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EXPRESS ONE INTL., INC. v. USPS

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


February 23, 1993

EXPRESS ONE INTERNATIONAL, INC., Plaintiff,
v.
UNITED STATES POSTAL SERVICE, Defendant. EMERY WORLDWIDE AIRLINES, INC., Plaintiff, v. UNITED STATES POSTAL SERVICE, Defendant.

The opinion of the court was delivered by: ROYCE C. LAMBERTH

MEMORANDUM OPINION AND ORDER

 On December 22, 1992, the court granted plaintiffs' motions for summary judgment and declared "illegal and void" the ANET-93-01 contract, awarded by the United States Postal Service (USPS) to Kitty Hawk Air Cargo, Inc. (now known as Postal Air) on September 16, 1992. Both defendants now have moved the court to modify its memorandum opinion; *fn1" Postal Air has also moved the court to alter its judgment in several other respects under Rule 59(e). In addition, Emery has submitted a bill of costs under Rule 54(d), 28 U.S.C. ยงยง 1920 and 1821, and Local Rule 214(d).

 I. Modification of the Memorandum Opinion.

 A. Mischaracterizing the Evidence.

 In the first complete paragraph on page 23 of its Memorandum Opinion, the court expressed concern that Postal Air and USPS are accusing Emery of mischaracterizing evidence. The court then gave an example of how the briefs submitted by both Postal Air and USPS contained mischaracterizations comparable to the alleged misdeeds of Emery. *fn2" Both defendants now move the court to delete this paragraph and thereby remove the court's expression of concern.

 Both Postal Air and USPS argue that, in the pages cited by the court, each was emphasizing a specific aspect of the record, not attempting to misdirect the court. Each also defends its practice by claiming to have given a more thorough reading of the two letters elsewhere in their briefs.

 The court acknowledges that defendants' briefs, in their entirety, do give a more complete description of the letters. The court still believes that the cited passages are deficient in that they lack complete candor: in these pages, defendants emphasized only a limited portion of the letters, neglecting to note that the clear implication of the letters was contrary to the passages they cited. However, defendants did address the rest of the letter elsewhere, and this mitigates the offense; the court will therefore strike the first paragraph of page 23 of its memorandum opinion.

 However, this litigation has been hard-fought, and all parties have taken a no-holds-barred approach to the evidence, the opposing parties, and the briefs. All parties have accused the others of improper conduct, and it appears that mistakes and errors in judgment have been made by all. The questioned paragraph in the opinion served to prevent any party from claiming the moral high ground in this case; even though that paragraph is now removed, the court's opinion remains that no party has a right to stake out that territory.

 Therefore, defendants' motions are GRANTED, and the first paragraph on page 23 of the court's December 22, 1992, Memorandum Opinion is hereby STRICKEN.

 B. Postal Air's Remaining Motions.

 Postal Air has also moved the court under Rule 59(e) to alter its judgment in three respects. One is moot, *fn3" one is granted, and one is granted in part.

 1. Postal Air's Opportunity to Participate.

 The court's order, in P 3., states that "plaintiffs shall be permitted to submit initial proposals and best-and-final offers (BAFOs)." Postal Air moves that the court clarify the order by altering this paragraph, thus ensuring that all offerors, including Postal Air, be afforded the same rights in the re-solicitation.

 Postal Air's position reflects the court's intention in the December 22, 1992, order, and its motion is therefore GRANTED. Therefore, the last sentence of P 3. shall be modified to read: "Plaintiffs Emery and Express One and Defendant Postal Air shall be permitted to submit initial proposals and best-and-final offers (BAFOs)."

 2. Declaring the ANET Contract "Illegal and Void."

 Postal Air also moves the court to strike out the first paragraph of its order in which the court declared the ANET contract to be "illegal and void;" rather, it would have the court determine that a valid contract existed until the government terminated it "for convenience." Emery and USPS have both opposed the motion.

 Postal Air's motion asserts that this modification will not disturb the court's intent in that the contract must be re-bid and re-evaluated in either case. The advantage of the latter holding is solely to Postal Air: if the contract is "terminated for convenience" and not "void," Postal Air will be able to recoup from USPS all moneys it expended in performance of the contract.

 Emery and USPS oppose the motion for separate reasons. Both look to the public policy inherent in the overturning of contracts in which there is a conflict of interest. In addition, Emery emphasizes that Postal Air had complete knowledge of the conflict during the procurement and thus cannot claim to be an innocent party. For its part, USPS argues that Postal Air cannot use this method to seek recoupment of its expenditures when Postal Air has failed to take advantage of available administrative remedies.

 Public policy alone is a sufficient justification to refrain from completely accepting Postal Air's position. The leading - and most appropriate - case is United States v. Mississippi Valley Generating Co., 364 U.S. 520, 5 L. Ed. 2d 268, 81 S. Ct. 294 (1961). There, the Supreme Court expounded at length on the importance of maintaining integrity and accountability in the procurement process. The conflict of interest here is one which cannot be tolerated by the government, the public, or the court. Thus, all actions taken after the conflict arose are tainted; this includes the contract.

 The innocence or fault of Postal Air has not been determined by this court as it was not necessary for granting summary judgment. Emery argues that Postal Air's motion places Postal Air's conduct in inquiry, and therefore urges the court to find that Postal Air both knew about the conflict and stands guilty of allowing the conflict to persist. Again, such a finding is unnecessary.

 As USPS notes, Postal Air has not pursued its available administrative remedies to determine whether it will be able to recoup its start-up expenses. When it seeks them from USPS, USPS will have the opportunity to either grant them or deny them. If USPS denies them, Postal Air will have the opportunity to seek judicial review, apparently in the Court of Claims.

 However, the court's finding the contract to be illegal and void prejudges and precludes any such claim by Postal Air before it even begins. If the contract is void, Postal Air, regardless of guilt, will be unable to recover on anything but a quantum meruit standard. And, as the government has yet to receive any benefits, quantum meruit apparently equals zero recovery for Postal Air.

 Therefore, Postal Air's motion is GRANTED in part; the court will modify P 1. of its order as follows: The words "declared illegal and void" are replaced with "set aside." *fn4"

 II. Emery's Statement of Costs.

 The court is in receipt of objections filed by Postal Air and USPS to Emery's bill of costs as well as Emery's reply in support of its costs. As the clerk has not yet taxed defendants, these briefs are premature and are stricken from the record. After the clerk has taxed costs, defendants may object or move to retax under Local Rule 214.

 III. Other Motions.

 These seven motions are also before the court and are disposed of as follows:

 o Emery's Motion for Leave to Respond, filed January 29, 1993, is GRANTED;

 o Emery's Motion for Leave to Respond, filed February 4, 1993, is GRANTED;

 o USPS's Motion for Enlargement of Time, filed January 19, 1993, is GRANTED nunc pro tunc;

 o USPS's Motion for Enlargement of Time, filed January 22, 1993, is GRANTED nunc pro tunc;

 o USPS's Motion for Enlargement of Time, filed January 25, 1993, is DENIED as moot;

 o Postal Air's Motion for Enlargement of Time, filed January 25, 1993, is DENIED as moot; and

 o Emery's Motion for Enlargement of Time, filed February 11, 1993, is DENIED as moot.

 IV. Conclusion.

 For the reasons stated above, USPS's motion to modify the court's memorandum opinion is GRANTED. Postal Air's motion to alter judgment is GRANTED in part as explicated above.

 SO ORDERED.

 Royce C. Lamberth

 United States District Judge

 DATE: FEB 23 1993


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