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HILL INT'L, INC. v. AMTRAK

December 17, 1996

HILL INTERNATIONAL, INC., Plaintiff,
v.
NATIONAL RAILROAD PASSENGER CORPORATION and NEW JERSEY TRANSIT, Defendants.



The opinion of the court was delivered by: SIMANDLE

 SIMANDLE, District Judge:

 This matter is before the court upon motion for preliminary injunctive relief in favor of plaintiff Hill International, Inc. ("Hill") against defendants National Railroad Passenger Corp. ("Amtrak") and New Jersey Transit, and upon cross-motions to dismiss, and alternatively for summary judgment, filed by defendants Amtrak and New Jersey Transit. Hill seeks to preliminarily enjoin defendants from negotiating with, awarding, entering into or maintaining any contractual relationship with anyone other than plaintiff regarding the Construction Management Contract for the East End Concourse, Penn Station, New York City. The East End Concourse project is estimated to consume approximately 5 years and approximately $ 60million to renovate the East End of the passenger terminal at Penn Station for the benefit of New Jersey Transit. Penn Station is owned by Amtrak, and defendant NJ Transit is funding the renovations. The construction project will be coordinated by the Construction Manager. Defendants Amtrak and NJ Transit are involved in the process of selecting the Construction Manager, which is the contract sought by Hill. Hill was allegedly advised it was a top-ranked firm in this competition as recently as April 25, 1996, when concerns about Hill's financial stability surfaced. Eventually, after an initial review and the receipt of additional financial information about Hill and other applicants, Amtrak advised Hill on July 11, 1996 that its application package would no longer be considered because the evaluations of the top candidates had been recalculated.

 Following the initial preliminary injunction hearing on August 28, 1996, Hill and Amtrak informed the court that they had negotiated an understanding, later memorialized in a letter dated September 4, 1996, under which Amtrak would give further consideration to Hill's financial stability so that Hill would present written information at a special meeting, following which Amtrak would issue a new response. On September 6, 1996, therefore, this Court entered an Order dismissing plaintiff's preliminary injunction motion without prejudice to renewal. This meeting was held on September 27, 1996, and Hill presented further information to clarify and explain its financial situation. On October 10, 1996, Amtrak issued a letter explaining that it was still unimpressed with Hill's financial stability and citing reasons why it would not enter into negotiations with Hill to become the Construction Manager.

 Hill then renewed its motion for a preliminary injunction. Additional briefs were submitted and the second hearing was convened on November 8, 1996, when the court heard further oral argument and received additional exhibits upon these motions, including defendants' summary judgment motions. The record is now complete.

 This opinion, then, constitutes the court's findings of fact and conclusions of law pursuant to Rule 52(a), Fed. R. Civ. P., as required by Rule 65, with respect to plaintiff's preliminary injunction motion, as well as addressing defendants' dismissal motions.

 I. Procedural History

 Plaintiff Hill International filed its Verified Complaint on August 7, 1996. The Complaint alleges jurisdiction under 28 U.S.C. §§ 1331 and 1349. Venue is proper under 28 U.S.C. § 1391(a) and 1931(b). The complaint alleges that defendants have violated federal procurement law, citing various parts of the D.C. Municipal Code, by failing to evaluate Hill's bid in accordance with the criteria established for the process. Hill alleges it has a "protected right and interest in the award of the Contract" (Compl. P 51) and that its right has been infringed by defendants' failure to perform a proper evaluation, especially concerning Hill's financial condition.

 Upon plaintiff's motion for emergency relief, a temporary restraining order was denied by the Honorable Mary Little Parell, U.S.D.J., on August 8, 1996. Judge Parell's Order set the matter down for hearing before the Honorable Joseph Irenas, U.S.D.J., on August 15th. It was necessary for Judge Irenas to recuse himself from hearing the case, and the matter was reassigned to me on August 15th. I convened a telephone conference on August 16th, addressing expedited discovery issues and setting a schedule for supplemental briefing, preparatory to the new P.I. hearing date of August 28th. Significant discovery was provided to plaintiff by Amtrak pursuant to the parties' consent confidentiality order, which this court memorialized in the protective order signed August 27, 1996, and filed August 28, 1996. The Protective Order memorialized this court's directives from the August 16th telephone conference and provided that Amtrak shall produce all documents relating to the selection and scoring criteria adopted from the receipt of proposals, the internal grading of the bidders and all documents relating to the re-scoring of plaintiff's financial stability and the criteria for that re-scoring. *fn1"

 The preliminary injunction hearing went forward on August 28th. The court heard arguments of counsel, augmented by the factual record developed for this hearing, including detailed documents about the Construction Manager procurement process, consuming about four hours. *fn2"

 II. Standards for Preliminary Injunctive Relief and for Summary Judgment

 As the party seeking preliminary injunctive relief, plaintiff Hill International must meet a demanding burden. A preliminary injunction will be granted only where a party is able to demonstrate to the court's satisfaction that (1) it has a substantial likelihood of success on the merits; (2) it will suffer irreparable injury if an injunction does not issue; (3) the interests of third parties will not be harmed; and (4) the public interest would be served and not harmed if the injunction were granted. Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797 (3d Cir. 1989) (quoting In Re Arthur Treacher's Franchisee Litigation, 689 F.2d 1137, 1143 (3d Cir. 1982). See also Randolph-Sheppard Vendors v. Weinberger, 254 U.S. App. D.C. 45, 795 F.2d 90, 110 (D.C. Cir. 1986); Washington Metro Area Transit Comm. v. Holiday Tours, Inc., 182 U.S. App. D.C. 220, 559 F.2d 841 (D.C. Cir. 1977); Virginia Petroleum Jobbers Ass'n v. FPC, 104 U.S. App. D.C. 106, 259 F.2d 921, 925 (D.C. Cir. 1958). This Circuit has held that the first and second elements must be demonstrated by a moving party in every case in order to permit the grant of a preliminary injunction. "To obtain a preliminary injunction, the moving party must demonstrate both [emphasis in the original] a likelihood of success on the merits and the probability of irreparable harm if relief is not granted." Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 197 (3d Cir. 1990) (quoting Morton v. Beyer, 822 F.2d 364, 367 (3d Cir. 1987)).

