The opinion of the court was delivered by: LAMBERTH
This case came before the court for a hearing on plaintiff Emery Worldwide's
Motion for Preliminary Injunction on October 16, 1992. Upon consideration of Emery's Motion, the Oppositions of the Federal Defendant and the Defendant-Intervenor Postal Air, Emery's Reply, Emery's Supplement to its Reply, Postal Air's Surreply, and the Federal Defendants' Response, as well as the arguments of counsel, and for the reasons presented below, Emery's Motion for Preliminary Injunction is GRANTED. An appropriate order will issue this date.
Plaintiffs in these consolidated suits, Emery and Express One, are disappointed bidders for a ten-year, $ 1 billion contract (known as "ANET") with the United States Postal Service to provide express and priority mail delivery for the Postal Service beginning January 20, 1993. The incumbent provider is Emery. Defendant Postal Air, formerly known as Kitty Hawk Aircargo, Inc., was awarded the new contract.
This court previously denied a motion by Emery for a temporary restraining order due to the lack of imminent harm. Since that date, Emery has presented new facts to the court, including the communications between Mr. Kalitta and Mr. Cole described in Part II.A., below. Defendants were given an opportunity to reply to Emery's allegations. Emery has now moved for a preliminary injunction.
In determining whether a preliminary injunction should be granted, this circuit has adopted a four-part standard: the moving party must demonstrate that it is likely to prevail on the merits, that it will suffer irreparable injury absent the granting of injunctive relief, that the issuance of an injunction will not cause substantial harm to other persons interested in the proceedings, and that the issuance of an injunction is in the public interest (or at least is not adverse to the public interest). Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc. ("WMATA"), 182 U.S. App. D.C. 220, 559 F.2d 841, 843 (D.C. Cir. 1977). The court finds that, based on the record in this case, very has demonstrated all four of the criteria as they are defined in this circuit. The motion for preliminary injunction is therefore granted.
A. Likelihood of Success.
The court is not required to determine that the ultimate success of the movant to "a mathematical probability," particularly when the other factors weigh heavily in favor of the injunction. WMATA, 559 F.2d at 843. Nonetheless, the court finds that plaintiffs are likely to be successful in this suit.
Plaintiffs have alleged several justifications for holding this contract illegal, including the Postal Service's failure to evaluate risk, an arbitrary and capricious scoring method, improper communications between the Postal Service and Postal Air, and negotiations between the Postal Service and Postal Air after Postal Air had been tentatively selected. Although the court believes that some of these contentions may have merit, one of very's allegations is particularly strong. By itself, this allegation satisfies the criteria for likelihood of success on the merits and thereby justifies the granting of the preliminary injunction.
This allegation concerns the communication between Connie Kalitta of AIA (a principal and major subcontractor of Postal Air) and William Cole, an evaluator on the ANET contract (indeed, the team leader of the Maintenance Surveys Team). On May 26, 1992, Mr. Kalitta contacted Mr. Cole about a position with AIA. Mr. Cole immediately wrote Rex M. Maytan, the Contracting Officer for the ANET contract, "I wish you to be aware of the possibility of my being employed by Kalitta Airlines at some future date that may precede the above contract award dates." Emery's Reply at App. B-1. After seeking legal (and political) advice, Mr. Maytan informed Richard Morris, the Project Manager at Arthur D. Little (Mr. Cole's firm), by letter on June 8, 1992, that "Mr. Cole must be removed from the project if he does not affirmatively reject Mr. Kalitta's invitation." Id. at App. B-5.
Mr. Maytan's determination that disavowal was required is correct. Nonetheless, Mr. Cole never disavowed interest in the position. In a letter to Mr. Maytan written by Mr. Morris on June 9, 1992, and countersigned by Mr. Cole, Mr. Cole states that he "will not discuss or negotiate employment . . . with Mr. Kalitta . . . until September 1992." Emery's Reply at App. B-6. Although Mr. Morris expresses that Mr. Cole does not want to create a conflict of interest situation, and states that Mr. Cole must affirmatively reject any further initiative by Mr. Kalitta if he wants to remain an evaluator, Mr. Cole never affirmatively rejects Mr. Kalitta's first offer. It is apparent that Mr. Cole wanted to keep his options open, particularly after the September 1992 award date, and thus never rejected Mr. Kalitta's offer.
Even though he had previously (and properly) determined that disavowal was required, Mr. Maytan on June 12, 1992, in a memo to J.E. Orlando, notes that he is "inclined to keep [Mr. Cole] on board." Emery's Reply at App. B-8. Mr. Orlando, in a memo dated June 15, 1992, agreed "provided there is no further contact." Id. at App. B-9. They give no rational explanation as to why their previous strict standard - that only disavowal would be sufficient to avoid a conflict of interest - need not be followed.
Moreover, on June 21, 1992, Mr. Kalitta again contacted Mr. Cole; again, Mr. Cole did not disavow interest in the position but rather stated that he "would not be available for a personal meeting or further telephone calls until after August 28, 1992." Id. at B-10. Although Mr. Cole again notified Mr. Maytan of this communication (and of his failure to disavow interest), Mr. Maytan and Mr. ...