motion for a stay
pending appeal pursuant to rule 62(c). For the reasons set out below, the
motion is denied.
On September 23, 2014, we issued an injunction against the Department
of Agriculture (“USDA”), directing it to reconsider its decision not to employ
an exception to the NAICS code size standard for the acquisition of certain
shoreline restoration work in southern Louisiana, and we confirmed that order
in an opinion and final judgment on October 3, 2014. After the agency
completed its review and issued a new decision reaffirming its initial selection
of the larger size standard and its award to another offeror, plaintiff filed a
motion to enforce the injunction, arguing that the agency had not complied
with this court’s directive. We denied that motion on November 6, 2014,
stating that the agency had literally complied with our order and that the merits
of the subsequent decision was not properly before the court.1 Plaintiff filed
a notice of appeal on November 25, 2014, and then on February 20, 2015, a
1
We also denied a motion for reconsideration of that order on November 21,
2014.
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motion to stay contract performance pending its appeal. The motion is fully
briefed, and we deem oral argument unnecessary. Because plaintiff has not
shown a likelihood of success on the merits or that the hardships balance in its
favor, it is not entitled to a stay of contract performance pending appeal.
An injunction pending appeal is an extraordinary remedy and will not
be lightly granted. Acrow Corp. of Am. v. United States, 97 Fed. Cl. 182, 183
(2011). Similar to the standard for an injunction during the pendency of a
case, an injunction entered by the trial court during appeal will only be granted
when the movant can show that, on the balance, it is likely to prevail on the
merits of the appeal, that it will be irreparably harmed absent the injunction,
that the injunction will not harm other parties, and that it is in the public
interest to issue the injunction. See id. at 184. No single factor is
determinative, but absent a showing of likely success on appeal, the other
factors must tilt “decidedly toward plaintiff.” Standard Havens Prods., Inc.
v. Gencor Indus., Inc., 897 F.2d 511, 513 (Fed. Cir. 1990).
Plaintiff is appealing our decision not to open a general review of the
agency’s actions post-injunction, other than our limited review for literal
compliance with the order. After plaintiff’s motion to enforce the injunction,
we ordered defendant to file a copy of the agency’s new decision. It did so,
and we reviewed that document. Noting the literal compliance with our order,
we declined further review of the underlying merits because the new agency
decision was not the subject of a protest currently before the court. RLB
Contracting, Inc. v. United States, No. 14-651C, at 2 (Fed. Cl. Nov. 6, 2014)
(order denying motion to enforce judgment). Plaintiff now challenges that
decision before the Federal Circuit, arguing that our conclusion that the merits
of the subsequent agency action were not properly in front of us was legally
erroneous.
As support for the merits prong of the injunction test, plaintiff cites case
law from a variety of circuits to the effect that it is within a trial court’s
inherent powers to enforce its injunctions, specifically through the contempt
power of the court. See, e.g., McCall-Bey v. Franzen, 777 F.2d 1178, 1183
(7th Cir. 1985). Plaintiff also directs our attention to an earlier decision of this
court in Mission Critical Solutions v. United States, a bid protest in which we
were confronted with the question of whether the army had complied with the
court’s injunction two years prior. 104 Fed. Cl. 18, 27-28 (2012). We
concluded there that the agency’s subsequent actions were a new procurement
and thus not subject to our previous injunction. Id. Plaintiff argues that this
is a good example of the exercise of authority it asked us to undertake in this
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case: a post-judgment review of the merits of agency action after the court
entered an injunction. This establishes, in plaintiff’s view, at a minimum, a
“substantial legal question” for the circuit to decide, which plaintiff argues the
Federal Circuit has previously held is sufficient to meet the merits prong of the
injunction test. See E.I DuPont Nemours & Co. v. Phillips Petroleum Co., 835
F.2d 277, 278 (Fed. Cir. 1987) (stating that the disagreement between the
district court and the patent office on the validity of the patent established
substantial legal questions, which it considered in granting the stay pending
appeal).
Plaintiff also argues that the equities arising from consideration of the
three other factors favor it as well because, absent an injunction pending
appeal, RLB may not have any remedy available, even if it were to succeed on
the merits. This is because contract performance in the interim may make it
a practical impossibility to rewind and re-procure the work. The end result
would be a missed opportunity to compete for a contract worth almost $22
million. As to harm to defendant were a stay entered, plaintiff alleges that any
delay would be short, especially since the award was delayed by an additional
100 days due to an unrelated protest at GAO after our decision. Plaintiff also
argues that the public interest is in favor of a stay because the integrity of the
federal procurement process will be maintained.