 The demonstration of probability of success on the merits in the Third Circuit does not require plaintiff to show a certainty of prevailing, but rather it requires the court to find a "reasonable probability of eventual success in the litigation," Kershner v. Mazurkiewicz, 670 F.2d 440, 443 (3d Cir. 1982) (en banc). The Third Circuit's definition of "reasonable probability of success" was concisely stated in Oburn v. Shapp, 521 F.2d 142, 148 (3d Cir. 1975):

 
"[it] is not necessary that the moving party's right to a final decision after trial be wholly without doubt; rather, the burden is on the party seeking relief to make a prima facie case showing a reasonable probability that it will prevail on the merits."

 Ordinarily, the consideration of plaintiff's likelihood of success on the merits necessitates an examination of the law governing this Amtrak service contract procurement process, for plaintiff fails unless it can first demonstrate that there is some law to apply to this procurement process. Because we have the benefit of a fully developed record, in which all parties have also addressed the dispositive motions of defendants before this court, the record is complete for not only defining the plaintiff's rights but also determining whether the record demonstrates any material issues of fact defeating defendants' positions upon the merits.

 The court will not further defer action upon defendants' summary judgment motions, pending since August, in order to permit plaintiff to obtain deposition discovery from Amtrak's decision makers, as requested by plaintiff's counsel at the November 8th hearing. First, the party opposing summary judgment on the ground that further discovery is needed must file an affidavit under Fed. R. Civ. P. 56(f) indicating the necessity for such discovery and why it may be material to the party's opposition if obtained; this has not been done. Second, more importantly, depositions of agency decisionmakers are rarely available in cases of judicial review of agency action, as such cases are decided upon the administrative record. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 419-20, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971). Discovery beyond the written record may be justified in limited circumstances not here present, including (1) where the record inadequately explains the agency's actions and thus frustrates judicial review, Camp v. Pitts, 411 U.S. 138, 143-43, 36 L. Ed. 2d 106, 93 S. Ct. 1241 (1973); (2) where the record is incomplete due to loss or inadvertence, see United States v. Rohm & Haas Co., 669 F. Supp. 672, 683 (D.N.J. 1987); United States v. Seymour Recycling Corp., 679 F. Supp. 859, 865-66 (S.D. Ind. 1987); or (3) where there is a strong showing that bad faith or fraudulent conduct sullied the decision making process, Seymour Recycling, 679 F. Supp. at 865-66. The record is indeed complete, all parties having contributed to it. Amtrak has given Hill discovery, pursuant to the confidentiality order, supra, that is full and robust in outlining internal decisionmaking, of the type seldom available in most administrative record review cases. Likewise, no showing of bad faith or fraudulent conduct has been made, and discovery is not permitted in this type of case by a disappointed bidder on plaintiff's speculation or surmise that the agency's decisionmakers were biased. Thus, the matter is ripe for decision.

 III. Plaintiff's Rights in Amtrak's Competitive Process of Procuring a Construction Management Contract

 For purposes of deciding these cross-motions, this court finds that due to Amtrak's unusual status, the federal procurement regulations do not apply to Amtrak. Congress has determined that Amtrak "shall be operated and managed as a for-profit corporation" and that Amtrak "is not a department, agency or instrumentality of the United States Government." 49 U.S.C. § 24301(a)(2) and (3). Although Congress could assuredly legislate obligations upon Amtrak such as in the area of procurement, it generally has not done so, as the Supreme Court noted in Lebron v. National Railroad Passenger Corp., 513 U.S. 374, 115 S. Ct. 961, 971, 130 L. Ed. 2d 902 (1995). There are occasional instances where persons dealing with Amtrak's procurement process are explicitly mentioned in federal statutory law, such as in the Byrd Amendment, codified at 31 U.S.C. § 1352(b)(2), which generally prohibits recipients of federal contracts from using federal funds to pay lobbyists to influence executive or legislative decision-making in connection with awarding a specific federal contract, because the Byrd Amendment broadly defines the term "agency" to include mixed-ownership government corporations such as Amtrak for purposes of this anti-lobbying provision, see 31 U.S.C. § 1352(a). Such stray references to Amtrak for limited procurement related purposes are not understood to convert the entire Amtrak procurement process into a federal procurement process for all other purposes.

 
The Federal Acquisition Regulations System is established for the codification and publication of uniform policies and procedures for acquisition by all executive agencies [emphasis added].

 "Executive agency," in turn, is defined in 48 CFR § 2.101 to include the executive and military departments and "any wholly owned Government corporation within the meaning of 31 U.S.C. 9101." Amtrak is not identified as a "wholly owned Government corporation" in the list set forth at 31 U.S.C. § 9101(3). On the contrary, Amtrak is a "mixed-ownership Government corporation." 31 U.S.C. § 9101(2)(a), to which the Federal Acquisition Regulations do not apply.

 Likewise, defendant New Jersey Transit's acquisition statute does not create particular strictures upon the award of this contract. Although NJ Transit is a beneficiary of this work and is funding it, there is no evidence that NJ Transit has controlled the selection process nor that it will supervise the construction process. This is an Amtrak project upon Amtrak's property in Penn Station, to ...


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