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TEXTOR v. CHENEY

January 29, 1991

RICHARD NORMAN TEXTOR, Plaintiff,
v.
RICHARD B. CHENEY, et al., Defendants



The opinion of the court was delivered by: HOGAN

 THOMAS F. HOGAN, UNITED STATES DISTRICT JUDGE

 This case is before the Court on cross-motions for summary judgment. Mr. Textor is challenging his three-year debarment from government surplus auctions. He asserts that the decision to debar him was arbitrary, capricious, an abuse of discretion and in violation of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A) ("APA"). He further asserts that he was debarred in retaliation for his efforts to publicize the waste and abuses which he observed at these auctions. In its cross-motion for summary judgment, the government asserts that the decision to debar Mr. Textor is supported by the administrative record and, therefore, was not arbitrary, capricious or an abuse of discretion. Further, the government argues that the procedure by which Mr. Textor was debarred violated neither the APA nor the Fifth Amendment right to due process.

 For the reasons set forth below, Plaintiff's Motion for Summary Judgment shall be denied and Defendant's Motion for Summary Judgment shall be granted.

 STATEMENT OF THE CASE

 In order to determine whether the plaintiff's debarment was based on sufficient evidence, the Court must review the entire administrative record. *fn1" Plaintiff Richard Norman Textor attended government auctions and bid on surplus items until debarment charges were filed against him. The Department of Defense ("DOD"), through the Defense Reutilization and Marketing Service ("DRMS") of its Defense Logistics Agency ("DLA"), holds auctions at which members of the public bid for surplus government property. The DLA provides logistical support in the areas of contracting supply, contract administration and technical services to the military, federal civil agencies and foreign governments. The DRMS is responsible for the reuse, sale, and disposal of DOD surplus personal property worldwide. This property is often sold at public auctions. At these auctions, bidders are frequently able to purchase new merchandise for very little money.

 In November 1986, an agent of the Defense Criminal Investigative Service ("DCIS") first became acquainted with the plaintiff at an auction in Brandywine, Maryland. At that auction, Mr. Textor had inadvertently purchased a tank scope which was included as part of a lot identified as "aircraft equipment." This scope, which is used for launching missiles from an M-1 tank, cost DOD $ 285,000.00 new, but Mr. Textor obtained the entire lot for a total of $ 50. According to Mr. Textor, he showed the scope to two individuals whom he had met at these auctions, William Christiansen and Ronny Lusk. He commented to them about how such equipment could fall into the hands of foreign governments. At that time, Messrs. Christiansen and Lusk were undercover investigators who were part of an investigation being conducted by DCIS at several surplus property auctions on the East Coast. Both men testified against plaintiff at the hearing which led to his debarment.

 According to Messrs. Christiansen's and Lusk's hearing testimony, Mr. Textor's comments concerning the tank scope suggested to them that Mr. Textor was ready to sell this scope to a Middle Eastern country. This concern over the potential diversion of military equipment was the initial focus of the overall investigative effort concerning Mr. Textor.

 The Defense Logistics Agency sent a follow-up, one-page letter dated May 24, 1989, which described in general terms DOD's program for disposing of surplus property, but did not address plaintiff's core concern about items being sold for too little return to the government.

 Also that day, the DOD sent plaintiff another letter, this one stating that proceedings to debar him from government auctions for up to three years had been initiated. The letter indicated that the proceedings were initiated based on five incidents where he allegedly engaged in collusive and anti-competitive activity. The letter indicated that there was evidence to debar him pursuant to 48 C.F.R. § 9.406-2. *fn2"

 The plaintiff answered these charges by letter dated June 4, 1989, by either denying the allegations or disputing the DOD's characterization of his activities.

 On July 14, 1989, columnists Jack Anderson and Dale Van Atta wrote a column on the plaintiff's case, criticizing the DOD for waste at auctions.

 On August 18, 1989, the plaintiff wrote another letter to the DOD which noted certain factual disputes between the investigators' versions of events and his own. Plaintiff also expressed the view that the debarment proceedings were initiated in retaliation for his letter to the President and for the Anderson column.

 In early September 1989, plaintiff's counsel spoke by telephone with Bruce W. Baird, who would be hearing the case against the plaintiff, and David Norris, who would be prosecuting it. During the conversation, Messrs. Baird and Norris stated that the DOD was scheduling hearings on the 13th, 14th and 15th of that month on plaintiff's case and that the hearing would be conducted in Battle Creek, Michigan, the headquarters of DRMS. Plaintiff asked that the hearing be held in the Washington, D.C. area since all of the people being charged lived in the Mid-Atlantic area and the allegedly collusive behavior all took place near Washington. Messrs. Baird and Norris explained that the DOD did not have the funds to fly them both to Washington since it was nearing the end of the agency's fiscal year and funds were limited. They informed plaintiff that the DOD did intend to fly Messrs. Lusk and Christiansen to Battle Creek to testify against him -- (Mr. Lusk from Miami and Mr. Christiansen from Philadelphia). Plaintiff's counsel was informed that it would be impossible to schedule the hearing at any other time or place because Mr. Lusk, one of the witnesses, would be leaving the country for Bolivia on the 18th of September to work in the government's anti-drug efforts and would be unavailable after that date. *fn3" They, consequently, rejected plaintiff's request that the hearing be held in the Washington, D.C. area.

 In a September 13, 1989 letter, Mr. Textor, through his attorneys, wrote that he accepted the terms under protest.

 A hearing was conducted by conference call on September 14, 1989 with Messrs. Lusk and Christiansen testifying in Battle Creek and plaintiff in Washington, D.C.

 At the hearing, the following five charges were considered:

 
(a) On January 27, 1987, at Auction 27-7103, at Fort Belvoir, VA, the plaintiff related to a registered source (informant) that he had made some deals with other people at the auction and didn't want them to think he was double crossing them by talking with the source.
 
(b) On September 3, 1987, at Auction 27-7452, at Fort Belvoir, VA, the plaintiff was observed by an undercover agent entering into a collusive bidding arrangement with Phyllis S. Miller. He related to the agent that he had agreed to give Ms. Miller two items from lot 70 for not bidding against him on the lot. During the auction, the auctioneer stopped the auction and strongly admonished two bidders who were engaged in collusive bidding activities, stating "That's illegal, you cannot do that in this auction. It is a Federal crime to do that. You can go to the Crossbar Hotel." The plaintiff related to the undercover agent that the auctioneer's statement was a joke. Everybody got together on bids.
 
(c) On September 16, 1987, at Auction 27-7511, DRMO Fort Meade, MD, Plaintiff entered into a collusive bidding agreement with a registered source on lot 83 where source agreed not to bid against him. If plaintiff was the successful bidder, source would pay half of the purchase price of the lot. He and source would each keep one of the items and split profits on the sale of the remaining items. Plaintiff was the successful bidder on lot 83 for $ 550.
 
(d) On September 28, 1987, in a general business conversation with a registered cause, Plaintiff stated that he could make bidding agreements with Phyllis S. Miller. He stated that he paid her in the past not to bid against him on particular items, but he usually ...

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