Defendant responds that plaintiff cannot meet its burden on the first
factor–success on the merits–because the standard for review of a trial court’s
decision about whether to use its contempt powers to enforce orders after
judgment is one of abuse of discretion, and that plaintiff cannot meet that
burden in light of the agency’s literal compliance with our order. Defendant
also contends that, should an injunction be entered, it will likely incur
substantial increased costs to complete the shoreline restoration project, which
is now not expected to be completed until April 2016. Changing site
conditions would require new surveys and possible changes to the scope of
work. All of which will expand the cost of the project. Further, this problem
will only be compounded should southern Louisiana be hit by a major storm.
Defendant concludes that the risk of potential harm inherent in further delay
is far greater to it and adjoining landowners than that alleged by plaintiff.
Both plaintiff and defendant’s arguments regarding the balance of the
harms are speculative. We can foresee both parties’ worst case scenarios
coming to fruition depending on how long it takes to resolve the appeal, but
just as likely is that, even with an injunction, the harm to plaintiff will still be
realized, while the harm to defendant can be avoided without one. On appeal,
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the Federal Circuit will decide whether we abused our discretion in denying
full administrative review of the agency’s redetermination of the size standard
through the rubric of a motion to enforce judgment. A favorable result in the
Federal Circuit will not give plaintiff the relief it ultimately seeks. Should the
circuit reverse and remand–which we view to be an unlikely result, as we
explain below–we will then be faced with a challenge to the underlying merits
of USDA’s redetermination of the applicable size standard. This will require
more briefing and supplementation of the record, pushing the time line well
beyond any contemplated by either party in their papers on the present motion.
We conclude that the balance of hardships does not particularly weigh in either
party’s favor, let alone in plaintiff’s favor. The likelihood of success on appeal
thus becomes more dispositive.2
Although plaintiff casts the issue on appeal as one of jurisdiction, i.e.,
whether we had jurisdiction to enforce our order after judgment, it recognizes
that the court’s power to enforce the order would have been found in our
contempt powers, both statutory and inherent. See Mission Critical Solutions,
104 Fed. Cl. at 22 (reciting the dual bases for this court’s contempt powers).
The Federal Circuit reviews a trial court’s decision to “entertain a contempt
proceeding for an abuse of discretion.” Abbot Labs v. Torpham, Inc., 503 F.3d
1372, 1380 (Fed. Cir. 2007) (holding that the district court did not err in
holding contempt proceedings to decide whether a product infringed on a
patent and thus violated the court’s earlier injunction); see also Additive
Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345, 1349
(Fed. Cir. 1998) (holding that the district court’s decision to enter contempt
proceedings was not an abuse of discretion).
We did not deny plaintiff’s motion to enforce the injunction merely for
want of jurisdiction. We ordered defendant to submit under seal the agency’s
redetermination decision, and we then reviewed it. We held that our order had
been literally complied with and thus our injunction need not be further
enforced. That was within the court’s discretion, and it is thus unlikely to be
reversed by the appellate court. Cf. Energy Recovery Inc. v. Hauge, 745 F.3d
1353 (Fed. Cir. 2014) (applying 4th Circuit law to hold that it owed the trial
court extra deference when considering the trial court’s interpretation of its
own order). Our statement that the underlying merits of the agency’s new
2
We note also that plaintiff’s argument for the public’s interest in the stay is
predicated on its view of the merits being correct. The likelihood of success
on the merits is thus dispositive.
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decision was not properly before us was premised on the predicate that the
agency had complied with our order. We gave the agency directions regarding
what it had to consider in making its new decision. Our review of that
decision revealed that it had done so. Plaintiff disagrees with the agency’s
redetermination, arguing that it was incorrect for a number of substantive
reasons. We declined consideration of those substantive arguments for
prudential and jurisdictional reasons. This court’s rules and procedures would
have been better served by the filing of a new protest and the generation of an
administrative record regarding the information in front of the agency when
it made its subsequent size standard determination. Plaintiff is thus unlikely
to prevail on the merits of its appeal.3 Accordingly, plaintiff’s February 20,
2015 motion for a stay pending appeal is denied.
s/Eric G. Bruggink
ERIC G. BRUGGINK
Judge
3
This is not inconsistent with the Federal Circuit’s decision in E.I. Dupont.
In that case, the appeals court found that the substantial legal question
presented, along with substantial risk of harm to the movant and the public,
and a relative lack of harm to other parties warranted a stay. 835 F.2d at 278-
79. Here, we do not find that the balance of hardships favors plaintiff as it did
in E.I. Dupont.
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